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UPDATE 2-Adecco's Q3 earnings miss forecasts as company cuts brands
2017年11月7日 / 早上6点58分 / 13 天前

UPDATE 2-Adecco's Q3 earnings miss forecasts as company cuts brands

* Writedown for brand cull weighs on profit

* Brexit hurting professional staffing in UK

* CEO sees potential in France as labour reforms take effect

* Shares fall nearly 2 percent in early trade (Adds CEO comments, analysts, share price reaction)

By John Revill

ZURICH, Nov 7 (Reuters) - Adecco reported worse-than-expected third-quarter earnings on Tuesday as the world’s largest staffing company took a hit from a big writedown for culling the number of brands it operates around the world.

The Swiss company is cutting its brand portfolio from 70 to less than 10 - and as a result took a 129 million euro ($149 million) one-off non-cash charge to net profit.

Adecco -- which operates globally under names including Adia, Badenoch & Clark, Lee Hecht Harrison, Modis, and Yoss -- wants to consolidate its brands to make the most of digital opportunities and give the brands a clearer identity, Chief Executive Alain Dehaze said.

“Imagine maintaining 70 brands in a digital world -- it is a nonsense,” Dehaze told Reuters. “It is better to focus on a fewer, more distinct brands.”

The process will be completed in the next six to eight months. It did not say which brands would go.

As a result of the write-down, Adecco’s net profit fell by 29 percent to 123 million euros ($142.8 million), missing the average estimate of 212 million in a Reuters poll. Sales for the three months ended Sept. 30 rose 2 percent to 5.9 billion euros, missing the 6.01 billion euro poll average.

When currency swings and changes in working days were taken into account, revenues grew 6 percent -- the same as the previous three months -- with strong growth in France, Italy, Spain, Belgium and the Netherlands.

Analysts and investors were unimpressed, sending Adecco shares down 1.9 percent.

Baader Helvea analyst Christian Weiz called the results “surprisingly soft....despite a seemingly positive environment”.

“Margins were under pressure in the important French and North America/UK markets, while investments in strategic initiatives and impairments on intangible assets burdened the operating and consequently the net result, which clearly was below expectations,” Weiz said.

Staffing companies are a bellwether for the health of the wider economy, with employers often taking on temporary workers at the start of a recovery before switching to permanent staff.

Adecco said revenue growth accelerated to 8 percent in September.

“Definitely there will be growth (in the fourth quarter), but the question is will there be an acceleration from the third quarter?” Dehaze said. “We are entering the fourth quarter slightly above the third quarter, but we have a tough comparison.”

In the third quarter, revenue rose 6 percent in France, its largest market.

Dehaze said he saw more potential in France as President Emmanuel Macron’s labour reforms took effect, but he was gloomier about Britain, saying Brexit uncertainty was impeding recruitment among professional staff like finance professionals.

$1 = 0.8646 euros Reporting by John Revill; Editing by John Miller, Stephen Coates and Adrian Croft

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