Please use symbol entry at top right of page to search

Recruiter Adecco sees October slowdown on economic worries

*

Third-quarter sales, profit in line with forecasts

*

October growth eases to around 5% due to macro environment

*

Company launches new cost savings scheme

(Rewrites with CEO comment, adds details)

By John Revill

ZURICH, Nov 3 (Reuters) - Adecco Group saw a slight slowdown in sales growth in October as uncertainties about the global economy crept into hiring decisions, the staffing company said on Thursday while reporting third-quarter results in line with forecasts.

The Swiss company, which supplies temporary and permanent staff to offices, factories and warehouses, said October sales increased by around 5%, down from the 6% increase in September.

"The markets are very difficult to read at the moment, it's a very diverse situation," Chief Executive Denis Machuel told Reuters, adding demand for talent services remained healthy.

"Our aim is to outperform the market whatever happens," said the former Sodexo boss who took charge in July.

For the three months to the end of September, Adecco reported sales rising 16% to 6.044 billion euros ($5.94 billion), in line with forecasts for 6.039 billion euros in a consensus of analyst forecasts.

On a like-for-like basis, which cuts out the impact of working days, currency movements and acquisitions, Adecco's sales increased by 6%.

Net profit, however, fell 19% to 108 million euros, slightly ahead of forecasts for 106 million euros, as it hired more sales staff.

The company said on Thursday it would launch a new 150 million euro savings scheme to improve its operating profit margin to 6%. The third quarter figure was 3.6%.

Adecco, along with peers Randstad and ManpowerGroup (MAN), is seen as a bellwether for the broader economy, with companies taking on staff when they feel confident.

Machuel said a scarcity of skilled workers remained an important driver in the employment market, with a high level of job vacancies in the United States.

"The market is very strong in Asia Pacific and Latin America. Europe is a little bit slower," he said.

Wage inflation was also supporting sales growth, with the company seeing price increases in the mid-single-digit range, the company added.

Its shares fell 2.3% in early trading.

($1 = 1.0178 euros) (Reporting by John Revill Editing by Paul Carrel and Mark Potter)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

Search News

Filter Results

Publication Date
Topic
Provider
  • All

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.