MAN - Earnings call transcript Q4 2019

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Operator

Welcome to ManpowerGroup’s Fourth Quarter Earnings Results Conference Call. [Operator Instructions] This call will be recorded.

If you have any objections, please disconnect at this time.

And now I will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. Sir, you may begin.

Jonas Prising

morning. Good yearend XXXX. the call conference to for Welcome With McGinnis. is our Officer, Jack Chief Financial me today

start concluding call flow. and will operating and first on and highlights some And We cash our will results of of through comment for the Jack our before Jack the the and some the quarter then fourth balance through then quarter go XXXX. the segments, year. thoughts the today an will full on the by sheet update our give will start will I some items I of Q&A strategic we outlook make Session. going

Before we harbor safe the will proceed, now cover language. Jack

Jack McGinnis

These or those projected Good may forward-looking forward-looking morning, assume statements. unknown which from includes statements everyone. beliefs. differ to on materially forward-looking are any the uncertainties. no statements, or are current management's Actual obligation conference known update based subject results expectations This We statements. call to in and and risks revise

of X filings includes our regarding non-GAAP information Slide reconciliations presentation of and previous measures. SEC earnings release important

Jonas Prising

Jack. Thanks,

economy. to global a continue execute slow well growth in We

Our from in environment and from offset the exited and experienced were which billion, U.S. down the by constant Australia, Netherlands. our clients. has improvements decrease similar Nordics, more in growth fourth quarter basis, Germany the driven third difficult currency trend has the months. and down same-day where The flat revenue the in representing basis. the a was quarter the came constant in quarter organic by low-margin the trend UK, markets third decreases in recent revenue $X.X step X% the in most in quarter APME. certain Italy, year-over-year fourth in within Revenue been This in Americas our manufacturing, revenue manufacturing X.X%, underlying by currency. offset a mainly issues On a at decreased become performance we've Europe, These on where partially environment trend reflects same by revenue revenue partially challenging

was Operating in down in quarter XX fourth the the currency. basis $XXX for margin in came profit from currency constant year. XX% million, prior constant Operating at X.X%, points down profit

in performance improvement, by profit and successful driven mix improved strong a initiatives. margin reflects gross margin the Our quarter

in managed continually and SG&A economic We very at the same key quarter time, costs, within considering in continuing markets, investments are closely our our the the monitoring environment while technology.

tax currency share Earnings per discrete fourth quarter was and benefit Earnings per in $X.XX quarter the year-over-year. items included $X.XX. constant in for X% a share the of from decreased

for the earnings Turning few the $X.XX. full share Reported results a per moments. for year to year was

constant earnings year-over-year. special $X.XX noted decrease Excluding and was XX% quarters, represented items in a currency share previous per of

currency for the year $XX.X billion. $XXX And in to decreased Revenues was profit million. X% operating reported constant

profit a noted was operating previous items constant decline special year-over-year. quarters, XX% million, the represented which in currency Excluding $XXX

XXXX Although position advancing good progress the made key growth. challenging future will year was in that well very for many us we initiatives respects,

an meeting solutions the relative and a perspective opportunity gathering many in was our can of Davos. business and with leaders provides of their organizational we to in outlook, Switzerland, broad provide, the World government global I to economy. at annual clients week, Forum's wider Economic Last challenges and sentiment This business capture us the participating concerning meet the of

take challenges, strong wars automotive slow progress in the moderate. such and the some employment not recent Despite negative Our regions and effect the impacting both as outlook industry-specific evenly labor to growth and they're growth low across manufacturing sector. environment, globally and reflects trade is sector a will of This trade is economic agreements, feeling time and distributed assessment that but overall the are overall where unemployment economic on markets industries.

transformation the in to Workforce are business model changing demands adoption technology skills many are evolving due organizations. faster and and needs of

our which XX% A showing XX,XXX XX%. businesses result, survey U.S., And want. and evidence they the And shortage we over gap, what figure what across need, of globally, than talent this record the decade are XX,XXX a world high talent around workers also the can sustain employers workers to countries. in skills paper, XX and of find, almost talent the see more of talent. need was shortages it is employers in find that a to double As latest ever engage white struggling Globally, help is ago. closing

and positioned our brands, our help clients well footprint challenges portfolio these market-leading to strong services. solutions address very are with We extensive of global and

financial over to turn it I additional review like would of results. provide and Jack to now information to segment our

Jack McGinnis

Revenues range. Thanks, our guidance quarter in the currency at fourth the of came constant Jonas. end in lower

margin profit gross bill-pay basis and reflects the was points continued range. our XX our in was exceeding year-over-year, up quarter in very yield Our guidance This strong initiatives. improvement

impact operational experience while in We the revenue deleveraging in we of continue invest to technology. the continue to slower environment,

an our a resulted performance of on X.X%. operating lower in the XX% an of of currency on guidance quarter in XX% or constant resulted basis year-over-year. margin at This midpoint revenues profit decline fourth operating profit Our

revenue This of negative impact the adjusted revenue similar the a days from impact after was days a currency for X%. was quarter, our about of decline the and trend a The basis. a U.S., the driven by the represented was quarter organic the in constant about trends adjusting in X.X%. on quarter third And net currency trend down of decline decline X.X% from constant revenue Nordics slight, the decline third primarily the resulted flat Australia. which of was revenue of Breaking the decline. into The bit detail, currency our X% impact more in dispositions

share of variance well the better-than-expected within lower due improved $X.XX a other as $X.XX discrete during on tax this count average the our interest on Earnings the $X.XX, $X.XX share $X.XX on was result weighted $X.XX of of in impact result a Turning and improved at items bridge. effective EPS guidance rate came to operational quarter. and positive above range. a lower foreign expense, in to realized rates, quarter, performance, from exchange per a Included currency the repurchases on

in our interim gross and our tight XX.X%. at largest of year-over-year margin market ongoing labor of Many the our see has margin a margins initiatives. conditions, staffing contributed stronger markets Looking and at And on came points. trend reflects profit in to staffing continue improving margin based basis this represents underlying increase XX an gross to detail, our

