UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
MANPOWERGROUP INC.
(Exact name of registrant as specified in its charter)
|
|
|
|
|
|
|
(State or other jurisdiction of incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
|
|
|
|
|
|
|
|
|
(Address of principal executive offices) |
|
(Zip Code) |
Registrant's telephone number, including area code: (
(Former name or former address, if changed since last report.)
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:
|
|
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
|
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
|
|
|
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. ☐
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
|
|
|
|
|
Item 2.02 |
Results of Operations and Financial Condition |
The information in this Item 2.02, including exhibit 99.1 attached herto, 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 18, 2019 we issued a press release announcing our results of operations for the three and nine months ended September 30, 2019. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
|
Item 9.01. |
Exhibits |
|
Exhibit No. |
|
Description |
|
99.1 |
|
|
|
99.2 104 |
|
Presentation materials for October 18, 2019 Conference Call Cover Page Interactive Data File (embedded within the Inline XBRL document)
|
|
|
|
|
SIGNATURE
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.
|
|
|
|
|
MANPOWERGROUP INC. |
|||
|
|
|
|
|
|
|
|
|
|
Dated: |
|
October 18, 2019 |
|
|
By: |
|
/s/ John T. McGinnis |
|
|
|
|
|
Name: |
|
John T. McGinnis |
|
|
|
|
|
|
Title: |
|
Executive Vice President and Chief Financial Officer |
|
Exhibit 99.1
|
FOR IMMEDIATE RELEASE |
|
Contact: |
|
|
|
|
|
|
|
Jack McGinnis |
|
|
|
+1.414.906.7977 |
|
|
|
jack.mcginnis@manpowergroup.com |
ManpowerGroup Reports 3rd Quarter 2019 Results
|
|
• |
Third quarter results showed relative strength in the Americas, APME and Right Management; continued headwinds in Europe |
|
|
• |
US, UK, Japan, Norway, Spain, and Canada were the key markets that delivered positive revenue growth |
|
|
• |
Greater China JV completed Hong Kong public offering in July 2019; ManpowerGroup remains largest shareholder and recorded a non-cash accounting gain of $30 million |
|
|
• |
Repurchased $51 million of common stock during the quarter |
|
|
• |
Anticipate a continuation of revenue trend into the fourth quarter |
MILWAUKEE, October 18, 2019 -- ManpowerGroup (NYSE: MAN) today reported net earnings of $2.42 per diluted share for the three months ended September 30, 2019 compared to $2.43 per diluted share in the prior year period. Net earnings in the quarter were $146.1 million compared to $158.0 million a year earlier. Revenues for the third quarter were $5.2 billion, a 3% decline from the prior year period.
The current year quarter included a non-cash accounting gain related to the July 10, 2019 initial public offering on the Hong Kong Stock Exchange of our joint venture in Greater China, ManpowerGroup Greater China Limited (Greater China IPO). The Greater China IPO resulted in the deconsolidation of this business and the non-cash gain increased earnings per share by 50 cents.
Financial results in the quarter were also impacted by the stronger U.S. dollar relative to foreign currencies compared to the prior year period. On a constant currency basis, revenues were flat. On a constant currency basis, net earnings per diluted share increased 3% and decreased 18%, excluding the impact of the gain from the Greater China IPO. Earnings per share in the quarter were negatively impacted 7 cents by changes in foreign currencies compared to the prior year.
Jonas Prising, ManpowerGroup Chairman & CEO, said, “The global economic environment continues to be uncertain, leading to uneven market conditions as economic growth slows but labor markets remain tight and skills shortages high. This was evident in our third quarter results and despite headwinds in Europe, many of our markets achieved good profitable growth, with the US, the UK, Japan, Norway, Spain and Canada leading the way.”
“We anticipate diluted earnings per share in the fourth quarter will be between $2.00 and $2.08,
which includes an estimated unfavorable currency impact of 7 cents.”
ManpowerGroup repurchased 610 thousand shares of common stock for $51 million during the quarter.
