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): October 21, 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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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 October 21, 2014, we issued a press release announcing our results of operations for the three- and nine-month periods ended September 30, 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
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Press Release dated October 21, 2014
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99.2
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Presentation materials for October 21, 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: October 21, 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
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Press Release dated October 21, 2014
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99.2
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Presentation materials for October 21, 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 3rd Quarter 2014 Results
MILWAUKEE, October 21, 2014 -- ManpowerGroup (NYSE: MAN) today reported that earnings per diluted share for the three months ended September 30, 2014 were $1.61 compared to $1.18 in the prior year period. Net earnings in the quarter were $130.5 million compared to $94.7 million a year earlier. Revenues for the third quarter were $5.4 billion, an increase of 4 percent from the year earlier period in U.S. dollars and 5 percent in constant currency.
Included in the prior year third quarter results is a restructuring charge, primarily related to office consolidations and severance costs, of $8.1 million ($6.2 million after tax or 8 cents per diluted share). There were no restructuring charges in the current year quarter. Net earnings in the third quarter were not materially impacted by changes in foreign currencies compared to the prior year period.
Jonas Prising, ManpowerGroup CEO, said, “Our third quarter results were strong, with solid revenue and profit growth in the majority of our operations and brands. While the economic recovery has recently become more choppy in some markets, we are still seeing growth opportunities and I am confident we are well positioned to deliver unique value to our clients in these uncertain times.
“We are anticipating the fourth quarter of 2014 diluted earnings per share to be in the range of $1.39 to $1.47, which includes an estimated unfavorable currency impact of 8 cents,” Prising stated.
Earnings per diluted share for the nine months ended September 30, 2014 were $3.82 compared to $2.36 per diluted share in 2013. Net earnings were $310.4 million compared to $186.8 million in the prior year. Revenues for the nine-month period were $15.6 billion, an increase of 4 percent from the prior year in reported U.S. dollars and in constant currency. Included in the prior year results for the nine month period are restructuring costs of 58 cents per diluted share. Foreign currency exchange rates had a favorable impact of 3 cents per share for the nine month period in 2014.
In conjunction with its third quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on October 21, 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/investors.
Supplemental financial information referenced in the conference call can be found at http://www.manpowergroup.com/investors .
About ManpowerGroup™
ManpowerGroup™ (NYSE: MAN) has been the world’s workforce expert for more than 65 years. We source, assess, develop and manage talent across a wide range of skills and industries. Our ManpowerGroup family of brands - Experis™, Manpower®, ManpowerGroup™ Solutions, and Right Management ® - helps 400,000 clients in 80 countries and territories improve workforce performance, while connecting more than 600,000 individuals to meaningful work. 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. www.manpowergroup.com
Forward-Looking Statements
This news release contains statements, including earnings projections, that are forward-looking in nature. These statements are based on management’s current expectations or beliefs, and are subject to known and unknown 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. Any forward-looking statement in this release speaks only as of the date on which it is made. The company assumes no obligation to update or revise any forward-looking statements.
###
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ManpowerGroup
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||||||||||||||||
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Results of Operations
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||||||||||||||||
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(In millions, except per share data)
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||||||||||||||||
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Three Months Ended September 30
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||||||||||||||||
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% Variance
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||||||||||||||||
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Amount
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Constant
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|||||||||||||||
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2014
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2013
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Reported
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Currency
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|||||||||||||
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(Unaudited)
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||||||||||||||||
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Revenues from services (a)
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$ | 5,416.0 | $ | 5,188.8 | 4.4 | % | 4.6 | % | ||||||||
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Cost of services
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4,510.4 | 4,335.2 | 4.0 | % | 4.3 | % | ||||||||||
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Gross profit
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905.6 | 853.6 | 6.1 | % | 6.5 | % | ||||||||||
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Selling and administrative expenses
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693.3 | 691.2 | 0.3 | % | 0.8 | % | ||||||||||
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Operating profit
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212.3 | 162.4 | 30.7 | % | 30.6 | % | ||||||||||
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Interest and other expenses
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9.9 | 5.4 | 81.9 | % | ||||||||||||
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Earnings before income taxes
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202.4 | 157.0 | 28.9 | % | 28.5 | % | ||||||||||
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Provision for income taxes
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71.9 | 62.3 | 15.4 | % | ||||||||||||
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Net earnings
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$ | 130.5 | $ | 94.7 | 37.8 | % | 37.4 | % | ||||||||
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Net earnings per share - basic
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$ | 1.64 | $ | 1.21 | 35.5 | % | ||||||||||
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Net earnings per share - diluted
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$ | 1.61 | $ | 1.18 | 36.4 | % | 35.6 | % | ||||||||
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Weighted average shares - basic
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79.7 | 78.4 | 1.6 | % | ||||||||||||
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Weighted average shares - diluted
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81.1 | 80.0 | 1.5 | % | ||||||||||||
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(a) Revenues from services include fees received from our franchise offices of $6.9 million and $6.6 million for the three months ended September 30, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $302.0 million and $285.4 million for the three months ended September 30, 2014 and 2013, respectively.
