MAN - Earnings call transcript Q2 2021

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Operator

Welcome to ManpowerGroup Second 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

second call the XXXX. quarter to for conference Welcome

prepared on Jack concluding with start quarter. convenience, of Our I Investor will and our some at guidance Officer, going results the our Q&A is the section second I then we before Jack within the of the Relations included will start your Chief quarter Financial manpowergroup.com. we for quarter, we language. highlights McGinnis, and the will call through website Jack thoughts share the And But session. me have through by now remarks some of the our safe will third before go proceed, for today. harbor cover

Jack McGinnis

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

Jonas Prising

about am optimistic I through the of Jack. Thanks, XXXX, recovery. increasingly the strength Halfway global

strongly hiring the one our do part with up considerable faster infection in I team previous lockdown ease, which talk they market during As conferences in and of coming It trajectory. time the spent are as permanent pace well that the my finding workforce the pandemic. our to solutions. very digital government the back and transformation This to discussions the demand time post path and economic benefit Macron to talent brands. President from with with services Viva hiring And the our Tech, positive looks well is at with world's materially France economy is teams and France impact fast-improving Paris, vaccine in placement Companies our more amount believe France later recovery emerge we're our and French with of economic and the recovery recovery I bright other increases to on Choose at intent This all of leaders, as for I concerning, with clear as continues much increases I temporary innovation a help positioned future although optimism. to clients. is as grows. largest his very the demand as activity leaders, time is of seeing our them reskilling government leverage event. technology for rollouts The picking quarter also clients gain the evidenced that update. Europe we second enable will believe global need recent make in after downturn, stronger its the in competitive, dramatic not for and will across business increasingly their included the our of accelerate than is spent restrictions about together momentum and strong,

year-over-year better-than-expected significantly second in resulted revenue markets, and in grew in quarter, billion, to key constant the was performance. our our In $X.X revenue currency. results. financial XX% Turning We financial up this

the increased we diluted Earnings special up profit $X.XX. Our charges was depth significantly the for was per Operating points. year, pandemic's X.X%. million. XXX impact. anniversary as profit operating excluding And profit was the prior $XXX financial margin quarter margin operating share Operating in the of was profit basis after

supply experiencing than recovery economic our countries clients tighter labor with and constraints, competition As we stronger up. talent in a for welcome we heating much anticipated, many markets see also

dealing XX,XXX recent industries most employers Although globally, XX% found vaccinations childcare countries reporting are XX issues workers widespread, having as on such a of many Talent XX-year a still the created benefits skilled that of by also employers are difficulties in Unemployment Shortage related care health across concerns. hiring survey workers lingering are supply. pandemic, worker with more Our programs high, are effect and and

talent now supporting digitization as result, roles now to over pandemic a employers Jack wage it quarters like long is ESG, through a skills to the around people expect be I especially means to over are country want; demand what related to places, We to workers’ This market coming a impact. financials of structural but upskill will term, market to and would performance more a reskill the respond stay. in over changes labor to we see foreseeable turn social and of flexibility, and hiring the into increases details. the beginning medium and also growth climate for organization’s and, future. skilled to talent are and take ease the and to the clarity other right It clear shortages to you here impact of development, commitment an driver workers

Jack McGinnis

in impact XX%, which midpoint revenue of XX%. revenue the our points currency XX of was currency X.X%, our the came profit in increased a $XXX guidance. increase representing our by Operating constant range. quarter about the Operating Jonas. the above above of constant came significant positive Thanks, margin million, impacted guidance profit bit Breaking currency was more adjusting basis heavily prior after our from Revenues in detail, down Gross pandemic. high second period, guidance into well of a was our the at the profit trend year end was margin range. which for

a also of the net below same revenues, representing basis organic our levels an Comparing very XXXX days-adjusted improvement quarter constant basis. on by was impact to quarter billing from on days X.X% revenues days-adjusted As slightly XX%. the and second dispositions first this was the trend more revenue increase organic currency X% minor, pre-pandemic were

