Good start for Adecco in 2007

The Adecco Group today announced results for the first quarter 2007. Net income increased by 33% to EUR 133 million compared to EUR 100 million a year earlier. Revenues were up 7% to EUR 5.0 billion from EUR 4.7 billion in the first quarter of 2006.

Dieter Scheiff, Chief Executive Officer, Adecco Group said: I’m very pleased that we are starting the year 2007 with a strong set of results. We continued to see healthy organic revenue growth, particularly in Europe, and further improved our operating income margins by 60 bps to 3.8% as a result of enhanced gross margins and better cost efficiency.

We remain confident in Adecco’s earnings’ future. The general industry outlook continues to be favourable - strong demand in Europe and Asia compensates for a weaker US market. Initial successes of our value oriented management approach, particularly in France, indicate that our strategy is the right one. Consequently, we reiterate our goals of 7 to 9% annual revenue growth, as well as an operating margin of over 5% and a return on capital employed of above 25% by 2009.

In USA and Canada, Adecco experienced a decline in revenues in constant currency of 6% to EUR 0.8 billion in Q1 2007. Favourable workers compensation cost development and a better business mix led to a 100 bps improvement in gross margins, which combined with a decline in SGandA resulted in an operating income growth of 25% in constant currency and an operating income margin enhancement of 100 bps to 4.1%.

In the first quarter of 2007, UK and Ireland added 10% to revenues in constant currency mainly driven by good demand in the Office and Industrial businesses. Unfavourable changes in business and customer mix continued to have a negative impact on gross margin. As a result, operating income declined 9% in constant currency. Management has taken appropriate measures.

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