Net earnings for the nine months ended September 30, 2019 were $326.9 million, or $5.40 per diluted share compared to net earnings of $398.4 million, or $6.03 per diluted share in the prior year. The year to date period included special items and restructuring costs which increased earnings per share by 5 cents. The prior year to date period included restructuring costs which reduced earnings per share by 41 cents and discrete income tax benefits which increased earnings per share by 19 cents. Revenues for the nine-month period were $15.7 billion, a decrease of 6% from the prior year or a decrease of 1% in constant currency. Earnings per share for the nine-month period were negatively impacted 22 cents by changes in foreign currencies compared to the prior year, or 30 cents excluding the special items and restructuring costs. ManpowerGroup repurchased 1.8 million shares of common stock for $152 million during the nine months ended September 30, 2019.
In conjunction with its third quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on October 18, 2019 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 hundreds of thousands of organizations every year, providing them with skilled talent while finding meaningful, sustainable employment for millions of people 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 70 years. In 2019, ManpowerGroup was named one of the World's Most Ethical Companies for the tenth year and one of Fortune's Most Admired Companies for the seventeenth year, 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, predictions about revenue trends and the effect of currency fluctuations, 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, 2018, which information is incorporated herein by reference.
###
Results of Operations
(In millions, except per share data)
|
|
|
Three Months Ended September 30 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
% Variance |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
Constant |
|
||
|
|
|
2019 |
|
|
2018 |
|
|
Reported |
|
|
Currency |
|
||||
|
|
|
(Unaudited) |
|
|||||||||||||
|
Revenues from services (a) |
|
$ |
5,248.9 |
|
|
$ |
5,418.7 |
|
|
|
-3.1 |
% |
|
|
0.3 |
% |
|
Cost of services |
|
|
4,408.6 |
|
|
|
4,528.1 |
|
|
|
-2.6 |
% |
|
|
0.9 |
% |
|
Gross profit |
|
|
840.3 |
|
|
|
890.6 |
|
|
|
-5.7 |
% |
|
|
-2.5 |
% |
|
Selling and administrative expenses |
|
|
623.3 |
|
|
|
673.9 |
|
|
|
-7.5 |
% |
|
|
-4.4 |
% |
|
Operating profit |
|
|
217.0 |
|
|
|
216.7 |
|
|
|
0.2 |
% |
|
|
3.3 |
% |
|
Interest and other expenses |
|
|
12.2 |
|
|
|
11.8 |
|
|
|
5.2 |
% |
|
|
|
|
|
Earnings before income taxes |
|
|
204.8 |
|
|
|
204.9 |
|
|
|
-0.1 |
% |
|
|
3.0 |
% |
|
Provision for income taxes |
|
|
58.7 |
|
|
|
46.9 |
|
|
|
24.7 |
% |
|
|
|
|
|
Net earnings |
|
$ |
146.1 |
|
|
$ |
158.0 |
|
|
|
-7.5 |
% |
|
|
-4.7 |
% |
|
Net earnings per share - basic |
|
$ |
2.44 |
|
|
$ |
2.45 |
|
|
|
-0.4 |
% |
|
|
|
|
|
Net earnings per share - diluted |
|
$ |
2.42 |
|
|
$ |
2.43 |
|
|
|
-0.4 |
% |
|
|
2.5 |
% |
|
Weighted average shares - basic |
|
|
59.9 |
|
|
|
64.5 |
|
|
|
-7.1 |
% |
|
|
|
|
|
Weighted average shares - diluted |
|
|
60.3 |
|
|
|
65.0 |
|
|
|
-7.1 |
% |
|
|
|
|
|
(a) |
