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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(Address of principal executive offices) |
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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 July 20, 2023, we issued a press release announcing our results of operations for the three and six months ended June 30, 2023 and 2022. 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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July 20, 2023 |
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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 2nd Quarter 2023 Results
MILWAUKEE, July 20, 2023 -- ManpowerGroup (NYSE: MAN) today reported net earnings of $1.29 per diluted share for the three months ended June 30, 2023 compared to $2.29 per diluted share in the prior year period. Net earnings in the quarter were $65.2 million compared to $122.2 million a year earlier. Revenues for the second quarter were $4.9 billion, a 4% decrease from the prior year period.
The current year quarter included restructuring costs and Argentina related non-cash currency translation losses which reduced earnings per share by $0.29 in the current quarter. Excluding these costs, earnings per share was $1.58 per diluted share in the quarter representing a decrease of 31% in constant currency.[1] Argentina is required to be treated as a hyperinflationary economy and the currency translation losses reflect the devaluation of the Argentine peso during 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 4 cent negative impact to earnings per share in the quarter compared to the prior year. On a constant currency basis, revenues decreased 3% compared to the prior year period. The foreign currency impact to earnings per share represented an additional 1 cent negative impact than was anticipated in our second quarter guidance.
[1] The prior year period included integration costs from our U.S. Experis acquisition which reduced earnings per share by $0.04 which are also excluded when determining the year over year trend.
Jonas Prising, ManpowerGroup Chairman & CEO, said, “Our second quarter results reflect a challenging operating environment for recruitment and resourcing in the U.S. and Europe. However, we continued to see demand in certain segments within these markets and ongoing strength in Latin America and Asia Pacific Middle East. We are prioritizing improved productivity and the advancement of our strategic initiatives to position us well for strong performance when market conditions improve.
As we start the third quarter, we have made the decision to wind down our Proservia managed services buisness in Germany. Although a difficult decision, this outsourcing business is not part of our go-forward strategy and will improve the profitability of our Northern Europe business going forward.
We anticipate diluted earnings per share in the third quarter will be between $1.32 and $1.42, which includes an estimated favorable currency impact of 8 cents. Our guidance excludes expected restructuring costs and the aforementioned Argentina related impact of non-cash currency translation losses.”
Net earnings for the six months ended June 30, 2023 were $143.0 million, or net earnings of $2.80 per diluted share compared to net earnings of $213.8 million, or net earnings of $3.97 per diluted share in the prior year, respectively. The current year to date period included restructuring costs and the aforementioned Argentina related non-cash currency translation losses which reduced earnings per share by 39 cents. Excluding the net impact of these charges, earnings per share for the six-month period was $3.19 per diluted share representing a decrease of 20% in constant currency.[2] Revenues for the six-month period were $9.6 billion, representing a decrease of 6% compared to the prior year or a decrease of 3% in constant currency. Earnings per share for the six-month period were negatively impacted by 18 cents due to changes in foreign currencies compared to the prior year.
In conjunction with its second quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on July 20, 2023 at 7:30 a.m. central time (8:30 a.m. eastern time). Prepared remarks for the conference call, webcast details, presentation and recordings are included within the Investor Relations section of manpowergroup.com.
Supplemental financial information referenced in the conference call can be found at http://investor.manpowergroup.com/.
[2] The prior year period included integration costs from the U.S. Experis acquisition and the net loss related to the sale of our Russia business which reduced earnings per share by $0.24 which are also excluded when determining the year over year trend.
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 70 countries and territories and has done so for 75 years. We are recognized consistently for our diversity – as a best place to work for Women, Inclusion, Equality, and Disability, and in 2023 ManpowerGroup was named one of the World's Most Ethical Companies for the 14th time – all confirming our position as the brand of choice for in-demand talent. For more information, visit www.manpowergroup.com.
Forward-Looking Statements
This press release contains statements, including statements regarding economic and geopolitical uncertainty, financial outlook, labor demand, the outlook for our business in key countries, the Company’s strategic initiatives and technology investments, and the positioning of future growth for our 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, 2022, 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.
