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03 March 2010
Adecco SA (ADEN:VTX), the world's biggest staffing company, today announces results for the full year and the fourth quarter of 2009.
Revenues in 2009 were down by -27% organically to 14.8 billion Euro compared to 20 billion Euro in 2008. Gross profit fell by -29% to 2.65 billion Euro. EBITA for the year fell -57% to 299 million Euro.
Selling, General and Administrative Expenses (SG&A) were reduced by -15% in 2009. On an adjusted basis and organically, SG&A fell by -19%.
Compared to year end 2008, the number of FTE employees was down -20% on an organic basis whilst branches were reduced by -16%.
Q4 2009 revenues were down by -18% to 3.78 billion Euro compared to Q4 2008. While this is at the lower end of analyst estimates, gross margin came out ahead of consensus. Q4 gross profit was down by -21% to 665 million Euro compared to the previous year. Q4 EBITA was down by -33% to 89 million Euro.
In France, Q4 revenues fell by -13% to 1.2 billion Euro. This compares to a revenue decline rate of -27% in Q3 2009. EBITA increased by +56% to 36 million Euro compared to Q4 2008. On an adjusted basis, however, EBITA declined by -31% compared to Q4 2008.
In Germany and Austria, Q4 revenues fell by -28% to 261 million Euro. EBITA decreased by -33% compared to Q4 2008. On an adjusted basis, EBITA declined by -44% compared to Q4 2008.
In the UK and Ireland, revenues in Q4 2009 were flat in constant currency compared to Q4 2008 but declined by -21% organically. At the EBITA level the region reported a loss of -12 million Euro, mainly due to integration costs related to the Spring Group acquisition of -6 million Euro and a sales tax accrual related to prior years of -7 million Euro. Adecco believes the integration of Spring Group is well on track.
In Italy, revenues declined by -28% in Q4 2009, and in Benelux by -13% (-19% organically). In the Nordics, revenues were down by -25% in constant currency, while in Spain and Portugal revenues declined by -16%. Eastern Europe returned to positive growth.
While Adecco's main business segments experienced negative growth on an organic basis in the fourth quarter, its Human Capital Solutions business grew by 5%.
Patrick De Maeseneire, Chief Executive Officer of the Adecco Group said "the year 2009 has been exceptionally tough, but I am pleased to say that we have managed the downturn very proactively. We made the necessary cost reductions and structurally changed our branch network and delivery models."
"Our pricing discipline and our well-balanced service portfolio have led to an adjusted gross margin that was only down 20 bps to 17.8%. In the fourth quarter, trading conditions continued to improve in our major markets France and North America, but also in most other geographies we saw positive momentum."
"This positive trend continued into the first two months of the year, with France and North America returning to year-on-year growth in recent weeks. The lower SG&A base, our disciplined pricing and the higher professional staffing exposure, will let us fully profit from the upturn."
Adecco also announced that it expects the acquisition of MPS Group in January 2010 will be accretive on an adjusted earnings per share basis in 2010 and thatthe acquisition will be EVA positive within three years. Adecco expects to achieve 25 million Euro of annual synergies from the integration of MPS within two years with integration costs expected to amount to approximately one time the annual synergies.
Management is gaining confidence on the recovery of the industry, however, the Company's focus remains on price discipline and strict cost control, while seeking opportunities to take advantage of improved market conditions.
Recent trading conditions are clearly more favourable with Adecco Group revenues down by only -5% (on an organic basis and adjusted for trading days) in January 2010 compared to the prior year. Based on current developments, management expects a continued improvement of market conditions.Given these more positive trends, management committed to a new EBITA margin target above 5.5% for the mid-term.
In early trading Adecco's shares were by 4.4% to 56.90 Swiss Francs.