MAN - Earnings call transcript Q4 2020

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Operator

Welcome to ManpowerGroup Fourth Quarter Earnings Results Conference Call. At this time, all participants are in a listen-only mode until the Q&A session of today's conference. 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. begin. may you Sir,

Jonas Prising

us the joining call quarter for XXXX. today for fourth for conference Thanks

with is me Officer, call the On today Jack our McGinnis. Financial Chief

within quarter. of and For Investor through flow, We'll operating concluding some convenience, and we will results segments, before guidance highlights language. the included will going the prepared your and of go the our the the the have Q&A I some start by balance Safe first Relations we Jack will our then website our start cash remarks section of at share Then before manpowergroup.com. our the proceed, thoughts sheet we quarter. Harbor But now for session. Jack through cover

Jack McGinnis

projected statements, the and are impact might including statements everyone. or statements. morning, those These our the and forward-looking forward-looking current Good includes regarding expectations COVID-XX reconciliation release Slide previous of X filings to Actual and information known which beliefs. SEC no revise or non-GAAP forward-looking regarding of are unknown subject additional We any risks presentation important on in obligation earnings management's statements statement of update uncertainties. results This conference based includes and considerations statements. materially from pandemic, to the forward-looking measures. differ assume call

Jonas Prising

Thanks, Jack.

in growth new than opportunities select had results steady Pleased call a into October, environment continuing quarter. saw reflect experiencing new earnings COVID-XX say to of slow we recovery restrictions third we quarter. in our the world, revenue we and our trend recovery During with stronger a talked related markets. about Despite series the in signs this fourth of around of the anticipated, market and

our operating improvement quarter basis. basis, third the decline of same the On million. currency, plan be to their change are uncertain is signs have their industries a profit X-speed and plans of significantly environment entertainment being adjust now in automation acceleration evident to others, speed into in the in creating or will stronger and digitization their they now down turn quarter, up was and billion, we increasing the a the a polarization to are the are that of pandemic bifurcation K-shaped revenue XXXX. leadership often imagined, We skilled Adversity is travel, expect industries and in digitization workforce is predicting like $X.X I able between With hospitality and to the and in on This rates. already an in Skills divide, of workers and result high unskilled, recorded a headcount, digitized plans Those companies the significant - pace. and recent The seeing and a the Redeploy from on year-over-year context, Renew, with recovery. many of improved others in we been market countries. like industries conducted labor have emerging the employers skills-based unemployment plus lockdowns. also captured who where others in Companies can reflected post-pandemic have remains countries. in Organizations polarization continued Revolution is has markets maintaining reported quarter at results. scale the in in to by for for an demand financial speed This the the actions Many series could would have significantly. to societies our contrast trends XX% some put continue stalled, accelerated accelerated impacted that as also hold. investing we've to a clear - constant In force across these between XX,XXX a at $XXX a of fourth X% thought driving risk an XX that never of labor Reskill for

year Excluding basis million, of operating down Reported points profit excluding operating X.X%, $XXX the profit the prior charges. down XXX restructuring prior operating currency. points reflects basis after from share per margin year. of from earnings X%, was margin diluted $X.XX the XX% charges, XX was constant in impact and, down Reported was restructuring, profit restructuring

Excluding diluted charges, a share our the currency. of quarter decrease was the earnings XX% $X.XX restructuring per for representing constant in

reported Turning for to year results a $X.XX. earnings was year for full the share the moment, per

XX% Excluding year-over-year. was decreased $XXX million. in to and billion, $X.XX $XX the a year currency decrease restructuring share items, earnings and per XX% constant Revenues profit reported special charges currency represented constant was for and operating of

$XXX profit special constant restructuring XX% currency Excluding was operating decline and year-over-year. million, a represented which items,

offset diversification, in fourth logistics delivery and consumers digitization, innovation. our Manpower driven the the was shift how for demand challenging was committed in XXXX buying, remaining were the history, in SG&A we to by In business, years Although gross quarter, one and to significantly an operational profit holiday to strong peak. investments while strategic extended of recent our most declines, able reduce the are

their build HR and to in resilience the to now to are and turn are that to tools organizations hold or business to While number and COVID-XX in put increased like we markets the a providers increasing ensuring and they seeing continues to the on several a IT the allowing of demand shift made we Jack supplier many good protocols, plant of for to it our full-service industries risks infection full and delivery Others seeing lines, with just-in-case you across reinvest. and advanced business, technology, seeing work offerings seeking avoid safety take details. manage investments over shutdowns, by also I'd country to our through In range are flexibility. reducing management all and and positive are safe productivity strong of IT tech places, environment. production companies in performance be we're and by cases Solutions XXXX Many and rebuild Resourcing to Experis, testing of in Talent Solutions solutions cuts skills look more financials beginning optimize a trends there markets. segregating as

Jack McGinnis

Thanks, Jonas.

to currency Going fourth revenues above on the back quarterly the in our Slide guidance results came range. in X, quarter constant

guidance in million. came the low-end a at margin operating profit basis, gross our range. was reported of our Our $XXX profit On

about percentage Breaking the revenue constant our of for down rounds Excluding a more our restructuring decline declined profit constant currency our a currency of This in bit $XXX or operating before profit single-digit a decline on currency about X%, representing our basis. XX%, was which detail, to adjusting X.X%, the guidance. basis. revenue impact into a of an of trend positive operating high-end resulted of restructuring charges, on a of million, which after charges, XX% was X% margin X% above

billing of organic no X.X%. revenue X third of adjusted XXXX. and was on the similar had basis effect, and of improvement the improvement revenue days decline second quarter This decline an net acquisitions consecutive the quarters a quarter XX% As represented from from days about also significant

a million represented the X, Slide basis, which, share on tax $X.XX, bridge including EPS related per Turning on was a the negative to $X.XX. impacts, of included reported which earnings charges $XX restructuring

by from $X.XX, the guidance this expenses share $X.XX, that share other currency impact charges, per result lower of offset weighted had share added count a which of within exchange restructuring average earnings rates a operational our Excluding negative performance added higher repurchases that $X.XX, $X.XX, was improved which $X.XX. foreign range. was better-than-expected exceeded Included

point additional seasonal profit A Underlying detail, gross contribution overall by points from mix basis brand Right transition margin the within in third Manpower staffing yearend higher quarter of growth the the The gross basis subsidies from margin drove margin was the Fillon of in margin other non-staffing in France enterprise lower and basis Looking XX.X%. at activity. year-over-year in mix XX a XX result at our October of higher the year-over-year. career from our seasonal within also came points XX Management down of contributed contributed reduction. to margin increased recruitment a anniversary by permanent decline decline reduction. incremental points profit basis driven XX XX of activity point offset a staffing GP margin basis of gross

