By John Revill
ZURICH (Reuters) -Adecco reported better-than-expected second-quarter earnings on Tuesday, and said it was seeing increased hiring activity by defence companies as government military spending rises in response to Russia’s invasion of Ukraine and NATO spending targets.
The Swiss staffing firm said operating income rose 6% year-on-year to 115 million euros ($132.93 million) in the three months ending June, surpassing analysts’ consensus forecast of 107 million euros.
Revenue for the period climbed 2% from the first quarter, signalling signs of recovery in the jobs market.
Chief Executive Denis Machuel highlighted growing demand for its services from defence companies, particularly within its Akkodis engineering and technology consultancy business.
“We see a bit more movement in Germany than in France, particularly related to the incentive package that the Chancellor has put in place,” Machuel told reporters on a post-earnings call.
The spending will see a wave of multi-billion-euro procurement orders, including 20 Eurofighter jets, up to 3,000 Boxer armoured vehicles, and as many as 3,500 Patria infantry fighting vehicles.
The company supplied staff to defence companies including Thales, KNDS and Airbus as well as Rheinmetall and Leonardo.
Spending with defence companies represents around 5% of Adecco’s revenue.
“I cannot say that we already have immense traction, but we’ve secured some very important partnerships. We are a key supplier to all the major players, in Germany, in France, in Spain, in Italy,” Machuel.
“And we know that there’s going to be traction in the coming quarters,” Machuel added.
Adecco said it was seeing signs of a recovery, with second quarter revenues 2% higher compared with the first three months of the year.
“Volumes improved through Q2, and in Q3 to date, positive momentum continues,” Adecco said.
($1 = 0.8651 euros)
(Reporting by John Revill, Editing by Ludwig Burger and Louise Heavens)