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ManpowerGroup
Results of Operations
(In millions, except per share data)
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Three Months Ended June 30 |
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% Variance |
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Amount |
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Constant |
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2023 |
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2022 |
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Reported |
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Currency |
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(Unaudited) |
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Revenues from services (a) |
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$ |
4,856.1 |
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$ |
5,074.1 |
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-4.3 |
% |
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-3.5 |
% |
Cost of services |
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3,993.8 |
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4,152.9 |
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-3.8 |
% |
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-3.0 |
% |
Gross profit |
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862.3 |
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921.2 |
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-6.4 |
% |
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-5.7 |
% |
Selling and administrative expenses |
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754.7 |
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740.5 |
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1.9 |
% |
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2.5 |
% |
Operating profit |
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107.6 |
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180.7 |
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-40.4 |
% |
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-39.1 |
% |
Interest and other expenses, net |
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11.8 |
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6.7 |
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76.7 |
% |
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Earnings before income taxes |
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95.8 |
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174.0 |
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-45.0 |
% |
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-43.4 |
% |
Provision for income taxes |
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30.6 |
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51.8 |
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-41.0 |
% |
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Net earnings |
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$ |
65.2 |
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$ |
122.2 |
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-46.6 |
% |
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-45.2 |
% |
Net earnings per share - basic |
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$ |
1.30 |
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$ |
2.32 |
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-43.9 |
% |
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Net earnings per share - diluted |
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$ |
1.29 |
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$ |
2.29 |
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-43.8 |
% |
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-42.2 |
% |
Weighted average shares - basic |
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50.2 |
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52.7 |
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-4.9 |
% |
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Weighted average shares - diluted |
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50.7 |
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53.4 |
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-5.1 |
% |
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ManpowerGroup
Operating Unit Results
(In millions)
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Three Months Ended June 30 |
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% Variance |
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Amount |
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Constant |
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2023 |
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2022 |
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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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$ |
736.7 |
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$ |
903.9 |
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-18.5 |
% |
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-18.5 |
% |
Other Americas |
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362.0 |
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358.8 |
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0.9 |
% |
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14.0 |
% |
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1,098.7 |
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1,262.7 |
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-13.0 |
% |
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-9.3 |
% |
Southern Europe: |
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France |
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1,278.2 |
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1,238.2 |
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3.2 |
% |
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0.9 |
% |
Italy |
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457.8 |
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454.3 |
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0.8 |
% |
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-1.5 |
% |
Other Southern Europe |
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490.9 |
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508.9 |
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-3.5 |
% |
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-4.7 |
% |
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2,226.9 |
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2,201.4 |
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1.2 |
% |
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-0.9 |
% |
Northern Europe |
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952.5 |
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1,027.1 |
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-7.3 |
% |
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-6.3 |
% |
APME |
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599.4 |
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603.7 |
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-0.7 |
% |
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4.2 |
% |
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4,877.5 |
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5,094.9 |
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Intercompany Eliminations |
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(21.4 |
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(20.8 |
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$ |
4,856.1 |
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$ |
5,074.1 |
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-4.3 |
% |
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-3.5 |
% |
Operating Unit Profit: |
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Americas: |
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United States |
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$ |
26.2 |
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$ |
64.7 |
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-59.5 |
% |
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-59.5 |
% |
Other Americas |
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17.0 |
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16.2 |
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5.0 |
% |
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22.8 |
% |
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43.2 |
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80.9 |
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-46.6 |
% |
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-43.1 |
% |
Southern Europe: |
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France |
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49.5 |
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62.3 |
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-20.5 |
% |
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-22.4 |
% |
Italy |
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36.3 |
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35.5 |
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2.1 |
% |
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-0.3 |
% |
Other Southern Europe |
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6.8 |
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13.9 |
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-50.4 |
% |
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-48.7 |
% |
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92.6 |
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111.7 |
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-17.0 |
% |
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-18.6 |
% |
Northern Europe |
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(9.7 |
) |
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10.8 |
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-188.9 |
% |
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-190.4 |
% |
APME |
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25.7 |
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22.5 |
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13.9 |
% |
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20.0 |
% |
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151.8 |
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225.9 |
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Corporate expenses |
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(35.5 |
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(35.8 |
) |
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Intangible asset amortization expense |
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(8.7 |
) |
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(9.4 |
) |
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Operating profit |
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107.6 |
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180.7 |
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-40.4 |
% |
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-39.1 |
% |
Interest and other expenses, net (b) |
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(11.8 |
) |
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(6.7 |
) |
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Earnings before income taxes |
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$ |
95.8 |
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$ |
174.0 |
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(a) In the United States, revenues from services include fees received from our franchise offices of $2.6 million and $3.1 million for the three months ended June 30, 2023 and 2022, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $100.8 million and $128.1 million for the three months ended June 30, 2023 and 2022, respectively.