Revenues from services include fees received from our franchise offices of $4.3 million and $6.2 million for the three months ended September 30, 2019 and 2018, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $274.0 million and $278.7 million for the three months ended September 30, 2019 and 2018, respectively. |
Operating Unit Results
(In millions)
|
|
|
Three Months Ended September 30 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
% Variance |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
Constant |
|
||
|
|
|
2019 |
|
|
2018 |
|
|
Reported |
|
|
Currency |
|
||||
|
|
|
(Unaudited) |
|
|||||||||||||
|
Revenues from Services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States (a) |
|
$ |
645.7 |
|
|
$ |
633.2 |
|
|
|
2.0 |
% |
|
|
2.0 |
% |
|
Other Americas |
|
|
425.0 |
|
|
|
406.8 |
|
|
|
4.5 |
% |
|
|
11.0 |
% |
|
|
|
|
1,070.7 |
|
|
|
1,040.0 |
|
|
|
2.9 |
% |
|
|
5.5 |
% |
|
Southern Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
1,382.1 |
|
|
|
1,460.6 |
|
|
|
-5.4 |
% |
|
|
-1.0 |
% |
|
Italy |
|
|
376.6 |
|
|
|
410.2 |
|
|
|
-8.2 |
% |
|
|
-3.9 |
% |
|
Other Southern Europe |
|
|
592.9 |
|
|
|
460.8 |
|
|
|
28.7 |
% |
|
|
31.9 |
% |
|
|
|
|
2,351.6 |
|
|
|
2,331.6 |
|
|
|
0.9 |
% |
|
|
5.0 |
% |
|
Northern Europe |
|
|
1,156.6 |
|
|
|
1,287.1 |
|
|
|
-10.1 |
% |
|
|
-5.3 |
% |
|
APME |
|
|
621.9 |
|
|
|
713.0 |
|
|
|
-12.8 |
% |
|
|
-12.6 |
% |
|
Right Management |
|
|
48.1 |
|
|
|
47.0 |
|
|
|
2.5 |
% |
|
|
4.7 |
% |
|
|
|
$ |
5,248.9 |
|
|
$ |
5,418.7 |
|
|
|
-3.1 |
% |
|
|
0.3 |
% |
|
Operating Unit Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
35.8 |
|
|
$ |
33.2 |
|
|
|
8.0 |
% |
|
|
8.0 |
% |
|
Other Americas |
|
|
18.9 |
|
|
|
18.1 |
|
|
|
4.4 |
% |
|
|
9.5 |
% |
|
|
|
|
54.7 |
|
|
|
51.3 |
|
|
|
6.7 |
% |
|
|
8.5 |
% |
|
Southern Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
70.4 |
|
|
|
78.8 |
|
|
|
-10.5 |
% |
|
|
-6.3 |
% |
|
Italy |
|
|
23.3 |
|
|
|
25.7 |
|
|
|
-9.1 |
% |
|
|
-4.8 |
% |
|
Other Southern Europe |
|
|
22.8 |
|
|
|
17.1 |
|
|
|
32.3 |
% |
|
|
35.0 |
% |
|
|
|
|
116.5 |
|
|
|
121.6 |
|
|
|
-4.2 |
% |
|
|
-0.1 |
% |
|
Northern Europe |
|
|
21.4 |
|
|
|
40.5 |
|
|
|
-47.2 |
% |
|
|
-44.2 |
% |
|
APME |
|
|
53.3 |
|
|
|
32.4 |
|
|
|
65.2 |
% |
|
|
64.0 |
% |
|
Right Management |
|
|
7.5 |
|
|
|
6.5 |
|
|
|
13.7 |
% |
|
|
16.0 |
% |
|
|
|
|
253.4 |
|
|
|
252.3 |
|
|
|
|
|
|
|
|
|
|
Corporate expenses |
|
|
(29.2 |
) |
|
|
(26.3 |
) |
|
|
|
|
|
|
|
|
|
Intangible asset amortization expense |
|
|
(7.2 |
) |
|
|
(9.3 |
) |
|
|
|
|
|
|
|
|
|
Operating profit |
|
|
217.0 |
|
|
|
216.7 |
|
|
|
0.2 |
% |
|
|
3.3 |
% |
|
Interest and other expenses (b) |
|
|
(12.2 |
) |
|
|
(11.8 |
) |
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
$ |
204.8 |
|
|
$ |
204.9 |
|
|
|
|
|
|
|
|
|
|
(a) |
In the United States, revenues from services include fees received from our franchise offices of $3.5 million and $3.7 million for the three months ended September 30, 2019 and 2018, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $151.6 million and $169.9 million for the three months ended September 30, 2019 and 2018, respectively. |
|
(b) |
The components of interest and other expenses were: |
|
|
|
2019 |
|
|
2018 |
|
||
|
Interest expense |
