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):
(Exact name of registrant as specified in its charter)
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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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(Address of principal executive offices) |
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(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:
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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 Exchange 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)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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 April 19, 2022, we issued a press release announcing our results of operations for the three months ended March 31, 2022 and 2021. 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. |
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Description |
99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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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.
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MANPOWERGROUP INC. |
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Dated: |
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April 19, 2022 |
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By: |
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/s/ John T. McGinnis |
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Name: |
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John T. McGinnis |
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Title: |
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Executive Vice President and Chief Financial Officer |
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Exhibit 99.1
FOR IMMEDIATE RELEASE |
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Contact: |
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Nick Hengst |
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+1.414.906.7356 |
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nicholas.hengst@manpowergroup.com |
ManpowerGroup Reports 1st Quarter 2022 Results
MILWAUKEE, April 19, 2022 -- ManpowerGroup (NYSE: MAN) today reported net earnings of $1.68 per diluted share for the three months ended March 31, 2022 compared to $1.11 per diluted share in the prior year period. Net earnings in the quarter were $91.6 million compared to $62.0 million a year earlier. Revenues for the first quarter were $5.1 billion, a 4% increase from the prior year period.
The current year quarter included integration costs from the U.S. Experis acquisition and the net loss related to the sale of our Russia business in January. These costs reduced earnings per share by $0.20 in the current quarter. Excluding these costs, earnings per share was $1.88 per diluted share in the quarter.
Financial results in the quarter were also impacted by the stronger U.S. dollar relative to foreign currencies compared to the prior year period, resulting in a 10 cent negative impact to earnings per share in the quarter compared to the prior year. On a constant currency basis, revenues increased 10% (6% organic constant currency) compared to the prior year period. Excluding the net impact of integration costs and the loss from our Russia disposition, on a constant currency basis net earnings per diluted share increased 64% during the quarter.
Jonas Prising, ManpowerGroup Chairman & CEO, said, “Our first quarter results demonstrate very good execution of our strategic initiatives to improve our business mix and strong demand for our higher margin
offerings. Even with the tragic events unfolding in Ukraine we continue to see good growth opportunities overall for our staffing and workforce solutions services in Europe as well as globally.
I am very proud of how our ManpowerGroup teams are bringing our values to life, especially in Poland and neighboring European countries: providing immediate humanitarian support to refugees from Ukraine, acting swiftly to assess, reskill and match them to employment opportunities, and working closely with our clients to advise and redefine roles to help people find work and start new lives.
Overall, we made good progress during the first quarter and believe that our focus on profitable growth positions us well in 2022.
We anticipate diluted earnings per share in the second quarter will be between $2.31 and $2.39, which includes an estimated unfavorable currency impact of 19 cents. Our guidance excludes expected integration costs ranging from $4 million to $6 million.”
In conjunction with its first quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on April 19, 2022 at 7:30 a.m. central time (8:30 a.m. eastern time). Prepared remarks for the conference call are included within the Investor Relations section of our website at manpowergroup.com. 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 and Talent Solutions – creates substantially more value for candidates and clients across more than 75 countries and territories and has done so for over 70 years. We are recognized consistently for our diversity - as a best place to work for Women, Inclusion, Equality and Disability and in 2022 ManpowerGroup was named one of the World's Most Ethical Companies for the 13th year - all confirming our position as the brand of choice for in-demand talent.
Forward-Looking Statements
This news release contains statements, including statements regarding economic and geopolitical uncertainty, financial outlook, and the Company’s strategic initiatives and brands 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 due to numerous factors. These factors include those 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, 2021, which information is incorporated herein by reference.