(b) The components of interest and other expenses, net were:
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2023 |
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2022 |
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Interest expense |
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$ |
20.0 |
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$ |
10.6 |
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Interest income |
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(8.4 |
) |
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(2.8 |
) |
Foreign exchange loss |
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5.1 |
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3.3 |
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Miscellaneous loss (income) |
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(4.9 |
) |
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(4.4 |
) |
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$ |
11.8 |
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$ |
6.7 |
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ManpowerGroup
Results of Operations
(In millions, except per share data)
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Six Months Ended June 30 |
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% Variance |
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Amount |
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Constant |
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2023 |
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2022 |
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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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$ |
9,608.4 |
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$ |
10,217.4 |
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-6.0 |
% |
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-2.8 |
% |
Cost of services |
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7,883.0 |
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8,399.1 |
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-6.1 |
% |
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-2.9 |
% |
Gross profit |
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1,725.4 |
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1,818.3 |
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-5.1 |
% |
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-2.2 |
% |
Selling and administrative expenses |
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1,499.9 |
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1,498.9 |
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0.1 |
% |
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2.7 |
% |
Operating profit |
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225.5 |
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319.4 |
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-29.4 |
% |
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-25.4 |
% |
Interest and other expenses, net |
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19.3 |
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9.4 |
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106.1 |
% |
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Earnings before income taxes |
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206.2 |
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310.0 |
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-33.5 |
% |
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-29.4 |
% |
Provision for income taxes |
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63.2 |
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96.2 |
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-34.3 |
% |
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Net earnings |
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$ |
143.0 |
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$ |
213.8 |
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|
|
-33.1 |
% |
|
|
-29.0 |
% |
Net earnings per share - basic |
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$ |
2.84 |
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$ |