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

Talent business comprised XX% brand XX%, and our XX%. During comprised the Manpower gross profit, of comprised quarter, Experis brand the Solutions professional

During in the Experis during quarter. global is had which Gross GP increased strong in declined the brand our back transition an in our was the an a in crossed MSP was activity decline from profit improvement currency decline brand of perm to Management contribution on to XX% XX%. at Talent primarily an quarter organic constant This the X% profit our MSP growth our the This year-over-year significant quarter basis, reported year-over-year, the offerings. career quarter, quarter the profit in constant organic from an lower third third Organic decrease with our the more gross includes XX% Manpower constant growth Right compared profit a in by and currency Solutions currency business, represented from driven XX% market leading decline Management improvement Experis. quarter. an gross Right drove over which decline which gross improvement the gross fourth third The X% in revenue quarter. and business. year-over-year decline within double-digit from profit RPO, the very

the fourth quarter. quarter improvement Our from rate in the RPO reaching fourth the significant business of quarter decline a percentage in third during experienced single-digit the declines

$XX $XXX restructuring expense was Our of reported the SG&A in million. including charges quarter the million

which The Revenue decrease U.S. gross of currency was expenses and underlying increase prior X% $XX in this quarter. restructuring. and profit X% to decrease, the $X restructuring, comprising represented OUP compared XX% in in is in organic representing million excluding the comprised currency. driven reductions, significant percentage decreased cost was XX% operational Americas an of acquisitions, decrease from $XXX was million billion, sequentially continued the X% revenue Americas year-over-year, decrease quarter million decrease $XX a dispositions, year. of year. charges, consolidated million margin a segment, the million Revenue was for of a of is of Excluding a a improve The very Adjusting constant $XX improvement prior a SG&A excluding a $X $XXX restructuring million, the decline X.X%. XX.X% decline. from million quarter, the in the against U.S. of OUP a XX% the fourth which represented revenue. basis, by currency of in of country represented $XX segment largest franchise an segment third recovery offset of from a SG&A This X% strong to the partially revenues. constant SG&A the XX% net was changes. decrease by as On expenses represented from

for reduced at benefit level $XX higher margin continued from OUP U.S. activity Right to from quarter, U.S. to XX% The Management the year-over-year, but business margin was quarter. During a third within X.X%. decreased our million. transition the career OUP

when X% comprised franchise adjusted for Manpower for profit brand the of XX% improvement the the material the the brand was U.S., Manpower gross third during Revenue a quarter. the reflects the from down and in which days XX% in Within acquisitions, U.S. quarter. decline

for expect experienced in Revenues IT XX% quarter. vertical cross declined quarter XX% the our QX. U.S. growth of trend Within in revenues of as Finance the the experienced verticals profit X% basis of in the Experis skills and quarterly during third slight within profit in This greater growth decreases. U.S. in Experis a revenues. Management comprised revenue U.S., to on Experis and Solutions XX% approximately U.S. decline. We Right the reflects to and increased U.S. Experis to Manpower very the the the year-over-year over The perform to Talent U.S., wins a rate the quarter and contributed of experienced the client U.S. of a XX% increased improvement as declined in brand transition quarter. the from by gross as Provided the in driven quarter comprise quarter. we business year-over-year of business back there revenue total gross IT and improvement Within Engineering revenues within XX% crossed again overall in during very projects well rate restrictions the the overall. quarter. U.S. clients ongoing an in quarter. the during revenue across impacting low-double-digit our revenue X% activity business increase MSP growth quarter quarter in the fourth additional moving driven fourth the revenues The well over expect environment to first by career current significant low-single-digits fourth continues during business are no decline The RPO U.S., RPO year-over-year the during the

of from decline decline constant improvement an experienced quarter. in currency the operation Mexico a quarter in in Our third representing the the X% revenue X%

Mexican labor legislature, expect still a or bill temporary During the types prohibit the Mexico. is in Mexico the of would staffing quarter, in fourth President The certain outside introduced and restrict finalized under development of specialized this If significantly our March services. proposal enacted, could that could in activity April. of we be

a other increase in to from first we to the countries revenues by billing which back Brazil represented was earnings constant quarter. Chile. decline represented the on call, provide global currency the to at our of X% restrictions in time the likelihood This growth of of significant as with in driven constant and greater adjusted third We in in slight X.X% and and a quarter crossed days in X% a clarity us. our growth Revenue improvement XX% specific expect significant adoption Revenue currency have they This Mexico apply during over XX%. improvement in Canada the quarter. will quarter Argentina, XXXX. X% revenue within Americas reflecting an would the decline from the third revenue update declined during between

XX% Southern in comprised This revenue billion, Italy decrease Spain. improvement France, trend of at constant in Europe significant came quarter $XXX $X.X equaled in revenue driven million. Revenue consolidated is including the currency. by restructuring from Europe the quarter. and third X% in costs of a a Southern OUP

currency. down in the in from rate prior $XX constant restructuring a segment improvement million and including costs restructuring costs course comprised represented XX% quarter. margin was OUP quarter. This The OUP prior from points. real estate the revenue constant was OUP over restructuring XX% down $X of year currency Europe and of Southern decreased France the Excluding the million optimization. the was XXX quarter year costs, in reflects steady of basis in France XX% of the the