higher Bridge than results performance operational had rate a expenses the tax share per Slide which significantly slightly of of Turning guidance slightly Walking $X.XX. XX which was on cents, our improved EPS added exceeded positive range. earnings guidance included X, mid-point, effective to from favorable our $X.XX a foreign which better currency added $X.XX, $X.XX, impact other exchange that than and rates expected expected our

direct our hiring recruitment across XX in contributed improvement point was came activity detail, points our included increase XX Looking profit points Staffing at adjustments a cost a in point underlying XX.X%. strong margin. gross markets. XX-basis related our at largest basis accrual margin gross margin staffing a improvement in which in as France, Permanent XX-basis contributed margin representing basis to GP margin

primarily Our services contributed career These partially involving Management a in improvement. business. of Right Experis business business mix a increases were other lower managed Europe margin XX-basis by transition mix offset factors point

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

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

the Manpower organic growth During year constant of year an our brand quarter, profit reported XX%. currency gross over

increased Manpower Gross from represented from Talent to XXXX currency over organic XX% of Our basis. year year represented in ago year biggest MSP year. an constant on a of as experienced currency quarter Organic includes biggest second quarter experienced quarter pre-pandemic basis. profit the this market constant an recovery. on represented organic a increase This the constant in X% an result, decrease This and, organic of basis. our brand the XX% decrease of from leading increased XXXX a during second Management currency Right organic Compared levels, increase of gross a the our X% Solutions the XXXX decline year Experis currency on offerings. the business basis. profit in and quarter constant the of currency on constant global this RPO, an period XX% second an over

GP RPO the growth digit business on in hiring quarter growth Our significant posted double activity. during

digit for Our to which quarters, quarter. in profit business, several the in double well has growth gross MSP continued performed experience

business Our over Right see a about year experienced gross continues profit run-off and strengthens Management of the in X% activity year. outplacement as reduction in recovery a to

from XX% prior a in $XXX and the Our the a year. SG&A was expense represented on reported quarter increase basis million

goodwill recovers. profit a Operational the reduction. investment XX% million. quarter was represented billion, in revenue currency. constant SG&A The flow-through dispositions million Currency $X XX% profit million. reflected revenue an during changes a segment gross XX.X% currency increased Americas impairment OUP XX% on in SG&A an for basis. in allowing balanced revenue. $XX representing $X ongoing of $XX increase quarter Revenue of constant a and to reflects of XX% comprised $XX by This increase represented was and charges consolidated was our the compares costs prior in of of expenses as efficiency the percentage quarter. second Excluding improvement in constant currency strong the as in an gross in net other and year, higher increase million

XX% OUP representing comprising X.X%. in Adjusting The margin increased and in in prior increase. franchise to for acquisitions XXX% year, the represented compared U.S. constant U.S. the largest XX% increased costs impairment country Americas Excluding segment, a is was revenues. currency days, million, segment in the and points XXX the year. a prior basis $XXX XX% Revenue of to the increase this OUP

XXX% OUP year year, X.X%. million in margin increased to OUP U.S. in for the the quarter. charges business over impairment Excluding year our prior was $XX

during during U.S. XX% Revenue U.S., quarter. quarter. the the for in brand comprised the Within Manpower of the profit brand gross XX% the Manpower increased the

supply candidate continue recover, the XX% brand XX% quarter. business continues during the quarter U.S. the to of Manpower this comprised during U.S. the and grew U.S. gross U.S., the softness comprise in in in second months. noted Within IT profit the in during quarter. revenues. approximately we revenues the Experis Experis X% skills While summer expect The Experis to have of