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ManpowerGroup
Results of Operations
(In millions, except per share data)
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Three Months Ended March 31 |
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% Variance |
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Amount |
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Constant |
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2022 |
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2021 |
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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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$ |
5,143.3 |
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$ |
4,924.4 |
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4.4 |
% |
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9.8 |
% |
Cost of services |
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4,246.2 |
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4,156.3 |
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2.2 |
% |
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7.6 |
% |
Gross profit |
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897.1 |
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768.1 |
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16.8 |
% |
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22.2 |
% |
Selling and administrative expenses |
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758.4 |
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669.7 |
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13.2 |
% |
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18.2 |
% |
Operating profit |
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138.7 |
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98.4 |
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40.9 |
% |
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49.3 |
% |
Interest and other expenses, net |
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2.7 |
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5.4 |
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-50.8 |
% |
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Earnings before income taxes |
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136.0 |
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93.0 |
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46.3 |
% |
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54.7 |
% |
Provision for income taxes |
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44.4 |
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31.0 |
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43.2 |
% |
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Net earnings |
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$ |
91.6 |
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$ |
62.0 |
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47.8 |
% |
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56.3 |
% |
Net earnings per share - basic |
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$ |
1.71 |
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$ |
1.12 |
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52.7 |
% |
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Net earnings per share - diluted |
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$ |
1.68 |
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$ |
1.11 |
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51.4 |
% |
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60.4 |
% |
Weighted average shares - basic |
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53.6 |
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55.1 |
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-2.8 |
% |
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Weighted average shares - diluted |
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54.4 |
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55.7 |
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-2.3 |
% |
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ManpowerGroup
Operating Unit Results
(In millions)
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Three Months Ended March 31 |
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% Variance |
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Amount |
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Constant |
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2022 |
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2021 |
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Reported |
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Currency |
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(Unaudited) |
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Revenues from Services: |
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Americas: |
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United States (a) |
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$ |
889.4 |
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$ |
608.8 |
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46.1 |
% |
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46.1 |
% |
Other Americas |
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361.8 |
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394.1 |
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-8.2 |
% |
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-5.9 |
% |
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1,251.2 |
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1,002.9 |
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24.8 |
% |
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25.7 |
% |
Southern Europe: |
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France |
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1,192.4 |
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1,188.9 |
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0.3 |
% |
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7.7 |
% |
Italy |
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445.0 |
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402.8 |
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10.5 |
% |
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18.6 |
% |
Other Southern Europe |
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556.5 |
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568.6 |
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-2.1 |
% |
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2.7 |
% |
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2,193.9 |
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2,160.3 |
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1.6 |
% |
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8.4 |
% |
Northern Europe |
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1,094.5 |
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1,133.8 |
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-3.5 |
% |
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2.0 |
% |
APME |
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618.2 |
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627.4 |
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-1.5 |
% |
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6.0 |
% |
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5,157.8 |
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4,924.4 |
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Intercompany Eliminations |
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(14.5 |
) |
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— |
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5,143.3 |
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4,924.4 |
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4.4 |
% |
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9.8 |
% |
Operating Unit Profit: |
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Americas: |
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United States |
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$ |
58.3 |
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$ |
29.2 |
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99.5 |
% |
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99.5 |
% |
Other Americas |
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14.5 |
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14.9 |
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-2.3 |
% |
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0.6 |
% |
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72.8 |
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44.1 |
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65.2 |
% |
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66.2 |
% |
Southern Europe: |
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France |
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49.6 |
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42.6 |
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16.4 |
% |
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25.1 |
% |
Italy |
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29.0 |
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19.4 |
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49.6 |
% |
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60.7 |
% |
Other Southern Europe |
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16.6 |
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11.4 |
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45.7 |
% |
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50.0 |
% |
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95.2 |
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73.4 |
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29.7 |
% |
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38.4 |
% |
Northern Europe |
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3.3 |
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4.8 |
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-32.4 |
% |
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-35.3 |
% |
APME |
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19.0 |
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18.8 |
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0.8 |
% |
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10.1 |
% |
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190.3 |
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141.1 |
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Corporate expenses |
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(42.0 |
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(37.2 |
) |
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Intangible asset amortization expense |
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(9.6 |
) |
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(5.5 |
) |
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Operating profit |
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138.7 |
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98.4 |
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40.9 |
% |
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49.3 |
% |
Interest and other expenses, net (b) |
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(2.7 |
) |
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(5.4 |
) |
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Earnings before income taxes |
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$ |
136.0 |
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$ |
93.0 |
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(a) In the United States, revenues from services include fees received from our franchise offices of $2.9 million and $3.1 million for the three months ended March 31, 2022 and 2021, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $110.8 million and $117.5 million for the three months ended March 31, 2022 and 2021, respectively.