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||||||||||||||||
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ManpowerGroup
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||||||||||||||||
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Operating Unit Results
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||||||||||||||||
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(In millions)
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||||||||||||||||
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Three Months Ended September 30
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% Variance
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||||||||||||||||
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Amount
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Constant
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|||||||||||||||
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2014
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2013
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Reported
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Currency
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|||||||||||||
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(Unaudited)
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||||||||||||||||
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Revenues from Services:
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||||||||||||||||
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Americas:
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||||||||||||||||
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United States (a)
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$ | 800.5 | $ | 761.8 | 5.1 | % | 5.1 | % | ||||||||
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Other Americas
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388.5 | 382.0 | 1.7 | % | 9.5 | % | ||||||||||
| 1,189.0 | 1,143.8 | 4.0 | % | 6.5 | % | |||||||||||
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Southern Europe:
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||||||||||||||||
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France
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1,454.3 | 1,420.7 | 2.4 | % | 2.2 | % | ||||||||||
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Italy
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294.1 | 269.7 | 9.0 | % | 9.0 | % | ||||||||||
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Other Southern Europe
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259.9 | 227.9 | 14.1 | % | 13.8 | % | ||||||||||
| 2,008.3 | 1,918.3 | 4.7 | % | 4.5 | % | |||||||||||
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Northern Europe
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1,554.6 | 1,448.1 | 7.4 | % | 6.2 | % | ||||||||||
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APME
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592.5 | 601.4 | -1.5 | % | -0.7 | % | ||||||||||
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Right Management
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71.6 | 77.2 | -7.2 | % | -8.0 | % | ||||||||||
| $ | 5,416.0 | $ | 5,188.8 | 4.4 | % | 4.6 | % | |||||||||
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Operating Unit Profit:
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||||||||||||||||
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Americas:
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||||||||||||||||
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United States
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$ | 41.9 | $ | 34.3 | 21.9 | % | 21.9 | % | ||||||||
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Other Americas
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14.6 | 11.4 | 29.3 | % | 34.8 | % | ||||||||||
| 56.5 | 45.7 | 23.8 | % | 25.1 | % | |||||||||||
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Southern Europe:
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||||||||||||||||
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France
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84.2 | 58.4 | 44.2 | % | 43.7 | % | ||||||||||
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Italy
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14.7 | 10.7 | 37.4 | % | 37.3 | % | ||||||||||
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Other Southern Europe
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6.1 | 4.0 | 51.4 | % | 50.6 | % | ||||||||||
| 105.0 | 73.1 | 43.6 | % | 43.1 | % | |||||||||||
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Northern Europe
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59.6 | 50.3 | 18.4 | % | 17.3 | % | ||||||||||
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APME
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21.6 | 19.2 | 12.5 | % | 13.7 | % | ||||||||||
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Right Management
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6.3 | 4.5 | 40.1 | % | 38.3 | % | ||||||||||
| 249.0 | 192.8 | |||||||||||||||
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Corporate expenses
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(28.3 | ) | (21.9 | ) | ||||||||||||
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Intangible asset amortization expense
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(8.4 | ) | (8.5 | ) | ||||||||||||
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Operating profit
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212.3 | 162.4 | 30.7 | % | 30.6 | % | ||||||||||
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Interest and other expenses (b)
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(9.9 | ) | (5.4 | ) | ||||||||||||
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Earnings before income taxes
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$ | 202.4 | $ | 157.0 | ||||||||||||
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(a) In the United States, revenues from services include fees received from our franchise offices of $4.4 million and $4.2 million for the three months ended September 30, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $196.3 million and $181.6 million for the three months ended September 30, 2014 and 2013, respectively.
