Adecco SA Confirms Improved Trends in the Third Quarter; Adecco Staffing Shows Positive Sales Growth.Business Editors CHESEREX, Switzerland--(BUSINESS WIRE)--Oct. 23, 2002 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. SA(NYSE NYSE See: New York Stock Exchange :ADO): Highlights: - Positive growth in sales and market share gains in major markets for Adecco Staffing - Gross margin stabilisation and even stronger recovery in Ajilon Professional's gross margin - Productivity improvement due to substantial cost reduction - Reduction of Days Sales Outstanding by three days and generation of cash-flow from operating activities of CHF 288 million in the nine months - Adecco well-positioned for current economic environment Adecco SA, the worldwide leader in HR solutions, today announced its results for the three months ended September September: see month. 29, 2002. Revenues for the third quarter were CHF CHF In currencies, this is the abbreviation for the Swiss Franc. 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. 6.4 billion, 1% below the corresponding period of last year in local currency, and above last year in August and September, confirming a sequential quarter-over-quarter improving trend since the beginning of the year. In CHF, revenues were down 9%. 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. was CHF 201 million, down 42% in CHF and 37% in local currency. Income before amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. of intangibles was CHF 120 million for the third quarter, down 43% in CHF and 38% in local currency. In the quarter, unfavourable currency fluctuations negatively affected revenues and operating income by 8% and 5%, respectively. For the nine months, the company reported revenues of CHF 18.8 billion, down 10% in CHF and 5% in local currency. Operating income of CHF 572 million was down 41% in CHF and 37% in local currency. Income before amortisation of intangibles was CHF 322 million for the nine months of 2002, down 44% in CHF and 40% in local currency. "We are happy to see that Adecco Staffing is showing positive growth in the third quarter. We have achieved market share gains in major markets, while gross margins have stabilised Adj. 1. stabilised - made stable or firm stabilized stable - resistant to change of position or condition; "a stable ladder"; "a stable peace"; "a stable relationship"; "stable prices" for the Group and have recovered strongly in Ajilon, our professional staffing division. As we were able to maintain our branch network, while reducing our costs we achieved substantial productivity improvements. Our strategy of carefully building and managing our branch network will further strengthen our market position to increase market share and to increase sales in a recovery without major cost addition." said Jerome Caille, Adecco's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . Divisional Performance Adecco Staffing reported positive sales growth in local currency in the third quarter. While profits remain below last year as a result of the lagging Lagging Strategy used by a firm to stall payments, normally in response to exchange rate projections. recovery of the permanent placement business, these positive results demonstrate management focus on sales and profitability enhancement. For the nine months, the division posted revenues of CHF 16.5 billion, 8% below last year's figures in CHF and 3% down in constant currency. Ajilon Professional revenues declined 27% to CHF 1.9 billion in the nine months, a 24% drop in local currency. The division achieved profitability improvement in Q3, as a result of a division wide effort aimed at restoring gross margins and aligning a·lign v. a·ligned, a·lign·ing, a·ligns v.tr. 1. To arrange in a line or so as to be parallel: align the tops of a row of pictures; aligned the car with the curb. its cost base to trading conditions. LHH LHH League for the Hard of Hearing LHH Laguna Honda Hospital (San Francisco, California) LHH L-Band HH LHH Lutheran Hospice of Hope Career Services increased revenues by 14% to CHF 328 million for the nine months, a 22% increase in local currency. Jobpilot e-HR reported revenues of CHF 14 million for the nine months. The integration of Jobpilot continued as planned. "All divisions showed positive developments." continued Mr. Caille. "In the quarter we achieved the sales turnaround Turnaround A situation where a company that has had poor performance for an extended period of time experiences a positive reversal. Notes: A speculator may profit from a turnaround if he or she accurately anticipates the improvement of a poorly performing company. in Adecco Staffing with higher sales in local currency than a year ago. Ajilon Professional has successfully improved profitability by aligning its cost structure to the market conditions. LHH Career Services sustained sales and profit on a very high level and Jobpilot is on track to turning profitable." Outlook The management of Adecco expects a positive first half of 2003, although short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. results are likely to be affected by the current economic environment. Jobpilot AG Acquisition As previously announced, the jobpilot AG AGM AGM annual general meeting AGM n abbr (= annual general meeting) → AG f AGM n abbr (= annual general meeting) → JHV f of August 22, 2002 voted in favour of a mandatory sales of the remaining shares not owned by Adecco against payment of a cash consideration in the amount of Euro 5.30 per share (squeeze-out squeeze-out The forcing of stockholders to sell their stock. Majority holders of a company's stock may attempt a squeeze-out of minority stockholders in order to take complete control of the firm. ). The resolution was filed with the Commercial Register and was registered on October 18. Quotation QUOTATION, practice. The allegation of some authority or case, or passage of some law, in support of a position which it is desired to establish. 2. Quotations when properly made, assist the reader, but when misplaced, they are inconvenient. of the shares in Jobpilot AG at the Frankfurt Neuer Markt was lifted at the same day. The transfer of the remaining shares against payment of the consideration will occur on October 23. US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results For the nine months ended September 29, 2002, Adecco reported under US Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (US GAAP) revenues of CHF 18.8 billion and a net income of CHF 317 million, including CHF 5 million amortisation of other intangibles. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Chief Financial Officer, Felix Weber Weber, river, United States Weber (wē`bər), river, c.125 mi (200 km) long, rising in the Uinta Mts., N central Utah, and flowing north and northwest to join the Ogden River at Ogden. The combined stream flows to the Great Salt Lake. , "Adecco continues to consider operating income and income before amortisation of intangibles and one-time items to be the most relevant benchmarks of the company's financial performance, as they measure our operational performance and our ability to fund growth and distribute dividends." Effective from fiscal year 2002, Adecco has adopted SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No 142, which requires that goodwill and other intangibles with indefinite/infinite lives no longer be amortised, but be subject to an annual impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. test. Intangibles with definite lives however continue to be amortised over the related lifetime. Statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to risks and uncertainties. The Company's actual results may differ materially from the results anticipated in these 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. as a result of certain factors as set forth in the Company's reports on Form 20-F made pursuant to the Securities Exchange Act of 1934. For instance, the Company's results of operations may differ materially from those anticipated in the forward-looking statements due to, among other things: our ability to successfully implement our growth and operating strategies, fluctuations in interest rates or foreign currency exchange rates, changes in economic conditions, changes in the law or government regulations in the countries in which Adecco operates, instability instability /in·sta·bil·i·ty/ (-stah-bil´i-te) lack of steadiness or stability. detrusor instability in domestic and foreign markets, our ability to obtain commercial credit, and changes in general political, economic and business conditions in the countries or regions in which Adecco operates. In addition, the market price of the Company's stock may be volatile from time to time as a result of, among other things: the Company's operating results, the operating results of other staffing service providers, and changes in the performance of global stock markets in general. About Adecco Adecco SA is a Forbes 500 company and the global leader in HR Solutions. The Adecco network connects up to 700,000 associates with business clients each day through its network of over 30,000 employees and nearly 6,000 offices in 62 countries around the world. Registered in Switzerland, and managed by a multinational team with expertise in markets spanning the globe, Adecco delivers an unparalleled range of flexible staffing and career resources to corporate clients and qualified associates. The Group comprises four Divisions, Adecco Staffing, Ajilon Professional, LHH Career Services and Jobpilot e-HR Services. In Adecco Staffing, the Adecco staffing network focuses on flexible staffing solutions for global industries in transition, 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; LHH Career Services encompasses our portfolio of 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. and coaching; Jobpilot e-HR focuses on online recruiting activities for the Group. Adecco SA is registered in Switzerland and is listed on the Swiss Exchange Swiss Exchange The major securities market of Switzerland. (ADEN / trading on Virt-x: 1213860), NYSE (ADO), Euronext 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. (12819). Further information can be found at the Investor Relations Investor relations The process by which the corporation communicates with its investors. page at www.adecco.com.
Selected Financial Highlights (Unaudited)
Three months ended % change
-------------------------- --------------------
CHF millions September 29, September 30, CHF Constant
2002 2001
-------------------------- --------------------
Net service revenues 6,422 7,037 -9% -1%
Operating income 201 347 -42% -37%
Income before
amortisation
of intangibles
and one-time items(1) 120 212 -43% -38%
Net income (loss) 117 (49)
(1) In the first quarter 2001, one-time items include internet
investment write-down of CHF 15 million and the cumulative
effect of change in accounting principles, net of tax, of CHF
8 million.
Nine months ended % change
------------------------------ ----------------
CHF millions September 29, September 30, CHF Constant
2002 2001
------------------------------ ----------------
Net service revenues 18,808 20,870 -10% -5%
Operating income 572 964 -41% -37%
Income before
amortisation
of intangibles
and one-time items(1) 322 579 -44% -40%
Net income (loss)(2) 317 (341)
-----------------------
Income per share
before amortisation
of intangibles and
one-time items (1)
Basic 1.72 3.11 -45%
Diluted 1.70 3.03 -44%
Weighted average shares 186,495,125 185,924,481
Diluted shares 192,934,530 192,881,274
(1) In the first quarter 2001, one-time items include internet
investment write-down of CHF 15 million and the cumulative
effect of change in accounting principles, net of tax, of CHF
8 million.
(2) For the nine months ended September 30, 2001, net income
(loss) and net income (loss) per share include goodwill
amortisation. For the nine months ended September 30, 2001,
the adjusted net income (under SFAS No. 142) is CHF 467
million; the adjusted basic EPS is CHF 2.51 and the adjusted
diluted EPS is CHF 2.45.
Income before amortisation of intangibles and one-time items is
not meant to portray net income or cash flow in accordance with U.S.
generally accepted accounting principles. Amortisation is a non-cash
charge to operating income; however, income before amortisation of
intangibles and one-time items does not represent cash available to
shareholders. This may not be comparable to similarly entitled items
reported by other companies. Up to December 30, 2001, Adecco amortised
goodwill over its estimated life of five years. In fiscal year 2002,
goodwill is no longer amortised.
Net Service Revenues Three months ended % change
----------------------------- ----------------
September 29, September 30, CHF Constant
2002 2001
----------------------------- ----------------
By Division
Adecco Staffing 5,725 6,101 -6% 1%
Ajilon Professional 595 830 -28% -20%
LHH Career Services 94 106 -11% 2%
Jobpilot e-HR 8 0 n.m. n.m.
By Region
Europe 4,059 4,336 -6% -3%
North America 1,617 1,875 -14% 0%
Asia/Pacific 593 634 -7% 4%
Rest of World 153 192 -20% 16%
---------------------------- -----------------
Total 6,422 7,037 -9% -1%
============================ =================
Net Service Revenues Nine months ended % change
------------------------------ ------------------
September 29, September 30, CHF Constant
2002 2001
------------------------------ ------------------
By Division
Adecco Staffing 16,536 17,922 -8% -3%
Ajilon Professional 1,930 2,658 -27% -24%
LHH Career Services 328 289 14% 22%
Jobpilot e-HR 14 1 n.m. n.m.
By Region
Europe 11,523 12,655 -9% -5%
North America 4,999 5,826 -14% -9%
Asia/Pacific 1,765 1,812 -3% 7%
Rest of World 521 577 -10% 14%
---------------------------------------------------
Total 18,808 20,870 -10% -5%
===================================================
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion