Document
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): July 24, 2017
MANPOWERGROUP INC.
(Exact name of registrant as specified in its charter)
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Wisconsin | 1-10686 | 39-1672779 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
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100 Manpower Place | |
Milwaukee, Wisconsin | 53212 |
(Address of principal executive offices) | (Zip Code) |
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)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
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 July 24, 2017, we issued a press release announcing our results of operations for the three month and six month periods ended June 30, 2017. 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. | Description |
99.1 | Press Release dated July 24, 2017 |
99.2 | Presentation materials for July 24, 2017 conference call |
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: July 24, 2017 | | By: | /s/ John T. McGinnis | |
| | | John T. McGinnis Executive Vice President and Chief Financial Officer | |
EXHIBIT INDEX
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Exhibit No. | Description |
99.1 | Press Release dated July 24, 2017 |
99.2 | Presentation materials for July 24, 2017 conference call |
Exhibit
Exhibit 99.1
FOR IMMEDIATE RELEASE Contact:
Jack McGinnis
+1.414.906.7977
jack.mcginnis@manpowergroup.com
ManpowerGroup Reports 2nd Quarter and First Half 2017 Results
MILWAUKEE, July 24, 2017 -- ManpowerGroup (NYSE: MAN) today reported that net earnings for the three months ended June 30, 2017 were $117.0 million, or $1.72 per diluted share compared to net earnings of $115.4 million, or $1.60 per diluted share in the prior year period. Revenues for the second quarter were $5.2 billion, an increase of 3% from the prior year period.
The current year quarter included restructuring charges which reduced earnings per share by 10 cents.
Financial results in the quarter were impacted by the stronger U.S. dollar relative to several foreign currencies compared to the prior year period. On a constant currency basis, revenues increased 6% and earnings per share increased 9%. Earnings per share in the quarter were negatively impacted 3 cents by changes in foreign currencies compared to the prior year, or 4 cents excluding the restructuring charges.
ManpowerGroup Chairman & CEO Jonas Prising said, “We are pleased with our strong second quarter results. The labor markets continue to improve in Europe and across the globe, which is a good foundation for continued profitable growth as we head into the second part of 2017.
“The improving market conditions were spread across the geographies where we operate, and revenue growth was strong in a number of our countries, with our teams in France, Italy, Mexico and Poland leading the way.
“We anticipate the third quarter diluted earnings per share to be in the range of $1.90 to $1.98, which includes an estimated favorable currency impact of 2 cents,” Prising stated.
Net earnings for the six months ended June 30, 2017 were $191.4 million, or $2.80 per diluted share compared to net earnings of $187.1 million, or $2.57 per diluted share in the prior year. The year to date period included restructuring charges which reduced earnings per share by 41 cents and discrete income tax benefits in the first quarter which increased earnings per share by 19
cents. Revenues for the six-month period were $9.9 billion, an increase of 3% from the prior year or an increase of 6% in constant currency. Foreign currency exchange rates had an unfavorable impact of 6 cents per share for the six-month period.
In conjunction with its second quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on July 24, 2017 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://investor.manpowergroup.com/ in the section titled “Investor Relations.”
Supplemental financial information referenced in the conference call can be found at http://investor.manpowergroup.com/ .
About ManpowerGroup
ManpowerGroup® (NYSE: MAN), the leading global workforce solutions company, helps organizations transform in a fast-changing world of work by sourcing, assessing, developing and managing the talent that enables them to win. We develop innovative solutions for over 400,000 clients and connect 3+ million people to meaningful, sustainable work across a wide range of industries and skills. Our expert family of brands - Manpower®, Experis®, Right Management® and ManpowerGroup® Solutions - creates substantially more value for candidates and clients across 80 countries and territories and has done so for nearly 70 years. In 2017, ManpowerGroup was named one of the World's Most Ethical Companies for the seventh consecutive year and one of Fortune's Most Admired Companies, confirming our position as the most trusted and admired brand in the industry. See how ManpowerGroup is powering the future of work: www.manpowergroup.com
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, 2016, which information is incorporated herein by reference.
