Adecco SA Reports 44% Increase in Revenues and 49% Increase in Operating Income for 2000.Business Editors NOTE TO MEDIA: Charts are available in a Smart News Release(TM) on Business Wire's Home Page at www.businesswire.com and at www.newstream.com CHESEREX, Switzerland--(BUSINESS WIRE)--Jan. 31, 2001 Strong organic and external growth boosts 2000 results; Board of Directors to Propose Dividend, Capital Increase, and Stock-Split Adecco SA, the world's leading provider of personnel services, today announced strong financial results for the fiscal year 2000. Year-over-year, revenues increased by 44% to 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. 26.6 billion, 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. by 49% to CHF 1.2 billion and income before amortization and restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. by 42% to CHF 746 million. Since 1996, when Adia and Ecco merged to form Adecco, the company has demonstrated outstanding growth. Revenues and income before amortization and restructuring charges have increased more than fourfold fourfold Adjective 1. having four times as many or as much 2. composed of four parts Adverb by four times as many or as much Adj. 1. during this period. Please see the Smart News Release URLs for charts illustrating revenues and income before amortization and restructuring charges from 1996 through 2000. In these five years, Adecco became the undisputed world leader in the staffing industry through a strategy combining organic growth with mergers and acquisitions. Today, Adecco has attained a number one or number two position in 11 of the world's 13 largest regions, which account for over 95% of the world market.
% Change to 1999 in CHF
FY 2000 FY 1999 Organic (%)
(CHF billion) (CHF billion) Total (%) (Approx.)
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Revenues 26.6 18.5 44% 19%
Operating Income 1.2 0.8 49% 26%
Income Before
Amortization of
Goodwill and
Restructuring
Charges 0.8 0.5 42% 32%
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Key figures as reported for the year show strong growth of the total business, both organically and through mergers and acquisitions. These results are in line with Adecco's multi-year strategy to grow organically 50% faster than the market, supplemented by external growth equivalent to 50% of organic revenue growth. Year-over-year, operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: improved by 10 basis points from 4.5% to 4.6% despite the incursion in·cur·sion n. 1. An aggressive entrance into foreign territory; a raid or invasion. 2. The act of entering another's territory or domain. 3. of approximately CHF 55 million one-time integration expenses as a part of our ordinary operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . These expenses were incurred to secure fast and complete merger integration during last year. Excluding these non-recurring integration expenses, the operating margin increased to over 4.8%, close to Adecco's 2003 target of 5%. As in the first three quarters of 2000, the impact of currency exchange rate movements was minimal with 4% on sales and approximately 2% on income before amortization and restructuring charges. "I'm absolutely delighted with our results in 2000", said John Bowmer, Adecco's Chief Executive Officer. "In this challenging year, we managed to grow our business organically while completing the largest merger ever in our industry within 12 months. This major and complex merger with Olsten is scheduled for completion by the end of the first quarter 2001. The new North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. headquarters close to New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of is fully operational with only a handful of staff left in the old California headquarters, the IT system integration is finished and the management restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). finalized See finalization. . We now have a stronger than ever company to serve our clients better. The financial results of this excellent year were far beyond expectations, and I congratulate the Adecco team worldwide for their commitment, initiative and drive to excel and be the best. This dedication has allowed us not only to merge with Olsten, but to concurrently achieve strong organic growth and enhance our operating margin. These figures demonstrate that we are on the right track to achieve our ambitious goals over the next few years." Progress Across the Globe All countries around the globe have contributed to this outstanding result. In all markets, we have significantly increased sales and over-proportionally increase operating profits Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. .
Sales (CHF Billion) % Change
2000 1999
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France 9.0 7.0 28%
North America 8.0 4.9 63%
UK 2.2 1.8 26%
Rest of Europe 4.5 3.0 50%
Rest of the World 2.9 1.8 63%
Total World 26.6 18.5 44%
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Areas with highest year-over-year percentage growth were Italy, Japan, Belgium and Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. , while the development in Netherlands and in the IT sector were below expectations. Unfortunately, the IT staffing market has not recovered as predicted. While we have experienced month-over-month revenue increase in 2000, monthly revenues remained below 1999 levels throughout the year, reaching last year's monthly levels only by year-end. Reviewing the 2000 performance by region, Mr. Bowmer stated, "Overall, I'm extremely pleased with our performance. Except for the IT sector, which fell short of expectations, all our business lines and geographic regions posted excellent organic as well as total revenue growth with equally strong increases in profitability. Our market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" increased in Scandinavia, Asia and Latin America, all promising emerging regions with huge potential for growth. The broad geographical and business diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. we have put in place over the last two years reduced our volatility dramatically. We are not dependent on one market or one single business line. We are a true global player with the necessary resources and positioning to counter market adversities and take advantage of changes in our business environment. We have delivered the results we promised, and I feel confident that we have the talent, the expertise and the financial power to reinforce our industry leadership and business growth into the new millennium." Board of Directors to Propose Dividend, Capital Increase, and Stock-Split The Annual General Meeting of the Shareholders of Adecco is scheduled to take place on May 2, 2001, when Adecco's Board of Directors will propose for the approval of shareholders a dividend of CHF 10 per share (CHF 2 per participation certificate). This represents a 19% increase over the CHF 8.40 per share (CHF 1.68 per participation certificate) paid in 2000. The Board of Directors will further submit for shareholder approval an increase of the company's conditional capital by 2 million shares, earmarked to be used primarily for financing mergers and acquisitions. The Board of Directors will also propose a 1:10 stock-split subject to the condition that the minimum nominal value Nominal Value The stated value of an issued security that remains fixed, as opposed to its market value, which fluctuates. Notes: When referring to fixed-income securities, the nominal value is also the face value. of CHF 10 required under the Swiss Code of Obligations be abolished as expected. US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results For the fiscal year ended December 31, 2000 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 (GAAP) revenues of CHF 26.6 billion and a net loss of CHF 428 million after charging goodwill amortization of CHF 1,109 million and restructuring charges of CHF 65 million. 