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Adecco fourth-quarter profit falls 29%

March 04 2008

Fourth-quarter net income fell 29% at Adecco SA, the world's largest staffing firm, while revenue rose 2%. However, the Swiss firm said U.S, and Canadian fourth-quarter revenue fell 15% year-over-year, and it plans to invest euro20 million in the countries.

Adecco had a euro64 million tax benefit in the U.S. in the fourth quarter of 2006 that wasn't repeated in Q4 of 2007. In addition, the company said it set aside euro15 million for a French antitrust case in the fourth quarter of 2007.

"We continue to see solid growth rates in the European and Asian staffing markets while demand patterns in the U.S. remain weak," CEO Dieter Scheiff said in a conference call with analysts. Scheiff said the U.S. and Canadian markets are expected to remain weak as this year begins.

The company posted fourth-quarter net income of euro150 million (US$220.9 million), up from euro212 million in the same period in the previous year.

Fourth-quarter revenue slipped to euro5.38 billion (US$7.92 billion) from euro5.28 billion in the fourth quarter of 2006. Gross margin improved to 17.8% from 17.7%.

Adecco's U.S. and Canada revenue fell to euro752 million (US$1.11 billion) in the fourth quarter from euro888 million in the same period in the previous year. Adecco said the decline was biggest in its industrial business. U.S. and Canadian office and industrial revenue fell 15% in constant currency. The company said it plans invest euro20 million in the U.S. and Canadian markets this year to improve customer mix and cost efficiency.

For fiscal year 2007, Adecco reported revenue of euro21.09 billion (US$31.06 billion), up 3% from euro20.42 billion in 2006.

Net income rose 20% in 2007 to euro735 million (US$1.08 billion) from euro611 million in 2006. Gross margin improved to 18.6% from 17.4%

The company also said a class action securities lawsuit in the U.S. against it has been dismissed.

Adecco SA
For the fourth quarter ended Dec. 31, 2007, compared with the same period in 2006.
Revenue: euro5.38 billion (US$7.92 billion), +2%
Net income: euro150 million (US$220.9 million), -29%

For full-year 2007 ended Dec. 31, 2007, compared with the previous year.
Revenue: euro21.09 billion (US$31.06 billion), +3%
Net income: euro735 million (US$1.08 billion), +20%

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