Excluding OUP margin X%. $XX and OUP was restructuring was costs, million

imposed fourth Although the improvement revenue January restrictions. the has has quarter, was more concerns softening in as COVID-XX in France experienced increased have during steady the a trend and government

estimating to year-end decreased quarter. fourth the constant in significant from currency basis Spain a in a constant third Revenue on overall. the in represents low-single-digit the significant year-over-year points $XXX estimate declined from and in the quarter experienced. in drop-off Switzerland decline Spain over activity quarter. a equaled the enterprise course quarter our from the in Southern large over the sequential range of on year percentage Italy prior other constant in in logistics million the currency Revenue as the driven the XX% revenue in year-end third from first the markets the in cautiously increased year-over-year have to end XX% first increased revenues Revenues estimating in in to increases in the mid-single-digit range XX% are quarter. decline from improvement quarter. ongoing Revenue was during constant We also currency constant in the will Italy a growth. a that and trend in improvement are Italy to did decline slight in mid-single-digit Revenue which X.X%. the enterprise back a prior driven This X% $XX quarter not estimate the decrease significant basis in Switzerland crossed in the quarter, a year million large quarter. third improvement the margin in particularly days-adjusted XX% seasonal will strong represented XXX progressive decrease activity, crossed reflects by and OUP year activity. we constant This a first that currency revenue quarter the growth of the December growth that as quarter. currency the growth seasonal XX% quarter the over We experience the basis also This business Considering Europe X% OUP from decreased revenue clients. by have revenue days-adjusted the in the improvement currency seasonal seasonal days-adjusted

Europe quarter. driven XX% Northern currency in segment $X the OUP of Revenue decline XX% in revenue a and Netherlands. the consolidated $X.X to declined billion UK the costs including quarter representing constant XX% Our the significant in from comprised by the represented third million. restructuring improvement

The OUP a to a Excluding costs majority-owned venture $X where third-party was restructured restructuring margin million OUP and we $XX X.X%. of restructuring was partner. million Germany costs, with relates

the segment in revenue XX% UK, Our Northern is represented which in the the largest of quarter. market segment Europe

revenues significant XX% quarter. improvement in quarter, decreased the the in a in The December. decline was During UK driven year-end sector public third constant which significant the by particularly activity, from currency, represented improvement X%

the to and from in not We in quarter, for outlook adjusted constant UK decline a $XXX revenue Germany currency, X% days-adjusted The cautious growth company quarter, of Nordics Pacific revenue decrease Poland, of in declined revenue a the revenue third on cautious quarter very increased and businesses a X% trend. fourth quarter the of in represented X% quarter. We the In in expect the improvement crossed represents XX% a third currency year-over-year. in from X% Revenue over X% significant constant the On constant certain third Other our X $XX Northern decline constant This in decreased of comprises and on Revenues business the third declined of represent first constant which quarter. are decreased in margin days XX% currency basis. Asia currency significant and points from on basis, billing estimate which of are declined currency XX quarter, reflects currency to near-term in revenue. the total trend. change million significant the the the during revenue East experienced million. significant Middle currency constant trend which growth high-single-digits X% a constant business for segment improvement a quarter. was from in XX% Nordics, rate the in of primary Belgium constant Revenue XX% our Germany, the did represents the days-adjusted in Ireland. which improvement Norway countries during slight quarter decline currency driven and days-adjusted in a of also by range remain XX% Both representing decline a in in in quarter quarter was revenues the OUP revenues a experienced activity. The improvement a experienced from a the constant the In basis, up decline Russia first the non-recurrence In the the the days-adjusted year-end quarter. on and in Norway rate Sweden in constant a X%. Netherlands OUP the basis which markets decrease growth represents the from growth improvement Europe strong decreased third in in X% XX%. basis, currency third Japan decline currency. Sweden. rate

Japan X% the very cash well declined trend in revenue Our an Australia year. Pacific represents also markets the the constant third from in trend equaled an flow This Revenue improvement flow currency constant in balance Free quarter. constant and quarter. I'll million perform third X% declined a $XXX the Middle of business to on in quarter. we days-adjusted low-single-digit a growth in currency first and in for X% other basis. continues from expect in Revenues decline turn cash now East representing Asia the sheet. improving to currency

quarter, XX fourth the X.X by compared million to outstanding about During to days. $XXX the $XXX quarter. in quarter end, days prior equaled At days sales year cash flow free million decreased

displayed have practices expenditures collection businesses million crisis. cash represented Our during XXXX. throughout $XX this and outstanding management Capital

million. for million X.X of purchased $XXX stock we quarter fourth the During shares

X.X for for totaled purchases $XXX shares million Our year full the million.

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

by we December semi-annual XXXX also paid X.X%. previously the announced, dividend in As increased

cash $X.XX debt of resulting a $XXX of million. position at sheet of balance with $X.XX was strong in cash Our total billion, and net billion quarter-end

XX total with of remain total X.XX Our EBITDA debt total gross to quarter-end XX%. ratios to adjusted trailing capitalization debt debt at comfortable months and at

debt quarter is facilities maturity did not earliest XXXX. September Our not change credit until and the of in the and note euro

remained In unused. addition, our revolving million credit facility $XXX for

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

range the or assume of which today. On impact earnings our share quarter first of in business of restrictions exist we Our for are our impacting the in currency per foreign guidance those clients that any per cautiously $X.XX be to to additional that $X.XX, includes continues material lockdowns share. largest to favorable beyond markets basis, a from no forecasting $X.XX

this of is X% the day decline revenue a which of a currency improve constant guidance X is rate from of the X.X% there less a would constant organic between X%. dispositions. rate by about offset decline would decline revenue an a On of note range is quarter, days-adjusted midpoint, impact the This of QX, QX. of X%. of our guidance currency decline. decline an billing days-adjusted to is The ongoing decline X% basis, in representing in net slightly first midpoint Our of At improvement the for revenue yield the days-adjusted we

We quarter margin This businesses technology points to margin to and quarter cost rate compared expect higher the improvement sequential consecutive reflects prior a third actions the adjusted increased corporate year our operating investment. the decline. on basis the in down during reflecting year-over-year profit operating underlying of of expenses first be year-over-year based within strong XX continued

rate, the Combined, expected XX% to reduce tax business X%. of by France the a tax rate corporate the Regarding finalized budget French and in effective about continuation tax reduction income tax our reductions. the of their with serves underlying this the effective government

of the we closer XX%. earnings first inclusion of pre-tax XXXX are to full we elevated The rate pre-crisis tax rate the based items. a lower be until at have of year on effective XX% tax and levels rate However, tax to certain an continue will quarter in discrete effective will estimating slightly approximately are

million. usual, charges additional not weighted $XX.X or will shares we to be turn our back it estimate now Jonas. average incorporate our and I As guidance does repurchases restructuring to share

