Adecco maintains margin levels despite tough conditions

Corporate news announcement processed and transmitted by Hugin AS.
The issuer is solely responsible for the content of this
announcement.
----------------------------------------------------------------------
--------------

Q3 HIGHLIGHTS (Q3 08 vs. Q3 07)

* Revenues of EUR 5.1 billion, down 6% (-4% organically[1])
* Solid gross margin of 18.0%, flat on an underlying2 basis
* EBITA margin at 5.0%, down 30 bps on an underlying basis
* Acquisition of French professional staffing company Groupe
Datavance

KEY FIGURES

+-------------------------------------------------------------------+
| EUR millions | Q3 2008 | Q3 2008 | Q3 2008 |
| (except EPS) | | Underlying[2] | underlying[2] |
| | | growth | Organic[1] growth |
| | | | |
|---------------------+---------+---------------+-------------------|
| Revenues | 5,101 | -6% | -4% |
|---------------------+---------+---------------+-------------------|
| Gross profit | 917 | -6% | -4% |
|---------------------+---------+---------------+-------------------|
| EBITA | 254 | -11% | -11% |
|---------------------+---------+---------------+-------------------|
| Operating income | 244 | -12% | -12% |
|---------------------+---------+---------------+-------------------|
| Net income | 168 | -23% | |
+-------------------------------------------------------------------+

Zurich, Switzerland, November 4, 2008: Adecco S.A. ("Adecco"), the
worldwide leader in HR services, today announced results for the
third quarter of 2008. Revenues of EUR 5.1 billion were down 4%
organically compared to Q3 2007. The gross margin was maintained at a
solid 18.0% on an underlying basis, while the EBITA margin of 5.0%
was down 30 bps when excluding the impact of the modified calculation
of French social charges in the prior year.

Dieter Scheiff, Chief Executive Officer of the Adecco Group said:
"Despite tough market conditions and declining revenues, I am pleased
to report that we maintained a solid gross margin of 18.0%, equal to
the underlying gross margin in Q3 2007. On the cost side, we continue
to work hard to adapt to revenue developments in order to protect our
EBITA margin, which still stands at a solid 5.0%. I am proud of this
achievement, especially given the increasingly difficult economic
environment."

"Looking ahead, we anticipate a progressively more difficult
environment in terms of revenue development. September saw the
negative revenue trend accelerate in most countries, with the
exception of the Emerging Markets, which continued to grow strongly."

FINANCIAL PERFORMANCE

Revenues
Group revenues for Q3 2008 were down 6% to EUR 5.1 billion compared
to Q3 2007. On a constant currency basis, revenues were down 3%,
while organically revenues declined by 4%. Permanent placement
revenues declined by 7% in constant currency to EUR 85 million in the
quarter.

Gross Profit
In Q3 2008, the gross margin was 18.0% compared to 18.5% in the same
period last year. On an underlying basis, adjusted for the modified
calculation of French social charges in the prior year, the gross
margin remained flat compared to Q3 2007.

Selling, General and Administrative Expenses (SG&A)
In the period under review, SG&A declined by 6%. Underlying and
organically, SG&A was down 1%, which, as a percentage of revenues,
reflects a 20 bps increase to 13.0% compared to Q3 2007.
FTEs, on an organic basis, declined by 3% (-1,200 FTEs) when
comparing to the same quarter last year. At the end of the third
quarter, Adecco operated a network of over 6,700 offices with more
than 36,000 FTEs.

Operating Income before Amortization of Intangible Assets (EBITA)
In the third quarter of 2008, EBITA was EUR 254 million, a decrease
of 16% compared to Q3 2007 and a decline of 11% on an organic and
underlying basis. The corresponding EBITA margin for Q3 2008 was
5.0%, which compares to 5.3%, on an underlying basis, in Q3 2007.

Amortisation of Intangible Assets
Amortisation increased to EUR 10 million from EUR 8 million in the
same quarter last year, largely attributable to the acquisition of
Tuja, which was consolidated as of August 2007.