|
$ |
11.9 |
|
|
$ |
10.2 |
|
|
Interest income |
|
|
(0.6 |
) |
|
|
(1.5 |
) |
|
Foreign exchange loss |
|
|
4.1 |
|
|
|
3.0 |
|
|
Miscellaneous (income) expenses, net |
|
|
(3.2 |
) |
|
|
0.1 |
|
|
|
|
$ |
12.2 |
|
|
$ |
11.8 |
|
|
(c) |
Includes an $80.0 million gain related to our acquisition of the remaining controlling interest in our Swiss franchise. |
|
|
|
Nine Months Ended September 30 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
% Variance |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
Constant |
|
||
|
|
|
2019 |
|
|
2018 |
|
|
Reported |
|
|
Currency |
|
||||
|
|
|
(Unaudited) |
|
|||||||||||||
|
Revenues from services (a) |
|
$ |
15,666.9 |
|
|
$ |
16,598.0 |
|
|
|
-5.6 |
% |
|
|
-0.7 |
% |
|
Cost of services |
|
|
13,151.4 |
|
|
|
13,899.3 |
|
|
|
-5.4 |
% |
|
|
-0.4 |
% |
|
Gross profit |
|
|
2,515.5 |
|
|
|
2,698.7 |
|
|
|
-6.8 |
% |
|
|
-2.2 |
% |
|
Selling and administrative expenses, excluding impairment charge |
|
|
1,998.2 |
|
|
|
2,119.9 |
|
|
|
-5.7 |
% |
|
|
-1.1 |
% |
|
Goodwill impairment charge (b) |
|
|
64.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Selling and administrative expenses |
|
|
2,062.2 |
|
|
|
2,119.9 |
|
|
|
-2.7 |
% |
|
|
2.0 |
% |
|
Operating profit |
|
|
453.3 |
|
|
|
578.8 |
|
|
|
-21.7 |
% |
|
|
-17.7 |
% |
|
Interest and other expenses |
|
|
(46.1 |
) |
|
|
38.4 |
|
|
|
— |
|
|
|
|
|
|
Earnings before income taxes |
|
|
499.4 |
|
|
|
540.4 |
|
|
|
-7.6 |
% |
|
|
-3.6 |
% |
|
Provision for income taxes |
|
|
172.5 |
|
|
|
142.0 |
|
|
|
21.4 |
% |
|
|
|
|
|
Net earnings |
|
$ |
326.9 |
|
|
$ |
398.4 |
|
|
|
-17.9 |
% |
|
|
-14.5 |
% |
|
Net earnings per share - basic |
|
$ |
5.43 |
|
|
$ |
6.08 |
|
|
|
-10.7 |
% |
|
|
|
|
|
Net earnings per share - diluted |
|
$ |
5.40 |
|
|
$ |
6.03 |
|
|
|
-10.4 |
% |
|
|
-6.8 |
% |
|
Weighted average shares - basic |
|
|
60.2 |
|
|
|
65.6 |
|
|
|
-8.3 |
% |
|
|
|
|
|
Weighted average shares - diluted |
|
|
60.6 |
|
|
|
66.1 |
|
|
|
-8.4 |
% |
|
|
|
|
|
(a) |
Revenues from services include fees received from our franchise offices of $14.0 million and $17.6 million for the nine months ended September 30, 2019 and 2018, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $680.2 million and $789.4 million for the nine months ended September 30, 2019 and 2018, respectively. |
|
(b) |
The goodwill impairment charge for the nine months ended September 30, 2019 relates to our investments in Germany and New Zealand. |
|
|
|
Nine Months Ended September 30 |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
% Variance |
|
|||||
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
Constant |
|
||
|
|
|
2019 |
|
|
2018 |
|
|
Reported |
|
|
Currency |
|
||||
|
|
|
(Unaudited) |
|
|||||||||||||
|
Revenues from Services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States (a) |
|
$ |
1,880.2 |
|
|
$ |
1,890.0 |
|
|
|
-0.5 |
% |
|
|
-0.5 |
% |
|
Other Americas |
|
|
1,241.2 |
|
|
|
1,225.1 |
|
|
|
1.3 |
% |
|
|
10.2 |
% |
|
|
|
|
3,121.4 |
|
|
|
3,115.1 |
|
|
|
0.2 |
% |
|
|
3.7 |
% |
|
Southern Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
4,103.7 |
|
|
|
4,397.1 |
|
|
|
-6.7 |
% |
|
|
-0.8 |
% |
|
Italy |
|
|
1,126.5 |
|
|
|
1,266.8 |
|
|
|
-11.1 |
% |
|
|