permanent France also contribution contributed a XX In reduction from to higher from contributed X. basis October about lower of to our point A Solutions contribution addition, points and XX benefited subsidies effective reduction. from lower basis recruitment businesses

business gross review our by line. Next, let's profit

Professional gross comprised XX% Solutions the Right XX%, Experis profit, the ManpowerGroup Manpower Management, During business quarter, comprised XX% brand comprised and X%. of our

in During currency reported third from year-over-year. This improvement gross our was was Southern flat and brand the quarter, manpower improvement by X% organic decline an the quarter. This the driven Northern constant Europe. profit

currency Gross profit and growth by from driven quarter, the organic in an decline a UK. in during experienced X% X% our the Experis constant decline was the the the basis U.S. This brand the quarter. X% primarily decreased on from third

third gross gross improvement business. our the Proservia currency in our Solutions a ManpowerGroup flat profit RPO the in driven This profit was growth from constant organic experienced business, the by growth quarter X% improvement double-digit is year-over-year, which and quarter. significant which growth was by in

in a review. growth driven career organic which X% in I X% experienced significant growth on basis from higher rate third comment on will gross management by the the my the of Right profit improvement currency also an Right constant Management segment quarter, was Management activity. during quarter,

expenses gain, a dispositions, on SG&A was The increased expense revenue was increased currency million by decreased as year-over-year. XX.X%, quarter SG&A the $XXX net basis, cost while of technology gain $XX prior $X maintaining an period the which management after year increase operational by reflected this million, driven decrease the investing SG&A the million prior revenues, from of excluding included currency the $X reported and of on On item year. $XX year-over-year. constant year, a representing million in a business offset percentage million of X.X% million changes, This for and deleveraging $X lower from represented expenses from adjusting in the year-over-year. strong sale costs. in which were special prior organic SG&A

the in of segment Americas revenue. quarter XX% $X.X consolidated an The currency. Revenue X% in increase was comprised constant of billion,

and million and an currency year-over-year. margin XX the OUP decrease basis year, of constant X% in prior decrease points $XX from a equaled OUP of represented

segment The the to U.S. is Revenue the in representing segment, of U.S. Americas revenues. compared the a was largest $XXX million, XX% country comprising in X% the of prior decline year.

franchise U.S. Manpower the rate. which of three and third revenue the in The additional during one quarter, fourth increased the growth acquisition small the quarter franchises completed

similar was basis Excluding revenue a on adjusting days, the the decline XXXX quarter. an the in third fourth growth a X% acquired revenues decline U.S. quarter, X% in of the from from franchises for which underlying had billing additional the the in and

the business growth. the In reflects margin in RPO of scarcity increased talent and the U.S., pricing year-over-year U.S., the profit strong gross we as experienced environment

Our RPO in as growth revenue This OUP new is activity fully increases for a clients. to front-loaded results slight until up. in these ramped we implement drag margin our has the service driven SG&A our platforms

During XX% U.S. million. the quarter, prior basis OUP to a margin X.X%, was year. $XX the decreased XX decrease our for from business points OUP of

third from franchise profit PMI last business The a X% the quarter Manpower U.S., the revenue Manpower the in to line U.S. decline down for trend The the quarter market manufacturing during months. has the the X% U.S. Revenue for in experienced and revenue current basis. when been in has Manpower of four the in brand or the the brand commercial trends the manufacturing days We in adjusted down the XX% U.S. U.S. our on of the activity. driven decrease comprised the the staffing. with reduced gross X% U.S. believe quarter. reflecting Within in in the over was for aligned our decrease Manpower business business was by billing decline same in Manpower acquisitions,

the brand Experis in in quarter. gross of XX% the profit The U.S. comprised

decline Experis convenience growth Although December declined year. reduced accounts, than revenues saw and quarter, from This quarter the experienced in X% growth the U.S. from in in Experis the the we large good few third prior a period. clients fourth the as enterprise X% a total expected larger represents a in drop higher-margin volumes experienced from holiday we had during

closing straight been U.S. and choppy the market on over quarters Although trend last the has believe we market actions. and remain gap growth performance revenue Experis taking right to has we a to two the the path focused not been line, are our

the and X% revenue in in the quarter, the gross contributed U.S. of Solutions experienced than in quarter. ManpowerGroup the slightly XX% profit rate lower X% growth growth third

We our RPO higher see and recent global strong MSP value up. continue RPO ramping clients wins our solutions large for are and demand to by

the U.S. double-digit in the Our RPO business experienced quarter. growth revenue in

similar a year-over-year trend organic days U.S. slightly the constant quarter trend revenue our basis business to overall a in first increase quarter. on fourth expect have revenue currency the adjusted We to and to

XX% had Revenue constant constant Mexico Canada quarter growth revenue represented decrease from the flat constant currency Our a quarter, in operation was the growth. up in in slight in currency, X% third currency. which

are as market-leading We performance of Canada they our pleased business very with growth. continue generate to the

the to in We again very a first performance have quarter. expect Canada strong

the Revenue was This other XX% growth Peru in growth currency. revenue primarily America. strong in constant Americas in driven was countries and growth Central by within up

quarter. revenue Southern billion, in in the Europe in currency. X% at revenue constant $X.X in Europe increase comprised Southern an came XX% of of consolidated Revenue

margin in Manpower experienced basis. to X% of third X% equal the OUP a the on constant quarter X.X% million, Switzerland year. this currency. decrease same days, equaled the for acquisition billing prior trend to $XXX the revenue Adjusting increase OUP was and the flat represented an of of in year-over-year,

of revenue X% quarter from the comprised Southern down currency. constant Europe segment in and the was XX% in year prior France

the France. we a of due at adjusted quarter, of holidays the timing X% as represented same was days this third lower continuation lower quarter decrease in as exited impact impacted activity the of partly in by the well Although rate, a holiday which to the strikes

to the currency was million, margin fee-owned constant the initiatives. and the X% X, an profit margin currency. increase from added And X.X%. third benefit $XX basis which also quarter points basis in well continued run was on commenced points GP on execute subsidies, of business additional in October rate, the gross to up of XX XX OUP at OUP which constant had France margin

partly first the in Considering activity December, in activity for France January, impact than represent of forecasting the in of first year-over-year. to strikes decline levels X% continued lower weeks levels the January, revenues In currency of in France current be we are a month. to quarter to the three constant due

same from Revenue representing basis on decrease in constant a the in represents of in X% a X% decrease the days X% Italy adjusted slight quarter. This improvement a currency. equaled $XXX a decline represented the basis. million, This billing on third

and improving in to revenue fourth have very the execute the well a continued quarter. margin rate businesses Although in gross at profit declines been improved slow Italy,

the and basis increased currency OUP X.X%. XX Despite to in margin constant lower by points increased environment, revenue OUP X%

