Adecco profits soar as temp work bounces back in Europe

The world's biggest temporary staffing group Adecco on Thursday announced a better-than-expected net profit for the first quarter, confirming that the long-depressed European market is on the rebound. For the first three months of the year, the Swiss company said its net profit swelled 64 percent to 110 million euros ($153 million). That beat the expectations of analysts polled by the AWP financial news agency, who had anticipated a net profit of 107 million euros ($149 million) for the quarter. Adecco's revenues meanwhile grew two percent to 4.6 billion euros ($6.4 billion) during the quarter, but the company stressed that excluding the negative impact of currency fluctuations it actually expanded 6.0 percent. The strong performance seemed to confirm that its long-struggling European market has indeed returned to growth. "Revenue growth continued to pick up in Europe, led once again by our Industrial business," company chief Patrick De Maeseneire said in the earnings statement. "Demand in manufacturing accelerated further, which is a good early-cycle indicator," he added. The Vontobel analysis firm hailed the better-than-expected results, pointing out that "momentum in Europe is building faster than anticipated"   Investors also responded positively, pushing the company's share price up 1.89 percent in mid-morning trading as the Swiss stock exchange's main SMI index rose just 0.39 percent. In France, the group's largest market, it saw sales inch up 1.0 percent during the quarter to one billion euros ($1.4 billion), driven by a 3.0-percent jump in its industrial activities, which account for the lion share of its revenues in the country. This marked the first time since late 2011 that Adecco's French business has shown growth. The company's office activities in the country however saw revenues plunge 16 percent during the quarter. Revenues meanwhile ballooned 16 percent on the neighbouring Iberian peninsula (Spain and Portugal), and 14 percent in Italy. In North America, Adecco's second largest market, the company saw its revenues rise 2.0 percent to 874 million euros. On a global scale, the company said it expected demand for temporary staffing to continue to grow this year. Recent positive reports from Adecco's main competitors also testify to that trend, with US company Manpower seeing its sales rise 3.0 percent in the first quarter, while Dutch firm Randstad posted a 4.0-percent hike.