Adecco SA Reports an 8% Increase in Revenues for the Nine Months of 2001.Business & Technology Editors CHESEREX, Switzerland--(BUSINESS WIRE)--Oct. 24, 2001 Highlights: -- Nine-month revenue growth of 8% to CHF 20.9 billion, 10% in local currency -- Current quarter revenue contraction of 4% in CHF, 2% in local currency -- Nine-month operating income growth of 7% to CHF 964 million, 9% in local currency -- Current quarter operating income depressed by 11% in CHF, 9% in local currency -- Nine-month income before amortization of goodwill, restructuring costs and one-time items growth of 5% -- Substantial generation of operating cash-flow of CHF 675 million in the nine months -- Outplacement business resilience Adecco SA, the worldwide leader in personnel services, announced today its financial results for the nine months of 2001. Group revenues increased by 8% 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. 20.9 billion and 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. grew by 7% to CHF 964 million. In local currency, revenues grew 10% and operating income increased by 9%, indicating a 2% negative impact of currency effects in the Group's results. Income before amortization of goodwill, 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). costs and one-time items grew by 5% to CHF 579 million. The Group reported a substantial operating cash-flow generation of CHF 675 million in the nine months. In the third quarter, Group revenues contracted by 4% (2% in local currency), while operating income reduced by 11% (9% in local currency), reflecting the sharp decline in volume that took place during the third quarter in key markets, as well as sharper than expected contraction contraction, in physics contraction, in physics: see expansion. contraction, in grammar contraction, in writing: see abbreviation. contraction - reduction in 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. . Due to lower interest rates and debt levels, the net income before amortization of goodwill, restructuring costs and one-time items contracted only by 9% (7 % in local currency). The Group generated operating cash-flow of CHF 345 million in the quarter. "We have moved into a period of lower growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. and tough trading conditions, when only the best strategies will prevail", commented John Bowmer, 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. . "We experienced a clear distinction between the business environment in the first half and the difficult conditions in the third quarter. We have managed to compensate most of the volume shortfall Shortfall The amount by which the capital required to fulfill a financial obligation exceeds available capital. Notes: Shortfall risk is often combated with an efficient hedging strategy created by a fund, group, institution, or individual. , while maintaining our branch infrastructure to be ready to capture the future opportunities. Obviously, we are well prepared for a challenging quarter ahead." Regional and Business Line Performance In North America, nine-month revenues were CHF 5.8 billion, up 1% over the corresponding period last year. Profits increased slightly. In local currency, the region experienced revenue contraction of 1%. Europe posted 10% revenue growth to CHF 12.7 billion year-to-date, with similar profit growth rates. In local currency, revenues in the region grew 13%, showing a 3% negative currency effect. Asia/Pacific posted 10% nine-month revenue growth to CHF 1.8 billion, with the same range of profit growth. In local currency, revenues grew 21% indicating that the region's results continued to be strongly affected by the depreciation of the Japanese Yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. and the Australian Dollar Noun 1. Australian dollar - the basic unit of money in Australia and Nauru dollar - the basic monetary unit in many countries; equal to 100 cents against the Swiss Franc Noun 1. Swiss franc - the basic unit of money in Switzerland franc - the basic monetary unit in many countries; equal to 100 centimes centime - a fractional monetary unit of several countries: France and Algeria and Belgium and Burkina Faso and Burundi and . Rest of World year-to-date revenues grew by 27% to CHF 574 million, a 32% growth in local currency. In the quarter, North America posted revenue decline of 16%. Europe revenues grew 1% in the quarter, a 3% growth in local currency. Asia/Pacific and Rest of World continued to post steady revenue growth of 20% and 10% in local currency, respectively. Specialty brands revenues grew 1% to CHF 2.6 billion in the nine months. In the quarter, specialty revenues were depressed by 12%. "The severe revenue contraction in North America is being addressed by sensible cost-containment. We exceeded the originally planned synergies from the Olsten acquisition, and gained market shares without compromising prices," said Mr Bowmer. "We saw a slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in revenue growth in Europe, but margins remain steady overall. Amid this difficult landscape, Lee Hecht