Our revenue trend difficult trend improved in Italy business we an the is should result revenue environment performing which very a flat quarter, well first in and year-over-year. a in expect

Revenue from This and days currency in reflects the the from in a X% quarter. increase growth the constant currency decrease Spain increased prior XX% represented XX% in adjusted year a days adjusted basis. on the third constant slight

We expect revenue another strong to result first quarter. Spain the have in

in As previously very franchise remaining in Southern This interest represented April. mentioned, well Europe's the Switzerland quarter. and performed business of we in Manpower acquired early revenues X% our the

the a On represented million. an OUP in X% declined The Our which the down days quarter. in the consolidated equaled XXX the was basis. currency XX% Revenue basis, driven constant decline improvement decline margin billion. to quarter was And an the decline, X% adjusted constant on Northern in Europe and OUP of this $XX $X.X organic from in Sweden. segment OUP basis X% by comprised declined currency. third revenue same XX% was points. Netherlands

difficult for in consecutive the the UK UK the of has the improvement constant quarter. X% from Northern revenue in well days. Europe represents days the in growth after adjusting UK, step in revenue the performing quarter XX% The which represented currency X% market largest billing for adjusted were up up third UK quarter. business the is third segment of up revenues or in Our a This segment been market. X% and

In adjusted XX% a in XX% constant days XX% quarter the or on a third a Germany, which in decline decline basis, fourth the revenues on basis represented an declined adjusted of from currency quarter. days of the improvement

activity. six a a business Germany seen remains Our although slow at pace. driven over market the manufacturing Germany by challenging had steady months, improvement very last lower

the adjusted third Norway a has represented days We X% the first high days the decreased during adjusted Although be on basis. X% a a quarter anniversary decline the lesser further quarter. very further Nordics, to and continued growth the growth lower improvement This in weak. in degree, In market trend revenue Sweden, anticipate the in by currency decrease constant rates. due of from to to the driven revenues

Our to revenues Norway is well. and business performing continues grow

decreased Our manufacturing Sweden activity. business has decline revenue experienced a on double-digit

revenue first the slight the We rate improvement Nordics to expect a the experience in of in decline quarter.

XX% XX% fourth on translation quarter. days is Revenue the currency revenue days due the from exit manufacturing reflect disposition to and in a of the on our XX% to for decline, impact quarter. the clients, decisions. currency This third a adjusted during represented adjusted the largely Netherlands same constant decreased improvement continues the business the market weaker Adjusting of a constant basis which slight language the decline basis last of pricing in year, this select

first quarter. We expect a decline rate stable in to the of slightly improved

quarter, in adjust decline in decline As the we these they or adjusted in currency of last we working to fourth during changes on first the Belgium as a with days is and rules. basis Netherlands X% mentioned temporary legislation new introduced revenue being been workers clients through constant experienced our quarter. quarter, new X% for the of the a have

represented a the days This currency from the constant third decline quarter. in decrease adjusted X%

quarter, JV XX% the the million, was down In reflecting last following Greater company and in XX% quarter. growth increase We had of discussed currency East deconsolidation offering The of trend expect XX% Ireland. Europe Poland, its in markets revenue. comprises in constant to in in Other the Middle constant segment China of Northern quarter. total similar a the by driven first revenue revenue a public revenue Asia-Pacific $XXX currency Russia

by by on an in quarter, in declined Japan. Organically, $XX year-over-year of in the currency. constant million XX% constant OUP organic represented revenues equaled currency. driven down APME performance XX% in increase X% And an basis, strong year-over-year,

and constant OUP growth adjusting by currency decrease of in the margin a same a slight Revenue third deconsolidation decreased the basis. XX quarter which basis X% days, on was represented X% points, Japan the rate, on driven this up X% the billing growth an was basis for from in China. growth

to first trends business perform Japan well, single-digit quarter. Our continues and expect revenue the into we mid very

XX% currency. the of declined decrease third low-margin constant in by from XX% driven Revenues in the improve business This exiting the Australia profitability. in decline further a quarter our in Australia represented Manpower to

to revenue continue the declines expect range We double-digits into in the percentage first quarter.

X%. of in as was Revenue a markets This Asia-Pacific was including Middle China, a revenue were growth in in Middle other XX% Korea, East. of of the organic down deconsolidation East growth Vietnam currency result in result number markets, a and of strong the constant and

$XX representing quarter. to year-over-year, of with quarter, Our consistent in Right the currency the constant business growth grew revenues growth in fourth million Management the X% rate third

$XX margin to will basis segments changes points increase XX% equaled my I OUP increased currency in outlook, OUP basis. of reporting a impacting upcoming an Later million, in right XX.X%. XXX management. on our constant discuss XXXX to

in one cash period. $XXX quarter was I'll $XXX fourth cash as $XXX flow, outstanding now flow million of decreased the year-ago Free at which balance experienced operations defined cash compared less sheet. for At end, flow The from very year. turn compared strong capital day. million sales to expenditures, positive the and in million the days cash $XXX prior to quarter by million year to

