UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 23, 2014
MANPOWERGROUP INC.
(Exact name of registrant as specified in its charter)
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Wisconsin
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1-10686
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39-1672779
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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100 Manpower Place
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Milwaukee, Wisconsin
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53212
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code: (414) 961-1000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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This 8-K is being filed to reflect the correct date of the filing.
Item 2.02 Results of Operations and Financial Condition
The information in this Item 2.02, including exhibit 99.1 attached hereto, is furnished solely pursuant to Item 2.02 of Form 8-K. Consequently, such information is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Further, the information in this Item 2.02, including exhibit 99.1, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933.
On April 23, 2014, we issued a press release announcing our results of operations for the three months ended March 31, 2014. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Exhibits.
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Exhibit No.
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Description
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| 99.1 |
Press Release dated April 23, 2014
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| 99.2 |
Presentation materials for April 23, 2014 conference call
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
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MANPOWERGROUP INC.
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Dated: April 23, 2014
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By:
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/s/ Michael J. Van Handel
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Michael J. Van Handel
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No.
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Description
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| 99.1 |
Press Release dated April 23, 2014
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| 99.2 |
Presentation materials for April 23, 2014 conference call
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Exhibit 99.1
FOR IMMEDIATE RELEASE Contact:
Mike Van Handel
+1.414.906.6305
michael.vanhandel@manpowergroup.com
ManpowerGroup Reports 1st Quarter 2014 Results
MILWAUKEE, April 23, 2014 -- ManpowerGroup (NYSE: MAN) today reported that net earnings for the three months ended March 31, 2014 were $70.1 million, or 86 cents per diluted share, compared to net earnings of $23.9 million, or 31 cents per diluted share, a year earlier. Revenues for the first quarter were $4.9 billion, an increase of 3% from the prior year period.
Included in the prior year first quarter results is a restructuring charge, primarily related to office consolidations and severance costs of $34.8 million ($25.3 million after tax or 32 cents per diluted share). There were no restructuring charges in the current year quarter. Net earnings in the first quarter were negatively impacted by 1 cent per diluted share, as certain foreign currencies were slightly weaker compared to the prior year period.
Jeffrey A. Joerres, ManpowerGroup Chairman and CEO, said, “Despite the slow start in January, we are experiencing more positive revenue trends as we enter the second quarter in almost all of the major geographies. Growth in our Europe business improved to over 4 percent in constant currency in the quarter, and exceeded 3 percent on an average daily basis.
“The work that our team did last year to simplify and re-calibrate our company is paying off as we were able to achieve strong flow through and operational leverage.
“We anticipate second quarter earnings per share will range between $1.26 to $1.34, which includes an estimated favorable currency impact of 2 cents.”
In conjunction with its first quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on April 23, 2014 at 7:30 a.m. CDT (8:30 a.m. EDT). Interested parties are invited to listen to the webcast and view the presentation by logging on to http://www.manpowergroup.com in the section titled “Investor Relations.”
Supplemental financial information referenced in the conference call can be found at http://www.manpowergroup.com in the section titled “Investor Relations.”
About ManpowerGroup
About ManpowerGroup™ManpowerGroup™ (NYSE: MAN) is the world leader in innovative workforce solutions that ensure the talent sustainability of the world's workforce for the good of companies, communities, countries, and individuals themselves. Specializing in solutions that help organizations achieve business agility and workforce flexibility, ManpowerGroup leverages its 65 years of world of work expertise to create the work models, design the people practices and access the talent sources its clients need for the future. From staffing, recruitment, workforce consulting, outsourcing and career management to assessment, training and development, ManpowerGroup delivers the talent to drive the innovation and productivity of organizations in a world where talentism is the dominant economic system. Every day, ManpowerGroup connects more than 600,000 people to work and builds their experience and employability through its relationships with 400,000 clients across 80 countries and territories. ManpowerGroup's suite of solutions is offered through ManpowerGroup™ Solutions, Manpower®, Experis™ and Right Management®. ManpowerGroup was named one of the World's Most Ethical Companies for the fourth consecutive year in 2014, confirming our position as the most trusted brand in the industry. See how ManpowerGroup makes powering the world of work humanly possible at www.manpowergroup.com. Follow ManpowerGroup Chairman and CEO Jeff Joerres on Twitter: Twitter.com/manpowergroupjj
Forward-Looking Statements
This news release contains statements, including earnings projections, that are forward-looking in nature and, accordingly, are subject to risks and uncertainties regarding the Company’s expected future results. The Company’s actual results may differ materially from those described or contemplated in the forward-looking statements. Factors that may cause the Company’s actual results to differ materially from those contained in the forward-looking statements can be found in the Company’s reports filed with the SEC, including the information under the heading ‘Risk Factors’ in its Annual Report on Form 10-K for the year ended December 31, 2013, which information is incorporated herein by reference.
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ManpowerGroup
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Results of Operations
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(In millions, except per share data)
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Three Months Ended March 31
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% Variance
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Amount
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Constant
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2014
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2013
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Reported
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Currency
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(Unaudited)
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Revenues from services (a)
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$ | 4,904.0 | $ | 4,768.9 | 2.8 | % | 3.0 | % | ||||||||
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Cost of services
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4,087.5 | 3,978.8 | 2.7 | % | 2.9 | % | ||||||||||
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Gross profit
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816.5 | 790.1 | 3.3 | % | 3.6 | % | ||||||||||
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Selling and administrative expenses
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689.6 | 735.7 | -6.3 | % | -6.1 | % | ||||||||||
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Operating profit
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126.9 | 54.4 | 133.4 | % | 134.6 | % | ||||||||||
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Interest and other expenses
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9.2 | 11.5 | -19.7 | % | ||||||||||||
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Earnings before income taxes
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117.7 | 42.9 | 174.3 | % | 175.5 | % | ||||||||||
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Provision for income taxes
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47.6 | 19.0 | 150.6 | % | ||||||||||||
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Net earnings
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$ | 70.1 | $ | 23.9 | 193.2 | % | 196.5 | % | ||||||||
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Net earnings per share - basic
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$ | 0.88 | $ | 0.31 | 183.9 | % | ||||||||||
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Net earnings per share - diluted
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$ | 0.86 | $ | 0.31 | 177.4 | % | 180.6 | % | ||||||||
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Weighted average shares - basic
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79.8 | 77.1 | 3.5 | % | ||||||||||||
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Weighted average shares - diluted
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81.2 | 78.2 | 3.8 | % | ||||||||||||
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(a) Revenues from services include fees received from our franchise offices of $5.5 million and $5.3 million for the three months ended March 31, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $256.6 million and $234.7 million for the three months ended March 31, 2014 and 2013, respectively.
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ManpowerGroup
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Operating Unit Results
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(In millions)
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Three Months Ended March 31
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% Variance
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Amount
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Constant
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2014
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2013
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Reported
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Currency
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(Unaudited)
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Revenues from Services:
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Americas:
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United States (b)
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$ | 720.5 | $ | 706.1 | 2.1 | % | 2.1 | % | ||||||||
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Other Americas
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350.6 | 386.9 | -9.4 | % | 3.6 | % | ||||||||||
| 1,071.1 | 1,093.0 | -2.0 | % | 2.6 | % | |||||||||||
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Southern Europe:
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France
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1,217.3 | 1,145.2 | 6.3 | % | 2.3 | % | ||||||||||
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Italy
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274.7 | 257.9 | 6.5 | % | 2.5 | % | ||||||||||
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Other Southern Europe
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230.0 | 193.4 | 18.9 | % | 14.7 | % | ||||||||||
| 1,722.0 | 1,596.5 | 7.9 | % | 3.8 | % | |||||||||||
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Northern Europe
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1,463.9 | 1,370.3 | 6.8 | % | 4.6 | % | ||||||||||
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APME
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573.7 | 632.5 | -9.3 | % | -1.1 | % | ||||||||||
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Right Management
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73.3 | 76.6 | -4.3 | % | -4.0 | % | ||||||||||
| $ | 4,904.0 | $ | 4,768.9 | 2.8 | % | 3.0 | % | |||||||||
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Operating Unit Profit: (a)
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Americas:
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United States
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$ | 13.4 | $ | 7.4 | 81.2 | % | 81.2 | % | ||||||||
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Other Americas
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12.6 | 8.7 | 43.8 | % | 64.6 | % | ||||||||||
| 26.0 | 16.1 | 61.0 | % | 72.2 | % | |||||||||||
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Southern Europe:
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France
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51.2 | 29.7 | 72.0 | % | 65.0 | % | ||||||||||
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Italy
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12.6 | 11.7 | 7.8 | % | 3.4 | % | ||||||||||
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Other Southern Europe
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4.6 | 2.3 | 97.5 | % | 90.0 | % | ||||||||||
| 68.4 | 43.7 | 56.2 | % | 49.9 | % | |||||||||||
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Northern Europe
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38.4 | 10.6 | 261.4 | % | 256.7 | % | ||||||||||
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APME
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20.2 | 14.8 | 38.1 | % | 52.4 | % | ||||||||||
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Right Management
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8.3 | 2.0 | 305.7 | % | 303.8 | % | ||||||||||
| 161.3 | 87.2 | |||||||||||||||
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Corporate expenses
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(26.2 | ) | (24.4 | ) | ||||||||||||
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Intangible asset amortization expense
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(8.2 | ) | (8.4 | ) | ||||||||||||
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Operating profit
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126.9 | 54.4 | 133.4 | % | 134.6 | % | ||||||||||
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Interest and other expenses (c)
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(9.2 | ) | (11.5 | ) | ||||||||||||
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Earnings before income taxes
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$ | 117.7 | $ | 42.9 | ||||||||||||
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(a) On a consolidated basis, the French business tax is reported in provision for income taxes, in accordance with the current accounting guidance on income taxes. Prior to the second quarter of 2013, we internally reviewed the financial results of our French operations including the French business tax within OUP given the operational nature of these taxes. While we continue to view this tax as operational, during the second quarter of 2013 we changed our internal reporting to exclude the French business tax from the OUP of our France reportable segment. Therefore, we are no longer required to show the business tax amount separately to reconcile to the consolidated results. All previously reported segment results have been restated to conform to the current year presentation. This change in segment reporting has no impact on our reporting of consolidated results.
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(b) In the United States, revenues from services include fees received from our franchise offices of $3.4 million and $3.2 million for the three months ended March 31, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $169.1 million and $155.1 million for the three months ended March 31, 2014 and 2013, respectively.
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(c) The components of interest and other expenses were:
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| 2014 | 2013 | |||||||||||||||
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Interest expense
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$ | 8.6 | $ | 10.7 | ||||||||||||
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Interest income
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(0.9 | ) | (0.9 | ) | ||||||||||||
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Foreign exchange (gain) loss
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(1.2 | ) | 0.4 | |||||||||||||
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Miscellaneous expenses, net
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2.7 | 1.3 | ||||||||||||||
| $ | 9.2 | $ | 11.5 | |||||||||||||
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ManpowerGroup
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Consolidated Balance Sheets
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(In millions)
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Mar. 31
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Dec. 31
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2014
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2013
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(Unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 696.5 | $ | 737.6 | ||||
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Accounts receivable, net
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4,244.1 | 4,277.9 | ||||||
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Prepaid expenses and other assets
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142.8 | 161.3 | ||||||
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Future income tax benefits
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67.2 | 66.2 | ||||||
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Total current assets
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5,150.6 | 5,243.0 | ||||||
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Other assets:
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Goodwill and other intangible assets, net
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1,411.4 | 1,400.0 | ||||||
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Other assets
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557.2 | 479.3 | ||||||
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Total other assets
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1,968.6 | 1,879.3 | ||||||
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Property and equipment:
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Land, buildings, leasehold improvements and equipment
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709.5 | 706.2 | ||||||
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Less: accumulated depreciation and amortization
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548.7 | 540.2 | ||||||
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Net property and equipment
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160.8 | 166.0 | ||||||
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Total assets
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$ | 7,280.0 | $ | 7,288.3 | ||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$ | 1,579.0 | $ | 1,523.9 | ||||
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Employee compensation payable
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184.3 | 230.4 | ||||||
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Accrued liabilities
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561.3 | 536.1 | ||||||
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Accrued payroll taxes and insurance
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578.0 | 680.7 | ||||||
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Value added taxes payable
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476.4 | 502.5 | ||||||
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Short-term borrowings and current maturities of long-term debt
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45.4 | 36.0 | ||||||
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Total current liabilities
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3,424.4 | 3,509.6 | ||||||
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Other liabilities:
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Long-term debt
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484.3 | 481.9 | ||||||
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Other long-term liabilities
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395.5 | 382.6 | ||||||
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Total other liabilities
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879.8 | 864.5 | ||||||
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Shareholders' equity:
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Common stock
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1.1 | 1.1 | ||||||
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Capital in excess of par value
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3,032.6 | 3,014.0 | ||||||
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Retained earnings
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1,387.6 | 1,317.5 | ||||||
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Accumulated other comprehensive income
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82.1 | 82.2 | ||||||
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Treasury stock, at cost
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(1,527.6 | ) | (1,500.6 | ) | ||||
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Total shareholders' equity
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2,975.8 | 2,914.2 | ||||||
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Total liabilities and shareholders' equity
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$ | 7,280.0 | $ | 7,288.3 | ||||
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ManpowerGroup
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Consolidated Statements of Cash Flows
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(In millions)
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Three Months Ended
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March 31
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2014
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2013
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(Unaudited)
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Cash Flows from Operating Activities:
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Net earnings
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$ | 70.1 | $ | 23.9 | ||||
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Adjustments to reconcile net earnings to net cash provided by operating activities:
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Depreciation and amortization
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21.6 | 24.2 | ||||||
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Deferred income taxes
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(1.5 | ) | 2.7 | |||||
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Provision for doubtful accounts
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6.6 | 5.9 | ||||||
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Share-based compensation
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10.8 | 6.5 | ||||||
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Excess tax benefit on exercise of share-based awards
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(2.2 | ) | (0.3 | ) | ||||
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Changes in operating assets and liabilities, excluding the impact of acquisitions:
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Accounts receivable
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27.8 | 20.2 | ||||||
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Other assets
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(55.8 | ) | (17.1 | ) | ||||
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Other liabilities
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(92.9 | ) | (128.3 | ) | ||||
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Cash used in operating activities
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(15.5 | ) | (62.3 | ) | ||||
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Cash Flows from Investing Activities:
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Capital expenditures
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(8.3 | ) | (12.8 | ) | ||||
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Acquisitions of businesses, net of cash acquired
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(9.4 | ) | - | |||||
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Proceeds from sales of property and equipment
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- | 0.6 | ||||||
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Cash used in investing activities
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(17.7 | ) | (12.2 | ) | ||||
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Cash Flows from Financing Activities:
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Net change in short-term borrowings
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13.3 | 2.2 | ||||||
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Repayments of long-term debt
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(0.6 | ) | (0.3 | ) | ||||
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Proceeds from share-based awards
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6.0 | 10.2 | ||||||
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Other share-based award transactions, net
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(8.2 | ) | 1.0 | |||||
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Repurchases of common stock
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(16.7 | ) | - | |||||
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Cash (used in) provided by financing activities
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(6.2 | ) | 13.1 | |||||
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Effect of exchange rate changes on cash
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(1.7 | ) | (3.3 | ) | ||||
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Change in cash and cash equivalents
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(41.1 | ) | (64.7 | ) | ||||
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Cash and cash equivalents, beginning of period
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737.6 | 648.1 | ||||||
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Cash and cash equivalents, end of period
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$ | 696.5 | $ | 583.4 | ||||
Exhibit 99.2
ManpowerGroup First Quarter Results April 23, 2014
ManpowerGroup | April 2014 * Forward-Looking Statements This presentation contains statements, including financial projections, that are forward-looking in nature. These statements are based on managements’ current expectations or beliefs, and are subject to known and unknown risks and uncertainties regarding expected future results. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the ManpowerGroup Inc. Annual Report on Form 10-K dated December 31, 2013, which information is incorporated herein by reference, and such other factors as may be described from time to time in the Company’s SEC filings. Any forward-looking statements in this presentation speak only as of the date hereof. The Company assumes no obligation to update or revise any forward-looking statements. *
ManpowerGroup | April 2014 * Excludes the impact of restructuring charges of $34.8M in Q1 2013. As Reported Excluding PY Restructuring Charges Q1 Financial Highlights 3% 3% Revenue $4.9B 3% CC 3% CC Revenue $4.9B 10 bps 10 bps Gross Margin 16.7% 133% 42% Operating Profit $127M 135% CC 43% CC Operating Profit $127M 150 bps 70 bps OP Margin 2.6% 177% 37% EPS $0.86 181% CC 38% CC EPS $0.86 Throughout this presentation, the difference between reported variances and Constant Currency (CC) variances represents the impact of currency on our financial results. Constant Currency is further explained on our Web site. Consolidated Financial Highlights (1)
ManpowerGroup | April 2014 * EPS Bridge – Q1 vs. Guidance Midpoint + 0.01 + 0.10 + 0.05 - 0.01 + 0.02
ManpowerGroup | April 2014 * Consolidated Gross Margin Change
ManpowerGroup | April 2014 * $817M Growth in CC % Business Line Gross Profit – Q1 2014 █ Manpower █ Experis █ ManpowerGroup - Total █ ManpowerGroup Solutions █ Right Management
ManpowerGroup | April 2014 * SG&A Expense Bridge – Q1 YoY (in millions of USD) Productivity Gain 14.1% % of Revenue 14.7% % of Revenue
ManpowerGroup | April 2014 * Operating Unit Profit (OUP) is the measure that we use to evaluate segment performance. OUP is equal to segment revenues less direct costs and branch and national headquarters operating costs. As Reported Excluding PY Restructuring Charges Q1 Financial Highlights 2% 2% Revenue $1.1B 3% CC 3% CC Revenue $1.1B 61% 18% OUP $26M 72% CC 26% CC OUP $26M 90 bps 40 bps OUP Margin 2.4% (1) Americas Segment (22% of Revenue) Included in these amounts is the US, which had revenue of $721M (+2%) and OUP of $13.4M (+81%, or +34% excluding the impact of restructuring charges in Q1 2013). Excludes the impact of restructuring charges of $5.9M in Q1 2013. (2)
ManpowerGroup | April 2014 * Americas – Q1 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue 67% 12% 5% 16%
ManpowerGroup | April 2014 * As Reported Excluding PY Restructuring Charges Q1 Financial Highlights 8% 8% Revenue $1.7B 4% CC 4% CC Revenue $1.7B 56% 52% OUP $68M 50% CC 46% CC OUP $68M 130 bps 110 bps OUP Margin 4.0% (1) Southern Europe Segment (35% of Revenue) Included in these amounts is France, which had revenue of $1.2B (+2% CC) and OUP of $51.2M (+65% CC). Excludes the impact of restructuring charges of $1.2M in Q1 2013. (2)
ManpowerGroup | April 2014 * Southern Europe – Q1 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue 71% 16% 6% 7% (1) On an organic basis, Spain revenue increased 28% (23% in CC).