Harrison, our career management and 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. brand, posted outstanding results once again and has proved to be highly anti-cyclical thus far." Internet Update "The deployment of our web-based IT platform in Europe is running on schedule", stated 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's CFO See Chief Financial Officer. . "Our Internet initiatives have already generated substantial revenues in Italy and France and other countries increasingly rely on this platform to add value and broaden the scope of their services. In Italy, the additional profits from revenue increase and costs savings achieved in the first half of the year equal to roughly 50% of the investment made - a very positive return of investment. Rather than a cost, we consider IT developments an essential investment to build a platform for sustainable growth and for the development of new business models." Outlook "The events of September the 11th in the US made it even harder to predict the future," said Mr. Bowmer. "Our near term strategy assumes a challenging market situation into the first half of 2002. We are taking a more cautious approach to our business forecast, but we remain convinced that our strong position in the market and our unrivalled office network will enable us to benefit from the eventual upturn. Last week we introduced our new organization for the future to reinforce our position in key business sectors to ensure rapid long-term growth." US GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). Results For the nine months ended September 30, 2001 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 20.9 billion and a net loss of CHF 341 million after charging goodwill amortization of CHF 897 million and one-time charges of CHF 23 million incurred in the first quarter of 2001, of which CHF 15 million relates to Internet investment write-down and CHF 8 million (net of tax) for cumulative effect of accounting changes resulting from the adoption of the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). statement no. 133, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , "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". 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 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. 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." 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 5,500 offices in 58 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 and career management services. Adecco clients retain this unique range of services through local, national and multinational contracts. 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 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. Adecco SA is listed on the Swiss Exchange Swiss Exchange The major securities market of Switzerland. (ADEN / trading on Virt-x: 1213860), (NYSE NYSE See: New York Stock Exchange :ADO), Euronext Premier Marche (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.
Financial Highlights
(Unaudited)
Nine Months Ended
--------------------------------------
CHF millions September 30, October 1, % Change
2001 2000
--------------------------------------
Net service revenues 20,870 19,362 8%
Operating Income 964 900 7%
Income before
amortisation
of goodwill,
restructuring costs
and one-time items 579 549 5%
Restructuring Costs - (65)
Amortisation of goodwill (897) (792)
One-time items (1) (23) -
---------------- ---------------
Net loss (341) (308)
================ ===============
Income per share before
amortisation of goodwill,
restructuring costs and
one-time items (basic) 2.99 3.00 0%
Income per share before
amortisation of goodwill,
restructuring costs and
one-time items (fully diluted) 2.91 2.87 1%
(1) One-time items includes Internet investment write-down of CHF
15 million and cumulative effect of accounting changes, net of tax of
CHF 8 million, in the first quarter of 2001.
All share and per share amounts reflect a ten-for-one stock split
in May 2001
Income before amortisation of goodwill, restructuring costs and
one-time items is not meant to portray net income or cash flow in
accordance with U.S. generally accepted accounting principles.
Goodwill amortisation is a non-cash charge to operating income;
however, income before amortisation of goodwill, restructuring costs
and one-time items does not represent cash available to shareholders.
This may not be comparable to similarly entitled items reported by
other companies. Adecco amortises goodwill over its estimated life of
five years.
Net Service Revenues by Geographic Segment
(Unaudited)
Nine Months Ended
-----------------------------------
CHF millions September 30, October 1, % Change
2001 2000
---------------- ---------------
North America 5,827 5,754 1%
Europe* 12,657 11,508 10%
Asia Pacific 1,812 1,648 10%
Rest of the World 574 453 27%
---------------- --------------- ----------
Total 20,870 19,363 8%
================ =============== ==========
Specialty Brands 2,617 2,594 1%
Additional information available upon request. |
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