Capital during expenditures quarter. the represented $XX million

of During $XXX X.X to million, stock for total million purchases the the quarter, we shares for purchased shares XXX,XXX million. $XX for year bringing

we the six August December shares share As remaining XXXX. of under in of have approved repurchase XXX,XXX million XX, program for

XXXX, August remains incremental unused. Our X million Board an approved in program which share of

$XX to strong $X.XX total end $X.XX at debt million. of cash debt and net billion bringing Our of was sheet our with balance billion, quarter

at trailing debt months total with ratios and XX debt to XX%. of are EBITDA X.XX% debt total to capitalization Our at end quarter total very comfortable

not the quarter. did in facilities credit debt change Our

turn back Jonas. our will it outlook, I I to Before cover

Jonas Prising

Thanks, Jack.

in accelerated areas we taking talent a cycle growing, As solutions, a especially of have calls, strong actions rapidly high our an diversify to double-digit trajectory, The value. market Solutions providing innovate pace at life business expertise. to mentioned previous in end-to-end is digitize, we're with global higher deliver market and growth margin

our Given at clients' value effective solutions create three these MSP needs. dynamics, ManpowerGroup called Solutions, added Right offerings and we're launching deliver to deep I'm brand, workforce excited brand announce our our Talent global new new expertise within of Tapfin addressing today. combines This to RPO, new that leverage a to complex global Management and current

to and develop leverage more what will scale, implementation. at with help manage solutions, talent core our Expert across effectively Solutions want. Talent data-driven our integrated delivery source, they workforce and organizations seamless strong capabilities multiple countries providing clients and offerings,

and time with data workforce as as insights over platforms, of Together scalable new we processes, Talent add consistent expect Solutions global to offerings technology via part well.

candidates technology our and We're our our clients. business initiatives mobile new deliver value and of SaaS roadmap. the that focus be as a stakeholders, cloud, differentiated to XXXX. accelerated key the at insights creating and assets continue leveraging strategic data main and interact and an to drivers We're efficiencies in digitizing technology with pace our differently drive for Our

analytics. designed HR an been suite virtual provide assessment stack platforms scalable integrated HR most challenges power technology data address to coaching, Our that and can and has processes, upskilling workforce AI-enabled pressing offer tools organization's using and cloud-based optimize

the competitive creation. our for and companies We that have value scalable products advantage strategically or to new data but global insights partnerships technology opportunities of with to real We analytics proprietary creating best-in-class from develop believe partners. technology chosen assets, comes not acquire

for differentiator is initiative. us our MyPath key Another

in earnings a the Our progression to for global to within frame, jobs develop time program with individuals and allowing required them their significant high-growth potential. increasing designed skills sectors provide career short

new readiness skills provide it into been at workforce learning this it motivation, our over scale. upskilling many providing potential, on rapid us a the and We’ve training reskilling and job and certifications market-based insight people’s With leader leverages and in associates level. traditional performance to adjacencies data-driven decades, for and a expertise training takes enables programs, MyPath our to

levels. time skills enrollment program, MyPath clients of skilled talent our of at or and the shortages of skill a decade-high at pool associates our new become that number expanding countries a in to offer learn allowing We’re to greater our

greater managing already rates, others become more of to of also advocates productivity is is reassignment talent and and overall associates faster motivated MyPath placements, that efficiency higher employment their increased It loyal associates agents driving driving and refer ManpowerGroup’s our opportunities. our and and our brands.

our innovation speed to to build we thousands some intend deployed of MyPath continue that markets, and success, year. Already skills at scaling to U.S., and in driving career from major the upon every progression of France from scale program individuals its including in-depth competition to differentiates and assessment of us this benefiting hundreds the

will review to updates, And turn now first back outlook having covered strategic to the it these for I the Jack quarter.

Jack McGinnis

the updated we our for XXXX. Jonas have As first quarter brands covered, of effective

now Proservia IT addition have end-user also into infrastructure Talent Right being brand, and Experis. our to Management In Solutions from within European included support Solutions moved we business,

IT our grow of business IT its to continued nature the more which Proservia successfully is Experis business, to The has aligned specialization.

and Lastly, our our talent Manpower offerings moved Solutions previously manufacturing aligned more services. this industrial based as business to to have and in been to business outsourcing more be continues

In to changes. release a profit line of presented fourth and of illustrate restated the the impact slides, view the quarter our business year to gross these full have XXXX for we appendix

are updating We quarter the segments of for effective our first XXXX. also reporting

smallest Management reporting business represented segment. Our has Right our

a segment, other workforce brand business a result separate become has solutions more We strategy. this historically perspective as client as business a connected offerings and reported our over strong time, and to this of our from have connected

regional covered, how offerings, first segments. continues important global it we will reporting Jonas our be our Beginning similar will to quarter, Solutions our leading new Solution and brand. Right Management offerings to Management Right we our our within offerings, be as of one Talent other the of report Talent geographical part core report an in

only results regional of going the will to included geographic Management the Our forward, reporting segment. Right regions and be be each will simplified include segments within

press for on have our and year-to-date XXXX We release appendix website. available a on in purposes of to segments our our basis quarterly restatement reporting included a comparability an

the for review first of quarter XXXX. I’ll the Next, outlook

in for $X.XX share quarter earnings of which range from negative foreign a share. of forecasting currency $X.XX the $X.XX, are includes be to first impact per per the to We

decrease to flat. range Our constant currency X% a revenue between guidance is of

impact midpoint currency XXXX Walking X%, decrease our accounts constant for revenues. days additional of adjusted revenue organic the represent the excess about X.X%. is of X% decline for net days of in favorable of guidance about the acquisitions X.X% from of in the of QX midpoint. a dispositions would that, After currency a adjusting constant And at

Sequentially, decline this the organic decline fourth adjusted quarter. represents in further X.X% days a from revenue the

be midpoint. in minus We expect revenue this in currency Europe increase Switzerland at constant of the low to constant in the for the the driven the low revenue in digits, an acquisition, mid-single Americas of growth single to trend about with Southern X% Southern growing Europe X% with resulting from digits, currency organic

