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Not Yet At The Bottom?

Not Yet At The Bottom?

Conditions in the world's staffing markets are likely to remain tough in 2009 and 2010, says the finance chief of the world's largest staffing company, Adecco. "We are not seeing any clear signs of stabilisation," Dominik de Daniel told Swiss newspaper Finanz und Wirtschaft.

"In the first quarter, the decline in (our) sales accelerated as expected. In April, the situation did not get worse. But in our opinion it would be too early to talk of having reached a bottom," he said.

Adecco, the world's largest staffing company, still expects to post operating profit in the second quarter and is likely to reach its mid-term earnings before interest, tax and amortisation (EBITA) margin goal of 5% in the medium term, de Daniel said.

"Before the downturn came we had already reached a margin of 4.4%. The measures we are currently taking to improve our structure will also lead to higher profitability," he said.

The group's operating margin was 2.1% in the first quarter and Adecco has cut jobs and shut branches in a bid to protect profitability. The group planned to spend 50 million on restructuring costs in the first semester.

"I cannot rule out that in the second half in particular there will be more restructuring costs. As a result of the steep drop in sales we have to adjust our costs and we are constantly looking at additional measures," de Daniel said. He repeated that Adecco was interested in buying companies in the area of higher-margin professional staffing and could spend 1 billion on acquisitions. But de Daniel said the professional staffing market, which has so far proven more resilient, would also face weaker demand.
"To a large extent the professional staffing segment gets hit comparatively later in the cycle. A further slowdown is therefore to be expected. But I don't think that the decline will be as severe as in the general staffing business," he said.

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