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ManpowerGroup |
Results of Operations |
(In millions, except per share data) |
| | | | | | | |
| Three Months Ended June 30 |
| | | | | % Variance |
| | | | | Amount | | Constant |
| 2017 | | 2016 | | Reported | | Currency |
| (Unaudited) |
Revenues from services (a) | $ | 5,174.8 |
| | $ | 5,022.1 |
| | 3.0 | % | | 5.6 | % |
Cost of services | 4,313.1 |
| | 4,161.4 |
| | 3.6 | % | | 6.3 | % |
Gross profit | 861.7 |
| | 860.7 |
| | 0.1 | % | | 2.5 | % |
Selling and administrative expenses | 667.1 |
| | 664.7 |
| | 0.3 | % | | 2.8 | % |
Operating profit | 194.6 |
| | 196.0 |
| | -0.7 | % | | 1.4 | % |
Interest and other expenses | 10.4 |
| | 10.3 |
| | 1.6 | % | |
|
Earnings before income taxes | 184.2 |
| | 185.7 |
| | -0.8 | % | | 1.2 | % |
Provision for income taxes | 67.2 |
| | 70.3 |
| | -4.4 | % | |
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Net earnings | $ | 117.0 |
| | $ | 115.4 |
| | 1.4 | % | | 3.4 | % |
Net earnings per share - basic | $ | 1.74 |
| | $ | 1.61 |
| | 8.1 | % | |
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Net earnings per share - diluted | $ | 1.72 |
| | $ | 1.60 |
| | 7.5 | % | | 9.4 | % |
Weighted average shares - basic | 67.4 |
| | 71.6 |
| | -5.9 | % | |
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Weighted average shares - diluted | 68.0 |
| | 72.3 |
| | -5.8 | % | |
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(a) Revenues from services include fees received from our franchise offices of $5.8 million and $5.7 million for the three months ended June 30, 2017 and 2016, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $247.3 million and $261.2 million for the three months ended June 30, 2017 and 2016, respectively. |
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ManpowerGroup |
Operating Unit Results |
(In millions) |
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| Three Months Ended June 30 |
| | | | | % Variance |
| | | | | Amount | | Constant |
| 2017 | | 2016 | | Reported | | Currency |
| (Unaudited) |
Revenues from Services: | | | | | | | |
Americas: | | | | | | | |
United States (a) | $ | 671.3 |
| | $ | 725.3 |
| | -7.4 | % | | -7.4 | % |
Other Americas | 385.6 |
| | 355.7 |
| | 8.3 | % | | 10.6 | % |
| 1,056.9 |
| | 1,081.0 |
| | -2.2 | % | | -1.5 | % |
Southern Europe: | | | | | | | |
France | 1,356.3 |
| | 1,252.2 |
| | 8.3 | % | | 11.0 | % |
Italy | 366.5 |
| | 299.8 |
| | 22.2 | % | | 25.2 | % |
Other Southern Europe | 412.9 |
| | 379.4 |
| | 8.8 | % | | 9.7 | % |
| 2,135.7 |
| | 1,931.4 |
| | 10.6 | % | | 12.9 | % |
Northern Europe | 1,281.7 |
| | 1,322.3 |
| | -3.1 | % | | 2.3 | % |
APME | 643.4 |
| | 614.6 |
| | 4.7 | % | | 5.2 | % |
Right Management | 57.1 |
| | 72.8 |
| | -21.6 | % | | -19.8 | % |
| $ | 5,174.8 |
| | $ | 5,022.1 |
| | 3.0 | % | | 5.6 | % |
Operating Unit Profit: | | | | | | | |
Americas: | | | | | | | |
United States | $ | 44.6 |
| | $ | 40.0 |
| | 11.4 | % | | 11.4 | % |
Other Americas | 13.0 |
| | 13.8 |
| | -6.0 | % | | -4.6 | % |
| 57.6 |
| | 53.8 |
| | 7.0 | % | | 7.3 | % |
Southern Europe: | | | | | | | |
France | 70.2 |
| | 67.5 |
| | 4.0 | % | | 6.2 | % |
Italy | 27.6 |
