August 9, 2018 / 5:39 AM / a year ago

UPDATE 2-Adecco says global uncertainty not hitting temporary staff demand

* Q2 net profit down 11 pct to 170 mln euros vs f'cast 173 mln

* Co sees slight slowdown in hiring trends in Europe

* CEO says no reluctance among companies to hire staff

* Co moves forward share buyback to Q3

* Shares down 1.6 pct in early trade (Adds CEO comments, share price reaction, analyst)

By John Revill

ZURICH, Aug 9 (Reuters) - Rising global trade tensions and slowing economic growth are not yet reducing companies' desire to hire temporary staff, Adecco said on Thursday.

The world's largest staffing company reported a slowdown in revenue growth in the second quarter but said employers were continuing to take on new workers.

Concerns about a possible trade war with the United States have weighed on European economic growth, which eased to a year-on-year 2.1 percent during the second quarter from 2.5 percent in the first three months.

"In temporary staffing there is a slight deceleration in Europe, but there are still solid macro-economic figures and there has been no disruption in the buying behavior of our customers," Chief Executive Alain Dehaze told Reuters.

"We are not seeing any reluctance among hirers," he said.

Adecco reported net profit slightly below expectations and said its revenue growth rate eased to 4 percent in the three months ended June 30 from 6 percent in the first quarter.

Revenue increased by 4 percent during June and July when adjusted for currency swings and trading days, Adecco said.

Slower Q2 growth was recorded in France, Adecco's biggest market with nearly a quarter of its sales, while Iberia and Italy had sharp decelerations, said Adecco, which supplies temporary and permanent staff to factories and offices.

But Dehaze said general staffing had returned to growth in North America.

The executive, who took over at Adecco in 2015, said companies continued hiring temporary staff because of global uncertainties, although Brexit concerns were delaying hiring decisions of permanent staff in Britain.


"Companies keep hiring temporary staff because you have a lot of uncertainty in the world," Dehaze said. "Temporary staffing is an excellent way to cope with this geopolitical climate."

Both Randstad and ManpowerGroup, Adecco's largest staffing rivals, also reported slowdowns in revenue growth during the second quarter.

Adecco said its net profit during the three months to the end of June fell 11 percent to 170 million euros ($197 million), just missing the average of 173 million in a Reuters poll of analysts.

Its shares fell 1.6 percent in early trading.

The company also moved forward its 150 million euro share buyback to the third quarter of this year from the originally planned fourth quarter, after selling a stake in a staffing software company.

Michael Foeth, an analyst at Bank Vontobel, said the results were broadly in line with expectations, showing a stable growth trend continuing into the third quarter.

"Margins will improve in (the second half) ... on the back of productivity gains resulting from Adecco's initiatives launched over the past two years," Foeth said.

$1 = 0.8618 euros Reporting by John Revill Editing by Michael Shields and David Holmes

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