Adecco Reports 16% Net Income Growth in Q3.CHESEREX, Switzerland Switzerland (swĭt`sərlənd), Fr. Suisse, Ger. Schweiz, Ital. Svizzera, officially Swiss Confederation, federal republic (2005 est. pop. 7,489,000), 15,941 sq mi (41,287 sq km), central Europe. -- Adecco Adecco S.A. is the largest human resources company in the world, based in Glattbrugg, Switzerland. The company was formed in 1996 as a result of the merger of the French company Ecco and the Swiss Adia Interim, and currently has over 6600 offices in over 75 countries worldwide. (NYSE NYSE See: New York Stock Exchange :ADO): Q3 2005 HIGHLIGHTS (Q3 05 vs. Q3 04) --Revenues of EUR EUR In currencies, this is the abbreviation for the Euro. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 4.8 billion, up 7% (5% organically(1)) --6% growth in General Staffing and 12% growth in Professional Staffing --Permanent placement revenues up by 21% --Gross margin improvement of 20 bps to 16.8% --Operating income of EUR 185 million, up 6% --Net income of EUR 119 million, up 16%; EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. of EUR 0.64 (2004: EUR 0.55) Subsequent Events: --Sale of non core minority holding will result in an exceptional gain of EUR 30 million in Q4 --Completion of the acquisition of StaffWise Legal in the US The Adecco Group, the worldwide leader in Human Resource services, today announces results for the third quarter 2005. Jerome Jerome St. Latin doctor of Church; preeminent biblical scholar. [Christian Hagiog.: Attwater, 185] See : Wisdom Caille, Adecco Group Chief Executive Officer, said: "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in pleased with this quarter's net income growth of 16%, which reflects our operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. growth, combined with lower tax and interest expenses." "Our sales growth in the period is satisfactory overall, with double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" growth in Adecco Japan, UK, Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). , Nordics Nordics can mean:-
"We improved gross margins by focusing on profitability in the US and further expanding into higher margin permanent recruitment recruitment /re·cruit·ment/ (re-krldbomact´ment) 1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged. 2. , professional staffing and human capital consulting." "With our customers asking for more specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. candidates, the recent acquisition of StaffWise Legal is in line with our strategy to grow professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. . We are confident that our investments in new offices and permanent placement consultants will deliver further returns." Q3 2005 FINANCIAL PERFORMANCE Sales Group sales Group sales Block sale (of large amounts) of securities to institutional investors. group sales The distribution of a new security issue to institutional clients. for the third quarter of 2005 were EUR 4.8 billion, a 7% increase (5% organic) compared to the third quarter of 2004. The permanent placement business grew 21% in revenues in the quarter, with a particularly strong contribution from Adecco Staffing, which recorded a 27% increase. Gross Margin As a result of the growing contribution from the permanent placement business, gross margin improved by 20 bps to 16.8% compared to the same quarter last year. The recently acquired Altedia contributed another 20 bps enhancement, which compensated compensated /com·pen·sat·ed/ (kom´pen-sa?tid) counterbalanced; offset. for the difficult trading conditions in the outplacement out·place·ment n. The process of facilitating a terminated employee's search for a new job by provision of professional services, such as counseling, paid for by the former employer. market. Operating Costs operating costs npl → gastos mpl operacionales Operating costs as a percentage of sales rose to 12.9% (2004: 12.7%). Organically, the office network has grown by 5% (+300 offices) and FTEs by 10% (+3,000 FTEs) compared to the same period last year. The two acquisitions in 2005 added a further 170 offices and 1,300 FTEs. The increase in headcount head count or head·count n. 1. The act of counting people in a particular group. 