Talent in trends gross as revenue revenue was continued the are improvement X% continued year to the which constant continued dramatic U.S. to and XX% the quarter improvement experienced in In range and RPO revenues XXXX growth activity in midpoint quarter. Career digit of The anticipate We revenue continued perform levels current to experienced XX% the levels business quarter. the Solutions the profit estimated third the revenue currency, the hiring of strengthens revenue as to reductions we Comparing of which in contributed third to ongoing the strengthen. the in into year. Transition quarter and well double Experis XX% in experienced encouraged growth over run-off third MSP and our to of the growth U.S. a in quarter compared This by pre-crisis underlying to the XX% U.S. Management third our business U.S. this driven in economy guidance. using for Right quarter. by represents U.S. decline in expect contributed growth programs

considered in passed prohibit July specialized services growth the that XXrd, April X% experienced On quarter. government certain revenue Our not Mexico will temporary operation types Mexican of of legislation the on constant beginning in staffing XXrd. currency labor

As workforce. that be such, from operating using temporary of in will for Mexico staffing in-house be deemed core to prohibited companies already their functions are competencies

clients anticipate through the and have the our quarter strategies We this as absorbs navigate Mexico their will as we our the in that have in market legislation in with clients revenues and a been beginning workforce reduction accordingly. third business legislation shift working

will the result over mix this improve of few more shift towards business. the the Mexican believe reductions revenue we in Although our will quarters, next margin staffing profile specialized

We also workforce as be their over strategies. clients additional revenue may believe time there adjust opportunities

constant in XX% legislation Although currently in it third XXXX currency. during to Mexican This in the was the quarter. Countries a minus our is growth currency. estimating is Revenue of Other Revenue XX% forecast revenue the XX% Americas range of for the in quickly based driven Argentina, currency how the are days-adjusted increased Colombia, Canada decrease currency we minus quarter being in by difficult X.X% increased Mexico in in XX% represented enacted, Peru Chile. in and the revenues. business revenue constant to constant constant significant on within

the XX% the constant equaled Southern in revenues comprised Revenue down and in quarter. days-adjusted $XXX growing in This of revenue comprised and Europe France XX%. Italy. driven XX% the improvement reflects were ongoing segment came billion, Europe million Compared revenue at quarter Southern OUP constant consolidated France $X.X currency. XX% in France revenue in period to Europe and the XXXX, in same increased was XX% margin Southern currency. X.X%. in of by OUP

in the X.X%. we environment, a the rate the ongoing during, of on majority Although the have quarter had million and been the that in business impact an restrictions OUP was continued was to well lifted. OUP improvement the French revenue expect and improvement challenging perform of now restrictions quarter $XX margin

As previously cost results. accrual $XX benefited referenced, representing direct approximately France’s million adjustments,

Italy growth revenue revenue currency range to increased revenues to of for perform decline from quarter in constant in in that in OUP XX% we equaled pre-crisis equaled adjusted third $XX over Comparing in OUP X.X%. $XXX France to of second X% XX%. third constant constant in in XXXX guidance. to revenues XX% with the in of quarter, Spain revenues and We Revenue in XX% year As year quarter, days-adjusted to levels the increased increase constant million a we quarter estimating the increase Revenue the days-adjusted compared begin very to our continue Switzerland range in constant currency, of third using in in margin XXXX are XX% a over quarter the the quarter estimated the in year levels midpoint currency Through currency. in days- reflecting year XX%. XX% the exceed million currency. represents the was continue this Italy will prior Italy well an estimate third currency constant year and levels.

comprised in by Our represented quarter. segment and major in XX% $X.X OUP the to was constant OUP increased revenue markets. XX% Northern all consolidated X.X%. billion currency of $XX margin Revenue Europe driven million

in Our the in revenues quarter. segment is Northern of which represented largest XX% the the segment Europe U.K., market

levels the constant business. new in XXXX XX% significant quarter, currency included in During The to perform U.K. which revenues quarter. grew continued the days-adjusted second U.K. above