4.02 |
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-29.5 |
% |
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Net earnings per share - diluted |
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$ |
2.80 |
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$ |
3.97 |
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-29.4 |
% |
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-25.1 |
% |
Weighted average shares - basic |
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50.4 |
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53.2 |
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-5.1 |
% |
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Weighted average shares - diluted |
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51.0 |
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53.8 |
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-5.3 |
% |
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ManpowerGroup
Operating Unit Results
(In millions)
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Six Months Ended June 30 |
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% Variance |
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Amount |
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Constant |
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2023 |
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2022 |
|
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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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$ |
1,506.7 |
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$ |
1,793.3 |
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-16.0 |
% |
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-16.0 |
% |
Other Americas |
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|
722.2 |
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720.6 |
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0.2 |
% |
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|
12.9 |
% |
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|
2,228.9 |
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|
2,513.9 |
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-11.3 |
% |
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-7.7 |
% |
Southern Europe: |
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France |
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2,447.5 |
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2,430.6 |
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0.7 |
% |
|
|
1.7 |
% |
Italy |
|
|
880.0 |
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|
|
899.3 |
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|
|
-2.1 |
% |
|
|
-1.2 |
% |
Other Southern Europe |
|
|
967.3 |
|
|
|
1,065.4 |
|
|
|
-9.2 |
% |
|
|
-7.6 |
% |
|
|
|
4,294.8 |
|
|
|
4,395.3 |
|
|
|
-2.3 |
% |
|
|
-1.2 |
% |
Northern Europe |
|
|
1,920.1 |
|
|
|
2,121.6 |
|
|
|
-9.5 |
% |
|
|
-5.1 |
% |
APME |
|
|
1,205.3 |
|
|
|
1,221.9 |
|
|
|
-1.4 |
% |
|
|
5.8 |
% |
|
|
|
9,649.1 |
|
|
|
10,252.7 |
|
|
|
|
|
|
|
||
Intercompany Eliminations |
|
|
(40.7 |
) |
|
|
(35.3 |
) |
|
|
|
|
|
|
||
|
|
|
9,608.4 |
|
|
|
10,217.4 |
|
|
|
-6.0 |
% |
|
|
-2.8 |
% |
Operating Unit Profit: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Americas: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
United States |
|
$ |
57.3 |
|
|
$ |
123.0 |
|
|
|
-53.4 |
% |
|
|
-53.4 |
% |
Other Americas |
|
|
34.5 |
|
|
|
30.7 |
|
|
|
12.6 |
% |
|
|
29.6 |
% |
|
|
|
91.8 |
|
|
|
153.7 |
|
|
|
-40.3 |
% |
|
|
-36.9 |
% |
Southern Europe: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
France |
|
|
94.4 |
|
|
|
111.9 |
|
|
|
-15.6 |
% |
|
|
-15.0 |
% |
Italy |
|
|
67.0 |
|
|
|
64.5 |
|
|
|
3.8 |
% |
|
|
4.6 |
% |
Other Southern Europe |
|
|
21.1 |
|
|
|
30.5 |
|
|
|
-30.7 |
% |
|
|
-27.1 |
% |
|
|
|
182.5 |
|
|
|
206.9 |
|
|
|
-11.8 |
% |
|
|
-10.6 |
% |
Northern Europe |
|
|
(4.7 |
) |
|
|
14.1 |
|
|
|
-133.0 |
% |
|
|
-121.7 |
% |
APME |
|
|
46.8 |
|
|
|
41.5 |
|
|
|
12.8 |
% |
|
|
21.8 |
% |
|
|
|
316.4 |
|
|
|
416.2 |
|
|
|
|
|
|
|
||
Corporate expenses |
|
|
(73.4 |
) |
|
|
(77.8 |
) |
|
|
|
|
|
|
||
Intangible asset amortization expense |
|
|