2. The number of people counted in this way. Noun 1. supports the investment in new offices and permanent placement, as well as growth within the existing network. Operating Income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. Operating income for the third quarter of 2005 was EUR 185 million, an increase of 6% compared to the third quarter of 2004. Operating income margin remained stable at 3.9%. Neither this nor last year's third quarter was impacted by any material one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. items. Interest and Other expenses Interest and other expenses were EUR 11 million in the third quarter, EUR 3 million less than in the same quarter last year due to a continued reduction in the group's gross debt position. Additionally, Adecco is benefiting from a short term investment gain of EUR 2 million as well as from better terms of the group's revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. For the full year the group now expects EUR 55 million interest and other expenses excluding the one time divestment divestment to strip one's investment from an entity. gain anticipated for the fourth quarter. Provision for Income Taxes The effective tax rate for the third quarter was 32% compared with 36% last year. In the year to September September: see month. the tax rate moved from 36% in 2004 to 31% in 2005. For the full year, Adecco continues to anticipate an effective tax rate of 31%. The principal elements supporting this improvement are: the absence of expenses associated with the 2003 financial reporting delay, which received a lower tax benefit; and successful tax audit closures achieved earlier in the year. Net Income and EPS Net income was up 16% to EUR 119 million (2004: EUR 102 million) in the third quarter 2005. Basic EPS was EUR 0.64 for 2005 (EUR 0.55 for 2004). Balance Sheet, Cash-flow, and Net Debt(2) The group generated EUR 158 million of operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. in the first nine months of the year, compared with EUR 163 million in the same period last year. The additional week at year end of fiscal year 2004 had a negative impact on operating cash flow in the first nine months of 2005. Despite the lower gross debt, net debt increased by EUR 270 million to EUR 569 million at the end of the third quarter. This increase was mainly due to the following: the purchase of Altedia (EUR 91 million net of cash acquired) and of Humangroup (EUR 57 million net of cash acquired) combined with dividend payments (EUR 121 million) and the purchase of Adecco shares (EUR 59 million). DSOs remained stable at 60 days in the first 9 months of the year compared to the same period last year. Currency Impact Currency fluctuations had a minimal impact on this quarter's revenues, costs, and earnings. Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and Regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. matters Members of the Adecco Group are defendants in various lawsuits relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc compliance with local employment laws in various jurisdictions, including litigation in the US. After the pending consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: class action complaint filed against the company and certain of its directors and officers in the United States District Court for the Southern District of California The United States District Court for the Southern District of California is the federal district court whose jurisdiction comprises the following counties in California: Imperial and San Diego. was dismissed dis·miss tr.v. dis·missed, dis·miss·ing, dis·miss·es 1. To end the employment or service of; discharge. 2. without prejudice Without any loss or waiver of rights or privileges. When a lawsuit is dismissed, the court may enter a judgment against the plaintiff with or without prejudice. When a lawsuit is dismissed without prejudice , the plaintiffs filed an amended complaint amended complaint n. what results when the party suing (plaintiff or petitioner) changes the complaint he/she has filed. It must be in writing, and can be done before the complaint is served on any defendant, by agreement between the parties (usually their lawyers), . The company continues to believe that there is no merit to the allegations and will continue to defend itself vigorously vig·or·ous adj. 1. Strong, energetic, and active in mind or body; robust. See Synonyms at healthy. 2. Marked by or done with force and energy. See Synonyms at active. . The previously announced US state unemployment tax reviews and French antitrust Antitrust The antitrust laws apply to virtually all industries and to every level of business, including manufacturing, transportation, distribution, and marketing. They prohibit a variety of practices that restrain trade. investigation are also ongoing. As previously stated, there can be no assurance that the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on Adecco's consolidated financial position, results of operations, or cash flows. DIVISIONAL PERFORMANCE General Staffing During the quarter, the division contributed EUR 4.2 billion or 88% of group revenues and 87% of total operating income generated by operating units operating unit A type of operating company that engages in transactions with outsiders and that is owned by another business. For example, in 1995 the stockholders of Capital Cities/ABC approved a $19 billion merger with the Walt Disney Company, whereupon . Overall, Adecco Staffing grew sales by 6% in constant currency. The division's operating income rose 2% at constant currency, which represents an operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: of 4.5%. Q3 2005 sales and sales growth at constant currency rates ('CR') for key Adecco Staffing business units, which account for over 90% of the division's revenues, were as follows:
Sales
----------------------------------------
(EUR million) (% variance at CR)
Adecco France 1,609 0%
Adecco North America 707 -4%
Adecco Japan 332 13%
Adecco Italy 246 5%
Adecco Iberia(3) 261 44%
Adecco Benelux 216 9%
Adecco UK 210 12%
Adecco Nordics 138 34%
Adecco Switzerland 103 12%
Adecco Germany 97 10%
In Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). in the quarter, revenues increased 7% while operating
income showed a decline of 7%. In France, stable revenues in the quarter
reflected lower demand in the automotive sector, which was compensated
by accelerating growth in speciality markets such as construction and
logistics logisticsIn military science, all the activities of armed-force units in support of combat units, including transport, supply, communications, and medical aid. The term, first used by Henri Jomini, Alfred Thayer Mahan, and others, was adopted by the U.S. . Operating profits decreased 18% reflecting price pressure and increased costs due to investments in speciality branches, permanent placement and higher labour costs. This trend is beginning to be offset by initial contributions from the new permanent placement business. Excluding France, Adecco's European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. revenues were up double digit and operating profits growth was positive. In Adecco North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. the group continued its focus on profitable accounts, which lowered revenues by 4% in constant currency, but brought in return a strong operating margin improvement of 150 bps, a year-on-year 75% operating profit growth in constant currencies. Professional Staffing Ajilon increased sales at constant currency for the quarter by 12% to EUR 0.5 billion with a 10% increase in operating income, which represents an operating margin of 5.0%. Ajilon represents 11% of group revenues and 12% of total operating income generated by operating units. Q3 2005 sales and sales growth in constant currency rates ('CR') for key professional staffing business units were as follows:
Sales
----------------------------------------
(EUR million) (% variance at CR)
Ajilon North America 196 11%
Ajilon UK 196 12%
Demand for finance, office and legal expertise in the quarter remained strong, especially in the US. In the UK better performance in the IT segment compensated for lower growth in office staff. The continued investments in the professional staffing network should allow the company to maintain growth. After the close of the quarter, Adecco acquired Staffwise Legal in the US. This staffing and recruiting firm offers single placements and full project staffing for the legal profession such as temporary and full time attorneys and paralegals. The addition of Staffwise Legal will double Ajilon's legal staffing business. Career Services LHH LHH League for the Hard of Hearing LHH Laguna Honda Hospital (San Francisco, California) LHH L-Band HH LHH Lutheran Hospice of Hope , which represents 1% of group sales and 1% of total operating income generated by operating units, increased revenues by 37% in constant currency including Altedia. Organically, the division experienced a further revenue decline of 16% in constant currency in the quarter reflecting general business conditions in the outplacement market. At the same time the Leadership and Human Capital Consulting and Career Management services grew in double digits Double Digits was a pricing game on the American television game show, The Price Is Right. Played from April 20, 1973 through May 18, 1973's show, it was played for a car and used small prizes. . Operating margins at 5.2% suffered year-on-year due to continuing lower consultant utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be . MANAGEMENT OUTLOOK Current trading conditions combined with the key indicators for the global staffing services market continue to point to a favourable growth for the industry. The group remains committed to its objective of growth, at or above market rates. With the investments in the business worldwide over the last 12 months, management is confident that it can further improve margins over the medium term. The divestment of a minority holding in 'Professional Service Industries', an inspection services company, will create an exceptional net financial gain of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. EUR 30 million net of