(b) The components of interest and other expenses, net were:
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2022 |
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2021 |
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Interest expense |
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$ |
10.4 |
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$ |
10.2 |
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Interest income |
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(2.8 |
) |
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(3.1 |
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Foreign exchange loss |
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1.8 |
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2.5 |
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Miscellaneous income |
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(6.7 |
) |
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(4.2 |
) |
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$ |
2.7 |
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$ |
5.4 |
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ManpowerGroup
Consolidated Balance Sheets
(In millions)
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March 31, |
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December 31, |
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2022 |
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2021 |
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(Unaudited) |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
777.3 |
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$ |
847.8 |
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Accounts receivable, net |
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5,440.0 |
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5,448.2 |
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Prepaid expenses and other assets |
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152.2 |
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126.7 |
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Total current assets |
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6,369.5 |
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6,422.7 |
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Other assets: |
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Goodwill |
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1,710.0 |
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1,722.2 |
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Intangible assets, net |
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573.0 |
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583.6 |
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Operating lease right-of-use asset |
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351.5 |
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373.4 |
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Other assets |
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603.7 |
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610.2 |
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Total other assets |
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3,238.2 |
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3,289.4 |
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Property and equipment: |
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Land, buildings, leasehold improvements and equipment |
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591.1 |
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594.9 |
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Less: accumulated depreciation and amortization |
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477.7 |
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478.1 |
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Net property and equipment |
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113.4 |
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116.8 |
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Total assets |
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$ |
9,721.1 |
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$ |
9,828.9 |
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LIABILITIES AND SHAREHOLDERS' EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
3,153.2 |
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$ |
3,039.2 |
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Employee compensation payable |
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228.9 |
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299.4 |
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Accrued liabilities |
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589.6 |
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584.7 |
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Accrued payroll taxes and insurance |
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733.2 |
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789.1 |
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Value added taxes payable |
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479.7 |
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515.5 |
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Short-term borrowings and current maturities of long-term debt |
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512.6 |
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552.6 |
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Total current liabilities |
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5,697.2 |
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5,780.5 |
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Other liabilities: |
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Long-term debt |
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551.3 |
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565.7 |
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Long-term operating lease liability |
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256.3 |
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275.8 |
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Other long-term liabilities |
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660.2 |
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675.2 |
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Total other liabilities |
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1,467.8 |
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1,516.7 |
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Shareholders' equity: |
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ManpowerGroup shareholders' equity |
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Common stock |
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1.2 |
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1.2 |
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Capital in excess of par value |
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3,455.2 |
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3,444.7 |
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Retained earnings |
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3,726.2 |
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3,634.6 |
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Accumulated other comprehensive loss |
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(399.6 |
) |
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(389.4 |
) |
Treasury stock, at cost |
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(4,237.5 |
) |
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(4,169.4 |
) |
Total ManpowerGroup shareholders' equity |