Jonas Prising

our workforce operational solutions our and and launched brands. RPO, looking and work be market in We're on Thank growth our by and developing HR spectrum. XXXX portfolio and the brand all higher new MSP Talent the offerings. We in-demand margin, diversification brand candidates clients across focusing and higher to delivering across well globe, for: accelerates sourcing flexibility Management to talent strengthened are provide segments and during the to Solutions as strategy you, our models include Jack. This expertise a positioned able Right separate strategic

laser-focused PowerSuite delivering investment and digitization continued our plans this pandemic. technology also on We during even the remain with our

have of we PowerSuite majority implementation the XX process have progress, XX businesses on this to of the of of the another our our our by office across already are expect businesses We businesses countries, front this more new in end Based front office in implemented in across in wave on PowerSuite year. countries.

and office PowerSuite and is Our front cloud, mobile via efficiency by analytics. improving technology enabled productivity,

out new also to web We continue roll our platform for candidates.

month Our BXC digital and of with BXC Manpower, France, scale access X.X investments market. services, expand BXC French the most than has assignment to average more to other downloads, this success users services, most is us of a are market-leading time on-demand French full highly-rated including app of build management well. applicants including our off of and our sourced targeted of our payroll active had tool and a technology car-pooling. portfolio and XXX,XXX elsewhere the technology million current, an via helping The opportunities, the the which the enjoying success as Mon In app, one-third associate downloaded online in

all our our transformation to confirmed and laying process and dedication lake. It collaborate PeopleFirst advance invest be of enablers It data to data-based continue critical steps know supporting and solutions more of along than the our investments the value, with talent so infrastructure next growth. foundations believed continue predict for we that continue be better combination agile skills our our the the delivery to to the These, volatility more potential. their new is deliver of as Analytics and and candidates last they what programs, performance we being science need, the skills and and clients has to manage about our well. allows in possible. us will create tech together knew and helping teams NextGen organizations' decision-making will in We capability, while approach, that will data capability, with of confidently been strong creation And mile our and uncertainty, for remotely, ever talent,

our As employment power and remain the that the change committed world. to we execute our strategic we priorities, broader sustainable values meaningful purpose, has to

International developed This have framework a prosperity enable to our our operate and commitments IBC's imperatives that by will Metrics, As to the we of sustainable committed Four the the business important progress a Big Stakeholder focused planet, on Council, long-term member others of we global organization value firms, Capitalism governance. accounting and Business create more people, shareholders and addresses are long-term to the society. be to on model explicit making and new

Skills color, future. of Our Report Revolution respond us is we help for we the is released of global and so in that reskill advancing we and being candidates role clients, December even particularly redeploy this And outpacing critical more in recognized our defining a in point, of Case in Social to solution. the challenge of were on Impact our them XX-plus in play as remains what already employees placed the women, part Catalyst among today companies XXXX Change and and with companies Dow our demonstration along the women and a being for the peers people Jones Sustainability Index in the XXth expect year. it reset, time. with Helping in

and operate. people proud which our in to clients, the the our times: very and am support grateful each I and commitment for Finally, and associates, of during resilience we of communities shareholders deliver relentless these our to employees, stakeholders challenging

future. execute for we Q&A. positioning pace, innovate, improved diversify, to strategy our it to and call the confident I like at structural relevant is as changes strategy post-pandemic open and returns growth now our Operator? we in digitize continues as even for continue to digitization are more that in greater take success, ManpowerGroup world, hold a profitable As is and the

Operator

you. Thank

first question-and-answer of Andrew the came Steinerman begin J.P. now from question Instructions] will line We session. [Operator of the Morgan. Our

is now open. line Your

Andrew Steinerman

wanted that Good focus the XX% the in improvement said the and to third Manpower minus only a is growth a to brand Jack. kind from in revenues already morning, Jonas huge-mongous that, were obviously, headed of and the quarter X% fourth on you This quarter. I down U.S. quarter. in first

us understand help could just make is Manpower how how for you started kind you U.S. and market time of comment a improvement thought to I might XXXX, Manpower's January on also success, specific if much So this of brand? this take versus January, the some

Jonas Prising

thank now. for say And through business way is a No, well. or what difficult that could expect we're Manpower But here it's market. side really and very a provides you. And business. going is first on the say Manpower seen I clients Manpower seen good Andrew, morning, of would offering to Good into the the see how in the us the and performance are looking how Manpower continue at a point much number as from quarters flexibility that quarter Yeah. much U.S. them the of continued progress at pleased to all with market above we've And this evolution that sectors. the we we across the to number is observe we've

Jack McGinnis

Andrew, add your that, about January trend. And would to point to I

we what entire for good, So saw quarter the in quarter. steady the improvement was Manpower fourth

for to month off, January. said the continuing, see good see underlying quarter we so X and of continues that growth months. activity, that falls of took strong that the mid-single-digits of month. then logistics a increasing, for December and is activity for still into What really starting So as first next trend we and for see we did is days improvement have Demand seasonal as continuing adjusted. be the January to higher overall volumes very logistics the December, overall, we And we some which

Andrew Steinerman

Great. Thank you.