taxes in the fourth quarter of 2005. Financial Agenda 2006 FY 2005 results March 8, 2006 Q1 2006 results May 10, 2006 Annual General Meeting May 23, 2006 Q2 2006 results August 16, 2006 Forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Information in this release may involve guidance, expectations, beliefs, plans, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based on information available to Adecco S.A. (the "company") as of the date of this release, and we assume no duty to update any such forward-looking statements. Factors that could affect the company's forward-looking statements include, among other things: global GDP GDP (guanosine diphosphate): see guanine. trends and the demand for temporary work; changes in regulation of temporary work; intense competition in the markets in which the company competes; changes in the company's ability to attract and retain qualified temporary personnel; the resolution of US state unemployment tax reviews; the resolution of a French anti-trust anti-trust adj (COMM): anti-trust legislation → legislazione f antitrust inv investigation; the resolution of the US class action litigation; and any adverse developments in existing commercial relationships, disputes or legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. . The forward-looking statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations. Numerous factors could cause or contribute to such differences. Please refer to the company's most recent Annual Report on Form 20-F and other reports filed with or submitted to the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission from time to time, for a further discussion of the factors and risks associated with our business. About Adecco Adecco S.A. is a Fortune Global 500 company and the global leader in HR services. The Adecco Group network connects over 700,000 associates with business clients each day through its network of over 33,000 employees and 6,600 offices in 75 countries and territories around the world. Registered in Switzerland, and managed by a multinational multinational Of, relating to, or being a company with subsidiaries or other operations in a number of countries. The diversity of operations of such companies subjects them to unique risks (for example, exchange rate changes or government nationalization) team with expertise in markets spanning the globe, the Adecco Group delivers an unparalleled range of flexible staffing and career resources to corporate clients and qualified associates. The Adecco Group comprises three Divisions: Adecco Staffing, Ajilon Professional and LHH Career Services. In Adecco Staffing, the Adecco network focuses on flexible staffing solutions for global industries, including automotive, banking, electronics, logistics and telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. ; Ajilon Professional offers an unrivalled range of specialised Adj. 1. specialised - developed or designed for a special activity or function; "a specialized tool" specialized specific - (sometimes followed by `to') applying to or characterized by or distinguishing something particular or special or unique; "rules with branded businesses; and LHH Career Services encompasses our portfolio of outplacement and coaching consultancy businesses. Adecco S.A. is registered in Switzerland (ISIN Isin (ĭs`ĭn), capital of an ancient Semitic kingdom of N Babylonia. The city became important after the third dynasty of Ur fell to the Elamites and the Amorites (c.2025 B.C.). The phase from c.2025–c.1763 B.C. : CH0012138605) and listed on the Swiss Stock Exchange with trading on Virt-x (SWX/VIRT-X:ADEN), the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. (NYSE:ADO) and Euronext Paris Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the London Stock Exchange. - Premier Marche Marche, region, Italy Marche (mär`kā) or the Marches, region (1991 pop. 1,429,205), 3,742 sq mi (9,692 sq km), E central Italy, extending from the eastern slopes of the Apennines to the Adriatic Sea. (EURONEXT  Euronext N.V. is a pan-European stock exchange based in Paris[1] : ADE).There will be an audio webcast of the analyst presentation at 12 am CET CET abbr. Central European Time CET Central European Time CET n abbr (= Central European Time) → hora de Europa central CET abbr , details of which can be found at our Investor Relations Investor relations The process by which the corporation communicates with its investors. section at http://webcast.adecco.com.
(1) Organic revenue growth is in constant currency excluding
acquisitions Humangroup and Altedia
(2) Net debt is a non-US GAAP measure and comprises short-term and
long-term debt as well as off balance sheet debt less cash and
cash equivalents and short-term investments. The off balance sheet
debt relates to the sale of receivables from Humangroup (EUR 1
million).
