Adecco posts first quarterly revenue growth since first-quarter 2012

ZURICH (Reuters) - An economic recovery in Europe helped Adecco (VTX:ADEN), the world's No.1 staffing agency, beat fourth-quarter profit expectations and grow revenue in constant currency terms for the first time in seven quarters.

The staffing sector is generally seen as a barometer of economic health because companies tend to hire temporary workers at the beginning of a recovery when most businesses are reluctant to commit to full-time hiring.

"Most European economies have begun to recover," Adecco said in a statement on Wednesday. "In Q4 2013, we saw a strong pick-up in our early-cyclical industrial business, driven by double-digit growth in the manufacturing sector."

Manufacturing activity has picked up in the euro zone this year, hitting a 2-1/2 year high in January, although a slight easing last month underscored the fragility of the recovery.

Excluding currency swings, fourth-quarter revenue rose 4 percent to 4.94 billion euros ($6.85 billion), marking the first quarterly revenue growth for Adecco since the first quarter of 2012.

Adjusted for trading days and currency fluctuations, revenue grew 5 percent in January and February, Adecco said.

The Zurich-based firm, which makes about 60 percent of its revenue in Europe, reported double-digit percentage revenue growth in Germany, Benelux and Iberia, while revenue in its biggest market, France, was stable after many quarters of declines.

Adecco has been cutting costs. It expects restructuring costs of roughly 20 million euros this year for unifying its North American headquarters at one site as well as several, smaller projects in other countries.

Fourth-quarter net profit came in at 174 million euros compared with 35 million a year earlier, and well ahead of the 126 million forecast by analysts in a poll.

Adecco said it was convinced it would achieve its earnings before interest, tax and amortisation (EBITA) margin target of more than 5.5 percent by 2015.

The staffing group proposed a dividend of 2.00 Swiss francs per share compared with 1.80 francs a year ago.

($1 = 0.7212 euros)

(Reporting by Caroline Copley; Editing by Mark Potter)