Operating Income
Operating income in the third quarter of 2008 was EUR 244 million, a
decline of 18% compared to Q3 2007 or down 12% organically and when
adjusting Q3 2007 for the modified calculation of French social
charges.

Interest Expense and Other Income / (Expenses), net
The interest expense amounted to EUR 15 million in the period under
review, equal to Q3 2007. For the full year 2008, the interest
expense is expected at approximately EUR 58 million. Other income /
(expenses), net was EUR 2 million in Q3 2008 compared to EUR 4
million in Q3 2007. Lower interest income was the main reason for the
difference.

Provision for Income Taxes
The effective tax rate for the third quarter of 2008 was 27% compared
to 18% in the same period a year ago. Last year's Q3 included a
positive impact of EUR 28 million due to a change in the German
income tax rate. For the full year 2008 Adecco expects an effective
tax rate of approximately 28%, based on current operations.

Net Income and EPS
Net income was down 27% to EUR 168 million in the third quarter of
2008 (Q3 2007: EUR 230 million), reflecting a net income margin of
3.3%. Basic EPS was EUR 0.96 (EUR 1.24 in Q3 2007). When excluding
the impact of the modified calculation of French social charges in
the prior year, basic EPS was down 18% in Q3 2008 compared to Q3
2007.

Balance Sheet, Cash-flow and Net Debt[3]
In the first nine months of 2008, the Group generated EUR 669 million
of operating cash flow, paid dividends of EUR 163 million, invested
EUR 71 million in capex and purchased treasury shares for EUR 274
million. The net debt position declined to EUR 800 million at the end
of September 2008 compared to EUR 866 million at year end 2007. In
the third quarter of 2008, DSO improved by 0.6 to 58.8 days compared
to the third quarter last year.

Currency Impact
In Q3 2008, currency fluctuations had a negative impact of
approximately 3% on revenues and 2% on operating income, mainly due
to the weakness of the US dollar and the British pound.

GEOGRAPHICAL PERFORMANCE

In France, Q3 2008 revenues declined by 2% to EUR 1.7 billion,
compared to the same period a year ago. The underlying gross margin
remained flat compared to the prior year. Operating income, excluding
the French social tax benefit in 2007, declined by 13% to EUR 69
million compared to Q3 2007, reflecting an underlying operating
income margin decline of 50 bps to 4.0%. SG&A as a percentage of
sales increased by 50 bps compared to Q3 2007. Costs associated with
headcount reductions, prior to the announced social plan, amounted to
EUR 6 million in the quarter.

In the USA & Canada, Adecco's revenues declined by 9% in constant
currency to EUR 651 million in Q3 2008. Organically, revenues were
down 8%. The decline was most pronounced in the Office and Industrial
business, while revenues in Human Capital Solutions continued to grow
strongly. Operating income declined by 18% in constant currency,
while the operating income margin was lower by 50 bps to 4.4%. Costs
associated with the investments to improve customer mix and
efficiency amounted to EUR 3 million in the quarter.

In Germany, revenues grew 12%, to EUR 404 million in Q3 2008, but
were down 2% organically compared to Q3 2007. On the operating income
level, Germany grew 8% (-4% organically) compared to Q3 2007,
corresponding to an operating income margin of 13.2% (Q3 2007:
13.6%).

In the UK & Ireland, revenues in Q3 2008 declined by 16% in constant
currency. Operating income fell by 58% in constant currency, which
reflects an operating income margin decline of 140 bps to 1.4%,
compared to the same quarter a year ago.

In Japan, third quarter revenues grew by 1% in constant currency.
Continued strong management on the cost side led to a 5% higher
operating income in constant currency and an improvement on the
operating margin side of 30 bps to 7.5% compared to Q3 2007.

In Italy revenues declined by 5% in Q3 2008 and in Iberia by 12%,
while revenues in the Benelux declined by 2%. In the Nordics,
revenues were down by 3% on a constant currency basis.