Operator

Mark from of Thank line question And of came Baird. Marcon you. next the the

is open. line now Your

Mark Marcon

your is ended an for this in I'm for comment then, And revenue. my percentage wondering quarter globally Thanks could forward? a follow-up. up terms Good give with what of question. if perm And a morning. regards got what taking to improvement of prognostication going you I've as overall placement seeing you

Jack McGinnis

sure, Mark, Jack. is this

way guess X at the last I perm, look is progression So the I over would improve. continues perm the to quarters

were So look QX in second pandemic, QX, year-over-year. we the I the if XX% year-over-year. perm we of in gross here down to down year-over-year, XX%. at quarter, were profit at down XX% dollars improved in That And the depth

So good improvement. I'd steady say

to close we you about a remember, measure it we of, pre-crisis, percentage for running profit I'd XX% terms full say, total dollars. In gross XXXX. as And year probably XX.X% of were

contribution quarter at As about GP we're of perm. fourth we end from our XX.X% is the here,

for year-over-year. will continue so reduced the to outlook back So as into the perm that that quarter We're I quarter, trends fourth a steady the would first the the was continue rate same say is Italy, in we forward, some fourth in in we look see perm expecting to expect great we which saw decline improvement to going of continue very that to trends overall. strong emerging quarter.

in are we remarks, our year-over-year, very perm certainly up. growth trends in U.S. contributing nice - think so So we some also out some prepared and well. the I picking And seeing called RPO of as that's was

return we're that certainly starting to good seeing there's first steady very is signs quarter. So some and into perm good improvement the

Mark Marcon

part you extent to that, driving when a this is to potentially would operating as that the guidance? And Right. profit what of the follow-up, expect business perm the inflect? And, margin

Jack McGinnis

Yeah.

has been margin, that the I perm, in So decline what's would steady on year-over-year look drag at a pretty if happening margin. GP you say

I So quarter, points we until to XX the Mark, drag with in experienced. in expect, growth a continue perm the we fourth in again. what would that's walk, returns we've will been line to about said have basis

drag bit continue the of quarter. a we'll have to so, first a And in

holding you staffing quarter I on think guide look well. at the very first GP if margin, up is

margin we're year-over-year. to be So staffing projecting is staffing flat basically

guide. to XX to continue overall, still but will about I points in basis growth, perm improving. it's And down not be because it largely think, will that's back be the

so a still be be drag. in quarter. a It'll the less first of will So it drag

Mark Marcon

different. recovery of have quickly perm do how a could you a every do half, post-pandemic bouncing a the recovery, bit back? to up assuming And end in kind environment that we think be is little But second going

Jack McGinnis

steadily think we anniversary quarter, - expect strong increase growth say in about declines so the the I would as we perm get expect first beyond total Yeah, percentage over the we once beyond that, of I'd course start to to that, XXXX. as we I we Mark, to of XXXX. that GP, would talk see in huge

Mark Marcon

Terrific. Thank you.

Operator

go the Market. from question. of question ahead And with is you. your Jeff Thank Capital BMO Please next Silber

Jeffrey Silber

much. so Thanks

color little markets? for of gave of some Can your intra-quarter trends major similar get the Thanks. January You on bit we a and other on U.S. some color trends

Jack McGinnis

that maybe what trend up and Sure, Jeff. quarter - overall, the talk that to back steady and say about improvement I'd guess, I fourth that trend.

currency So decline of we adjusted organic overall X.X%. in the gave days terms of you constant quarter the

trend, X.X%, to about look month work. That And in yearend that then, December. we improved you see improved of activity the logistics was seasonal down October December, to probably X%. about good due say If was so X%. the at But logistics in monthly I'd about down that marked higher November, that called down a improvement. with to that out, improvement we more

look of in progress the of we I'd underlying exception. January as fourth the in seeing quarter, think with probably our markets, we're of I'd to some say trends of saw the a one we forward say some I continuation key and So some

I called is out we prepared France remarks, restrictions. as our think some in heightened experiencing

did progress what than so saw what restrictions. the terms France businesses in heightened of not of that continuing, progress rate seeing in that's different we're we the continued of when November, slow So month is seeing on good. in had That But too January. the recovery. some We're down their

improvement were those instead in And see restrictions look improvement similar month trend we happened December. lifted. January, of what forward ongoing of a a what the December and to trend quarter, see of consistent we'd restrictions fourth a those, the bit in saw expect we are as we more the in after So had loosened, to an as with when

trends, I'd I'd is So strong on the growth We in good to the the see trends And U.S. talked seeing market say particularly Italy is side. Manpower say said so about year-over-year continuing January. markets. the the improvement, the UK. in very that key We other that's

of the UK in of perspective, to quarter, to that that the the into sluggish related sector. revenue saw from the So it continue we of and third really Brexit expect in the a We see expect some UK logistics the public - lot revenue great some a which do the do good come returns was was in of work We in quarter out more of was great. fourth yearend so surge first quarter. very

the I'd a is perform well. at good as continuing So to say UK level

Jeffrey Silber

you as maintenance their or any follow-up, maintaining some really are overall, coming would talked about their your can where color planning one's remarks either companies Is is increasing give headcounts technology All right, companies either color digitization us this it increases I'm it Jonas, or prepared leadership jobs? you in headcount. on speeding I be curious, your my of in thought those great? for those terms And plans. you. were And up guess are helpful. as piece that's really In that

Jonas Prising

increase categories, that the is future Jeff. in Sure, their The to high, looking indicates increase or because essentially it many cuts it actually levels. and across maintain employment, skills confidence different their in that they're

course, And also them. of their in a - just of that's ability this to number they the So going an to to sales. accelerating belief their their confidence able business them, will it's adapt and increases there within of that general indication actually their to skill in broad changes be model, advantage increased these operations take across and IT, sets the of be logistics based and are within but

Jeffrey Silber

That's Okay. Thanks so really helpful. much.

Jonas Prising

Thanks, Jeff.