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, "This net result reflects the accounting principles of US GAAP and Adecco's chosen goodwill amortization schedule of five years. Adecco considers operating income and income before amortization of goodwill and restructuring charges 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 to distribute dividends." In 1998, the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). issued Statement No. 133, amended, "Accounting for Derivative Instruments Derivative instruments Contracts such as options and futures whose price is derived from the price of an underlying financial asset. and Hedging Activity". This new standard requires that all derivative instruments be recognized in the balance sheet as either assets or liabilities measured at their fair value. Changes in fair value must be recognized in earnings unless specific criteria are met. This new standard is required to be implemented by Adecco effective as of January 1, 2001. Adecco has reviewed the provisions of this required new standard and determined that adoption will result in a one time, after tax non-cash charge Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. of CHF 8 million in the first quarter of fiscal 2001. This transition adjustment will be reported as a "change in accounting principle" as required by the new standard, a one-time non-operating charge. About Adecco Adecco SA is the global leader in personnel services. With the addition of Olsten, the Adecco network connects up to 700,000 associates with business clients each day through its network of over 30,000 employees and over 5,000 offices in 60 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. Adecco provides clients with staffing services and solutions covering all major industries as well as specific professions. The worldwide Adecco Brand network focuses on 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. . Adecco is also positioned as a worldwide leader in each of the major professional staffing segments with several world-class business lines: aoc (Accountants on Call) and Jonathan Wren wren, small, plump perching songbird of the family Troglodytidae. There are about 60 wren species, and all except one are restricted to the New World. The plumage is usually brown or reddish above and white, gray, or buff, often streaked, below. for Finance, Banking and Accounting; Ajilon and Computer People for high-end Information Technology, TAD and Roevin for Engineering and Technical. These Adecco businesses provide their clients with a broad range of staffing solutions, from temporary work to permanent placement, to consulting and managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality . Adecco also offers a range of HR solutions with Econova/Lee Hecht Harrison, delivering 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 career management services. Adecco clients retain this unique range of services through local, national and multinational contracts. Adecco SA is listed on The Swiss Exchange Swiss Exchange The major securities market of Switzerland. (ADECCO N (ADEN 700'939)), NYSE NYSE See: New York Stock Exchange (ADO), the Bourse bourse (b  rs), term applied to a European stock exchange. The first international bourse was established in Antwerp in the 16th cent. de Paris (RM 12819). Further
information can be found at the Investors page at www.adecco.com.
ADECCO SA
Financial Highlights
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Year Ended Year Ended
In CHF Millions December 31, 2000 January 2, 2000
(52 weeks) (52 weeks) Change
----------------------------------------------------------------------
Net Service Revenues 26,628 18,471 44%
----------------------------------------------------------------------
Operating Income 1,237 829 49%
----------------------------------------------------------------------
Income Before Amortization
of Goodwill and
Restructuring Charges 746 525 42%
----------------------------------------------------------------------
Restructuring Charges 65 -
------------------------------------------------------------
Amortization of Goodwill 1,109 699
------------------------------------------------------------
Net Loss 428 174
------------------------------------------------------------
Net Service Revenues by Geographic Segment
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In CHF Billions Year Ended Year Ended Change
December 31, 2000 January 2, 2000
(52 weeks) (52 weeks)
----------------------------------------------------------------------
France 9.0 7.0 28%
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North America 8.0 4.9 63%
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UK 2.2 1.8 26%
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Rest of Europe 4.5 3.0 50%
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Rest of the World 2.9 1.8 63%
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26.6 18.5 44%
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Specialist/Career Services
Brands (included in
geographic regions.) 3.5 2.7 33%
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Income before amortization of goodwill and restructuring charges is not meant to portray por·tray tr.v. por·trayed, por·tray·ing, por·trays 1. To depict or represent pictorially; make a picture of. 2. To depict or describe in words. 3. To represent dramatically, as on the stage. net income or cash flow in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. generally accepted accounting principles. Goodwill amortization is a non-cash charge to operating income; however, income before amortization of goodwill does not represent cash available to shareholders. This may not be comparable to similarly entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: items reported by other companies. Adecco amortizes goodwill over its estimated life of five years. Further, statements made in this press release, other than those concerning historical information, should be considered forward-looking and subject to various 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: management's ability to effectively integrate Olsten Corporation into the Company's existing operations; the Company's ability to continue to mitigate the effects of legislation in France upon gross margins; increased price competition, the general level of economic health and activity in the markets and countries in which the Company operates; the impact of changes in foreign currency exchange rates; changes in interest rates; and the continued availability of qualified personnel. 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. Note: Charts are available at URL URL in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : http://www.businesswire.com/cgi-bin/photo.cgi?pw.013101/bb2 http://www.businesswire.com/cgi-bin/photo.cgi?pw.013101/bb2a |
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