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||||||||||||||||
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(b) The components of interest and other expenses were:
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||||||||||||||||
| 2014 | 2013 | |||||||||||||||
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Interest expense
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$ | 9.6 | $ | 7.9 | ||||||||||||
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Interest income
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(1.4 | ) | (0.9 | ) | ||||||||||||
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Foreign exchange loss (gain)
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0.7 | (0.3 | ) | |||||||||||||
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Miscellaneous expense (income), net
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1.0 | (1.3 | ) | |||||||||||||
| $ | 9.9 | $ | 5.4 | |||||||||||||
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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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||||||||||||||||
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Nine Months Ended September 30
|
||||||||||||||||
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% Variance
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||||||||||||||||
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Amount
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Constant
|
|||||||||||||||
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2014
|
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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$ | 15,641.7 | $ | 14,998.4 | 4.3 | % | 3.8 | % | ||||||||
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Cost of services
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13,022.3 | 12,518.3 | 4.0 | % | 3.5 | % | ||||||||||
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Gross profit
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2,619.4 | 2,480.1 | 5.6 | % | 5.3 | % | ||||||||||
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Selling and administrative expenses
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2,092.8 | 2,135.2 | -2.0 | % | -2.2 | % | ||||||||||
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Operating profit
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526.6 | 344.9 | 52.7 | % | 51.7 | % | ||||||||||
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Interest and other expenses
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27.0 | 27.2 | -0.9 | % | ||||||||||||
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Earnings before income taxes
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499.6 | 317.7 | 57.3 | % | 55.9 | % | ||||||||||
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Provision for income taxes
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189.2 | 130.9 | 44.6 | % | ||||||||||||
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Net earnings
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$ | 310.4 | $ | 186.8 | 66.1 | % | 65.0 | % | ||||||||
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Net earnings per share - basic
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$ | 3.89 | $ | 2.41 | 61.4 | % | ||||||||||
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Net earnings per share - diluted
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$ | 3.82 | $ | 2.36 | 61.9 | % | 60.6 | % | ||||||||
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Weighted average shares - basic
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79.8 | 77.6 | 2.8 | % | ||||||||||||
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Weighted average shares - diluted
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81.3 | 79.2 | 2.7 | % | ||||||||||||
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(a) Revenues from services include fees received from our franchise offices of $18.8 million and $18.0 million for the nine months ended September 30, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $845.2 million and $792.4 million for the nine months ended September 30, 2014 and 2013, respectively.
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||||||||||||||||
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ManpowerGroup
|
||||||||||||||||
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Operating Unit Results
|
||||||||||||||||
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(In millions)
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||||||||||||||||
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Nine Months Ended September 30
|
||||||||||||||||
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% Variance
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||||||||||||||||
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Amount
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Constant
|
|||||||||||||||
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2014
|
2013
|
Reported
|
Currency
|
|||||||||||||
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(Unaudited)
|
||||||||||||||||
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Revenues from Services:
|
||||||||||||||||
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Americas:
|
||||||||||||||||
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United States (a)
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$ | 2,296.9 | $ | 2,216.4 | 3.6 | % | 3.6 | % | ||||||||
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Other Americas
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1,114.3 | 1,156.1 | -3.6 | % | 6.9 | % | ||||||||||
| 3,411.2 | 3,372.5 | 1.1 | % | 4.8 | % | |||||||||||
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Southern Europe:
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||||||||||||||||
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France
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4,083.7 | 3,886.5 | 5.1 | % | 2.1 | % | ||||||||||
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Italy
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882.7 | 806.0 | 9.5 | % | 6.4 | % | ||||||||||
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Other Southern Europe
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732.9 | 624.3 | 17.4 | % | 14.4 | % | ||||||||||
| 5,699.3 | 5,316.8 | 7.2 | % | 4.2 | % | |||||||||||
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Northern Europe
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4,546.3 | 4,217.2 | 7.8 | % | 5.2 | % | ||||||||||
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APME
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1,760.2 | 1,857.2 | -5.2 | % | -1.2 | % | ||||||||||
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Right Management
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224.7 | 234.7 | -4.3 | % | -4.9 | % | ||||||||||
| $ | 15,641.7 | $ | 14,998.4 | 4.3 | % | 3.8 | % | |||||||||
|
Operating Unit Profit:
|
||||||||||||||||
|
Americas:
|
||||||||||||||||
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United States
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$ | 85.0 | $ | 72.3 | 17.5 | % | 17.5 | % | ||||||||
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Other Americas
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41.2 | 32.0 | 29.2 | % | 40.9 | % | ||||||||||
| 126.2 | 104.3 | 21.1 | % | 24.7 | % | |||||||||||
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Southern Europe:
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||||||||||||||||
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France
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207.3 | 129.0 | 60.7 | % | 56.3 | % | ||||||||||
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Italy
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45.6 | 37.1 | 23.1 | % | 19.4 | % | ||||||||||
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Other Southern Europe
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16.4 | 7.5 | 117.9 | % | 112.4 | % | ||||||||||
| 269.3 | 173.6 | 55.1 | % | 50.8 | % | |||||||||||
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Northern Europe
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144.2 | 94.1 | 53.2 | % | 50.4 | % | ||||||||||
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APME
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62.8 | 54.2 | 15.8 | % | 21.3 | % | ||||||||||
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Right Management
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27.3 | 13.9 | 96.2 | % | 95.4 | % | ||||||||||
| 629.8 | 440.1 | |||||||||||||||
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Corporate expenses
|
(78.2 | ) | (69.9 | ) | ||||||||||||
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Intangible asset amortization expense
|
(25.0 | ) | (25.3 | ) | ||||||||||||
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Operating profit
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526.6 | 344.9 | 52.7 | % | 51.7 | % | ||||||||||
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Interest and other expenses (b)
|
(27.0 | ) | (27.2 | ) | ||||||||||||
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Earnings before income taxes
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$ | 499.6 | $ | 317.7 | ||||||||||||
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(a) In the United States, revenues from services include fees received from our franchise offices of $11.7 million and $11.2 million for the nine months ended September 30, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $555.7 million and $512.0 million for the nine months ended September 30, 2014 and 2013, respectively.