| | 22.8 |
| | 21.0 | % | | 24.0 | % |
Other Southern Europe | 12.5 |
| | 12.0 |
| | 5.2 | % | | 5.9 | % |
| 110.3 |
| | 102.3 |
| | 7.9 | % | | 10.1 | % |
Northern Europe | 32.9 |
| | 37.8 |
| | -13.0 | % | | -9.0 | % |
APME | 23.3 |
| | 22.2 |
| | 4.7 | % | | 5.5 | % |
Right Management | 8.5 |
| | 14.5 |
| | -41.4 | % | | -40.9 | % |
| 232.6 |
| | 230.6 |
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Corporate expenses | (29.6 | ) | | (25.6 | ) | | | | |
Intangible asset amortization expense | (8.4 | ) | | (9.0 | ) | | | | |
Operating profit | 194.6 |
| | 196.0 |
| | -0.7 | % | | 1.4 | % |
Interest and other expenses (b) | (10.4 | ) | | (10.3 | ) | | | | |
Earnings before income taxes | $ | 184.2 |
| | $ | 185.7 |
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(a) In the United States, revenues from services include fees received from our franchise offices of $3.6 million for both the three months ended June 30, 2017 and 2016. These fees are primarily based on revenues generated by the franchise offices, which were $155.6 million and $170.9 million for the three months ended June 30, 2017 and 2016, respectively. |
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(b) The components of interest and other expenses were: | | | | |
| 2017 | | 2016 | | | | |
Interest expense | $ | 9.1 |
| | $ | 9.2 |
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Interest income | (1.2 | ) | | (0.8 | ) | | | | |
Foreign exchange losses | 0.2 |
| | 0.7 |
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Miscellaneous expenses, net | 2.3 |
| | 1.2 |
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| $ | 10.4 |
| | $ | 10.3 |
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ManpowerGroup |
Results of Operations |
(In millions, except per share data) |
| | | | | | | |
| Six Months Ended June 30 |
| | | | | % Variance |
| | | | | Amount | | Constant |
| 2017 | | 2016 | | Reported | | Currency |
| (Unaudited) |
Revenues from services (a) | $ | 9,932.0 |
| | $ | 9,609.8 |
| | 3.4 | % | | 6.1 | % |
Cost of services | 8,282.5 |
| | 7,975.3 |
| | 3.9 | % | | 6.7 | % |
Gross profit | 1,649.5 |
| | 1,634.5 |
| | 0.9 | % | | 3.5 | % |
Selling and administrative expenses | 1,327.9 |
| | 1,306.8 |
| | 1.6 | % | | 4.2 | % |
Operating profit | 321.6 |
| | 327.7 |
| | -1.9 | % | | 0.4 | % |
Interest and other expenses | 25.3 |
| | 23.0 |
| | 10.2 | % | | |
Earnings before income taxes | 296.3 |
| | 304.7 |
| | -2.8 | % | | -0.5 | % |
Provision for income taxes | 104.9 |
| | 117.6 |
| | -10.8 | % | | |
Net earnings | $ | 191.4 |
| | $ | 187.1 |
| | 2.3 | % | | 4.6 | % |
Net earnings per share - basic | $ | 2.83 |
| | $ | 2.59 |
| | 9.3 | % | | |
Net earnings per share - diluted | $ | 2.80 |
| | $ | 2.57 |
| | 8.9 | % | | 11.3 | % |
Weighted average shares - basic | 67.5 |
| | 72.2 |
| | -6.4 | % | | |
Weighted average shares - diluted | 68.3 |
| | 72.9 |
| | -6.4 | % | | |
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(a) Revenues from services include fees received from our franchise offices of $11.1 million and $10.9 million for the six months ended June 30, 2017 and 2016, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $486.4 million and $489.0 million for the six months ended June 30, 2017 and 2016, respectively. |
