Adecco expects continued modest growth in US market, says CEO

CNBC.com with Reuters
Adecco CEO: Expect modest growth in US market

Adecco's first-quarter profit rose more than a fifth, better than expected, as the world's largest temporary staffing company continued to get a boost from major markets in southern Europe while projecting modest growth in the U.S.

Net profit attributable to shareholders rose to 176 million euros ($192.2 million) in the three months ended March 31, the company said in a statement, beating the average estimate of 165 million euros in a Reuters poll of analysts.

Sales rose to 5.73 billion euros, also better than the poll average of 5.68 billion euros.

"We expect a continuation of that kind of momentum, especially when we look at the GDP (gross domestic product) forecasts for the U.S., which is about 1.6 percent, so it means a continuation of modest growth over there," Alain Dehaze, chief executive officer at Adecco Group, told CNBC on Tuesday.

Analysts from Kepler Cheuvreux called the results "very strong".

The Zurich-based company said on Tuesday its organic revenue growth momentum was maintained at 6 percent, despite a global economic outlook that remained uncertain. The positive trend continued in April, it added.

Macron is 'good news for Europe'

Adecco: France needs to become more competitive

In main market France, revenues rose 8 percent to 1.2 billion euros. Revenues there increased 9 percent in General Staffing, which accounts for over 90 percent of revenues.

Dehaze suggested the victory for the pro-business and market-friendly candidate, Emmanuel Macron, in the French election on Sunday was "good news for Europe".

"We know that France needs to become much more competitive if they want to attract investment - this about cost (and) this is for sure also about flexibility and Macron is intending to work on both. We will see what the parliamentary elections will give, because that is also a very important moment but I would say the direction is good for us," Dehaze added.

The company said it had completed about 10 percent of the 300 million euro share buyback programme that it launched in March. It cut its net debt at the end of the quarter to 823 million euros from 887 million at the end of 2016.