|
||||||||||||||||
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(b) The components of interest and other expenses were:
|
||||||||||||||||
| 2014 | 2013 | |||||||||||||||
|
Interest expense
|
$ | 27.5 | $ | 28.9 | ||||||||||||
|
Interest income
|
(3.4 | ) | (2.7 | ) | ||||||||||||
|
Foreign exchange (gain) loss
|
(1.4 | ) | 1.5 | |||||||||||||
|
Miscellaneous expense (income), net
|
4.3 | (0.5 | ) | |||||||||||||
| $ | 27.0 | $ | 27.2 | |||||||||||||
|
ManpowerGroup
|
||||||||
|
Consolidated Balance Sheets
|
||||||||
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(In millions)
|
||||||||
|
Sep. 30
|
Dec. 31
|
|||||||
|
2014
|
2013
|
|||||||
|
(Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 660.7 | $ | 737.6 | ||||
|
Accounts receivable, net
|
4,381.4 | 4,277.9 | ||||||
|
Prepaid expenses and other assets
|
120.9 | 161.3 | ||||||
|
Future income tax benefits
|
50.7 | 66.2 | ||||||
|
Total current assets
|
5,213.7 | 5,243.0 | ||||||
|
Other assets:
|
||||||||
|
Goodwill and other intangible assets, net
|
1,389.8 | 1,400.0 | ||||||
|
Other assets
|
627.4 | 479.3 | ||||||
|
Total other assets
|
2,017.2 | 1,879.3 | ||||||
|
Property and equipment:
|
||||||||
|
Land, buildings, leasehold improvements and equipment
|
673.4 | 706.2 | ||||||
|
Less: accumulated depreciation and amortization
|
523.6 | 540.2 | ||||||
|
Net property and equipment
|
149.8 | 166.0 | ||||||
|
Total assets
|
$ | 7,380.7 | $ | 7,288.3 | ||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 1,601.9 | $ | 1,523.9 | ||||
|
Employee compensation payable
|
215.4 | 230.4 | ||||||
|
Accrued liabilities
|
499.9 | 536.1 | ||||||
|
Accrued payroll taxes and insurance
|
597.7 | 680.7 | ||||||
|
Value added taxes payable
|
520.2 | 502.5 | ||||||
|
Short-term borrowings and current maturities of long-term debt
|
40.1 | 36.0 | ||||||
|
Total current liabilities
|
3,475.2 | 3,509.6 | ||||||
|
Other liabilities:
|
||||||||
|
Long-term debt
|
443.8 | 481.9 | ||||||
|
Other long-term liabilities
|
421.8 | 382.6 | ||||||
|
Total other liabilities
|
865.6 | 864.5 | ||||||
|
Shareholders' equity:
|
||||||||
|
Common stock
|
1.1 | 1.1 | ||||||
|
Capital in excess of par value
|
3,076.8 | 3,014.0 | ||||||
|
Retained earnings
|
1,588.9 | 1,317.5 | ||||||
|
Accumulated other comprehensive (loss) income
|
(44.8 | ) | 82.2 | |||||
|
Treasury stock, at cost
|
(1,582.1 | ) | (1,500.6 | ) | ||||
|
Total shareholders' equity
|
3,039.9 | 2,914.2 | ||||||
|
Total liabilities and shareholders' equity
|
$ | 7,380.7 | $ | 7,288.3 | ||||
|
ManpowerGroup
|
||||||||
|
Consolidated Statements of Cash Flows
|
||||||||
|
(In millions)
|
||||||||
|
Nine Months Ended
|
||||||||
|
September 30
|
||||||||
|
2014
|
2013
|
|||||||
|
(Unaudited)
|
||||||||
|
Cash Flows from Operating Activities:
|
||||||||
|
Net earnings
|
$ | 310.4 | $ | 186.8 | ||||
|
Adjustments to reconcile net earnings to net cash provided by operating activities:
|
||||||||
|
Depreciation and amortization
|
64.3 | 70.9 | ||||||
|
Deferred income taxes
|
6.9 | (0.1 | ) | |||||
|
Provision for doubtful accounts
|
15.0 | 19.1 | ||||||
|
Share-based compensation
|
34.3 | 22.8 | ||||||
|
Excess tax benefit on exercise of share-based awards
|
(3.4 | ) | (4.5 | ) | ||||
|
Changes in operating assets and liabilities, excluding the impact of acquisitions:
|
||||||||
|
Accounts receivable
|
(355.4 | ) | (128.8 | ) | ||||
|
Other assets
|
(136.7 | ) | (101.1 | ) | ||||
|
Other liabilities
|
169.5 | 46.6 | ||||||
|
Cash provided by operating activities
|
104.9 | 111.7 | ||||||
|
Cash Flows from Investing Activities:
|
||||||||
|
Capital expenditures
|
(32.8 | ) | (33.6 | ) | ||||
|
Acquisitions of businesses, net of cash acquired
|
(25.1 | ) | (18.2 | ) | ||||
|
Proceeds from sales of property and equipment
|
1.3 | 2.6 | ||||||
|
Cash used in investing activities
|
(56.6 | ) | (49.2 | ) | ||||
|
Cash Flows from Financing Activities:
|
||||||||
|
Net change in short-term borrowings
|
10.2 | (1.1 | ) | |||||
|
Proceeds from long-term debt
|
- | 3.6 | ||||||
|
Repayments of long-term debt
|
(1.6 | ) | (268.7 | ) | ||||
|
Proceeds from share-based awards
|
24.3 | 65.8 | ||||||
|
Other share-based award transactions, net
|
(5.5 | ) | 12.0 | |||||
|
Repurchases of common stock
|
(72.6 | ) | - | |||||
|
Dividends paid
|
(39.0 | ) | (35.5 | ) | ||||
|
Cash used in financing activities
|
(84.2 | ) | (223.9 | ) | ||||
|
Effect of exchange rate changes on cash
|
(41.0 | ) | 2.0 | |||||
|
Change in cash and cash equivalents
|
(76.9 | ) | (159.4 | ) | ||||
|
Cash and cash equivalents, beginning of period
|
737.6 | 648.1 | ||||||
|
Cash and cash equivalents, end of period
|
$ | 660.7 | $ | 488.7 | ||||