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2,545.5 |
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2,521.7 |
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Noncontrolling interests |
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10.6 |
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10.0 |
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Total shareholders' equity |
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2,556.1 |
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2,531.7 |
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Total liabilities and shareholders' equity |
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$ |
9,721.1 |
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$ |
9,828.9 |
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ManpowerGroup
Consolidated Statements of Cash Flows
(In millions)
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Three Months Ended |
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March 31, |
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2022 |
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2021 |
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(Unaudited) |
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Cash Flows from Operating Activities: |
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Net earnings |
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$ |
91.6 |
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$ |
62.0 |
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Adjustments to reconcile net earnings to net cash provided by operating activities: |
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Depreciation and amortization |
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21.3 |
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17.9 |
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Non-cash loss on sale of a subsidiary |
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8.0 |
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— |
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Deferred income taxes |
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|
2.4 |
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(10.6 |
) |
Provision for doubtful accounts |
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2.8 |
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5.2 |
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Share-based compensation |
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10.6 |
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7.5 |
|
Changes in operating assets and liabilities, excluding the impact of dispositions: |
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Accounts receivable |
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(96.9 |
) |
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(94.5 |
) |
Other assets |
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(17.1 |
) |
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(39.5 |
) |
Other liabilities |
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|
47.9 |
|
|
|
192.9 |
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Cash provided by operating activities |
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|
70.6 |
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|
|
140.9 |
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Cash Flows from Investing Activities: |
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Capital expenditures |
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(19.4 |
) |
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(12.7 |
) |
Acquisitions of businesses, net of cash acquired |
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|
— |
|
|
|
(7.1 |
) |
Proceeds from the sale of subsidiaries and property and equipment |
|
|
0.8 |
|
|
|
0.7 |
|
Cash used in investing activities |
|
|
(18.6 |
) |
|
|
(19.1 |
) |
Cash Flows from Financing Activities: |
|
|
|
|
|
|
||
Net change in short-term borrowings |
|
|
(3.7 |
) |
|
|
4.9 |
|
Repayments of revolving debt facility |
|
|
(25.0 |
) |
|
|
— |
|
Proceeds from long-term debt |
|
|
0.7 |
|
|
|
0.1 |
|
Repayments of long-term debt |
|
|
— |
|
|
|
(2.2 |
) |
Payments of contingent consideration for acquisitions |
|
|
— |
|
|
|
(5.8 |
) |
Proceeds from share-based awards |
|
|
0.3 |
|
|
|
1.7 |
|
Other share-based award transactions |
|
|
(8.2 |
) |
|
|
(4.6 |
) |
Repurchases of common stock |
|
|
(59.9 |
) |
|
|
(100.1 |
) |
Cash used in financing activities |
|
|
(95.8 |
) |
|
|
(106.0 |
) |
Effect of exchange rate changes on cash |
|
|
(26.7 |
) |
|
|
(60.2 |
) |
Change in cash and cash equivalents |
|
|
(70.5 |
) |
|
|
(44.4 |
) |
Cash and cash equivalents, beginning of period |
|
$ |
847.8 |
|
|
$ |
1,567.1 |
|
Cash and cash equivalents, end of period |
|
$ |
777.3 |
|
|
$ |
1,522.7 |
|
April 19, 2022 ManpowerGroup First Quarter Results Exhibit 99.2
FORWARD-LOOKING STATEMENT This presentation contains statements, including statements regarding economic uncertainty, the Russia-Ukraine war and other geopolitical uncertainty, financial and labor outlook, the Company’s strategic initiatives and technology investments, the impact of the Mexican labor regulation, and the potential impacts of the COVID-19 pandemic and the Company’s efforts to respond to such impacts, 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 due to numerous factors. These factors include those 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, 2021, which information is incorporated herein by reference. 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.
Consolidated Financial Highlights Excludes the net impact of integration costs of $3.7M ($2.9M net of tax) and loss on Russia disposition of $8M in Q1 2022. EBITA is a non-GAAP financial measure and is defined herein as Operating Profit before Amortization of Intangible Assets. As Reported As Adjusted(1) Q1 Financial Highlights 4% 10% CC 6% OCC 4% 10% CC 6% OCC Revenue $5.1B 180 bps 150 bps OCC 180 bps 150 bps OCC Gross Margin 17.4% 43% 51% CC 33% OCC 56% 64% CC 46% OCC EBITA(2) $148M ($162M as adjusted) 80 bps 50 bps OCC 100 bps 80 bps OCC EBITA(2) Margin 2.9% (3.1% as adjusted) 41% 49% CC 36% OCC 55% 63% CC 50% OCC Operating Profit $139M ($152M as adjusted) 70 bps 60 bps OCC 100 bps 80 bps OCC OP Margin 2.7% (3.0% as adjusted) 51% 60% CC 46% OCC 69% 78% CC 64% OCC EPS $1.68 ($1.88 as adjusted)
EPS Bridge – Q1 vs. Guidance Midpoint
Business Line Revenue Q1 2022(1) Business line classifications can vary by entity and are subject to change as service requirements change. Experis showing strong growth and integration of the U.S. acquisition is proceeding well Continued strong growth in market-leading RPO and MSP offerings Solid organic constant currency growth in Manpower during the first quarter Higher margin brands growing at double-digit growth rates MANPOWER EXPERIS TALENT SOLUTIONS 35%
Consolidated Gross Margin Change
Trend Business Line Gross Profit – Q1 2022(1) (1) Business line classifications can vary by entity and are subject to change as service requirements change. █ Manpower █ Experis █ Talent Solutions █ ManpowerGroup – Total Total Gross Profit $897M
SG&A Expense Bridge – Q1 YoY (in millions of USD) Reported and as adjusted ratios are unfavorably impacted 10 bps due to the effect of currency exchange rates on our business mix. In constant currency, SG&A reported and as adjusted are 14.6% and 14.4% of revenue, respectively. (2)
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 (24% of Revenue) As Reported As Adjusted(1) Q1 Financial Highlights 25% 26% CC 7% OCC 25% 26% CC 7% OCC Revenue $1.3B 65% 66% CC 22% OCC 74% 75% CC 31% OCC OUP $73M ($77M as adjusted) 140 bps 60 bps OCC 170 bps 100 bps OCC OUP Margin 5.8% (6.1% as adjusted) Excludes the impact of integration costs of $3.7M in Q1 2022.