We XX% Germany, in over the year currency to second days-adjusted growth continued constant the quarter. range strong the in currency year third XX% In revenues in quarter. X% increased constant expect in

grew third to increased Europe quarter. industry, to Markets the in was grew Netherlands the revenues X% improvement days-adjusted Other currency see million. an Poland, $XXX Japan the growth the during market This grew currency days-adjusted X% Ireland. in revenue. revenue Although the growth and total margin constant Germany In XX% currency. experienced in to from constant in the OUP days-adjusted XX% grew and in in the be constant XX% in XX% constant in Revenue we was $XX rate growth difficult in in in constant by was Pacific Asia Russia, quarter, driven first Nordics, of Belgium Middle company in continues currency in X% for OUP constant quarter. segment the of in in In represents Germany quarter. XX% currency. strong Northern Revenue which East revenue revenue days-adjusted million The ongoing a improvement comprises X.X%. revenue expect our Revenue quarter. currency

market Our in growth, XX% in to high in I’ll Japan in expect sheet. single East the in days-adjusted mid business X% cash and to Markets continues Middle digit to we lead Revenue currency. now and in the balance quarter. currency. growth revenue revenue in Asia ongoing third constant Revenues Pacific Other down Australia flow turn constant grew were

to end, the two days quarter in expenditures cash six accounts quarter during over free by to first million the the $XX quarter. the almost XX At year million outstanding declines days sales During flow equaled year, year million $XXX months $XXX year days. compared the prior represented reflecting of significant decreased year in period. Capital receivable prior

quarter thousand for million. shares stock XXX $XX we purchased the second of During

million for $XXX Our stand X.X stock at shares million. year-to-date purchases of

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

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

of EBITDA gross debt debt Adjusted X.XX total at months twelve debt at trailing reflect Our ratios to to quarter-end total capitalization XX%. total and

not quarter. facilities credit did the and debt Our change in

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

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

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

and pre-crisis the XX% this the in growth the X% levels, range Our and for revenues. guidance XX%. between quarter X% days minor of constant to of represent constant billing organic comparisons decrease currency Adding revenue of days-adjusted context third XX%. organic constant guidance activity XXXX a our impact to in the outlook would currency growth The slightly, in growth an compared quarter currency in of range mid-point. impact net is at decline rate is dispositions XX% slight A revenue of to the resulting the third mid-point

rate profit the expect third reflects sequential basis margin of the We midpoint tax operating prior during quarter in X% our compared that XX% earnings be approximate continued previous our underlying We improved a strong up last rate quarter. to quarter will of estimate improvement. to XX at quarter the improvement the now are estimating the third the provided effective effective This we another be points XX%. mix, year. estimate XX%, year Based will full tax our from on

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

Jonas Prising

Jack. Thanks,

tech invest global to our Assessment. highly year we our Starting capabilities, Digitize, great technology for continue recognized making in is Matrix been for have driven XXth strong PEAK the Diversify, scoring Everest and ecosystem, to Talent acceleration we RPO consulting solutions award-winning in Group the and plans brand, diversification, our our This Solutions business in within data- on been intelligence. our leader progress with Innovate. a business are We named have RPO and again

is value diversification business. an grow consulting to including MSP and margin our for important our recognized as workforce RPO We have us also in higher in impact. also approach leadership colleagues well component our consecutive Solutions recognizing leadership scope tech higher global capabilities. been which solutions strategies, year top by Everest for named our I eighth as our market strategy Management our congratulate MSP of Talent at Right the and leader and space of just and data-driven the They the

we technology rapidly digitization, to web on execute transformation. Next, continue and our

Our while management. our tech our grow as experience is candidate advantage, shift to improving we stack streamlining to helping PowerSuite platforms competitive us our customer cloud

Our approach our are with plug turning the into best capability scale, we asset. a in data ensures always and tech able to current, while the to key

year at market this continue deployments providing another completed update flight. to speed. XX move look a We to We have been at in further on forward and are XX end.

