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Adecco's Q3 profit rises 38% on skilled staffing

Adecco, the world's biggest temporary employment company, said Q3 profit rose 38% on demand for professional staffing. Net income increased to €164 million ($210 million) from €119 million a year earlier, the Glattbrugg, Switzerland-based company said today in an e-mail.

That beat the median forecast of €150 million by eight analysts surveyed by Bloomberg. Adecco SA confirmed a goal to increase operating profit to 5% of sales by 2009, from 3.4% last year, by supplying more high-paid professionals such as lawyers and accountants. Chairman Klaus Jacobs has bought four companies since January 2005, including Deutscher Industrie Service AG, to grow professional staffing and reduce dependence on France, its largest market. Adecco is „achieving good sales growth,” said Dieter Winet, who helps manage 3.5 billion Swiss francs ($2.8 billion) in Swiss equities at Zurich-based Swisscanto Asset Management, and holds more shares of Adecco than their weighting in the Swiss Market Index.

„If they manage to raise operating margins, then hallelujah.” Sales rose 11% to €5.33 billion from €4.78 billion in the same period a year ago, in line with analysts' forecast. Skilled staffing now contributes about a quarter of operating profit. Most of the rest of profit comes from staffing in the so-called „general” market which includes workers in construction, office administration and hotel services. CEO Dieter Scheiff, who took over as top manager from Jacobs on August 1, said in September he wants to focus on raising profit by increasing revenue by placing more long-term workers in areas such as auditing, accounting, and legal consulting.

Unemployment in the 12 countries sharing the euro rose in August for the first time since November 2003, the European Union's statistics office said October 3. Concern about a slowdown in the US economy is leading some companies to curtail hiring. In France, Adecco's biggest market, car maker PSA Peugeot Citroen said in September it will cut 10,000 jobs. Scheiff said in an interview September 29 Adecco is prepared to drop unprofitable accounts in France. Jacobs increased his holding in Adecco last year when he bought a $1 billion stake from Philippe Foriel-Destezet, the founder of Ecco SA. In 1996, Paris-based Ecco merged with Swiss jobs company Adia SA to form Adecco. Jacobs was chairman of Adia before the merger. (Bloomberg)