(3) Includes revenues of Humangroup; organic revenue growth of 7%
Consolidated Statements of Operations
EUR millions Three months ended
-------------------------------------------
Variance %
October 2, September 26, ----------------
2005 2004 EUR Constant
------------ ------------- ------- --------
Revenues 4,784 4,468 7% 7%
Direct costs of services (3,981) (3,725)
------------ -------------
Gross margin 803 743 8% 8%
16.8% 16.6%
Selling, general &
administrative expenses (617) (569)
Amortisation of
intangibles (1) -
------------ -------------
Operating income 185 174 6% 6%
% 3.9% 3.9%
Interest and other
expenses (11) (14)
Income applicable to
minority interests - -
Provision for income taxes (55) (58)
------------ -------------
Income from continuing
operations 119 102 16%
2.5% 2.3%
Income from discontinued
operations - -
------------ -------------
Net income 119 102 16%
============ =============
2.5% 2.3%
--------------------------
Basic earnings per share:
Continuing operations 0.64 0.55
Discontinued operations - -
------------ -------------
Basic earnings per share 0.64 0.55
Diluted earnings per
share:
Continuing operations 0.61 0.52
Discontinued operations - -
------------ -------------
Diluted earnings per
share 0.61 0.52
Basic weighted-average
shares 185,881,875 187,009,172
Diluted weighted-average
shares 195,812,463 201,469,544
EUR millions Nine months ended
-------------------------------------------
Variance %
October 2, September 26, ----------------
2005 2004 EUR Constant
------------ ------------- ------- --------
Revenues 13,410 12,548 7% 8%
Direct costs of services (11,170) (10,459)
------------ -------------
Gross margin 2,240 2,089 7% 8%
16.7% 16.6%
Selling, general &
administrative expenses (1,788) (1,741)
Amortisation of
intangibles (2) (1)
------------ -------------
Operating income 450 347 30% 31%
% 3.4% 2.8%
Interest and other
expenses (42) (39)
Income applicable to
minority interests (1) -
Provision for income taxes (125) (111)
------------ -------------
Income from continuing
operations 282 197 43%
2.1% 1.6%
Income from discontinued
operations - 30
------------ -------------
Net income 282 227 24%
============ =============
2.1% 1.8%
--------------------------
Basic earnings per share:
Continuing operations 1.51 1.05
Discontinued operations - 0.16
------------ -------------
Basic earnings per share 1.51 1.21
Diluted earnings per
share:
Continuing operations 1.46 1.02
Discontinued operations - 0.15
------------ -------------
Diluted earnings per
share 1.46 1.17
Basic weighted-average
shares 186,789,355 186,996,646
Diluted weighted-average
shares 195,816,524 201,690,611
Revenues and Operating Income by Division & Geographical Segment
Q3 2005 Revenues
------------------------------------
EUR millions Variance %
2005 2004 ----------------
EUR Constant
------------------------------------
Adecco Staffing
Europe 2,937 2,745 7 7
North America 707 732 -3 -4
Asia Pacific 448 404 11 10
Rest of World 132 98 34 26
--------------------------------- ------------------------------------
Total 4,224 3,979 6 6
================================= ------------------------------------
Ajilon Professional
Europe 247 222 11 13
North America 196 174 13 11
Asia Pacific 68 58 17 13
Rest of World
--------------------------------- ------------------------------------
Total 511 454 12 12
================================= ------------------------------------
LHH Career Services
Europe 23 5 322 324
North America 26 30 -14 -15
Asia Pacific
Rest of World
--------------------------------- ------------------------------------
Total 49 35 38 37
================================= ------------------------------------
--------------------------------- ------------------------------------
Total Operating Units 4,784 4,468 7 7
================================= ------------------------------------
Adecco Group Summary
By Division
Adecco Staffing 4,224 3,979 6 6
Ajilon Professional 511 454 12 12
LHH Career Services 49 35 38 37
By Region
Europe 3,207 2,972 8 8
North America 929 936 -1 -2
Asia Pacific 516 462 12 10
Rest of World 132 98 34 26
Corporate Expenses
Amortisation of Intangibles
--------------------------------- ------------------------------------
Adecco Group 4,784 4,468 7 7
================================= ------------------------------------
Q3 2005 Operating Income(1)
------------------------------------
EUR millions Variance %
2005 2004 ----------------
EUR Constant
------------------------------------
Adecco Staffing
Europe 144 156 -7 -7
North America 23 13 77 75
Asia Pacific 20 16 26 26
Rest of World 2 1 23 39
--------------------------------- ------------------------------------
Total 189 186 2 2
================================= ------------------------------------
Ajilon Professional
Europe 12 10 15 18
North America 11 10 7 6
Asia Pacific 3 3 2 0
Rest of World
--------------------------------- ------------------------------------
Total 26 23 10 10
================================= ------------------------------------
LHH Career Services
Europe 0 -2 n.m. n.m.