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ManpowerGroup |
Operating Unit Results |
(In millions) |
| | | | | | | |
| Six Months Ended June 30 |
| | | | | % Variance |
| | | | | Amount | | Constant |
| 2017 | | 2016 | | Reported | | Currency |
| (Unaudited) |
Revenues from Services: | | | | | | | |
Americas: | | | | | | | |
United States (a) | $ | 1,332.8 |
| | $ | 1,428.4 |
| | -6.7 | % | | -6.7 | % |
Other Americas | 750.3 |
| | 698.5 |
| | 7.4 | % | | 9.6 | % |
| 2,083.1 |
| | 2,126.9 |
| | -2.1 | % | | -1.3 | % |
Southern Europe: | | | | | | | |
France | 2,493.8 |
| | 2,331.0 |
| | 7.0 | % | | 10.2 | % |
Italy | 660.9 |
| | 562.9 |
| | 17.4 | % | | 20.9 | % |
Other Southern Europe | 784.9 |
| | 725.2 |
| | 8.2 | % | | 9.7 | % |
| 3,939.6 |
| | 3,619.1 |
| | 8.9 | % | | 11.8 | % |
Northern Europe | 2,520.4 |
| | 2,536.2 |
| | -0.6 | % | | 5.4 | % |
APME | 1,275.8 |
| | 1,190.8 |
| | 7.1 | % | | 6.5 | % |
Right Management | 113.1 |
| | 136.8 |
| | -17.3 | % | | -15.4 | % |
| $ | 9,932.0 |
| | $ | 9,609.8 |
| | 3.4 | % | | 6.1 | % |
Operating Unit Profit: | | | | | | | |
Americas: | | | | | | | |
United States | $ | 71.0 |
| | $ | 62.8 |
| | 13.1 | % | | 13.1 | % |
Other Americas | 25.4 |
| | 25.4 |
| | -0.4 | % | | 2.4 | % |
| 96.4 |
| | 88.2 |
| | 9.2 | % | | 10.0 | % |
Southern Europe: | | | | | | | |
France | 120.3 |
| | 114.7 |
| | 4.9 | % | | 7.8 | % |
Italy | 45.8 |
| | 38.9 |
| | 17.7 | % | | 21.2 | % |
Other Southern Europe | 25.2 |
| | 20.4 |
| | 23.9 | % | | 25.7 | % |
| 191.3 |
| | 174.0 |
| | 10.0 | % | | 12.9 | % |
Northern Europe | 44.2 |
| | 70.3 |
| | -37.1 | % | | -34.6 | % |
APME | 43.4 |
| | 41.5 |
| | 4.6 | % | | 4.3 | % |
Right Management | 17.3 |
| | 24.0 |
| | -27.9 | % | | -27.1 | % |
| 392.6 |
| | 398.0 |
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Corporate expenses | (54.2 | ) | | (52.3 | ) | | | | |
Intangible asset amortization expense | (16.8 | ) | | (18.0 | ) | | | | |
Operating profit | 321.6 |
| | 327.7 |
| | -1.9 | % | | 0.4 | % |
Interest and other expenses (b) | (25.3 | ) | | (23.0 | ) | | | | |
Earnings before income taxes | $ | 296.3 |
| | $ | 304.7 |
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(a) In the United States, revenues from services include fees received from our franchise offices of $7.1 million and $7.0 million for the six months ended June 30, 2017 and 2016, respectively. These fees are primarily based on revenues generate by the franchise offices, which were $323.3 million and $331.7 million for the six months ended June 30, 2017 and 2016, respectively. |
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(b) The components of interest and other expenses were: | | | | |
| 2017 | | 2016 | | | | |
Interest expense | $ | 18.4 |
| | $ | 18.7 |
| | | | |
Interest income | (2.2 | ) | | (1.5 | ) | | | | |
Foreign exchange losses | 0.3 |
| | 1.6 |
| | | | |
Miscellaneous expenses, net | 8.8 |
| | 4.2 |
| | | | |
| $ | 25.3 |
| | $ | 23.0 |
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ManpowerGroup |
Consolidated Balance Sheets |
(In millions) |
| | | |
| Jun. 30 | | Dec. 31 |