Emerging Markets revenues continued to grow strongly by 16% in
constant currency, while the operating income margin was raised by 40
bps to 4.1% compared to Q3 2007.

BUSINESS LINE PERFORMANCE

In Q3 2008, Adecco's revenues in the Office and Industrial businesses
declined by 4% in constant currency to EUR 4.0 billion (-6%
organically) while the underlying gross margin declined by 20 bps to
16.2%. Revenues in the Industrial business declined by 3% in constant
currency (-5% organically). In Germany, revenues were down 4%
organically, France declined by 3%, Italy by 7%, Iberia by 17% and in
the USA & Canada revenues decreased by 12% in constant currency. The
Office business saw a decline of 6% both organically and in constant
currency. While Japan grew 1% in constant currency, revenues declined
in the Nordics by 5%, in the UK & Ireland by 13% and in USA & Canada
by 17%, all in constant currency. In France revenue development was
flat.
In constant currency, revenues in the Professional Business[4]
declined by 3%. The underlying gross margin in the Professional
Business improved by 110 bps to 27.7%, which was mainly driven by
Human Capital Solutions and the Engineering & Technical business.

In Information Technology (IT), Adecco's revenues decreased 9% in
constant currency. Continued weak developments in the UK & Ireland
led to a revenue decline in constant currency of 15%. Revenues in the
USA & Canada declined by 5% in constant currency when compared to Q3
2007.

Adecco's Engineering & Technical (E&T) business was down 5% in
constant currency. Germany saw healthy demand with revenues up 8% in
Q3 2008. USA & Canada, faced a revenue decline of 3% and UK & Ireland
declined by 36%, both in constant currency.

In Finance & Legal (F&L), revenues declined by 3% in constant
currency in the third quarter of 2008. Declining demand in USA &
Canada was only partially offset by good growth in Continental
Europe.

In the third quarter of 2008 revenues in Sales, Marketing & Events
(SM&E) were up by 1% on a constant currency basis, whereas Medical &
Science (M&S) grew 13%. Revenues in Human Capital Solutions (HCS)
increased 10% in constant currency.

MANAGEMENT OUTLOOK

Adecco remains committed to value based management and, in today's
particularly tough market environment, places utmost importance on
aligning costs to revenue developments. Investments continue to be
considered with strict financial discipline and with the focus on
professional and specialized business fields, aim to place Adecco in
a sound strategic position.

For the remainder of the year, management anticipates difficult
market conditions, leading to even more pronounced pressure on
revenues in most countries, albeit by varying magnitude. The target
to reach an EBITA margin in excess of 5.0% was initially set in 2006
to be achieved under favourable economic conditions in 2009. In the
last two quarters, the company reported an EBITA margin of 5.0%.
Given the difficult economic developments, it is unlikely that Adecco
will be in a position to achieve or exceed a 5.0% EBITA margin in the
quarters to come, and consequently not in 2009. The company remains
however fully committed to reach this target in the medium term,
while management continues to be strongly focussed on margin
protection in the current economic downturn.

As announced in mid October, Adecco plans to structurally improve the
French business and to align the cost base to market conditions. This
investment is expected to amount to approximately EUR 35 million and
the majority of this is expected to be accrued in the fourth quarter
of 2008. In order to align the cost base to trading conditions,
Adecco will invest an additional EUR 10 million in Q4 2008 in various
European countries.

Professional staffing acquisition in France

Adecco strengthens its French professional staffing business with the
acquisition of Groupe Datavance. This company is specialized in the
IT field and achieved sales of EUR 66 million in 2007/2008.

Management changes

Andreas Dinges (49), will be taking over the role of Country Manager
of Adecco in Germany as of January 1, 2009. In this function, he will
be a member of Group Management and report directly to the Group CEO,
Dieter Scheiff. In addition to his new function as Country Manager of
Adecco in Germany, Andreas Dinges will remain CEO of DIS AG. Having
successfully managed the transition of Tuja into the Adecco Group,
Peter Jackwerth, the current country manager, will pursue other
interests.