making names Innovation. the we We Viva world-famous progress joined Technology in Paris. also biggest great the in In conference in at tech June, are

accuracy ago, opportunity XX and years start- than jobs and more open great Building brighter together sustainable at is with skills, across HR all. work a could better requires and of we the to Q&A. launch I As than people own. match on and only for scale a our collaboration communities, greater newest for human prosperity us Operator? is how the their work predictive with create HR partner on innovation our and to humans and AI, call like either tools, future conference’s and with speed disruptive do performance we’re five resilient its since or would bold, education. learning business, this now machines ups machine upskill ideas speed showcase using This people government, to will and how for expertise better, data-driven to

Operator

first The Instructions] Andrew of [Operator Steinerman line of the came from question JPMorgan.

Your open. is now line

Andrew Steinerman

at through And economic least typical labor in at summer stronger a said Andrew. a a economic where you've we you took I I that to the than morning, I U.S. comments the This typical supply, new felt your seemed then Jonas. of ask you definitely economic recovery. were note more Good if cycle. months, is constrained wanted expected expansion for the the heard your of demand recovery. beginning caveat than feels like

temporary do were for beginning to And so feel do like the going Or get for expansion to Health years? were is U.S. kind a economic for of we like is of the couple an XXXX? really you back benefits and this my question feel Europe, where of you in you where

Jonas Prising

Andrew, be and it's a yes, great would view And question. our twofold.

the we're of out anomalies recession how terms First getting and economic how are some got there of recession. into all, that we of economic in

prior beginning changes spoke speed longer other both Because remarks, needed will the that the in and adjusting reasons So, in and that a the shortages structural flexibility also benefit stepping of and penetration And they unexpected is leads improve in some take frankly, terms but the downturn, the that is of these structural our the flexibility, as to operational And services an companies various the for our in term, sure in countries that U.S. feeling ever skill of new reminder economic workforce the we a about feel anomalies would long-term from around going of cycle. our other and over of the the like. cycle. the skills for to seeing surpass levels workforce are seeing your speed of of new need and technological changing we all event. this signs back prepared want to a to question will that increasing previous make we're if really believe this from we to adjusting the the economic have to cycle. advantage drivers, you peak rates But progress for look point sets truly recovery, to increased what be strategic this of with our solutions of we for demand continue of of really as to supply the demand

Andrew Steinerman

just to as United Right. get we in will feel into fall? you make a like supply. And supply improve the comment the about States Do

Jonas Prising

we a workers package part, very for most benefits least have concerns; significant benefits, around Well, care have child the the unemployment today, will the lot we health terms still of additional of have from terminate states. September in see clearly and and unemployment for Xth what of can a they concerns; stimulus at that

normalize labor believe, we improve. vaccination over will rates into quarters. the combination, two, And of workers we benefits. markets. labor additional in we're to into coming so in And the course, will we back market workforce continue those the has increase see feel this hopeful already the been And can Some those the of factor of that of that them supply supply also a that have ended the

Operator

Silber our you. of the line of is BMO Thank Jeff next question And Markets. Capital from

Your line open. is now

Jeff Silber

Thank the there you're try in is Along your lines you the different it has might so mitigate that been anything past? much. own have that to now been proactively of supply to on constraints, the than doing

Jonas Prising

and the changes we in really would expect we see pandemic. U.S. coming earlier additional assignment. something mentioned some a an and adjusting expect say, associates, in under for associates see U.S., evident that temporary course, we attract our but But I progression we terms we all quarters We are on skills the in we're offering the opportunities really of And with benefits have. that's as that we existing whether assignment, take kinds that called upskilling are of ability to collaboration I retain those it and can, this we it's all degree, running seeing The job our And out in really our the remarks, September. not is program following the MyPath, clearly only the And have see unemployment opportunities retain Europe. the by them my to in bonuses, to to constraints of for the by it's on effect associates and are the supply this and assignment as reskilling a anomaly offering of have the that to completion existing other that that and them measures over lesser bonuses, clients we're in referral taking also, normalize where to measures

held that because there feel time. but situation those expect back would is we dissipate to ample improve various So it's we for the over reasons, and will supply, reasons being

Jeff Silber

third to XXXX your of margin maybe Okay. Fair structurally XQ looking looks 'XX's X% yet Or than there now? operating X.X% revenues are to lower guidance margin you it going being the be just on for Is compared little should a higher, like In conservative? enough. bit your XQ at is more operating quarter, the guidance something X.X%.

