Adecco Group –
Operating and financial review and prospects
in millions, except share and per share information

1.2 Segment performance

The segment breakdown of revenues and operating income for the six months ended June 30, 2011 and June 30, 2010 is presented in the following table:

Download xls sheet

[1]Since January 1, 2011, LHH is reported as a separate segment. The 2010 information has been restated to conform to the current year presentation.

[2]In the first six months of 2011, revenues changed organically in North America by 14%; UK & Ireland by 2%; Germany & Austria by 34%; Benelux by 14%; and Adecco Group by 15%.

France

In the first six months of 2011, revenues in France increased by 19% and operating income amounted to EUR 94 compared to EUR 76 in the first six months of 2010. The operating income margin was 3.1% in the first six months of 2011. The French payroll tax subsidy cut had a negative impact on the operating income margin in France of 55 bps.

North America

In North America, revenues increased by 15%, or by 14% organically, compared to the first six months of 2010. Operating income in the first six months of 2011 was EUR 75, an increase of 48% in constant currency. Furthermore, in the first six months of 2011, the operating income margin increased by 70 bps to 4.1%.

UK & Ireland

In the first six months of 2011, revenues in the UK & Ireland increased by 6% or by 2% organically. In the first six months of 2011, the UK & Ireland operating income amounted to EUR 15 compared to EUR 7 in the first six months of 2010.

Japan

In Japan, revenues increased by 10% or by 3% in constant currency, compared to the first six months of 2010. Operating income was EUR 40 compared to EUR 34 in the first six months of 2010 and the operating income margin increased from 5.5% in the first six months of 2010 to 5.9% in the first six months of 2011.

Germany & Austria

In Germany & Austria, revenues increased by 35% compared to the first six months of 2010. Operating income amounted to EUR 48 compared to EUR 26 in the same period of 2010. The operating income margin was 6.5% in the first six months of 2011 compared to 4.7% in the first six months of 2010.

Benelux

In the first six months of 2011, revenues in Benelux increased by 15%. The operating income margin improved by 150 bps to 4.3% in the first six months of 2011 compared to the first six months of 2010.

Italy

Revenue growth in Italy remained exceptionally strong, increasing by 36%, mainly driven by continued strong growth in the Industrial business. Italy achieved strong improvements in profitability, as the operating income margin was up 210 bps to 6.4% in the first six months of 2011 compared to the same period of 2010.

Other

Revenues in the Nordics increased by 14% in constant currency. The operating income margin was 1.5% compared to 4.4% in the prior year’s first six months. The results of the first six months of 2011 were negatively impacted by EUR 9 related to the issues in the Medical & Science business in Norway.

In Iberia, revenues increased by 8%, despite the challenging economic conditions in the region.

Revenues were up 26% or 13% in constant currency in Australia & New Zealand in the first six months of 2011.

Switzerland grew revenues by 36% or by 20% in constant currency and continued to deliver very strong profitability, driven by strict cost control, with an operating income margin of 9.2% in the first six months of 2011.

Emerging Markets continued to perform strongly in the first six months of 2011 with revenues up 17% in constant currency, mainly driven by Eastern Europe and India. Operating income was up 23% in constant currency and the operating income margin was 2.8%.

Revenues of Lee Hecht Harrison (“LHH”), Adecco’s career transition and talent development business, amounted to EUR 109, a decline of 19% in constant currency, in the first six months of 2011. Operating income totalled EUR 21 and the operating income margin was 19.5%.