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Switzerland — Adecco optimistic but cautious

14 December 2009

Temporary employment agency giant Adecco is optimistic about the future but remains cautious. Adecco CEO Patrick de Maeseneire told 'Finanz und Wirtschaft' "since mid August we have seen weekly improvements in our figures. The upwards trend is slow but the figures are above seasonal expectations."

"2010 will be another demanding year. After the first phase of market improvement our growth should be at least twice that of the gross domestic product but that will not happen until 2011."

Mr. De Maeseneire explained that due to the recession industrial companies manufacture noticeably less in advance and wait until they get specific orders in. "This is an advantage for Adecco because flexibility in manufacturing has become a high priority since it enables companies to react to changes in demand."

According to de Maeseneire financial services, industry and logistics are recovering in the US and France. Construction and the chemical industry are recovering in Europe and even car manufacturing shows slight improvements, albeit from a much lower base.

On the subject of pressure on margins de Maeseneire made it clear that profitability comes before market share. He said "Adecco has demonstrated this in the third quarter when you compare our margins with our competitors. However, there is definitely pressure on margins from larger clients and that will not change in the first quarter of 2010. We are counter-acting this by reducing our cost base."

In the fourth quarter of 2009 the 35 million Euro of re-structuring costs Adecco has already announced will have an effect on numbers. "After that the main measures will have taken place." Over the next two years de Maeseneire expects the integration costs for the recently acquired Spring Group and MPS staffing businesses to be offset by the synergies they create for Adecco.
In the medium term the CEO aims to achieve an EBITDA of 5%. "It is one of my principles to promise less and keep more. This has served me well in the past."



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