| 2017 | | 2016 |
| (Unaudited) |
ASSETS | | | |
Current assets: | | | |
Cash and cash equivalents | $ | 573.1 |
| | $ | 598.5 |
|
Accounts receivable, net | 4,927.4 |
| | 4,413.1 |
|
Prepaid expenses and other assets | 120.6 |
| | 121.3 |
|
Total current assets | 5,621.1 |
| | 5,132.9 |
|
Other assets: | | | |
Goodwill | 1,291.9 |
| | 1,239.9 |
|
Intangible assets, net | 290.3 |
| | 294.4 |
|
Other assets | 781.3 |
| | 759.7 |
|
Total other assets | 2,363.5 |
| | 2,294.0 |
|
Property and equipment: | | | |
Land, buildings, leasehold improvements and equipment | 606.4 |
| | 567.0 |
|
Less: accumulated depreciation and amortization | 451.5 |
| | 419.7 |
|
Net property and equipment | 154.9 |
| | 147.3 |
|
Total assets | $ | 8,139.5 |
| | $ | 7,574.2 |
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LIABILITIES AND SHAREHOLDERS' EQUITY | | | |
Current liabilities: | | | |
Accounts payable | $ | 2,172.3 |
| | $ | 1,914.4 |
|
Employee compensation payable | 192.6 |
| | 208.1 |
|
Accrued liabilities | 405.6 |
| | 398.6 |
|
Accrued payroll taxes and insurance | 664.6 |
| | 649.2 |
|
Value added taxes payable | 485.8 |
| | 448.7 |
|
Short-term borrowings and current maturities of long-term debt | 435.8 |
| | 39.8 |
|
Total current liabilities | 4,356.7 |
| | 3,658.8 |
|
Other liabilities: | | | |
Long-term debt | 454.8 |
| | 785.6 |
|
Other long-term liabilities | 728.6 |
| | 683.4 |
|
Total other liabilities | 1,183.4 |
| | 1,469.0 |
|
Shareholders' equity: | | | |
ManpowerGroup shareholders' equity | | | |
Common stock | 1.2 |
| | 1.2 |
|
Capital in excess of par value | 3,278.6 |
| | 3,227.2 |
|
Retained earnings | 2,420.5 |
| | 2,291.3 |
|
Accumulated other comprehensive loss | (324.7 | ) | | (426.1 | ) |
Treasury stock, at cost | (2,863.6 | ) | | (2,731.7 | ) |
Total ManpowerGroup shareholders' equity | 2,512.0 |
| | 2,361.9 |
|
Noncontrolling interests | 87.4 |
| | 84.5 |
|
Total shareholders' equity | 2,599.4 |
| | 2,446.4 |
|
Total liabilities and shareholders' equity | $ | 8,139.5 |
| | $ | 7,574.2 |
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ManpowerGroup |
Consolidated Statements of Cash Flows |
(In millions) |
| | | |
| Six Months Ended |
| June 30 |
| 2017 | | 2016 |
| (Unaudited) |
Cash Flows from Operating Activities: | | | |
Net earnings | $ | 191.4 |
| | $ | 187.1 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: | | | |
Depreciation and amortization | 40.7 |
| | 42.6 |
|
Deferred income taxes | 26.1 |
| | 29.8 |
|
Provision for doubtful accounts | 10.0 |
| | 9.2 |
|
Share-based compensation | 14.8 |
| | 14.9 |
|
Excess tax benefit on exercise of share-based awards | — |
| | (0.1 | ) |
Changes in operating assets and liabilities, excluding the impact of acquisitions: | | | |
Accounts receivable | (258.8 | ) | | (182.8 | ) |
Other assets | 36.0 |
| | 62.9 |
|
Other liabilities | 87.8 |
| | 98.5 |
|
Cash provided by operating activities | 148.0 |
| | 262.1 |
|
Cash Flows from Investing Activities: | | | |
Capital expenditures | (25.5 | ) | | (30.8 | ) |
Acquisitions of businesses, net of cash acquired | (21.2 | ) | | (41.2 | ) |
Proceeds from the sale of investments, property and equipment | 3.1 |
| | 2.4 |