(17.5 |
) |
|
|
(19.0 |
) |
|
|
|
|
|
|
||
Operating profit |
|
|
225.5 |
|
|
|
319.4 |
|
|
|
-29.4 |
% |
|
|
-25.4 |
% |
Interest and other expenses, net (b) |
|
|
(19.3 |
) |
|
|
(9.4 |
) |
|
|
|
|
|
|
||
Earnings before income taxes |
|
$ |
206.2 |
|
|
$ |
310.0 |
|
|
|
|
|
|
|
||
(a) In the United States, revenues from services include fees received from our franchise offices of $5.8 million and $6.0 million for the six months ended June 30, 2023 and 2022, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $200.1 million and $238.9 million for the six months ended June 30, 2023 and 2022, respectively.
(b) The components of interest and other expenses, net were:
|
|
2023 |
|
|
2022 |
|
||
Interest expense |
|
$ |
38.7 |
|
|
$ |
21.0 |
|
Interest income |
|
|
(16.5 |
) |
|
|
(5.6 |
) |
Foreign exchange loss |
|
|
8.2 |
|
|
|
5.1 |
|
Miscellaneous income |
|
|
(11.1 |
) |
|
|
(11.1 |
) |
|
|
$ |
19.3 |
|
|
$ |
9.4 |
|
ManpowerGroup
Consolidated Balance Sheets
(In millions)
|
|
June 30, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022 |
|
||
|
|
(Unaudited) |
|
|||||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
407.6 |
|
|
$ |
639.0 |
|
Accounts receivable, net |
|
|
4,995.2 |
|
|
|
5,137.4 |
|
Prepaid expenses and other assets |
|
|
188.1 |
|
|
|
158.0 |
|
Total current assets |
|
|
5,590.9 |
|
|
|
5,934.4 |
|
Other assets: |
|
|
|
|
|
|
||
Goodwill |
|
|
1,635.2 |
|
|
|
1,628.1 |
|
Intangible assets, net |
|
|
533.8 |
|
|
|
549.5 |
|
Operating lease right-of-use asset |
|
|
404.7 |
|
|
|
365.7 |
|
Other assets |
|
|
588.3 |
|
|
|
540.5 |
|
Total other assets |
|
|
3,162.0 |
|
|
|
3,083.8 |
|
Property and equipment: |
|
|
|
|
|
|
||
Land, buildings, leasehold improvements and equipment |
|
|
516.8 |
|
|
|
584.9 |
|
Less: accumulated depreciation and amortization |
|
|
400.5 |
|
|
|
472.7 |
|
Net property and equipment |
|
|
116.3 |
|
|
|
112.2 |
|
Total assets |
|
$ |
8,869.2 |
|
|
$ |
9,130.4 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
2,727.6 |
|
|
$ |
2,831.4 |
|
Employee compensation payable |
|
|
204.9 |
|
|
|
271.7 |
|
Accrued liabilities |
|
|
545.4 |
|
|
|
572.6 |
|
Accrued payroll taxes and insurance |
|
|
686.3 |
|
|
|
746.7 |
|
Value added taxes payable |
|
|
429.9 |
|
|
|
462.7 |
|
Short-term borrowings and current maturities of long-term debt |
|
|
22.3 |
|
|
|
26.6 |
|
Total current liabilities |
|
|
4,616.4 |
|
|
|
4,911.7 |
|
Other liabilities: |
|
|
|
|
|
|
||
Long-term debt |
|
|
978.8 |
|
|
|
959.9 |
|
Long-term operating lease liability |
|
|
308.7 |
|
|
|
266.6 |
|
Other long-term liabilities |
|
|
515.5 |
|
|
|
534.1 |
|
Total other liabilities |
|
|
1,803.0 |
|
|
|
1,760.6 |
|
Shareholders' equity: |
|
|
|
|
|
|
||
ManpowerGroup shareholders' equity |
|
|
|
|
|
|
||
Common stock |
|
|
1.2 |
|
|
|
1.2 |
|
Capital in excess of par value |
|
|
3,497.3 |
|
|
|
3,484.2 |
|
Retained earnings |
|
|
3,938.4 |
|
|
|
3,868.5 |
|
Accumulated other comprehensive loss |
|
|
(459.5 |
) |
|
|
(458.7 |
) |
Treasury stock, at cost |
|
|
(4,538.2 |
) |
|
|
(4,447.9 |
) |
Total ManpowerGroup shareholders' equity |
|
|
2,439.2 |
|
|
|
2,447.3 |
|
Noncontrolling interests |
|
|
10.6 |
|
|
|
10.8 |
|
Total shareholders' equity |
|
|
2,449.8 |
|
|
|
2,458.1 |
|
Total liabilities and shareholders' equity |
|
$ |
8,869.2 |
|
|
$ |
9,130.4 |
|
ManpowerGroup
Consolidated Statements of Cash Flows
(In millions)
|
|
Six Months Ended |
|
|||||
|
|
June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
|
|
(Unaudited) |
|
|||||
Cash Flows from Operating Activities: |
|
|
|
|
|
|
||
Net earnings |
|
$ |
143.0 |
|
|
$ |
213.8 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
42.6 |
|
|
|
42.5 |
|
Loss on sale of a subsidiary, net |
|
|
— |
|
|
|
8.0 |
|
Deferred income taxes |
|
|
14.3 |
|
|
|
2.8 |
|
Provision for doubtful accounts |
|
|
2.9 |
|
|
|
6.1 |
|
Share-based compensation |
|
|
12.0 |
|
|
|
21.6 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
186.3 |
|
|
|
(218.3 |
) |
Other assets |
|
|
(63.2 |
) |
|
|
(18.0 |
) |
Other liabilities |
|
|
(369.1 |
) |
|
|
(37.2 |
) |
Cash provided by (used in) operating activities |
|
|
(31.2 |
) |
|
|
21.3 |
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(34.6 |
) |
|
|
(41.7 |
) |