Northern the teens double-digit about XX% midpoint. in rate due currency to APME mid-single deconsolidation and the Europe Middle resulting organic to range, decreasing East this the of growth of digits with for decreasing in Greater China, Asia at Pacific low flat in decrease a constant

prior quarter. be the to during is quarter basis points to year down expected margin the XX profit operating compared first Our

rate our We full income for rate approximate we result, applicable is tax in XXXX And the tax XX%. expect the full about expect for our first The year. be XXXX quarter as a year of X.X% to tax XXXX, globally French to rate XX.X%. impact approximately decrease, the

repurchases, charges weighted $XX.X not be and additional As usual, guidance share restructuring we to average does shares our incorporate million. estimate or our

will pension and of into guidance broken of a separately U.S., been charge incorporated be and not our settlement out We charge also to as a planned first in expect the part plan our results. quarter to has the incur this modest related

like I’d turn back Jonas. to that, With to it

Jonas Prising

work closing, our and to to on find key and is delivering In our solutions deliver to millions work our hard need Thanks, like people clients of I Jack. expertise would succeed. talented mission thank team, sustainable to meaningful, workforce ManpowerGroup to whose the for

call would open Q&A. I the now to Operator? for like

Operator

you. Thank

Instructions] question of We [Operator will question-and-answer the first the from JPMorgan. of Andrew begin now is line Our session. Steinerman

now line is open. Your

Andrew Steinerman

gross in Slide if like XX Hi, I of Could a temp want see you X? you’re feel time Jack. is this up back inflection you margins. to go I basis to number points. know

French first mentioned mentioned subsidy. And then better you You secondly, additional bill pay. the

So in better much getting us France, subsidy? the without specifically, consideration if are you how by getting could a sense driven spreads you pay. give of that’s bill-pay of to better And just bill

Jack McGinnis

of a started on seen thanks mentioned. terms would see we’ve I a in been as bit we large definitely this the basis. trend some underlying improvement had would pressure had improvement. quarterly markets a year-over-year for And an earlier our I do say some think markets, question. margin inflection where trend, of to in I seeing Andrew an have a quite of for we as GP improving time we’ve the we’ve I GP basis, is on in our that seven we And mentioned, seen margin overall, very And say I’d And year. steady the I say, improvement. top

mentioned, yield had the points France. on ended from higher seeing higher basis XX we’re where from help also the fee quarter third subsidies. subsidies initiatives in that added So very beyond perspective a that, in I bill that the we from Certainly, broad-based. it trending France we was But on improved

earlier the U.S. as And there. that actions. see well subsidies We’ve talked in yield the other overall. pricing can getting we’re initiatives improvement quarter in themselves. in the had for true Italy us significant the beyond item about the was the the of margin terms in bill-pay OUP Italy’s quarter additional that’s – additional that And So very in the Italy. you strong and for year, was

trends first our largest and would GP the across we’ve we strong is the to And So in saw in say that, I actions that from we that we businesses, the of expect on year. margin result continue very the all say board, on been I’d efforts in expect putting the bill-pay – and the earlier guidance, quarter. our pricing based into yield the

Andrew Steinerman

thank you. Okay,

Operator

you. Thank

from go Silber Markets. Our Capital ahead BMO next question. question is of with your Jeff Please

Jeff Silber

right Actually second. just guess, lot a to businesses reporting I understand a can typically perspective. at of of there? regions what But Right of I reason major the sense. you what high countercyclical give moving segment the much. us focus kind are I’m businesses makes in regions? those so for, seeing in a right for more you’re It’s which little Thanks. are a I trends level, Management for a wanted just wondering more you color Thank you That on mostly? those And from bit business. a

Jack McGinnis

take I’d be that. to Jeff, Yes. happy

you as be regions. the color Management’s Right quarter. regional will to forward of Management fourth give reporting from go So we’ll And the strong we it on results. continue in I performance the the in certainly, say, as saw, should on terms But in have Right we impact performance it’ll

in basically, at, look the biggest Southern about of U.S. of the with XX% business about that fall you the roughly is that, being of right, about XX% XX%. in revenues Americas, part France. in of of within X% Right with Europe, terms the the Management’s If composition,

And business and quarter the to of XX% about XX% in is in Northern APME. Europe then a

bit gives you purposes. So breakout that a of the modeling for

businesses, in continue margin good GP help modeling. basis. from improvement said, And see mentioned, on the with we we do guidance appendix, to saw Right restated if close the But do from very I’d expect As as revenue be a Management impact margin that other addition overall, those what to in the flat Management – quarter to the expect have views first say we look or you Right we overall should our to strong to GP and breakouts, the QX. I at be that able But that I you’ll has. into you and

Jeff Silber

between trends differing four any for geographic Right there those are regions major And specifically?

Jack McGinnis

say a segments, but of Management. we’re We’ve in about driving see business a activity seen very seeing to that say, business select I management balance pockets what that for the been that’s three expect we’re seen wouldn’t overall, trend outplacement we step would I’d that has and increase revenue that’s being with the quarter wouldn’t it strong, is change that ramp more rate business improvement. career been to in up. Talent the starting I us business of the the forward. And that going we’ve say new been cause the of to – that’s No.