|
Cash used in investing activities | (43.6 | ) | | (69.6 | ) |
Cash Flows from Financing Activities: | | | |
Net change in short-term borrowings | (4.2 | ) | | (15.0 | ) |
Repayments of long-term debt | (0.2 | ) | | (6.0 | ) |
Payments of contingent consideration for acquisitions | (12.9 | ) | | (2.9 | ) |
Proceeds from share-based awards and other equity transactions | 34.1 |
| | 1.9 |
|
Other share-based award transactions | (16.3 | ) | | (3.2 | ) |
Repurchases of common stock | (115.8 | ) | | (290.5 | ) |
Dividends paid | (62.2 | ) | | (60.8 | ) |
Cash used in financing activities | (177.5 | ) | | (376.5 | ) |
Effect of exchange rate changes on cash | 47.7 |
| | (0.2 | ) |
Change in cash and cash equivalents | (25.4 | ) | | (184.2 | ) |
Cash and cash equivalents, beginning of period | 598.5 |
| | 730.5 |
|
Cash and cash equivalents, end of period | $ | 573.1 |
| | $ | 546.3 |
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earningspresentation2017
ManpowerGroup Second Quarter Results | July 24, 2017
Exhibit 99.2
ManpowerGroup July 2017 2
FORWARD-LOOKING STATEMENT
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, 2016,
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 July 2017 3
ManpowerGroup 2017 Second Quarter Results
Throughout this presentation, the difference between reported variances and Constant Currency (CC) variances represents the
impact of changes in currency on our financial results. Constant Currency is further explained in the Annual Report on our Web site.
As
Reported
Excluding
Restructuring
Costs(1)
Q2 Financial Highlights
3% 3%
Revenue $5.2B
6% CC 6% CC
40 bps
40 bps
Gross Margin 16.7%
1% 5% Operating Profit $195M
($205M excluding restructuring costs) 1% CC 7% CC
10 bps 10 bps OP Margin 3.8%
(4.0% excluding restructuring costs)
8% 14% EPS $1.72
($1.82 excluding restructuring costs) 9% CC 16% CC
(1) Excludes the impact of restructuring costs of $10.5M ($7.0M net of tax) in Q2 2017.
Consolidated Financial Highlights
ManpowerGroup July 2017 4
ManpowerGroup 2017 Second Quarter Results
EPS Bridge – Q2 vs. Guidance Midpoint
ManpowerGroup July 2017 5
ManpowerGroup 2017 Second Quarter Results
Consolidated Gross Margin Change
17.1%
16.7%
Q2 2016 Staffing Right Management /
Solutions
Currency Q2 2017
-0.3%
-0.2%
+0.1%
ManpowerGroup July 2017 6
ManpowerGroup 2017 Second Quarter Results
2%
4% CC
0%
2% CC
5%
6% CC
-24%
-22% CC
0%
2% CC
Growth
█ Manpower █ Experis █ ManpowerGroup Solutions █ Right Management █ ManpowerGroup – Total
Business Line Gross Profit – Q2 2017
$543M
63%
$175M
20%
$108M
13%
$36M
4%
$862M
ManpowerGroup July 2017 7
ManpowerGroup 2017 Second Quarter Results
SG&A Expense Bridge – Q2 YoY
(in millions of USD)
656.6
664.7 667.1
Q2 2016 Currency Acquisitions Operational
Impact
Q2 2017
Excluding
Restructuring Costs
Restructuring
Costs
Q2 2017
-15.7
+5.8
+10.5
+1.8
13.2%
% of Revenue
12.7%
% of Revenue % of Revenue
12.9%
ManpowerGroup July 2017 8
ManpowerGroup 2017 Second Quarter Results
As
Reported
Excluding
Restructuring
Costs(1)
Q2 Financial Highlights
2% 2%
Revenue $1.1B
1% CC 1% CC
7% 19%
OUP $58M
7% CC 19% CC
40 bps 100 bps OUP Margin 5.4%
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.