Proceeds from the sales of subsidiaries and property and equipment |
|
|
0.1 |
|
|
|
1.0 |
|
Cash used in investing activities |
|
|
(34.5 |
) |
|
|
(40.7 |
) |
Cash Flows from Financing Activities: |
|
|
|
|
|
|
||
Net change in short-term borrowings |
|
|
(9.5 |
) |
|
|
(3.9 |
) |
Net proceeds (repayments) of revolving debt facility |
|
|
4.0 |
|
|
|
(25.0 |
) |
Proceeds from long-term debt |
|
|
0.4 |
|
|
|
416.1 |
|
Repayments of long-term debt |
|
|
(0.5 |
) |
|
|
(2.5 |
) |
Payments for debt issuance costs |
|
|
— |
|
|
|
(1.5 |
) |
Proceeds from derivative settlement |
|
|
— |
|
|
|
2.0 |
|
Payments of contingent consideration for acquisitions |
|
|
— |
|
|
|
(1.4 |
) |
Proceeds from share-based awards |
|
|
1.7 |
|
|
|
0.3 |
|
Payments to noncontrolling interests |
|
|
(0.6 |
) |
|
|
(1.0 |
) |
Other share-based award transactions |
|
|
(9.8 |
) |
|
|
(8.1 |
) |
Repurchases of common stock |
|
|
(79.9 |
) |
|
|
(160.0 |
) |
Dividends paid |
|
|
(73.1 |
) |
|
|
(71.2 |
) |
Cash provided by (used in) financing activities |
|
|
(167.3 |
) |
|
|
143.8 |
|
Effect of exchange rate changes on cash |
|
|
1.6 |
|
|
|
(86.0 |
) |
Change in cash and cash equivalents |
|
|
(231.4 |
) |
|
|
38.4 |
|
Cash and cash equivalents, beginning of period |
|
|
639.0 |
|
|
|
847.8 |
|
Cash and cash equivalents, end of period |
|
$ |
407.6 |
|
|
$ |
886.2 |
|
ManpowerGroup Second Quarter Results July 20, 2023 Exhibit 99.2
FORWARD-LOOKING STATEMENT This presentation contains statements, including statements regarding economic and geopolitical uncertainty, financial outlook, labor demand, the outlook for our business in key countries, the Company’s strategic initiatives and technology investments, and the positioning of future growth for our 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, 2022, 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.
Excludes the net impact of restructuring costs of $14.5M ($11.8M net of tax) and a non-cash currency translation charge of $2.9M related to hyperinflationary Argentina, while Q2 2022 excludes the net impact of integration costs of $2.7M ($2.1M net of tax). EBITA is a non-GAAP financial measure and is defined herein as Operating Profit before Amortization of Intangible Assets. Reported operating profit was $108M, and operating profit margin was 2.2%. On an adjusted basis, operating profit was $122M, and adjusted operating profit margin was 2.5%. As Reported As Adjusted Q2 Financial Highlights -4% -3% CC -4% -3% CC Revenue $4.9B -40 bps -40 bps Gross Margin 17.8% -39% -38% CC -32% -31% CC EBITA $116M ($131M as adjusted) -130 bps -110 bps EBITA Margin 2.4% (2.7% as adjusted) -44% -42% CC -32% -31% CC EPS $1.29 ($1.58 as adjusted) (2) (2) (1) Consolidated Financial Highlights ManpowerGroup 2023 Second Quarter Results
EPS Bridge – Q2 vs. Guidance Midpoint ManpowerGroup 2023 Second Quarter Results
Experis revenues decreased in the quarter with most pronounced impact from enterprise clients Both RPO and Experis anniversaried record revenue levels in the prior year period Manpower posted a modest organic CC revenue rate of decline which equaled the same rate of decline in the first quarter Business line classifications can vary by entity and are subject to change as service requirements change. Talent Solutions reported organic CC decline driven by RPO which was partially offset by strong growth in Right Management Business Line Revenue Q2 2023(1) ManpowerGroup 2023 Second Quarter Results
Consolidated Gross Margin Change ManpowerGroup 2023 Second Quarter Results
Trend (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 $862M Business Line Gross Profit – Q2 2023(1) ManpowerGroup 2023 Second Quarter Results
Q2 2023 includes restructuring costs of $14.5M which consists of, $0.8M in the Americas, $6.0M in Southern Europe, and $7.7M in Northern Europe (1) (15.2% CC) (15.5% CC) (14.4% CC) SG&A Expense Bridge – Q2 YoY (in millions of USD) ManpowerGroup 2023 Second Quarter Results
As Reported As Adjusted Q2 Financial Highlights -13% -9% CC -13% -9% CC Revenue $1.1B -47% -43% CC -47% -44% CC OUP $43M ($44M as adjusted) -250 bps -260 bps OUP Margin 3.9% (4.0% as adjusted) 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. Current period excludes the impact of restructuring costs of $0.8M. Prior year period excludes the impact of integration costs of $2.7M. (1) Americas Segment (23% of Revenue) ManpowerGroup 2023 Second Quarter Results