Jonas Prising

that adapting and companies on as what’s geographies. their to benefiting context across opposed is of more as on the major business – any a that. occurring It’s transformations leveraging are they more of the color to actions provide technology are models So from bit are that broad-based within what we’re kind

So the those identifying job good team has opportunities. done a

Jeff Silber

very for helpful. so you much That’s color. Right. the Thank

Operator

Thank Markets. RBC And Seth the of next you. from Weber Capital question is

open. now is line Your

Emily Mclaughlin

Hi, morning. progression discuss And on you to for demand what this could how seen U.S. all U.S. Wondering margin business. is you’re this you January? about looking the in ahead? if into seeing Experis Mclaughlin the Seth back at Emily think come Have

Jonas Prising

a commercial perspective. in Manpower in has U.S. We the fourth markets business business Solutions some the spoken And four we is So saw we’ve believe The seen evolution we’ve – terms good from staffing business. that very about. the our business components. Manpower at of quarter

growing reflecting RPO, business and ManpowerGroup the in and at there Jack and doing permanent especially Management we’re well. XX% talent for well demand strength placement U.S. had is market strong Our Right Solutions as that growth, the of just then referenced

turn clients And on can perspective, that enterprise some an Experis I in quarter. primarily segment. we we've our go see by off convenience is still that and and enterprise growth we good demand, driven very the in volatility clients, and mentioned are seen last but on turn mostly From the dependent would say we

We with trends convenience plan the and ensure part segment to that our from offset higher-margin within continue more able growing of potential segment. and to convenience is the certain volatility enterprise that to the the are we see stable clients

professional I still in level progress skills with the and of to is convenience opportunities and market our pleased demand progress. on segment. have we're to come the We're we that evolution continue pleased solid think made say we the good And the would back higher for the bill-pay U.S., with we've rates. the

Jack McGinnis

that from And in more we I volatility result that continue I Jonas growing. news would a to Emily, convenience mentioned, some some to mentioned our effect holiday the demand related of now a expected. the It's book is over a of But the of to December. now. of book was trends. in has month add clients. been terms little certainly as the December bit large pronounced of in enterprise half see the that, flows came – just And Experis through color the we some good few than That

with enterprise reduce to that business. volatility And so grow, that continues the as the will associated

Emily Mclaughlin

would at side? if you in And cost cost what these And realized restructuring the just quarter more you of actions? levers on Okay. pull and kind kind the from you point wondering earlier what of levels, fourth separately, the could savings environment stays at

Jack McGinnis

Yes.

year, So and in actions, announced actions did I'd the savings a rate through. $XX we say, come based on those from earlier the restructuring we're quarter running about at basically million a those run

terms in so Northern particularly at when Europe of cost that the in you You results, and trends their can forth. look see

did forth. some talked outsized are those They the so actions. of And also then an restructuring about and as changes America we've part in we've we that footprint getting the receive North of So benefit. made of changes part

have our we Emily, plans more to to the So And in efficiency, from place you the going programs continue year. – forward, as we guess, costs improve in to throughout our continue terms back-office I to to And in XXXX. in should say those have expect hear reduce proceed we those I'd continue and particularly of processes. that

Emily Mclaughlin

Great, thank you.

Operator

next the of George And is Sachs. you. Thank from question Tong Goldman

line open. now is Your

George Tong

good thanks, Hi, morning.

that environment the of you're what you the staffing overhang indicated Brexit into the U.K. temp discuss is and incorporating the business, U.K. on assumptions guidance? Can improving. impact You've Brexit around

Jonas Prising

the job, you has great really team done market U.K. the believe may with the term, that still been the – because of has forward. to on Brexit team have of well have be Longer Brexit we strong. And the the exist would very in that has and the George, course, upon quite for been whole, we in covering opportunities term, U.K. the affect that the guidance employment and that the short going all outlook we're growth performing U.K. I successful negative as us. about the actual think and U.K. despite are might in there'll as comfortable around parts rhetoric a opportunities impact a you seen say economy. of continue And and negative market. a

business terms and tax really But happens. of what transition It's regulatory in nothing and the today really changes as usual from standpoint. a

the in U.K., to guidance. to exist So and in what's we expect opportunities our the that's reflected continue

George Tong

it. That’s Got, helpful.

quarter, pressure currency a markets next incremental on help in and represents of X.X% from? adjusted XQ. decline a organic of Can at you deconstruct elaborate further for X.X% constant bit step guidance the the midpoint down that most you're which seeing Your down of from days

Jack McGinnis

Yes. George, the quarter it's straightforward trend. first a for story mentioned pretty France. in actually terms sequential of I the

that we the activity we of – in France our strike and as going the prepared from seeing QX an we're in And impact France certainly to remarks, month in had do So QX. X% in down levels mentioned January. X% in down see the

what in to of and seeing first what first that's guidance we're our So we're terms quarter. trends calling early using we're the moment France for for the at quarter, the the for influence

part driver. good to the fourth I’d We very of So a in say biggest that's quarter. well. had continues perform the the the U.K. growth

a we'll think U.K. just see reduced I for level slightly the the growth first into quarter. of

first quarter of low step we're So digits, as on typically, But to down based result, trend, quarter the well. perform in very to a environment good flattish. the closer bit that's well. still single there. what But they continues Japan projecting a closer a to the And see and fourth from

Netherlands, improvement of rate in improvement Germany, the rate anticipating quarter. the to for what for and a the anticipating the decline and of that in we've all Europe a that we're first fourth countries steady we're we've decline certainly Italy, remarks. about, we covered for countries I into is lot that quarter, of of continued all So our the offset lot the seen in talked through that And prepared in think in that's of all,

Jonas Prising

while in with provides steps mentioned to short-term what And on Jack do the turbulence George, French us occurring make Stepping color to of all strikes. market it and attractive the maybe is that some the going for as companies more is on the in. even the that just a bit seen we've France down business pain, back, reason France, in

So the reform has reforms, as they they're France. in prior improved on in pensions addressing issues they've in addressing of France through and and pushed that business competitiveness structural are that these terms reforms environment underlying as the long-term well the both attractiveness this really now

very we French market. So a bit is believe, seeing of while, of in economy of underlying The strong. now French and strength, labor course, the we're the the little turbulence market still

business. we'll France this to do how to long a reforms pushed being forward. So think term, least, out make see plays through in of going very all the attractive are that all at we these But medium place

George Tong

helpful. you. Very, Thank

Operator

with you. your And Hamzah from the Jefferies. next question. of Thank question is Mazari ahead go Please

Hamzah Mazari

has your I the brand that's you market the if market line Thank mentioned Hello, U.S. rate good just to you touch in what you think realistic? outgrow happen and Maybe for growth you with could on you. to morning. in believe Manpower growing whether