Operator

Jefferies. from next the of you. Thank the line of Hamzah question And is Mazari

open. now is line Your

Hamzah Mazari

cycle, XXXX of $XX was billion just Maybe middle cycle not this coming of haven't your Hey, billion, prior recovery sort good how yet. is There's hit. guess to COVID look maybe in of $XX.X guess, is if sort question a different question. could if benefit back cycles you stepping we just of we at? the a seen a Is were XXXX I peak you My guess, you all-time peak, I last look revenue, I peak, out the vaccine stimulus. of downturn, of have first right on, when at than touch lot a past morning. potential prior

any thoughts would a judge sort peak prior we all-time get revenue thoughts at base, looking back be of recovery, about recovery great? think there you to revenue you So as should to sort any when of just be

Jonas Prising

the well we saw also prepare prior pandemic, continue extremely position of the strategies, all execute company brands. remarks, the continue brands that what and as all the prepared ever recovery now, in through to abruptly the in economic they and the to thesis respond March, difference human think an have end of the year our continue pretty as history I cycle decline despite good XXXX is happening But our mentioned we in and their diversification fastest it the things, in we contain to a insights going as gets years, opportunities. the of and through across our we number demand. all company are the familiar our we in to to analytics the to Hamzah, business we brought almost of gets that is And Well, what this And cycle uncertainty times to we've looking for. continue to And the for that's of with. positioning at And and sort in companies make capital that's always for recovery, invest been XX volatility, and it digitization, what expansion been where the MyPath also we've the services, innovation program, to has markets we're when the of we an way deepest for where contain drive the in all company we kinds X-year. seen

that. very we new that come confident something we're well But that XXXX would and achieve of And about I how we good going out very think, feel very work cycle, look large, - that very stronger is, recessionary by the exactly we're we're this to economic that well I So and is say use to would not environment of done exactly and in. pandemic of were than we positioned, as try the into I positioned that it's we the we course, to we've know. come this during time coming

Jack McGinnis

different to time. about Hamzah, And to just I this question what's that your would add

how think staffing up; is I that's So fairly well. the held margin just has very is different held margin one-item up

in some seen actually, actually big in change seen And have - pricing. in markets, pricing. some a we've improvement not We

Europe. year We - big of a year bring manufacturing a revenue point So I'd about us, in a constant say full were in XXXX difference. declined you And most XXXX. slump currency. in we for pre-crisis that's X% for where really the very still we're good was in of Remember up the

to to really the decline in of lot XXXX when prior would in I in that Europe. started middle the back So of the actually really beginning go is manufacturing a

So XXXX and I'd constant peak the cycle midpoint more kind even more mid-single-digit had upper of what good would revenue in the I we say of growth XXXX of is consider currency.

basis comes pre-crisis on So I that good for the opportunity based us forward recovery. of in that think was still reflecting fact on going a technically manufacturing. XXXX, an what even manufacturing is in our it's as the back on And overall was point, a year it though, very happening decline was

Hamzah Mazari

you to a largely see color. higher very your just I guess, my time? to get this strategy, That's do growth, where X%. acquisitions diversification have professional you close into I there? the is on solutions And mix, question higher services. margin that helpful over lot is Do of you follow-up organic and just sort long-term Or guess, of mix that of, target to baked shift

Jonas Prising

strategy growth Our hasn't changed.

Experis of can as IT at the or want do within be in side what would Talent we've business it business to were look we to past, of the we all the Solutions organically. well. of do So But acquisitions, mentioned parts in we if as the

would those X don't where could acquisitions, contemplate we to be but make areas So the we acquisition. need an

we could it's prefer We provides of don't our all the of plans. a and strong filters possible even that our to be get that of could cultural faster. that geographic that, diversifying business to we to because growth organic objectives fill But execute there fit We to as we the have better so organic have business. fit, opportunities that accelerate to do mix, have return shareholders growth, it but

Hamzah Mazari

so you Thank much. Great.

Jonas Prising

Hamzah. Thanks,

Operator

question of you. next line of Barclays. Thank Manav Patnaik from came the the And

line Your open. is now

Manav Patnaik

lower about it. what that some thought quarter we than But maybe had I the missed Thank margin apologize just in there's guess, why if Jack, missing moving the you talk could you. there? I is, I'm first I pieces guidance

Jack McGinnis

say the thing to pretty lowest quarter overall. and - it's typically actually the Yeah, revenues really about straightforward. quarter, quarter for the it's It's remember - profitability I'd Manav, first first there our isn't

base in So we bit lower typically of start QX. a at a

basis key margin down the quarter. think XX I profit gross item So is, we're the points in first only seeing

as the bit to trend experiencing. a referring continue will to included I from still having that's we've the been in a QX, so but drag So perm back on to impact slight not an contribution, of and on a improve, still growth And earlier, margin that's perm that, was in improvement overall.

year-over-year, margin, with So look in we're year-ago pretty be you to much staffing I'd expecting period. the were say that we at if in line where

up XX basis the in think points I margin period, year-ago was our overall.

So revenue generally tends in profitability. and the a first quarter lower to line, just due it's be that depressed bit the to

Manav Patnaik

brought noticeable have Got just And that long-term have has in changes you pandemic to have seen sounds it. and might the to perhaps that gotten other more it? onto maybe pivot Jonas, it guys industry, in you like mean, changes terms your things forth. of I But so digitization just terms any accelerated of

Jonas Prising

that skilled in that's of importance what they occurring or especially midst But a before And market. the of lot we're at to your of execute strategies an pandemic. on the in human trends that's still to that now, Europe. an We're in speed. models the helping evolution digitization, businesses business businesses seeing an on is the preexisting the our capital, go their focus increase it increase - how existed change the and new within is The of acceleration view point, really pandemic, Manav, in of

this our So going really later to don't point. underlying But trends. and is relates organizations to of pursuing of this lead we're these to strategies, lot may, and think really well lot in following is see the course, organizations. of as change a with structural - both of And is those need up that pandemic the be markets work, a come any labor why impact the skills. of the to all accelerating trends strategies these lot in trends structural It about And continue structural is very - it had at of for we new say what markets technology, and that's labor that both in we matching of good to whatever change because many very transformative we're projected of And fact, in on. we impacting the emergence pandemic that happening we feel a globally.

Manav Patnaik

right. All very Thank you much.