-5.5 |
% |
|
Other Southern Europe |
|
|
1,610.8 |
|
|
|
1,413.7 |
|
|
|
13.9 |
% |
|
|
19.4 |
% |
|
|
|
|
6,841.0 |
|
|
|
7,077.6 |
|
|
|
-3.3 |
% |
|
|
2.4 |
% |
|
Northern Europe |
|
|
3,529.5 |
|
|
|
4,097.9 |
|
|
|
-13.9 |
% |
|
|
-8.0 |
% |
|
APME |
|
|
2,030.7 |
|
|
|
2,158.0 |
|
|
|
-5.9 |
% |
|
|
-3.1 |
% |
|
Right Management |
|
|
144.3 |
|
|
|
149.4 |
|
|
|
-3.4 |
% |
|
|
-0.3 |
% |
|
|
|
$ |
15,666.9 |
|
|
$ |
16,598.0 |
|
|
|
-5.6 |
% |
|
|
-0.7 |
% |
|
Operating Unit Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
United States |
|
$ |
84.4 |
|
|
$ |
98.1 |
|
|
|
-13.9 |
% |
|
|
-13.9 |
% |
|
Other Americas |
|
|
51.0 |
|
|
|
52.8 |
|
|
|
-3.5 |
% |
|
|
1.5 |
% |
|
|
|
|
135.4 |
|
|
|
150.9 |
|
|
|
-10.3 |
% |
|
|
-8.5 |
% |
|
Southern Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
France |
|
|
201.6 |
|
|
|
209.5 |
|
|
|
-3.7 |
% |
|
|
2.1 |
% |
|
Italy |
|
|
73.5 |
|
|
|
82.8 |
|
|
|
-11.1 |
% |
|
|
-5.6 |
% |
|
Other Southern Europe |
|
|
51.8 |
|
|
|
48.7 |
|
|
|
6.0 |
% |
|
|
10.0 |
% |
|
|
|
|
326.9 |
|
|
|
341.0 |
|
|
|
-4.1 |
% |
|
|
1.4 |
% |
|
Northern Europe |
|
|
46.3 |
|
|
|
81.8 |
|
|
|
-43.4 |
% |
|
|
-39.9 |
% |
|
APME |
|
|
101.5 |
|
|
|
87.5 |
|
|
|
16.2 |
% |
|
|
17.6 |
% |
|
Right Management |
|
|
18.6 |
|
|
|
23.4 |
|
|
|
-20.8 |
% |
|
|
-18.8 |
% |
|
|
|
|
628.7 |
|
|
|
684.6 |
|
|
|
|
|
|
|
|
|
|
Corporate expenses |
|
|
(89.0 |
) |
|
|
(79.0 |
) |
|
|
|
|
|
|
|
|
|
Goodwill impairment charge |
|
|
(64.0 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
Intangible asset amortization expense |
|
|
(22.4 |
) |
|
|
(26.8 |
) |
|
|
|
|
|
|
|
|
|
Operating profit |
|
|
453.3 |
|
|
|
578.8 |
|
|
|
-21.7 |
% |
|
|
-17.7 |
% |
|
Interest and other (income) expenses, net (b) |
|
|
46.1 |
|
|
|
(38.4 |
) |
|
|
|
|
|
|
|
|
|
Earnings before income taxes |
|
$ |
499.4 |
|
|
$ |
540.4 |
|
|
|
|
|
|
|
|
|
|
(a) |
In the United States, revenues from services include fees received from our franchise offices of $10.8 million for both the nine months ended September 30, 2019 and 2018. These fees are primarily based on revenues generated by the franchise offices, which were $462.8 million and $485.6 million for the nine months ended September 30, 2019 and 2018, respectively. |
|
(b) |
The components of interest and other expenses were: |
|
|
|
2019 |
|
|
2018 |
|
||
|
Interest expense |
|
$ |
33.3 |
|
|
$ |
37.1 |
|
|
Interest income |
|
|
(3.2 |
) |
|
|
(4.1 |
) |
|
Foreign exchange loss |
|
|
6.5 |
|
|
|
2.8 |
|
|
Miscellaneous (income) expense, net (c) |
|
|
(82.7 |
) |
|
|
2.6 |
|
|
|
|
$ |
(46.1 |
) |
|
$ |
38.4 |
|
|
(c) |
Includes an $80.0 million gain related to our acquisition of the remaining controlling interest in our Swiss franchise. |
Consolidated Balance Sheets
(In millions)
|
|
|
Sep. 30 |
|
|
Dec. 31 |
|
||
|
|
|
2019 |
|
|
2018 |
|
||
|
|
|
(Unaudited) |
|
|||||
|
ASSETS |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
807.1 |
|
|
$ |
591.9 |
|
|
Accounts receivable, net |
|
|
5,122.1 |
|
|
|
5,276.1 |
|
|
Prepaid expenses and other assets |
|
|
145.3 |
|
|
|
129.1 |
|
|
Total current assets |
|
|
6,074.5 |
|
|
|
5,997.1 |
|
|
Other assets: |
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
1,231.8 |
|
|
|
1,297.1 |