On January 1, 2009, Federico Vione (36), takes over as Country
Manager of Adecco Italy. In his new role, he will also report
directly to Dieter Scheiff and will be part of the Adecco Group
Management. Federico has been with Adecco since 1999 in various
leading positions. Since 2005 he has been the Head of Eastern Europe.
Sergio Picarelli (41), the current Country Manager, after having
successfully developed Adecco's operations in Italy, is taking on the
role of Chief International Sales Officer, in order to coordinate the
most important global accounts for the Adecco Group. He will continue
to report to the Group CEO.

Financial Agenda 2009

Q4 & FY 2008 results March 4, 2009
Q1 2009 results May 6, 2009
Annual General Meeting May 13, 2009
Q2 2009 results August 11, 2009
Q3 2009 results November 4, 2009

Forward-looking statements
Information in this release may involve guidance, expectations,
beliefs, plans, intentions or strategies regarding the future. These
forward-looking statements involve risks and uncertainties. All
forward-looking statements included in this release are based on
information available to Adecco S.A. as of the date of this release,
and we assume no duty to update any such forward-looking statements.
The forward-looking statements in this release are not guarantees of
future performance and actual results could differ materially from
our current expectations. Numerous factors could cause or contribute
to such differences. Factors that could affect the Company's
forward-looking statements include, among other things: global GDP
trends and the demand for temporary work; changes in regulation of
temporary work; intense competition in the markets in which the
Company competes; changes in the Company's ability to attract and
retain qualified temporary personnel; the resolution of the French
anti-trust procedure and any adverse developments in existing
commercial relationships, disputes or legal and tax proceedings.

About Adecco
Adecco S.A. is a Fortune Global 500 company and the global leader in
HR services. The Adecco Group network connects about 700,000
associates with clients each day through its network of over 36,000
employees (FTEs) and over 6,700 offices in over 60 countries and
territories around the world. Registered in Switzerland, and managed
by a multinational team with expertise in markets spanning the globe,
the Adecco Group delivers an unparalleled range of flexible staffing
and career resources to clients and associates.

Adecco S.A. is registered in Switzerland (ISIN: CH0012138605) and
listed on the Swiss Stock Exchange with trading on SWX Europe (SWX:
ADEN) and the Euronext Paris (EURONEXT: ADE).

Contacts:

Adecco Corporate Press Office
press.office@adecco.com ; Tel. +41 (0) 44 878 87 87

Adecco Corporate Investor Relations
Investor.relations@adecco.com ; Tel. +41 (0) 44 878 89 89

There will be a media conference call at 9 am CET as well as an
analyst conference call at 11 am CET, details of which can be found
on our website in the Investor Relations section at
http://webcast.adecco.com.

[1] Organic growth is a non US GAAP measure and excludes the impact
of currency, acquisitions and divestures.
[2] Underlying is a non US GAAP measure and excludes the impact of
the modified calculation of French social charges for Q3 2007 which
positively impacted Q3 2007 with EUR 26 million on gross profit, EUR
18 million on operating income and EUR 12 million on net income. For
further analysis see page 13.
[3] Net debt is a non US GAAP measure and comprises short-term and
long-term debt less cash and cash equivalents and short-term
investments
[4] Professional business refers to Adecco's Information Technology,
Engineering & Technical, Finance & Legal, Medical & Science, Sales,
Marketing & Events and Human Capital Solutions businesses.

The full report (in English) including tables can be downloaded from
the following link:

--- End of Message ---

Adecco SA
Sagereistrasse 10 Glattbrugg Switzerland

WKN: 922031;
ISIN: CH0012138605; Index: SLCI, SMI, SPI, SMIEXP;
Listed: Main Market in SWX Swiss Exchange;
Copyright © Hugin AS 2008. All rights reserved.