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Adecco revenue falls in Q4 and January

March 04 2009

Adecco SA, the world's largest staffing firm, reported a 14% year-over-year decline in revenue to euro4.63 billion (US$6.53 billion) for the fourth quarter ended Dec. 31. And tough times continued this year. Adecco said January revenue fell 25%.

January's decline excludes the impact of currencies, acquisitions and dispositions. It was also adjusted for trading days compared with January 2008. Adecco's fourth-quarter revenue fell 15% on a constant currency basis — not excluding acquisitions and dispositions.

Fourth-quarter U.S. and Canadian revenue fell 10% year-over-year to euro678.0 million (US$955.8 million). The decline was 16% on a constant currency basis.

U.S. and Canadian industrial staffing revenue fell 20% on a constant currency basis in the quarter. In addition, North American fourth-quarter office/clerical revenue fell 22%, information technology revenue fell 14% and engineering and technical revenue fell 7% — all on a constant currency basis.

In France, Adecco's largest single market, fourth-quarter revenue declined 17% to euro1.43 billion (US$2.02 billion).

The company's fourth-quarter gross margin improved to 18.2% from 17.8% in the year-ago period.

Adecco posted a fourth-quarter net loss of euro22.0 million (US$31.0 million) compared with net income of euro150.0 million in the same period in 2007. The company reported a goodwill impairment of euro116.0 million (US$163.5 million) in the fourth quarter. Half of the impairment related to its United Kingdom and Ireland operations, and the other half involved the Tuja brand. Adecco acquired the Tuja Group, a European staffing firm, in 2007.

The company reported it cut internal employment by 2,300, or 6%, year-over-year in the fourth quarter. It also reduced its branch network by 240, or 3%. Adecco said it plans a more pronounced reduction of workers in the first half of 2009.

For full-year 2008, revenue fell 5% to euro19.97 billion (US$28.15 million). It was down 3% on a constant currency basis.

Full-year gross margin narrowed to 18.4% from 18.6%.

Adecco reported net income of euro495.0 million (US$697.8 million) for 2008, down 33% from euro735.0 million in the previous year.

The company also reported today it plans to appeal a euro34.2 million fine levied by the French Competition Council for alleged anti-competitive practices between March 2003 and November 2004. Manpower Inc. (NYSE: MAN) and Randstad Holding NV also face fines in the action.

Adecco SA
For the fourth quarter ended Dec. 31, 2008, compared with the same period in the previous year.
Revenue: euro4.63 billion (US$6.53 billion), -14%
Net loss: euro22.0 million (US$31.0 million) vs. net income of euro150.0 million

For the full year ended Dec. 31, 2008, compared with the previous year.
Revenue: euro19.97 billion (US$28.15 billion), -5%
Net income: euro495.0 million (US$697.8 million), -33%


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