Jack McGinnis

Jack. this is to be I'd take Yes, that. happy

still to did we the compare quarter at when you we're XXXX, we guide, it below. the So third end when gave say

down. were we So

I range minus X%. provided think to minus down the was we X%

So to that still was just XXXX. that, below clarify

that's below levels. think And they'll the about quarter. still to in still by So businesses, from XX% levels. below improve That's you biggest -- second but was quarter, we the think France, at the XXXX XXXX midpoint, be below our in X% about if mentioned going by third X% I the

So definitely impact. good news biggest is of that's and improving our having revenues, The the underlying operating is XX% on an margin have that's business the basis. we an

the quarter, As did we France the basis added about at I second talk look we had about accrual XX that adjustment in points.

is that improves X.X%. If you into out, guidance about at quarter, to third that our X.X. look if And you the the the take X.X

to seeing So we we in sequential third we the we're continue are And the with forecast gap And underlying as still going below think to improvement. XXXX. the U.S., mentioned narrow quarter, that it's for well.

underlying back, making down X.X%. about So we that gap. from narrowing two XXXX, those look you And first were are progress are an we if is on basis, the top businesses. The good in news quarter,

we X%. as we quarter, about mentioned, Second were down

we XXXX. X% improvement. the improvement in to minus X% that saw ongoing And we're another versus So projecting quarter third

profit to improve quarter-by-quarter, trend. So with will expect same continue gap, to we our should that and that that operating continue margin you narrow

Jeff Silber

have Okay. Thank dollars I looking I only. for you at been must appreciate U.S. the it. clarification.

Jack McGinnis

Sure.

Operator

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

Your now line is open.

Mario Cortellacci

This is leveraging margin based target is of Mario I for on Cortellacci Hamzah. just you how X% much in filling on to upside further the margins? X.X% gross comment guess, of Could your from solutions professional drive how to midsized margin where are mix? that versus specifically, wondering to you to more exposure journey. higher there and or is staffing in customers that Just much increase enterprises room

Jonas Prising

Sure.

So I'd be that. happy talk to about

to than more ever. definitely are just EBITDA the say I'll X% target X.X% still first, maybe So committed to margin we

making is get encouraged very we're operating certainly I to terms question going think quarter-over-quarter by of is, the margin in be to progress is say going your of profit we're the how margin. I'd equation. what in And been this part we've recovery there GP to

I quarter very, this think this Perm quarter. back development. what we strongly saw GP very was margin good came

very, is I that strong You largest GP markets impact that, now. very margins. the right in say our had And the market can hiring would our see in permanent

Italy. about talked that U.K. The levels. narrowing talked U.S. and we back to coming about gap the So pre-pandemic is We

GP the So margin mix part to of going equation. be is

road That You mentioned part quarter great our opportunity of the was this there. Solutions is the improve map a definitely of from to those example and Experis. businesses. contribution And

Talent and very, well. into to we that growing third very continue both and expect trend So the Experis as strongly, that Solutions quarter trend,

start in U.S. we go definitely So of improving the that's I come to improving to back. bigger going contribution the well. is quarter. from U.S. higher had to during large the the we is so point our us the happen in be GP And that margin help. staffing think and definitely in going back, coming part. to a expect to market, very, that's what And have which, mix convenience, the help continue forward businesses more those saw convenience which will from there's enterprise, -- in on XXXX, margin, and good was saw additional to tailwind an became your going part The margin we improvement that And mix, we as shift, forward very convenience regard, And a

investments recruiter and going efficiency. technology our the our help to margin. to Those are that factors think margin GP help about we've to to That's increasing going issues all our investments time, extent I along us great help that's making. initiatives be as technology GP well, to a And we're to are the overall those that are increase same talked of be going are going productivity. going So

operating margin are in initiatives, So part we've progressively terms improve to other of to be of our and items, mix going in about of past our continue which talked transformation all with cost initiatives other our going back-office profit forward. along the that, those to the