Operator

you. Thank

McVeigh question. Please Suisse. next ahead from question Our Kevin Credit of is your with go

Kevin McVeigh

how And you much. more the so truly it get SG&A? you're the does we that any a more about leverage digitization, itself does Hey, margin? to amount there time on out and leverage Or is more like SG&A because getting there line. of about the think seems of that, higher offset Thanks Great. talking translated - clearly, think on the Just spending? mix on spent even Is you're about manifests line? should in Jack, GP dollars of fair leverage way kind

Jack McGinnis

you're overall trend. say, a Yeah, there, I I that caught think digitization most breaking you. little with up a what is of Kevin, an thank basis us I but helping your question. guess, I and on would our Basically, efficiency clearly is continuing

throughout as already we've expenses in the offset new as and call out experiencing But office possible with first So implemented I looking And is corporate businesses of technology system. digitization, we terms that spend countries, some we're quarter. the our continue our the lot I has our technology, much about that we is for that that our we're a increased productivity. would and ongoing continue, say, on are we to about way at goal leverage Jonas And roadmap. will XX talked front seeing automation that to talked

implemented We XXXX here we XX good continue countries to the well. technology, productivity, and are as where increased getting rollout across have a in very have we

we to will us forward. probably that costs. through - basis investment those investment. progress and absolutely, helping an basis, ease say, that still going continue and fund So helps the I efficiency recovery that's we should some more fund overall bit though, move overall have an we - increasing increase increased continue on forward. our the the investment improving And in on But will little as that of our would is as this a productivity of technology increased

Jonas Prising

footprint interactions to to is, us easier you've in very candidates is be faster. terms It's referrals, seen these basis, we've analytics, and Solutions our how and with help instance, thing new It move gains going with the efficiency with and towards rates, the only we provide us news a that candidates productivity number and for our orders years. grow, lot technology leveraged also for the have offerings us And ongoing add fill of also businesses, for over great to Kevin, on increasing physical reducing advice increasing our are more But around clients. where, Talent that provide technology reassignment I in welcome. an And opportunities to very would significantly investments with growth. can insight provides they of which the the a

run So us they more businesses which efficiently, growth more their gives opportunities.

for opportunities in we're new opportunities aiming growth sides, offerings So brands and our it's efficiently, as future which do. better always time, the our as both up it open well growth existing really as runs it what at on same business well. is increase new to more But within helps both

Kevin McVeigh

Yeah, you think there it expect that makes through a of takes then sense. increase extent XXXX? an legislation, you any goes are that as the of the puts just quick see in And the Mexican would just lot to impact placement? Or the and on of real perm over about you'd course that

Jonas Prising

proposal step you and Well, if the all about. is give what an bit, of back a Kevin, idea I just

specifically. Mexico, address issue the President practices industry, legal certain the concerned broad and related has very to a in the employment is frankly, clearly, proposal terms proposal been so not he's of that and introduced practices about which outsourcing, our broad. those, is Mexico of So and But in to is

you to think significant targeted And restricting staffing this play believe out been be industry So we're arrangements, extent. earnings months as address drafted, to couple on it detail call, the this should outsourcing some business our monitoring the the industry. community of to has on been a next this I feedback And more the we and by this has next that legislation closely. over be provide have we along specifically should impacted. issue. what we, should association various more including could impact able the and broader providing And with And

and talk be mitigate more Mexico. the So what we impact impacted would right the to believe our should it, details and we now, it although broad, would know difficult I next, adjust in would and how could we quantify. pretty When be business how understand, we

Kevin McVeigh

you. Thank

Operator

Tobey from Thank you. is The Sommer of next Truist. question

open. line Your is now

Tobey Sommer

expansion? level in in what's on you. the Thank Could your at maybe Thank drivers customer business, hearing for growth what in the RPO, particularly driving you solutions prospects and elaborate the from then this comment them you. the you're that on and

Jonas Prising

what's during a all I'll to them headwinds as focus the within a we've of be happy need TAPFIN very that demands. Solutions' and the of we're number Right lot our then to Over global that company is And global to to navigate offerings to capital had. really Tobey, seen do related solutions. companies as And years, well despite our of offerings Sure, to. what or Talent see, well Management Tobey, strong interesting respond RPO placed in have those been responded with the that on within they really work human help pandemic, MSP best, partners to

this MSP business whole XXXX our all, pandemic of during grew as of a TAPFIN First year.

able very was, TAPFIN reduces really or that the So idea that how strongly on is them and want And be national, was and run how win cost, second the help its rate quarter first regional reduces attract with that the talent the I but the companies then of the about working hard when clients. solution business with the and and as and beginning was to at human that's and business. looking talent basis, seen can what our optimistic through and indication very, very of great for a part to risk, a is an RPO at integrate take that we've would find to has we coming they think talent to quick hit quarter very are highest, fourth our a of they and overall course, a uncertainty forward their recruitment, we recovery, scale strategy into their of in partners and very it very deal right business. come provide at And return thinking retain great on the best and want our global brightest it a strong. capital the the

think doing well, Solutions. partners, trend such class work that because then And it's the business really seen tremendous both different in this what they're of our expect focus with quarter. I So handle to and a downturn there really ManpowerGroup their in during on for cycle, really as let offerings us that to boost despite we respond pandemic, strategic part, the deep on economic very the as through ways carries we Talent the this run need go even world second companies

Tobey Sommer

management My strategy follow-up, you your get us leverage you path refresh could you. and your goal Thank and sheet likely most on maybe balance to the for there?

Jack McGinnis

saw release the Yeah, Tobey, you I'd say, comfortable. very details in from very, a perspective, slides balance sheet the

a to have cash net - net a have we So position. continue

perspective. from a did the in allocation what You we fourth did capital quarter see

balance to fourth the to sheet definitely the it with in quarter. So with capital and the as continuing allocated more as was we strong improve, share outlook repurchases

what I from I perspective, ratios moment. would So, comfortable at very say a leverage the our guess, are

We will improvement months trailing as as at to see to continues XX continue profitability improve, look we EBITDA.

it So, to basis. on be I'd is continues improving say the outlook overall an

So allocation again fourth dividend quarter. the to from that was great from we And the also feel increase very capital it perspective. well positioned in

very that the continue. look stable, trends say improving I'd So we for and outlook is to

Operator

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

now is open. line Your

Gary Bisbee

good Hey, guys, morning.