|
|
Intangible assets, net |
|
|
272.9 |
|
|
|
246.3 |
|
|
Operating lease right-of-use asset |
|
|
410.0 |
|
|
|
— |
|
|
Other assets |
|
|
618.1 |
|
|
|
826.7 |
|
|
Total other assets |
|
|
2,532.8 |
|
|
|
2,370.1 |
|
|
Property and equipment: |
|
|
|
|
|
|
|
|
|
Land, buildings, leasehold improvements and equipment |
|
|
596.7 |
|
|
|
613.6 |
|
|
Less: accumulated depreciation and amortization |
|
|
456.7 |
|
|
|
461.0 |
|
|
Net property and equipment |
|
|
140.0 |
|
|
|
152.6 |
|
|
Total assets |
|
$ |
8,747.3 |
|
|
$ |
8,519.8 |
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
2,322.2 |
|
|
$ |
2,266.7 |
|
|
Employee compensation payable |
|
|
203.8 |
|
|
|
209.7 |
|
|
Accrued liabilities |
|
|
473.7 |
|
|
|
411.0 |
|
|
Accrued payroll taxes and insurance |
|
|
571.2 |
|
|
|
729.8 |
|
|
Value added taxes payable |
|
|
495.7 |
|
|
|
508.6 |
|
|
Short-term borrowings and current maturities of long-term debt |
|
|
47.0 |
|
|
|
50.1 |
|
|
Total current liabilities |
|
|
4,113.6 |
|
|
|
4,175.9 |
|
|
Other liabilities: |
|
|
|
|
|
|
|
|
|
Long-term debt |
|
|
983.2 |
|
|
|
1,025.3 |
|
|
Long-term operating lease liability |
|
|
305.2 |
|
|
|
— |
|
|
Other long-term liabilities |
|
|
629.2 |
|
|
|
620.1 |
|
|
Total other liabilities |
|
|
1,917.6 |
|
|
|
1,645.4 |
|
|
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
ManpowerGroup shareholders' equity |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
1.2 |
|
|
|
1.2 |
|
|
Capital in excess of par value |
|
|
3,361.0 |
|
|
|
3,337.5 |
|
|
Retained earnings |
|
|
3,419.4 |
|
|
|
3,157.7 |
|
|
Accumulated other comprehensive loss |
|
|
(452.5 |
) |
|
|
(399.8 |
) |
|
Treasury stock, at cost |
|
|
(3,631.0 |
) |
|
|
(3,471.7 |
) |
|
Total ManpowerGroup shareholders' equity |
|
|
2,698.1 |
|
|
|
2,624.9 |
|
|
Noncontrolling interests |
|
|
18.0 |
|
|
|
73.6 |
|
|
Total shareholders' equity |
|
|
2,716.1 |
|
|
|
2,698.5 |
|
|
Total liabilities and shareholders' equity |
|
$ |
8,747.3 |
|
|
$ |
8,519.8 |
|
Consolidated Statements of Cash Flows
(In millions)
|
|
|
Nine Months Ended |
|
|||||
|
|
|
September 30 |
|
|||||
|
|
|
2019 |
|
|
2018 |
|
||
|
|
|
(Unaudited) |
|
|||||
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
Net earnings |
|
$ |
326.9 |
|
|
$ |
398.4 |
|
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
57.1 |
|
|
|
64.8 |
|
|
Non-cash gain on disposition of previously held equity interest |
|
|
(80.4 |
) |
|
|
— |
|
|
Non-cash gain on disposition of previously held controlling interest |
|
|
(30.4 |
) |
|
|
— |
|
|
Non-cash lease expense |
|
|
96.1 |
|
|
|
— |
|
|
Non-cash goodwill impairment charge |
|
|
64.0 |
|
|
|
— |
|
|
Deferred income taxes |
|
|
7.4 |
|
|
|
(9.5 |
) |
|
Provision for doubtful accounts |
|
|
16.9 |
|
|
|
15.5 |
|
|
Share-based compensation |
|
|
18.8 |
|
|
|
19.5 |
|
|
Excess tax benefit on exercise of share-based awards |
|
|
0.0 |
|
|
|
0.0 |
|
|
Changes in operating assets and liabilities, excluding the impact of acquisitions: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(60.9 |
) |
|
|
(140.8 |
) |
|
Other assets |
|
|
60.2 |
|
|
|
31.8 |
|
|
Other liabilities |
|
|
19.7 |
|
|
|
(77.7 |
) |
|
Cash provided by operating activities |
|
|
495.4 |
|
|
|
302.0 |