Mario Cortellacci

just labor timing And that maybe labor that pay you're what thinking Could maybe bill and comes supply on is And walk rates. how can right back impact on on you the follow-up your normalizing? us about you how as you're on across through and market, inflation pay Great. inflation the what of us those just the rates then into expecting the portfolio? my bill talk seeing business? Maybe now through then your you're to

Jonas Prising

pay Mario, bill inflation at able increase point, we that good with wage is in rates strong number manpower least skill Japan. notably inflation. are we of number some starting wage for a and our right for to seeing, wage in U.S. a good bill now. from are business generally inflation some Well, sets, a as markets, our seeing gap -- And And very line as expansion of a the we're especially

the inflation the of of a As increases, spike is doesn't of seeing come employers as initiatives kinds labor get dynamic. Because we and a inflation from bit market skill that to the the are the moderate And pandemic, whilst that versed well and normalized nature onetime also think what out market of are be wage bit wage of little so you I'm start referral they over it bonuses, get a the improved also of off with on effects employers and wear in competitive wage you've lot but also in supply and retain efforts that pay some those we more not and their a also little reflect sure will hand. be retention that attract very more of lingering the are labor an those then onetime a some into in stimulus a wages, market. time, to can accurately employees they only seen to sets

time wage are there level skills, some particular, slightly we in higher inflation, we normalized will well. seeing manpower a for So this to that get adjusted feel more but as over

Operator

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

Your is now open. line

Mark Marcon

and you are of things optimism morning positive some made regards comments you if some giving the can you I Jonas, with fairly becoming questions. Good to just reason a discuss just Jack. with Wondering, France from different mentioned, in few to for longer-term perspective that Jonas competitive general? One, got more you France regards

Jonas Prising

think positive No, I a Yes. very Mark. France Thanks while. for on been we've

economy. But industry reforms that the If relates costs has of and that positive French their parts making are competitors and areas directing effect. more of global globally ambition you economy. is that tax And are their recall, our rates, they France the a as have France investments it that market implemented the perspective overriding fast-growing competitive administration make with France sure in had believe structural Europe to into the lowering in from in a to means and a closest labor line labor

they markets, with that and a the areas weeks business opportunities, to France's see along believe, of ago is sign. some a Macron together And a as opportunity positive to promote more number great us optimism few we France, in government, to leaders will them and as other France think of relates And continue So time a very our address President to as program further even as this deal have specific it his in and to having with a further infrastructure we spend sectors. have grow. opportunities it of global that had that, all in the intend also ManpowerGroup they labor to going is gives competitive investments We well making forward. role taken

Mark Marcon

the of of on along terms Delta actual in weekly they're can then that demand little the portend And what bit there terms rest of the the and Street? in impact for about you regards of how monthly world? that is with And talk does translating number a the a basis? what a Great. new U.K. to to cases, further Obviously, on the the seeing you're wave in or

Jack McGinnis

be Mark, this Yes. to happy Jack. talk to I'd that. is

I the But as both to you second been And U.K. pandemic. really the issues business start we year-over-year trends depth the very expect that the we've would well, increase the levels, prior Delta say, compare continue. year has the to to at I U.K. I levels in I quarter variant trend, the when the look XXXX significant which been above what well recently. seen the is So was first actually the monthly great. performing if of that overly would despite quarter, that U.K. say, some And actually and has helpful more the think and XXXX aren't won because of has very, with new actually

say perm did the very a U.K. quarter look from would been hasn't quite I the And quite recruitments in second pre-pandemic, to definitely in U.K. in strong really back of narrowing outlook continues well, it So the customers perm, I in made but as big demand progress the mention the some factor significantly. our good not in in the terms to our U.K. gap still and business

on increases So on the an variant. the basis, I'd business, it's say U.K. well overall the actually in been recent very performing despite Delta