Americas Segment
(20% of Revenue)
(1) Excludes the impact of restructuring costs of $6.3M in Q2 2017.
ManpowerGroup July 2017 9
ManpowerGroup 2017 Second Quarter Results
Revenue Growth - CC Revenue Growth
% of Segment
Revenue
Americas – Q2 Revenue Growth YoY
Average Daily
Revenue Growth - CC
-7%
11%
8%
6%
-7%
14%
20%
6%
US
Mexico
Argentina
Other
64%
13%
5%
18%
-7%
18%
23%
ManpowerGroup July 2017 10
ManpowerGroup 2017 Second Quarter Results
As
Reported Q2 Financial Highlights
11%
Revenue $2.1B
13% CC
8%
OUP $110M
10% CC
10 bps OUP Margin 5.2%
Southern Europe Segment
(41% of Revenue)
ManpowerGroup July 2017 11
ManpowerGroup 2017 Second Quarter Results
Southern Europe – Q2 Revenue Growth YoY
Revenue Growth - CC Revenue Growth
% of Segment
Revenue
(1)
(1) On an organic basis, revenue for Spain decreased 2% (+1% in CC).
Average Daily
Revenue Growth - CC
8%
22%
7%
10%
11%
25%
9%
10%
France
Italy
Spain
Other
64%
17%
7%
12%
11%
29%
14%
ManpowerGroup July 2017 12
ManpowerGroup 2017 Second Quarter Results
As
Reported
Excluding
Restructuring
Costs(1)
Q2 Financial Highlights
3% 3%
Revenue $1.3B
2% CC 2% CC
13% 10%
OUP $33M
9% CC 6% CC
30 bps 20 bps OUP Margin 2.6%
(1) Excludes the impact of restructuring costs of $1.2M in Q2 2017.
Northern Europe Segment
(25% of Revenue)
ManpowerGroup July 2017 13
ManpowerGroup 2017 Second Quarter Results
-20%
7%
2%
16%
0%
11%
-10%
10%
7%
18%
3%
7%
UK
Germany
Nordics
Netherlands
Belgium
Other
30%
21%
21%
13%
8%
7%
-8%
16%
16%
20%
7%
Northern Europe – Q2 Revenue Growth YoY
Revenue Growth - CC Revenue Growth
% of Segment
Revenue
(1) On an organic basis, revenue for the Nordics was flat (+5% in CC), and the Netherlands increased 7% (+10% in CC).
(1)
(1)
Average Daily
Revenue Growth - CC
ManpowerGroup July 2017 14
ManpowerGroup 2017 Second Quarter Results
As
Reported Q2 Financial Highlights
5%
Revenue $643M
5% CC
5%
OUP $23M
6% CC
0 bps OUP Margin 3.6%
APME Segment
(13% of Revenue)
ManpowerGroup July 2017 15
ManpowerGroup 2017 Second Quarter Results
2%
-4%
13%
5%
-5%
12%
Japan
Australia/NZ
Other
34%
23%
43%
3%
-2%
APME – Q2 Revenue Growth YoY
Revenue Growth - CC Revenue Growth
% of Segment
Revenue
Average Daily
Revenue Growth - CC
ManpowerGroup July 2017 16
ManpowerGroup 2017 Second Quarter Results
As
Reported
Excluding
Restructuring
Costs(1)
Q2 Financial Highlights
22% 22%
Revenue $57B
20% CC 20% CC
41% 27%
OUP $8M
41% CC 27% CC
500 bps 140 bps OUP Margin 14.8%
Right Management Segment
(1% of Revenue)
(1) Excludes the impact of restructuring costs of $2.0M in Q2 2017.
