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Adecco SA Reports an 18% Increase in Revenues and a 24% Increase in Operating Income for the First Nine Months of 1999

Income Before Amortization Increases 26%

Chéserex, Suisse, Oct 27, 1999 

Adecco SA, the world's leading provider of personnel services, today announced excellent financial results for the first nine months of 1999 that once again confirm the success of the company's global growth strategy.

Adecco's unaudited results for the nine-month period of 1999 include revenues of CHF 13.3 billion, an 18% increase over the CHF 11.3 billion reported in the equivalent nine-month period of 1998.There was no significant impact from changes in exchange rates. Operating income for the period showed sustained growth rising from CHF 488 million in the first nine months of 1998 to CHF 603 million in the first nine months this year with a pleasing improvement in operating margins from 4.3% to 4.5%. Income before amortization of goodwill for the nine-months of 1999 was CHF 382 million, a 26% increase over the CHF 303 million in the same period of 1998. Income before amortization of goodwill grew more than operating income primarily as a result of tax benefits associated with acquisitions which more than offset increased interest costs associated with acquisition financing.

The nine months results include 6 months of operations of the Delphi Group plc acquired in April 1999, and 5 months of operations of Career Staff Co. Ltd. of Japan acquired in May 1999. Delphi is a leading provider of information technology staffing, training and consulting with operations in the United Kingdom, Continental Europe and the United States. Career Staff is one of the largest personnel service firms in Japan.

Olsten Merger 

The merger with Olsten as announced at the press conference in August is well on track. We have received the US regulatory clearance at the beginning of September. The file to the European Commission was submitted as planned at the end of September, and we expect the reply by the Commission at the end of October. Further, the proxy to the SEC was filed on October 7, 1999. It is now pending regulatory review, and the transaction is expected to be completed near the end of the year.

Progress Across the Globe 

Adecco's nine-month results are a measure of the Company's continuing position of industry leadership and growth in the major employment market countries that collectively account for over 90% of staffing industry revenues. A local currency comparison of the first nine months of 1999 to the equivalent nine months of 1998 reveals revenue growth in excess of 20% in Belgium, Germany, Spain and Switzerland. France and USA showed steady growth of 11% and 6% respectively. Both UK and Japan continue to post strong results that benefit from revenues generated by Delphi and Career Staff, Adecco's recent additions.

Reviewing the nine months performance, Mr. Bowmer stated, "In France, we have successfully implemented a strategy to improve operating margins, and revenues in local currency are increasing at about 11%. In the USA we grew at 6% in local currency in the first 9 months, but after restatement for businesses sold, discontinued unprofitable contracts arising from the TAD acquisition and including acquisitions, growth in the USA was 8% in local currency. In addition, we have successfully continued our program to enhance US operating margins and have achieved over 30% growth in operating profit. The operating margin has increased by 1.2 %. These results make us confident that we have the right strategy, the right network, the right systems, and the right people in place to achieve continued success."

US GAAP Results 

For the nine months ended October 3, 1999 Adecco reported under US Generally Accepted Accounting Principles (GAAP) revenues of CHF 13.3 billion and a net loss of CHF 126 million after charging goodwill amortization of CHF 508 million.

According to Chief Financial Officer Felix Weber, "Adecco considers operating income and income before amortization of goodwill 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."

Adecco SA is the global leader in personnel services, connecting up to 450,000 associates with business clients each day through its network of over 20,000 employees and over 3,000 offices in 52 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. Adecco is also positioned as a worldwide leader in each of the major professional staffing segments with several world-class business lines: Accountants on Call and Jonathan Wren 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. Adecco also offers a range of HR solutions with Econova/Lee Hecht Harrison, offering outplacement 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 [ADECCO I (ADE-136973); ADECCO PS (ADEP - 136963)], the Bourse de Paris [RM 12819] and NASDAQ [ADECY].

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