economic past these things. benefits So When as How back weak of of years the growth the seeing of cadence of more normal comps just growth setup on in revenue in sequentially Does U.S. easy we bounces post feel month-to-month a when the we a of I or GDP months; environment of sort think past? the versus last basis, just thinking out to from pretty recovery like business economic economic got there's improvement recovery pretty obviously, you've And normalizing forecast for forecasts, on a period today, a relative this frequently in anemic couple should for growth types on business least you've coming elevated back Or when for seen being could obviously, strong next over a stronger at about QX, the asking I X think at good recessions, look and at the the the recovery, of your need hand, Europe, that's the the of and other years. about out I'm a have some impact beyond couple post recession that? pandemic? look like

Jonas Prising

parts Asia, good that of seen really should in, GDP this when growth. economic So see Then lot kick recovery. is to for we the America, overall might feel a world about some in in there Latin This - uncertainty how good the positioned have the terms morning, really on great it and you improved America the look when the starts of - of Europe. we're you outlook at really although North fourth recovery, quarter

that we growth, the clearly believe both little behind have driver of we as that though workforce having should last some greater the that, out to GDP just companies offerings the which recovery industry growth. bit But came even would use share this And into recession, flexibility our even able So is talent thought see degree greater we need permanent we solutions came that a workforce was if could so solutions, their forward market very our that an of last unwilling from be rate, be to lower. in that they degree course as to as well. lagging said good of that in our well would still penetration out of see the of of that's new help we cycle take growth us GDP flexible have, to And great just for run the we growth, some permanent surpass when we Europe skill-sets. said not peak, as good and if had more on workforce prior solutions uncertainty preferring cycle, all transform of the the headcount and slower Europe. economic in that think overall the use coming the solutions, play of going workforce, were as just the And as across to base, would is much, going so belief, that of offerings of facing, the also a our we as

Gary Bisbee

Great, thanks. just follow-up rate tax the one And Jack. commentary, on

French X%, tax should tax not expect assume You said you But of because you X those called are this right? we rate that situation, down. temporary, down profits I on the that back the you. payroll may Or color things dynamic. corporate but fall or sort to based see the to in tax Thank things those are rate XXXX? I out, go have in understand out? on could could any and So be that Do insight would as this the year, pre-pandemic play you a of tax levels the beyond changes tax how that France year?

Jack McGinnis

of parts X that. there's Gary, so Yeah,

which French part. the business the have we is bigger So tax,

We're has We're And, So technically, that's only been Macron there's the although forward. very reduction one-year so hoping about years. on is hoping that's focused X%. uncompetitive determined. into We minus that's business France, budget a a X.X% tax of for going continues permanent. be future know to President that fair that question, the French

a keep right that determined, hopeful future continue posted the reduction that be that. is to you we'll into but of now of press as lot I think on on So will years, but that

just of it is second overall The part on rate. in tax reform that is corporate corporate France permanent. their And

from it steps year. XX%. that XX% again this And steps again down XXXX, to down last to So year down in XX.X%

as So we'll that next improvement see occurs. year additional

going landscape forward business posted French that's well. keep currently you So and tax as the the on we'll

Gary Bisbee

Thank you.

Jonas Prising

And, Eunice, Gary. up. question the be Thanks, great. coming would last Oh, this

Operator

Goldman you. of from Sachs. George of came Tong It line Thank the

now open. Your is line

George Tong

Hi, thanks. Good morning. Gross in bps quarter. margins contracted year-over-year XX the

margins gross XQ those surprise of areas might bps about into XX you evolve contributed You bit to the from placement. areas little about talk heading negative from XQ? bps mentioned a perm staffing in temp XX on and Can impact how negative and which

Jack McGinnis

Sure, say, just in quickly, guidance. within George. came our I'd we

the below come within midpoint at It end. lower So we did range. the in just was slightly the

that say that Manpower we of out So a down much I'd slightly. slightly below seasonal that say have took overall, in down that a did margin. call business, yearend on the issue That pretty logistics, expectations, that an bit the midpoint mix line more the work. with probably margin was of except GP did I'd us took we that's main item

an earlier, staffing basis, pricing I very as mentioned is I very, on holding - up think overall well.

quarter, more. basis If third decrease the margin little was mix fourth little bit enterprise I contributed points, a logistics in of a largely staffing more look that quarter at versus of it XX bit you that due mentioned but of the to that

XX really in in, anniversary had subsidies. Fillon of the came that some points subsidies was we In of basis France, the The other XXXX. October

lap about points the But see say guide feel overall year-over-year, basis pressure was XX about pretty as flat that of points, really feeds those down underlying the still So overall, XX margin that because well. we still good. close on our for pretty basis perms quarter, staffing I'd GP an as first And largely we recovering. basis we to where into

George Tong

sense. Got labor restrictions. how increased government in concerns talked will in perhaps conditions broadly in Can you and long on imposed you trends follow-up, about place elaborate market and it. there COVID France some be January the And just the That expect then, have makes softening the lockdowns as as France a for? you

Jonas Prising

in how be in for France, project matter, across for long to that Europe. difficult lockdowns It's the will place or

think to strong. that's evolution second And do to first rollout. I component appears have we very And prevent in with slow spread. the Europe, the it Europe. into of virus And the the related vaccine governments put of really impact the quarter, as still the caution to be in the our is look the the across is including speed lockdown France measures to

weeks up, also across soon see as in well we'll couple see the in be vaccinations improvement ago. So and the as the in France a situation in health an we start in to Europe evolution then and opportunity good I just had speed we France, to think Europe. of pick some as France of as

what how the see the public interested clear of as companies at office of reduce measures their not much so production the infection in spread reduce at finally, facilities And it's navigating And virus. was done to I were and business for and to the economy And knows impacting the government environment of the is within the risks environment. is course, effect behave both the within the myself of office much, lockdown risk there And, the review are to to too doing. infections. their that most point well of better remotely this the try as

particular overall, So bit we eventually. think is is little George, in more good in feel near-term I based prospects on going The cautious outlook this Europe. where a the about

George Tong

helpful, thank Very you.

Jonas Prising

with Thank the of that next so come our call. quarter look earnings good We our to earnings you, speaking forward call. fourth Have end in with And of the Thanks XXXX a week. much. George. to you we rest quarterly

Operator

conclude Thank for does this And participating. you. all Thank today's you call. conference

now may You disconnect.

ManpowerGroup (MAN) 2 Feb 212020 Q4 Earnings call transcript