North America 2 6 -67 -67
Asia Pacific
Rest of World
--------------------------------- ------------------------------------
Total 2 4 -42 -42
================================= ------------------------------------
--------------------------------- ------------------------------------
Total Operating Units 217 213 2 2
================================= ------------------------------------
Adecco Group Summary
By Division
Adecco Staffing 189 186 2 2
Ajilon Professional 26 23 10 10
LHH Career Services 2 4 -42 -42
By Region
Europe 156 164 -5 -5
North America 36 29 25 24
Asia Pacific 23 19 22 22
Rest of World 2 1 23 39
Corporate Expenses -31 -39
Amortisation of Intangibles -1 0
--------------------------------- ------------------------------------
Adecco Group 185 174 6 6
================================= ------------------------------------
1) Contribution (Operating income before amortisation) on the division
level
Revenues and Operating Income by Division & Geographical Segment
Sep YTD 2005 Revenues
------------------------------------
EUR millions Variance %
2005 2004 ----------------
EUR Constant
------------------------------------
Adecco Staffing
Europe 8,154 7,544 8 8
North America 1,980 2,115 -6 -4
Asia Pacific 1,314 1,170 12 14
Rest of World 351 288 22 21
--------------------------------- ------------------------------------
Total 11,799 11,117 6 7
================================= ------------------------------------
Ajilon Professional
Europe 714 640 11 13
North America 572 509 13 15
Asia Pacific 189 165 15 14
Rest of World
--------------------------------- ------------------------------------
Total 1,475 1,314 12 14
================================= ------------------------------------
LHH Career Services
Europe 52 19 171 172
North America 84 98 -14 -11
Asia Pacific
Rest of World
--------------------------------- ------------------------------------
Total 136 117 16 20
================================= ------------------------------------
--------------------------------- ------------------------------------
Total Operating Units 13,410 12,548 7 8
================================= ------------------------------------
Adecco Group Summary
By Division
Adecco Staffing 11,799 11,117 6 7
Ajilon Professional 1,475 1,314 12 14
LHH Career Services 136 117 16 20
By Region
Europe 8,920 8,203 9 9
North America 2,636 2,722 -3 0
Asia Pacific 1,503 1,335 13 14
Rest of World 351 288 22 21
Corporate Expenses
Amortisation of Intangibles
--------------------------------- ------------------------------------
Adecco Group 13,410 12,548 7 8
================================= ------------------------------------
Sep YTD 2005 Operating Income(1)
------------------------------------
EUR millions Variance %
2005 2004 ----------------
EUR Constant
------------------------------------
Adecco Staffing
Europe 351 361 -3 -3
North America 41 26 57 59
Asia Pacific 54 40 33 35
Rest of World 8 7 10 19
--------------------------------- ------------------------------------
Total 454 434 4 5
================================= ------------------------------------
Ajilon Professional
Europe 30 25 17 19
North America 36 27 35 38
Asia Pacific 8 8 -1 -1
Rest of World
--------------------------------- ------------------------------------
Total 74 60 23 25
================================= ------------------------------------
LHH Career Services
Europe 3 -1 n.m. n.m.