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(36.2 |
) |
|
|
(39.8 |
) |
|
Acquisitions of businesses, net of cash acquired |
|
|
86.1 |
|
|
|
(8.2 |
) |
|
Impact to cash resulting from deconsolidation of subsidiaries |
|
|
(57.9 |
) |
|
|
— |
|
|
Proceeds from the sale of subsidiaries, investments, property and equipment |
|
|
8.0 |
|
|
|
7.8 |
|
|
Cash provided by (used in) investing activities |
|
|
— |
|
|
|
(40.2 |
) |
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
Net change in short-term borrowings |
|
|
(2.0 |
) |
|
|
(5.0 |
) |
|
Proceeds from long-term debt |
|
|
9.0 |
|
|
|
583.3 |
|
|
Repayments of long-term debt |
|
|
(0.7 |
) |
|
|
(408.3 |
) |
|
Payments for debt issuance costs |
|
|
— |
|
|
|
(2.4 |
) |
|
Payments of contingent consideration for acquisitions |
|
|
(22.8 |
) |
|
|
(18.6 |
) |
|
Proceeds from share-based awards |
|
|
6.3 |
|
|
|
4.7 |
|
|
Payments to noncontrolling interests |
|
|
(2.1 |
) |
|
|
(1.9 |
) |
|
Other share-based award transactions |
|
|
(7.3 |
) |
|
|
(17.3 |
) |
|
Repurchases of common stock |
|
|
(152.0 |
) |
|
|
(299.2 |
) |
|
Dividends paid |
|
|
(65.2 |
) |
|
|
(66.0 |
) |
|
Miscellaneous, net |
|
|
0.2 |
|
|
|
— |
|
|
Cash used in financing activities |
|
|
(236.6 |
) |
|
|
(230.7 |
) |
|
Effect of exchange rate changes on cash |
|
|
(43.6 |
) |
|
|
(37.5 |
) |
|
Change in cash and cash equivalents |
|
|
215.2 |
|
|
|
(6.4 |
) |
|
Cash and cash equivalents, beginning of period |
|
|
591.9 |
|
|
|
689.0 |
|
|
Cash and cash equivalents, end of period |
|
$ |
807.1 |
|
|
$ |
682.6 |
|
ManpowerGroup Third Quarter Results | October 18, 2019 Exhibit 99.2
FORWARD-LOOKING STATEMENT This presentation contains statements, including financial 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 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, 2018, 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. We reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include a reconciliation of these measures, where appropriate, to GAAP on the Investor Relations section of our website at manpowergroup.com.
As Reported As Adjusted(1) Q3 Financial Highlights 3% 3% Revenue $5.2B 0% CC 0% CC 40 bps 40 bps Gross Margin 16.0% 0% 14% Operating Profit $217M ($187M as adjusted) 3% CC 11% CC 10 bps 40 bps OP Margin 4.1% (3.6% as adjusted) 0% 21% EPS $2.42 ($1.92 as adjusted) 2% CC 18% CC Consolidated Financial Highlights ManpowerGroup 2019 Third Quarter Results As Adjusted figures exclude the impact of the gain of $30M from our Greater China IPO.
EPS Bridge – Q3 vs. Guidance Midpoint ManpowerGroup 2019 Third Quarter Results
Consolidated Gross Margin Change ManpowerGroup 2019 Third Quarter Results
Growth █ Manpower █ Experis █ ManpowerGroup Solutions █ Right Management █ ManpowerGroup – Total Business Line Gross Profit – Q3 2019(1) (1) Business line classifications can vary by entity and are subject to change as service requirements change. ManpowerGroup 2019 Third Quarter Results
SG&A Expense Bridge – Q3 YoY (in millions of USD) ManpowerGroup 2019 Third Quarter Results This was unfavorably impacted 10 bps due to the effect of currency exchange rates on our business mix. In constant currency, SG&A as adjusted was 12.4% of Revenue.