Jonas Prising

slight the a as in the actually We very in had and think quarter the commercial you there down. third well quarter if market was compared we rate was and good to growth second But a where step believe about underlying wars, uncertainties as some particularly this and trend. has at specific manufacturing what to we're the issues been a global around level, around trade the in that's those an automotive. seeing sectors, suppressed the And trend due

early that countries As appears seen number have are stabilized. we've pressure mentioned, that more that, appeared, of some signs where Jack in though, there a to

look at you if PMI. Certainly,

that So if now wars have trade agreed. been

be areas can well MCA other think agreements and U.S. the conducive just trade the and this hopeful it take some stabilizes We the be pressure some the of China, So that as will would this. between visible, trade well. that But time to eases, as we as then the U.S. to wars effects for reversing to took of to off be trade start over time. effect ease starts as wars it

Hamzah Mazari

my And question. follow-up just

no get margin blocks your SG&A any line I know frame from of line? to do the to at longer-term just margin or time help the look sense there's there, margin expect but you target, more you. you number. that sort gross building Thank of As

Jack McGinnis

our call. have of say, are plans from continuing with of we headwinds back would I'll margin more we're reach and plan underpinnings environment the is Certainly, going to which how the And that our that, effectively, level. we're SG&A place there. pace in targets. changed one to to some I operation But had do changed and to really and more to we've efficient, major welcome nothing's get going that our definitely, at take that. Hamzah, committed to yes, revenue the make have certainly, reach the to we

be will we clearly there. get lever pull that major a to So that

growing That's higher-margin it levers by great business. doing one business to well, actions to would as I about like actually Experis that convenience business. and of the margin the talked talked is for the be margin going say, GP in U.S. that. mix. just just to items initiatives we've about our the we're We was taking And improvement, we're I'd do are together those areas say give on continue drivers to Those us those successful items two of get And us be focus major forward. And us continuing if going to there. GP key to will our execute to initiatives. improving a are going see that

Hamzah Mazari

Thank you.

Operator

is of from The you. the of next line Mark Thank Marcon question Baird.

is line now open. Your

Mark Marcon

those implemented? news. was just fully would with When U.S. these Good to U.S., you've contracts, Jack. you see is wondering, good I of in obviously this would operating margins? morning, RPO the got because Jonas drag the sort And and what regards you're rebound we anticipate implementing just be should that which

Jack McGinnis

up It depends six take just or so. size RPO of the lead time ramp-ups months say Thanks, could for to implementation. the these the Mark. on I’d sometimes

build the in these our prepared platform said we've large business. some but great, infrastructure are that to new very which for is remarks, involve up RPOs, As that set does

So it quarters. that happens typically of couple a over –

would the likely or the to That fourth the line. we're quarter continue for falling see I quarter. seeing the say we so to would will And that so. benefit another through then bottom pressure in And start

Jonas U.S. one business. just as part that's and of said, So the

in of impact level that every same having quarter. quarter. happen it that, I So necessarily an fourth will wouldn't is expect impact the

based to scale would way those of the good wins. bit a about it. say that's outsized, But I So more think probably large it a was on

the quarter get should beyond or we – once should So next be that you neutralized. two,

Mark Marcon

least partially attribute there. internal a you're Europe, over to of regards What point, few – you're than this Germany, sounds at basis? One, it regards questions Northern some optimistic your stabilizing – there. things European adjusted of from a sequential Great. in to environment your And the terms we're success and with then do growing about with hearing the on operations you feeling competitors more the at like seasonally what

Jack McGinnis

in to Well, situation time. get starting difficult still that that the No for to some I There to we think seem incrementally the as though, from doubt, we've sector actions working team are traction And Germany. been starting automotive it's some well about the stabilize. external on indicate that is the is better some indicators market. feel decline a

now, quarters seen us So of seen and the improve us although over you've you've slow. a improve, pace improvement number of is

is that taking Germany. So I we say and actions I taking that's progress think And is taking probably signs now showing results in that would that the making forward Gradual think and what as and that we're well. actions management we're about the good looking progress. should from continued of the

Unidentified Analyst

we should rate we as by half go How towards, we being in stabilized end OUP Northern issues back got a we that? the up Sweden PMI the some should how about we've But of I Netherlands if think Great. longer-term Europe? and year, right the And the we like ultimately about for might. say, normalized know suggests about what should now. we think think the then margin out

Jack McGinnis

Yes.

businesses very you at seeing impact Mark, the There and strong When of you businesses. down that the think, manufacturing come to they're you currently in nature the I markets manufacturing lot the in of manufacturing a improvement Europe look those really the a the it's as activity, activity. and going overall. Northern say, depressed of to sector mentioned, is our Manpower

the think as some data. has there see if is move we – been recent news is, good very we I So forward,

manufacturing, the eurozone recently up If just you from did step look December January. it at PMI to

So that let's becomes trend. a if see

that start PMI to think to too traditional little early to as I a we I we'll continue of on move Mark, But if but this to we're the then, that call point, and improvement margin at trend A continue going of half say, second in manufacturing OUP the to more we see would year, continued watch updates strengthen, would for you carefully, Northern very forward. to give Europe. see

Unidentified Analyst

strong this we additional And to relates and last CapEx? it one as free about for think The one really last XXXX? How to should puts any this if flow thinking cash is relative I then about could. flow free cash And Great. year. takes year

Jack McGinnis

Sure.

capital would million range XXXX, million to the basically we I'd anywhere $XX terms probably end $XX I year. probably say, So a million. closer top of – annually, that expenditures, in use that $XX from run for of to

allocation the say, broader capital changed. within strategy terms in range in. I'd that a is And really historically punch So line the our been there hasn't strategy, we've of

during repurchases share do the quarter. us saw You

mechanism We continue to cash shareholders. share to think repurchases are excess a good back return to

appetite that type And past about of in and the for areas we've the M&A we talked our consider M&A.

at said, being careful the with we'll So And when ways to M&A, that an if in there shareholders M&A. return cash comes interim. continue to very look to it to we're is

Unidentified Analyst

factor sold? Anything receivables in nonrecurring of being we should in, CICE terms just

Jack McGinnis

I'd we've very say No. in done well that regard.

pay the receivables majority think that down of a I sold that CICE we've taxes. our we've of been using balance to

Now back XXXX. after changes that into in taxes fairly no, we're say balance the is regulatory small France. paying But I'd the to

So nothing really to consider Mark. there,

Unidentified Analyst

Great. Thanks.

