Third-Quarter Earnings Round-Up

on Nov 6, 2012

**Adecco Keeps Business “Under Control”**

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Adecco (VS:ADEN), the world’s biggest staffing group, achieved a quarterly net profit of €118 million (£95 million) – 18 percent lower compared to last year’s third quarter but still ahead of expectations of €109 million (£87 million) in a Reuters poll. The company registered an earnings before interest, tax and depreciation (EBITA) margin of 4.4 percent in the August-September period, up from 3.7 percent in the second quarter, which analysts believe is a result of Adecco’s cost discipline.

“The operating results emphasise once more the on-going cost control and pricing discipline,” opined Patrick Hasenboehler, analyst at Sarasin. “Today’s result should support the share price, as it shows Adecco has its business under control.”
Adecco’s CEO Patrick De Maeseneire told Reuters he believes there will be no improvement in Europe’s job market until late next year because businesses are reluctant to hire due to the ongoing Eurozone crisis.

**Mark & Spencer Profits Fall 10 Percent**
The retailer (LON:MKS)registered a drop in profits last quarter as it paid the price for missing key fashion trends in womenswear earlier in the year. Marks & Spencer saw pre-tax profit drop by 10 percent to £289.5 million, ahead of City expectations of £280 million.
“We took steps to address the short term issues in general merchandise and as a result we delivered an improved performance.” said Chief Executive Marc Bolland. According to him the retailer has bought five times as many of the advertised lines as last year to avoid disappointing shoppers.

Analysts at Singer Capital Markets opined that the latest figures suggest Marks was beginning to get back on track. Mr Bolland warned the store chain will show real improvement in Jully at the earliest when the first autumn products start to arrive in store.
**Hannover Re Ready to Face Hurricane Sandy Costs**
The German reinsurer (NYSE:THG) announced strong earnings and healthy investment returns, prompting its CFO Roland Vogel to state that he did not see the group’s budget for natural disasters being “in danger” given the damage estimates so far.

!m[Adecco, Hanover Re, DSM Report Strong Results whilst Marks & Spencer Promises Improvement](/uploads/story/731/thumbs/pic1_inline.png)Operating profit in the last quarter more than doubled to €766 million (£614 million) as earnings were boosted by the relatively small costs of catastrophes in the first nine months of 2012. Costs of “major losses” fell year-on-year from €743 million (£595 million) to €193 million (£155 million). Net income from January to September rose more than 75 percent to €670.8 million (£537 million) as gross premiums increased to €10.3 billion (£8.25 billion) from €9.1 billion (£7.29 billion) in the same period last year. Ulrich Wallin, chief executive, said the surge in profits “puts in place a good platform for achieving a very pleasing result for the full 2012 financial year,”
Hannover Re revised its outlook for the year upward, saying it would grow between 8 and 9 percent compared with the previously forecasted 5-7 percent range.
**DSM Reports “Solid” Results**
The multinational life-sciences and material-sciences company reported third-quarter EBITDA of €270 million (£216 million), which included a negative impact of €105 million (£84 million) sustained from a fall in caprolactam prices, the raw material for Nylon-6, and of which DSM is a major producer.
Nutrition delivered a strong performance with 15 percent higher EBITDA year-on-year – the result of organic growth, positive exchange rate effects and the contribution of Ocean Nutrition Canada. Pharma results were hit by thinner margins and an uneven delivery pattern at DSM Pharmaceutical Products.
FeikeSijbesma, CEO/Chairman of the DSM Managing Board, commented:
“Despite a challenging global trading environment DSM continued to generate good results mainly driven by our Nutrition cluster. We continued to make good progress towards our strategic goals with the purchase of Tortuga and Cargill’s cultures and enzymes business. We have now invested €2.3 billion (£1.84 billion) in acquisitions since the end of 2010, of which €1.9 billion (£1.52 billion) in Nutrition. With these acquisitions we are building new platforms and are strengthening our downstream network. This will create significant future value for the company whilst further increasing the resilience of DSM’s earnings profile.”


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