ManpowerGroup | April 2014 * As Reported Excluding PY Restructuring Charges Q1 Financial Highlights 7% 7% Revenue $1.5B 5% CC 5% CC Revenue $1.5B 261% 39% OUP $38M 257% CC 37% CC OUP $38M 180 bps 60 bps OUP Margin 2.6% Northern Europe Segment (30% of Revenue) (1) Excludes the impact of restructuring charges of $17.1M in Q1 2013.
ManpowerGroup | April 2014 * Northern Europe – Q1 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue
ManpowerGroup | April 2014 * As Reported Excluding PY Restructuring Charges Q1 Financial Highlights 9% 9% Revenue $574M 1% CC 1% CC Revenue $574M 38% 18% OUP $20M 52% CC 31% CC OUP $20M 120 bps 80 bps OUP Margin 3.5% APME Segment (12% of Revenue) (1) Excludes the impact of restructuring charges of $2.4M in Q1 2013.
ManpowerGroup | April 2014 * APME – Q1 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue 37% 25% 38%
ManpowerGroup | April 2014 * Right Management Segment (1% of Revenue) As Reported Excluding PY Restructuring Charges Q1 Financial Highlights 4% 4% Revenue $73M 4% CC 4% CC Revenue $73M 306% 42% OUP $8M 304% CC 41% CC OUP $8M 860 bps 370 bps OUP Margin 11.3% (1) Excludes the impact of restructuring charges of $3.8M in Q1 2013.
ManpowerGroup | April 2014 * Cash Flow Summary – Q1
ManpowerGroup | April 2014 * Balance Sheet Highlights Total Debt (in millions of USD) Total Debt to Total Capitalization Total Debt Net Debt (Cash)
ManpowerGroup | April 2014 * (1) (2) The $600M agreement requires that we comply with a Leverage Ratio (Debt-to-EBITDA) of not greater than 3.5 to 1 and a Fixed Charge Coverage Ratio of not less than 1.5 to 1, in addition to other customary restrictive covenants. As defined in the agreement, we had a Debt-to-EBITDA ratio of 0.34 and a fixed charge coverage ratio of 3.54 as of March 31, 2014. As of March 31, 2014, there were $0.9M of standby letters of credit issued under the agreement. Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $375.6M. Total subsidiary borrowings are limited to $300M due to restrictions in our Revolving Credit Facility, with the exception of Q3 when subsidiary borrowings are limited to $600M.
ManpowerGroup | April 2014 * Second Quarter Outlook Revenue Total Up 4-6% (Up 2-4% CC) Americas Up/Down 1% (Up 3-5% CC) Southern Europe Up 9-11% (Up 3-5% CC) Northern Europe Up 6-8% (Up 2-4% CC) APME Down 3-5% (Up/Down 1% CC) Right Management Right Management Flat/Down 2% (Down 1-3% CC) Gross Profit Margin Gross Profit Margin 16.7 – 16.9% Operating Profit Margin Operating Profit Margin 3.4 – 3.6% Tax Rate Tax Rate 39% EPS EPS $1.26 – $1.34 (favorable $0.02 currency)
ManpowerGroup | April 2014 * Highlights Strong first quarter execution Positive revenue momentum in major geographies Simplification plan driving sales focus and strong operating leverage. Management transition smooth and on track
ManpowerGroup | April 2014 * ManpowerGroup | April 2014 * Questions