As Reported Q3 Financial Highlights 3% Revenue $1.1B 6% CC 7% OUP $55M 9% CC 20 bps OUP Margin 5.1% 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) ManpowerGroup 2019 Third Quarter Results
Revenue Growth - CC Revenue Growth % of Segment Revenue Americas – Q3 Revenue Growth YoY Average Daily Revenue Growth - CC ManpowerGroup 2019 Third Quarter Results
As Reported Q3 Financial Highlights 1% Revenue $2.4B 5% CC 4% OUP $117M 0% CC 20 bps OUP Margin 5.0% Southern Europe Segment (45% of Revenue) ManpowerGroup 2019 Third Quarter Results
Southern Europe – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue Average Daily Revenue Growth - CC ManpowerGroup 2019 Third Quarter Results
Northern Europe Segment (22% of Revenue) ManpowerGroup 2019 Third Quarter Results As Reported Q3 Financial Highlights 10% Revenue $1.2B 5% CC 47% OUP $21M 44% CC 130 bps OUP Margin 1.8%
Northern Europe – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue Average Daily Revenue Growth - CC ManpowerGroup 2019 Third Quarter Results (1) On an organic basis, revenue for the Netherlands decreased 20% or -16% in constant currency. (ADR in organic constant currency is -18%).
APME Segment (12% of Revenue) ManpowerGroup 2019 Third Quarter Results As Reported As Adjusted(1) Q3 Financial Highlights 13% 13% Revenue $622M 13% CC 13% CC 65% 29% OUP $53M ($23M as adjusted) 64% CC 29% CC 410 bps 80 bps OUP Margin 8.6% (3.7% as adjusted) Excludes the impact of the Greater China IPO gain of $36M.
APME – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue Average Daily Revenue Growth - CC On an organic basis excluding Greater China, revenue for APME Other increased 19% or +21% in constant currency. (1) ManpowerGroup 2019 Third Quarter Results
Right Management Segment (1% of Revenue) ManpowerGroup 2019 Third Quarter Results As Reported Q3 Financial Highlights 3% Revenue $48M 5% CC 14% OUP $8M 16% CC 150 bps OUP Margin 15.5%
Cash Flow Summary – 9 Months YTD ManpowerGroup 2019 Third Quarter Results
Balance Sheet Highlights Total Debt (in millions of USD) Total Debt to Total Capitalization Total Debt Net Debt (Cash) ManpowerGroup 2019 Third Quarter Results
Interest Rate Maturity Date Total Outstanding Remaining Available Euro Notes - €500M 1.809% Jun 2026 540 - Euro Notes - €400M 1.913% Sep 2022 434 - Revolving Credit Agreement 3.02% Jun 2023 - 599 Uncommitted lines and Other Various Various 56 257 Total Debt 1,030 856 Debt and Credit Facilities – September 30, 2019 (in millions of USD) (2) (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 0.76 and a fixed charge coverage ratio of 5.16 as of September 30, 2019. As of September 30, 2019, there were $0.5M of standby letters of credit issued under the agreement. Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $313.0M. 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 2019 Third Quarter Results
Fourth Quarter 2019 Outlook ManpowerGroup 2019 Third Quarter Results Revenue Total Down 3-5% (Flat/Down 2% CC) Americas Up 1-3% (Up 3-5% CC) Southern Europe Up 1-3% (Up 4-6% CC) Northern Europe Down 9-11% (Down 5-7% CC) APME Down 16-18% (Down 16-18% CC) Right Management Flat/Down 2% (Flat/Up 2% CC) Gross Profit Margin 16.1 – 16.3% Operating Profit Margin 3.6 – 3.8% Tax Rate 33.0% EPS $2.00 – $2.08 (unfavorable $0.07 currency)
Our third quarter performance and earnings reflect a continuation of many of the same trends we experienced in the second quarter, against a backdrop of slowing economic growth globally and continued tight labor markets in many countries. We continue to make the necessary investments to diversify our business mix, digitize all aspects of our operations and continuously innovate to create new value. Our market leading geographic diversification and our leadership in innovative workforce solutions continues to set us apart from our competitors. Overall global demand for our services and workforce solutions remains stable. In this uncertain environment, the need for strategic and operational flexibility remains crucial and we are focused on driving profitable growth based on these opportunities. Key Take Aways ManpowerGroup 2019 Third Quarter Results