Americas – Q2 Revenue Trend YoY ManpowerGroup 2023 Second Quarter Results
As Reported As Adjusted Q2 Financial Highlights 1% -1% CC -1% OCC 1% -1% CC -1% OCC Revenue $2.2B -17% -19% CC -20% OCC -12% -13% CC -15% OCC OUP $93M ($99M as adjusted) -90 bps -70 bps OUP Margin 4.2% (4.4% as adjusted) Southern Europe Segment (46% of Revenue) Current period excludes the impact of restructuring costs of $6.0M. (1) ManpowerGroup 2023 Second Quarter Results
Impact reflects underlying business performance excluding France Talent Solutions acquisition. Impact reflects business performance after adjusting for loss of revenues due to Hungary sale. Southern Europe – Q2 Revenue Trend YoY ManpowerGroup 2023 Second Quarter Results
As Reported As Adjusted Q2 Financial Highlights -7% -6% CC -7% -6% CC Revenue $952M -189% -190% CC -118% -117% CC OUP $-10M ($-2M as adjusted) -210 bps -130 bps OUP Margin -1.0% (-0.2% as adjusted) Northern Europe Segment (19% of Revenue) Current period excludes the impact of restructuring costs of $7.7M. ManpowerGroup 2023 Second Quarter Results (1)
Northern Europe – Q2 Revenue Trend YoY ManpowerGroup 2023 Second Quarter Results
As Reported Q2 Financial Highlights -1% 4% CC Revenue $599M 14% 20% CC OUP $26M +60 bps OUP Margin 4.3% APME Segment (12% of Revenue) ManpowerGroup 2023 Second Quarter Results
APME – Q2 Revenue Trend YoY ManpowerGroup 2023 Second Quarter Results
Cash Flow Summary – YTD ManpowerGroup 2023 Second Quarter Results
Total Debt (in millions of USD) Total Debt to Total Capitalization Total Debt Net Debt Net (Cash) Balance Sheet Highlights ManpowerGroup 2023 Second Quarter Results
Interest Rate Maturity Date Total Outstanding Remaining Available Euro Notes - €500M 1.809% Jun 2026 543 - Euro Notes - €400M 3.514% Jun 2027 433 - Revolving Credit Agreement 6.266% May 2027 4 596 Uncommitted lines and Other Various Various 21 329 Total Debt 1,001 925 (3) (1)(2) (4) (2) Debt and Credit Facilities – June 30, 2023 (in millions of USD) 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 1.53 to 1 and a fixed charge coverage ratio of 4.94 to 1 as of June 30, 2023. (In the agreement, net debt is defined as total debt less cash in excess of $400M.) As of June 30, 2023, there were $0.4M 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 $300M. Represents uncommitted lines of credit & overdraft facilities. The total amount of the facilities as of June 30, 2023 was $376.9M and subsidiary facilities accounted for $326.9M of the total. 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. This rate is the effective interest rate for this note, net of a favorable impact of a forward rate lock. ManpowerGroup 2023 Second Quarter Results
EBITA is a non-GAAP financial measure and is defined herein as Operating Profit before Amortization of Intangible Assets. Estimates are assuming FX rates of 1.11 for the Euro, 1.29 for the GBP and 0.0071 for JPY. Revenue Total Down 2%/Up 2% (Down 3-7% CC) Americas Down 9-13% (Down 7-11% CC) Southern Europe Up 5-9% (Flat/Down 4% CC) Northern Europe Down 1%/Up 3% (Down 4-8% CC) APME Flat/Down 4% (Down 3%/Up 1% CC) Gross Profit Margin 17.3 – 17.5% EBITA(1) Margin 2.4 – 2.6% Operating Profit Margin 2.2 – 2.4% Tax Rate 30.0% EPS $1.32 – $1.42 (favorable $0.08 currency) Third Quarter 2023 Outlook ManpowerGroup 2023 Second Quarter Results
Q2 results reflect the continuation of a challenging operating environment in North America and Europe, partly offset by strength in APME and Latin America. Gross profit margin of 17.8%, down 40 basis points year over year, reflects consistency in staffing margin and further softening in permanent recruitment. As part of our ongoing strategy to improve our profitability, we have decided to wind down our Proservia managed services business in Germany. Everest Group has named our Recruitment Process Outsourcing business as a Global Leader for the 13th year. Key Take Aways ManpowerGroup 2023 Second Quarter Results
Appendix
Industry Vertical Composition Based on Revenues – Q2 2023 ManpowerGroup 2023 Second Quarter Results