Adecco’s profit rose in Q1, good news by French elections

8 years ago - Published in Finance, Fundamental Analysis

Adecco's first-quarter profit rose more than a fifth, better than expected, as the world's largest temporary staffing company continued to get a boost from major markets in southern Europe while projecting modest growth in the U.S.

Net profit attributable to shareholders rose to €176 million ($192.2 million) in the three months to March, beating the average estimate of 165 million in a Reuters poll of analysts. Sales rose to €5.73 billion, better than the poll average of 5.68 billion.

Dutch staffing company Randstad last month reported a 21 increase in net profit during the quarter, boosted by strong growth in France and Germany. U.S. rival Manpower's earnings rose 3.8 percent in the first three months as it saw broad improvement across Europe.

Group chief executive Alain Dehaze said: "In Q1 2017, The Adecco Group maintained its positive momentum, thanks to our more than 33,000 colleagues and over 700,000 associates around the world. 

"In Q1 2017, every one of our regional business segments delivered positive revenue growth, organically and trading days adjusted. 

"Reflecting our focus on driving productivity, our 6% underlying revenue growth was delivered with an increase of only 1% in FTE employees. And importantly, we converted our strong profit growth into excellent cash flow. "Our strategic agenda is to Perform, Transform, and Innovate" he underlined.

Talking about French election, Dehaze suggested the victory for the pro-business and market-friendly candidate, Emmanuel Macron, was "good news for Europe".

"We know that France needs to become much more competitive if they want to attract investment – this about cost (and) this is for sure also about flexibility and Macron is intending to work on both. We will see what the parliamentary elections will give, because that is also a very important moment but I would say the direction is good for us," Dehaze added. 

The company said it had completed about 10% of the €300 million share buyback programme that it launched in March. It cut its net debt at the end of the quarter to €823 million from 887 million at the end of 2016.