North America 10 22 -55 -53
Asia Pacific
Rest of World
--------------------------------- ------------------------------------
Total 13 21 -36 -33
================================= ------------------------------------
--------------------------------- ------------------------------------
Total Operating Units 541 515 5 6
================================= ------------------------------------
Adecco Group Summary
By Division
Adecco Staffing 454 434 4 5
Ajilon Professional 74 60 23 25
LHH Career Services 13 21 -36 -33
By Region
Europe 384 385 0 0
North America 87 75 17 20
Asia Pacific 62 48 28 29
Rest of World 8 7 10 19
Corporate Expenses -89 -167
Amortisation of Intangibles -2 -1
--------------------------------- ------------------------------------
Adecco Group 450 347 30 31
================================= ------------------------------------
1) Contribution (Operating income before amortisation) on the division
level
Consolidated Balance Sheets
EUR millions October 2, January 2,
2005 2005
---------- ----------
Assets
Current Assets
Cash and cash equivalents 656 879
Short-term investments 69 324
Trade accounts receivable, net 3,700 3,149
Other current assets 274 260
---------- ----------
Total current assets 4,699 4,612
Property, equipment and leasehold improvements,
net 247 261
Other assets 331 364
Intangibles, net 41 8
Goodwill 1,416 1,196
---------- ----------
Total assets 6,734 6,441
========== ==========
Liabilities
Current liabilities
Accounts payable and accrued expenses 3,348 3,025
Short-term debt and current maturities of
long-term debt 573 230
---------- ----------
Total current liabilities 3,921 3,255
Long-term debt, less current maturities 720 1,272
Other liabilities 154 139
---------- ----------
Total liabilities 4,795 4,666
---------- ----------
Minority interests 11 2
---------- ----------
Shareholders' equity
Common shares 117 116
Additional paid-in capital 2,038 2,026
Treasury stock, at cost (59) (1)
Accumulated deficit (196) (356)
Accumulated other comprehensive income / (loss),
net 28 (12)
---------- ----------
Total shareholders' equity 1,928 1,773
---------- ----------
Total liabilities and shareholders' equity 6,734 6,441
========== ==========
Consolidated Statements of Cash Flows
EUR millions Nine months ended
--------------------------
October 2, September 26,
2005 2004
------------ -------------
Cash flows from operating activities of
continuing operations
Net income 282 227
Adjustments to reconcile net income to cash
flows from operating activities of
continuing operations:
(Income) / loss from discontinued
operations - (30)
Depreciation and amortisation 80 91
Other charges 43 51
Changes in operating assets and liabilities,
net of acquisitions:
Trade accounts receivable (394) (420)
Accounts payable and accrued expenses 138 211
Other assets and liabilities 9 33
------------ -------------
Cash flows from operating activities of
continuing operations 158 163
------------ -------------
Cash flows from investing activities of
continuing operations
Capital expenditures, net of proceeds (47) (45)
Acquisition of 85% in Altedia, net of cash
acquired (91) -
Acquisition of Humangroup, net of cash
acquired (57) -
Purchase of short-term investments (162) (93)
Proceeds from sale of short-term investments 423 169
Cash settlements on derivative instruments (9) -
Other investing activities, net (7) (3)
------------ -------------
Cash flows from investing activities of
continuing operations 50 28
------------ -------------
Cash flows from financing activities of
continuing operations
Net increase in short-term debt (1) (7)
Repayment of long-term debt (247) (36)
Dividends paid to shareholders (121) (86)
Purchase of treasury shares (59) -
Cash settlements on derivative instruments (21) 9
Other financing activities, net 4 11
------------ -------------
Cash flows used in financing activities of
continuing operations (445) (109)
------------ -------------
Net proceeds from the sale of discontinued
operations - 64
Effect of exchange rate changes on cash 14 -
------------ -------------
Net increase / (decrease) in cash and cash
equivalents (223) 146
Cash and cash equivalents:
Beginning of period 879 565
------------ -------------
End of period 656 711
============ =============
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Supplemental disclosure of non-cash
investing activities:
Stock received in the sale of jobpilot - 24
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