ManpowerGroup July 2017 17
ManpowerGroup 2017 Second Quarter Results
Cash Flow Summary – 6 Months YTD
(in millions of USD) 2017 2016
Net Earnings 191 187
Non-cash Provisions and Other 92 96
Change in Operating Assets/Liabilities (135) (21)
Capital Expenditures (26) (31)
Free Cash Flow 122 231
Change in Debt (4) (21)
Acquisitions of Businesses, including Contingent
Considerations, net of cash acquired (34) (44)
Other Equity Transactions 18 (1)
Repurchases of Common Stock (116) (291)
Dividends Paid (62) (61)
Effect of Exchange Rate Changes 48 -
Other 3 3
Change in Cash (25) (184)
ManpowerGroup July 2017 18
ManpowerGroup 2017 Second Quarter Results
Balance Sheet Highlights
Total Debt
(in millions of USD)
Total Debt to
Total Capitalization
Total Debt
Net Debt (Cash)
-221 -231 125
227
109
318
516 468
855 825 834 891
-300
0
300
600
900
2013 2014 2015 2016 Q1 Q2
2017
15% 14%
24% 25% 25% 26%
0%
10%
20%
30%
2013 2014 2015 2016 Q1 Q2
2017
ManpowerGroup July 2017 19
ManpowerGroup 2017 Second Quarter Results
(1) The $600M agreement requires that we comply with a Leverage Ratio (net 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 net Debt-to-EBITDA ratio of
0.84 and a fixed charge coverage ratio of 5.09 as of June 30, 2017. As of June 30, 2017, there were $0.8M of standby letters of credit issued under the
agreement.
(2) Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $297.7M. 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.
Interest
Rate
Maturity
Date
Total
Outstanding
Remaining
Available
Euro Notes - €350M 4.505% Jun 2018 400 -
Euro Notes - €400M 1.913% Sep 2022 454 -
Revolving Credit Agreement 2.22% Sep 2020 - 599
Uncommitted lines and Other Various Various 37 261
Total Debt 891 860
Debt and Credit Facilities – June 30, 2017
(in millions of USD)
(2)
(1)
ManpowerGroup July 2017 20
ManpowerGroup 2017 Second Quarter Results
Third Quarter Outlook
Revenue Total Up 5-7% (Up 4-6% CC)
Americas Down 2-4% (Down 2-4% CC)
Southern Europe Up 12-14% (Up 10-12% CC)
Northern Europe Up 2-4% (Up 1-3% CC)
APME Up 2-4% (Up 5-7% CC)
Right Management Down 16-18% (Down 16-18% CC)
Gross Profit Margin 16.5 – 16.7%
Operating Profit Margin 4.0 – 4.2%
Tax Rate 37.0%
EPS $1.90 – $1.98 (favorable $0.02 currency)
ManpowerGroup July 2017 21
ManpowerGroup 2017 Second Quarter Results
Strong performance in the second quarter, with improving top line growth and solid
bottom line performance. Continued slow growth environment but improving economic
and labor market outlook in many parts of the world, particularly in Europe.
Our extensive portfolio of services and solutions bridges the gap between supply and
demand. We help companies engage productive and skilled talent where and when
they need them, and we help individuals find meaningful and sustainable employment
while acquiring additional skills and work experience.
Much of our progress in innovation, efficiency, and new service offerings will be
enabled by leveraging technology and strengthening our digital capabilities. Our
investments in these areas are helping to build relationships with clients and
candidates while improving our productivity.
Key Take Aways