Operator

from the Thank Bisbee of the America. line you. question of is of And next Bank Gary

now is Your open. line

Gary Bisbee

morning. guys. Hey Good

back and profit margin look gross the I XXXX. over throughout As gross

called wrong about Or that a is Solutions' – I – And growing had why I else, new bit margins you that every than business. been helping how cost sort quarter. You the core which drag the Solutions be been year, – to much Solutions? anything temp And I I'd of I a this is figure called what's also RPO margins? better think contracts. note out been why quarter, the pretty am been in than they've guess, quite of I've margins throughout quite out that going there businesses for about on? I can't understanding faster the wouldn't gross know Is is those

Jack McGinnis

say to contribution overall just that to what year-over-year I'd trying is Gary, slide the the that show margin. is

as as growth. was some and where we good the did GP that will of fourth lesser of are growth And growth – have all other certainly, the you have quarter, quarters, certainly balance businesses case in you the so contribution margin if And GP saw outside. overall contribution a brand that growth, other with GP the could mix having slide. margin we the businesses an But in on be the GP the

reflection in it of a just businesses. what's mix It on those happening specific business. is some of not the the So necessarily is

What the organically had We margin growth Proservia single-digit in RPO growth, MSP double-digit the I in would at And mid in had if good say, quarter. good growth business, business had the fourth in mid margin as we we GP good our growth look well. business. single-digit GP

brand I So slide that mentioned dollar accelerated should slide as you from that think growth, a And earlier, probably I now and expect think on reverse. the view. GP quarters, next see higher RPO trend the slide, those seeing the future business the in more I – think contribution I relevant growth we're more in is to should

Gary Bisbee

other growth GP I I almost every better appreciate than looks that it, I answer, this guess year look the had at Yes. like – guess Solutions I can it but businesses. when quarter

So a not quite on higher it a margin is bit gross percentage? margins

Jack McGinnis

It definitely is a much margin. higher

RPO Right So has have continues, margin Gary. Management, MSP our been businesses, – behind highest that been it and our and

wins are we've you'll think a it's change we've do on new start issue. been based talked high RPO, for margin. are the workforce with about is MSP talk see changes clearly, and to we they that very back driving commonly businesses. And And and to seeing. the I going really Talent – I And clients, it's Those expect those So they Right includes higher-margin Talent mix offerings But about, the as which Management. Those now are our client-based Solutions that look brand, Solutions. solutions. very

high all margin. they're So

Solutions. really And business Proservia more as talked reclasses Talent some the as of of the of of some higher-margin the the pieces we'll all mentioned, making solutions, to Manpower Experis. like some and And to forward, those are other businesses. we've talent-based of seen together we we're of aligned go some businesses better the you've outsourcing, I our have – and in staffing And about

be differentiated of of we think going that prominently it'll Talent margin and I will even go more the clearer, Solutions. terms profile be in forward as forward, So even

Gary Bisbee

been up, for temp strong it. perm in then a mean in on and the couple remarks, to as the early Got gross you the it segments. I trends much out follow drag, of give your Thanks. can and you last today. a that got to an you've And out call perm over us a called that you perm of more prepared versus number didn't In Does slight quarters? XXXX XXXX? has growth that just difficult margin, see relative a temp while update

Jack McGinnis

consolidated what third for us growth seen the well. We call Yes. have quarter some in seen perm in basis. But as for to we see very fourth we've had I'd I had the single – saw strong in perm. in we about has would fourth Australia digits of quarter. to say the been a – from perm growth out opportunities the double-digit did good quarter. low double-digit good so perm improvement the in on markets. U.S. perm growing say,

of perm. always overall of has single on markets, driven seen of strength bit basis. say, in a little But double-digit nature the Europe a some some had perm in that And clients us and perm and very, has been in by Japan of some manufacturing Italy was sector. And for Southern high our I In we've lower, the in would an growth as that's been good an very area digits. been

And first very feel basis, single we quarter. think to opportunities overall – down bit continue perm an this perm more good trended to but consolidated And lower we has about And the there's market. still on very lower grow perm year. good digits. a the on a So basis, into little

Gary Bisbee

you. Thank

Operator

question next of is Barclays. of the Manav you. Thank line Patnaik The from

now Your line open. is

Ryan Leonard

of is in the ordering potential Leonard of supply mostly manufacturing to that early of trade from for and coronavirus, impact be This on, disruption of is there view on Yes. just sort any some that kind Ryan could there but way it's of a appreciate outside think impact chain in I a Manav. wars. just

Jonas Prising

Ryan. Thanks, No. Well.

can impact. in it's And a course, that, to the too that I they China, like are measures travel hospitality taking see assess in number in still any way are you to and China. things think involved that operating need of do early are companies of and

actions I and communicating our taking think would that Pacific, you very need especially in regular our do, to to And our that closely. clients. to we're the monitoring we're the sure providing make we're as situation Asia reporting expect, associates, employees we and

in continuity continue risk So made make and and like And what too China, too evolves. the we're business early be. assessments, and we as the have place to I we is of overall, to monitor to operations mainly many outside would have and take say, and actions But monitoring and the now, it's fluid, processes situation organizations, it. right are determine we've whose – situation impact the would

Jonas Prising

again And you, Q&A. Thank in, quarter for we look we when out forward calling and with everyone, with come our that, to report results. the of on to our we you end first speaking

Jack McGinnis

Thanks, everyone.

Operator

you Thank you. for Thank All conclude And all participating. call. does this today’s at parties may disconnect time. this

ManpowerGroup (MAN) 31 Jan 202019 Q4 Earnings call transcript