Exhibit 99.2
ManpowerGroup Third Quarter Results October 21, 2014
ManpowerGroup | October 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 | October 2014 * As Reported Excluding PY Restructuring Charges Q3 Financial Highlights 4% 4% Revenue $5.4B 5% CC 5% CC Revenue $5.4B 20 bps 20 bps Gross Margin 16.7% 31% 24% Operating Profit $212M 31% CC 24% CC Operating Profit $212M 80 bps 60 bps OP Margin 3.9% 36% 28% EPS $1.61 36% CC 28% CC EPS $1.61 Excludes the impact of restructuring charges of $8.1M in Q3 2013. 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 | October 2014 * EPS Bridge – Q3 vs. Guidance Midpoint
ManpowerGroup | October 2014 * Consolidated Gross Margin Change
ManpowerGroup | October 2014 * Growth in CC % Business Line Gross Profit – Q3 2014 █ Manpower █ Experis █ ManpowerGroup - Total █ ManpowerGroup Solutions █ Right Management
ManpowerGroup | October 2014 * SG&A Expense Bridge – Q3 YoY (in millions of USD) Productivity Gain 12.8% % of Revenue 13.2% % of Revenue
ManpowerGroup | October 2014 * SG&A Expense Bridge – Q3 YTD YoY (in millions of USD) Productivity Gain 13.4% % of Revenue 13.8% % of Revenue
ManpowerGroup | October 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 Non-Recurring Items Q3 Financial Highlights 4% 4% Revenue $1.2B 7% CC 7% CC Revenue $1.2B 24% 21% OUP $57M 25% CC 22% CC OUP $57M 80 bps 70 bps OUP Margin 4.8% (1) Americas Segment (22% of Revenue) Included in these amounts is the US, which had revenue of $800M (+5%) and OUP of $41.9M (+22%). Excludes the impact of restructuring charges of $1.1M in Q3 2013. (2)
ManpowerGroup | October 2014 * Americas – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue
ManpowerGroup | October 2014 * As Reported Excluding PY Restructuring Charges Q3 Financial Highlights 5% 5% Revenue $2.0B 5% CC 5% CC Revenue $2.0B 44% 42% OUP $105M 43% CC 42% CC OUP $105M 140 bps 140 bps OUP Margin 5.2% Southern Europe Segment (37% of Revenue) Included in these amounts is France, which had revenue of $1.5B (+2% CC) and OUP of $84.2M (+44% CC, or +43% excluding the impact of restructuring charges in Q3 2013). Excludes the impact of restructuring charges of $0.6M in Q3 2013. (1) (2)
ManpowerGroup | October 2014 * Southern Europe – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue
ManpowerGroup | October 2014 * As Reported Excluding PY Restructuring Charges Q3 Financial Highlights 7% 7% Revenue $1.6B 6% CC 6% CC Revenue $1.6B 18% 13% OUP $60M 17% CC 12% CC OUP $60M 30 bps 20 bps OUP Margin 3.8% Northern Europe Segment (29% of Revenue) Excludes the impact of restructuring charges of $2.4M in Q3 2013. (1)
ManpowerGroup | October 2014 * Northern Europe – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue
ManpowerGroup | October 2014 * As Reported Excluding PY Restructuring Charges Q3 Financial Highlights 2% 2% Revenue $592M 1% CC 1% CC Revenue $592M 12% 6% OUP $22M 14% CC 7% CC OUP $22M 50 bps 30 bps OUP Margin 3.7% APME Segment (11% of Revenue) Excludes the impact of restructuring charges of $1.1M in Q3 2013. (1)
ManpowerGroup | October 2014 * APME – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue
ManpowerGroup | October 2014 * Right Management Segment (1% of Revenue) As Reported Excluding PY Restructuring Charges Q3 Financial Highlights 7% 7% Revenue $72M 8% CC 8% CC Revenue $72M 40% 15% OUP $6M 38% CC 16% CC OUP $6M 290 bps 80 bps OUP Margin 8.7% Excludes the impact of restructuring charges of $2.9M in Q3 2013. (1)
ManpowerGroup | October 2014 * Cash Flow Summary – 9 Months YTD
ManpowerGroup | October 2014 * Balance Sheet Highlights Total Debt (in millions of USD) Total Debt to Total Capitalization Total Debt Net Debt (Cash)
ManpowerGroup | October 2014 * Interest Rate Maturity Date Total Outstanding Remaining Available Euro Notes - €350M 4.505% Jun 2018 442 - Revolving Credit Agreement 1.23% Oct 2018 - 599 Uncommitted lines and Other Various Various 42 307 Total Debt 484 906 Credit Facilities – September 30, 2014 (in millions of USD) (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 0.29 and a fixed charge coverage ratio of 4.06 as of September 30, 2014. As of September 30, 2014, there were $0.9M of standby letters of credit issued under the agreement. Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $348.5M. 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 | October 2014 * Fourth Quarter Outlook Revenue Total Down 1-3% (Up 2-4% CC) Americas Up 2-4% (Up 5-7% CC) Southern Europe Down 5-7% (Up 1-3% CC) Northern Europe Flat/Down 2% (Up 3-5% CC) APME Flat/Down 2% (Flat/Up 2% CC) Right Management Right Management Down 7-9% (Down 5-7% CC) Gross Profit Margin Gross Profit Margin 16.8 – 17.0% Operating Profit Margin Operating Profit Margin 3.5 – 3.7% Tax Rate Tax Rate 35% EPS EPS $1.39 – $1.47 (unfavorable $0.08 currency)
ManpowerGroup | October 2014 * Key Take-Aways