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Adecco Group (ADEN:VTX), the world largest HR Solutions provider, announces a 32% decline in group revenues to â‚¬3.6 billion in Q2 2009 compared to Q2 2008 on a constant currency basis.
The gross margin in Q2 2009 was down to 17.8% compared to 19.3% in the same period last year. The lower gross margin in the temporary staffing business, partly impacted by lower utilisation in Germany and Sweden, where temporary employees are on Adeccoâ€™s payroll, and the negative impact on gross margin from the weak permanent placement business, was only partially compensated by the positive contribution of the outplacement business.
In Q2 2009, the Adecco Group reported an operating loss of â‚¬173 million, impacted by the impairment charges on goodwill and intangible assets of
â‚¬192 million. This compares to an operating income of â‚¬304 million in the second quarter of 2008, which was positively impacted by the modified calculation of French social charges of â‚¬54 million. Analysts had expected Adecco to generate a profit of â‚¬29 million.
In France revenues declined by 34% to â‚¬1.2 billion in Q2 2009. In Germany revenues declined by 44% to â‚¬229 million. UK and Ireland revenues were down by 31% to â‚¬217 million. Italian revenues declined by 48% to â‚¬169 million. Benelux was down by 20% to â‚¬192 million. Iberian revenues were down by 42% to â‚¬160 million.
Patrick De Maeseneire, Chief Executive Officer of the Adecco Group, said: â€œThe pressure on the revenue decline rate has eased in most markets over the course of Q2 2009. In spite of the revenue decline, the pricing environment in our major market France remained rational and temp gross margins in the US were
sequentially pretty stable.â€?
â€œOur considerable efforts to adapt the cost base are starting to pay off. SG&A was reduced by 21% on an adjusted basis and in constant currency. The adjusted EBITA margin reached 2.4% in Q2 2009, up 30 bps sequentially. We expect business conditions to remain demanding. However, our initiatives in terms of structurally optimising our cost base, combined with our value-based strategy, position the Adecco Group well, not only in the current environment, but more importantly when the upswing materialises.â€?
â€œLooking ahead, management anticipates no material pick-up of business activities and has therefore initiated further restructuring measures.â€?
In early trading Adeccoâ€™s shares were down 2.08% to CHF 51.75.