Americas – Q1 Revenue Trend YoY
Southern Europe Segment (43% of Revenue) As Reported Q1 Financial Highlights 2% Revenue $2.2B 8% CC 30% OUP $95M 38% CC 90 bps OUP Margin 4.3%
Southern Europe – Q1 Revenue Trend YoY
As Reported As Adjusted(1) Q1 Financial Highlights 3% 2% CC 4% OCC 3% 2% CC 4% OCC Revenue $1.1B 32% 35% CC 28% OCC 88% 92% CC 114% OCC OUP $3M ($9M as adjusted) 10 bps 10 bps OCC 40 bps 40 bps OCC OUP Margin 0.3% (0.8% as adjusted) Northern Europe Segment (21% of Revenue) Excludes the loss on disposition of our Russia business of $5.8M in Q1 2022. An additional $2.2M net loss related to the disposition of Russia is recorded outside of the geographic segment representing $3.9M within Corporate expense offset by a currency translation gain of $1.7M in Other expenses.
Northern Europe – Q1 Revenue Trend YoY Revenue trend includes the loss of revenues since the sale of Russia. On an organic CC basis, the revenue trend is +11%.
APME Segment (12% of Revenue) As Reported Q1 Financial Highlights 1% Revenue $618M 6% CC 1% OUP $19M 10% CC 10 bps OUP Margin 3.1%
APME – Q1 Revenue Trend YoY (1)
Cash Flow Summary – YTD
Balance Sheet Highlights Total Debt (in millions of USD) Total Debt to Total Capitalization Total Debt Net Debt Net (Cash)
Debt and Credit Facilities – March 31, 2022 (in millions of USD) (3) (1)(2) 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 .92 to 1 and a fixed charge coverage ratio of 5.56 to 1 as of March 31, 2022. (In the agreement, net debt is defined as total debt less cash in excess of $400M.) As of March 31, 2022, there were $0.5M of standby letters of credit issued under the agreement. Under the $600M agreement, we have an option to increase the total availability under the facility by an additional $200M. Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $340.9M. 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 - €500M 1.809% Jun 2026 550 - Euro Notes - €400M 1.913% Sep 2022 443 - Revolving Credit Agreement 1.450% Jun 2023 50 549 Uncommitted lines and Other Various Various 21 320 Total Debt 1,064 869
Second Quarter 2022 Outlook Revenue Total Down 2/Up 2% (6-10% CC) (2-6% OCC) Americas Up 22-26% (24-28% CC) (5-9% OCC) Southern Europe Down 2-6% (Up 3-7% CC) Northern Europe Down 8-12% (Flat/Down 4% CC) (Down 1%/Up 3% OCC) APME Flat/Down 4% (Up 3-7% CC) Gross Profit Margin 17.7 – 17.9% EBITA(1) Margin 3.6 – 3.8% Operating Profit Margin 3.4 – 3.6% Tax Rate 30.0% EPS $2.31 – $2.39 (unfavorable $0.19 currency) EBITA is a non-GAAP financial measure and is defined herein as Operating Profit before Amortization of Intangible Assets. Estimates do not include second quarter impact of acquisition integration costs of approximately $4M to $6M.
Our first quarter results reflect strength of brands and geographic footprint with revenue growth of 10% in constant currency Gross profit margin of 17.4% reflects good pricing discipline, strong permanent recruitment activity and improved business mix Very good progress in advancing our Diversification, Digitization and Innovation initiatives to date during 2022 Recognized as one of the World’s Most Ethical Companies for the 13th year by Ethisphere Key Take Aways
Appendix
Industry Vertical Composition – Q1 2022 Manufacturing, 40.3%