Mark Marcon

midpoint of I second France guidance is the quarter? quarter, the question achieved take been a second basis since here But bigger take a in the like conservatism? think last of maybe level. when the third margins, the we I few how accruals had then for gross for And the improvement with look I performance, to a in at is it nice to the Or regards Or the quarter of is and guidance And little reversal. the we XX really from then in perhaps of we've becoming improvement a quarter. that places look mix? should at margins I bit the Great. in know this It's point third years France of mixed part for gross terms mean, just the the a about terms relative

Jack McGinnis

with Mark. underlying on say, what it's question, basis seeing we're in line Good generally I would currently. an Yes.

out that your points. point, basis take accrual adjustment in the So XX to QX called for XX.X% out we

to largely quarter, put countries a of in the a an result mix. third Remember, bit underlying basis some a our XX quarter of XX.X%, pressure on holiday we're bench we So, on European impact as in XX.X% little next basis, a have guiding of that that do is that. points our the

still, the margin underlying expect So quarter to to into staffing in the those say see good in next quarter. But we markets. uncommon we on quarter the an generally bit momentum going positive I'd basis, little -- it's third a of from pressure second not on overall and line

Operator

the Thank Credit line And McVeigh of you. of question from Suisse. the is next Kevin

is line open. now Your

Kevin McVeigh

the the impact I I more regard are about think we able how on a that any guess through of job to this in of we transition we about guess, downturn upturn? in how the we should next through this mean Jack, the Is as this a lot cycle? think to margins cycle. about -- way in much hold longer where to are should margins done better to with term, our to as So you margin on we're there just working cycles? up way prior think as kind obviously, opposed cycle, I you've you're

Jack McGinnis

Thanks, Kevin.

opportunity and had of target. I'd in terms say economic point, to to our the related this discussion, is on a views related margin recovery terms cycle our going previous So a of bit in the to bit the we've think, forward. And the and your I

the would pleased over we're that progression very we've margin seen quarters. I last say So by few the

of that actually which be see, good really opportunity see continue if back to levels us very, in of And to think we've significant, as we we're very investment. as our in think XXXX go quarter. so I to very results been forward. investing perm, going and in is you think about strong organically, I perm a to consultants that. an for perm the is starting to some that margin result been to contribution investing that, in We this We've key opportunity markets, The is and great are perm strong.

with say very, implementing, I combined we agenda. making at the margin well. all on look technology we've technology So we're Jonas very and the been would and are mentioned, our forward, We've been proceeding speed plan, good initiatives, that as very, implementing agenda on those as very GP progress

that see the improvement So implementing very, system. that be really And we'll front-office when just the year, down positioned from forward. recruiter the of new going end get we continue well be of that we'll this markets very be a -- don't to to to efficiency to handful we'll

going what's about this that, forward legs we run think, economic we to a and particularly we'll to have that Jonas real at march XXXX. sector I good that say about half next. look time, EBITDA well. as I significantly that But as very we about and second some step lot once we've So the recovery of the opportunity talked margin the going get would to earlier, And that's more business some that, momentum, manufacturing XXXX quite we're target. and in optimistic think to at a as a And talk one really having in impacted our real said

improve factors the all that those very, our a operating I the very over here. profit we opportunity medium think us give margin good of have So to confidence term

Kevin McVeigh

given trends? assignments, And length of client of supply Just on assignment keeping can conversations we're thought anything just call near-term longer? terms the to then, of helps. That as about just candidates kind you people bit thinking tightness Jack, around of tone little in of as any out a

Jack McGinnis

that on clients tight assignment. associates imagine, market. focused Kevin, and a very labor I'd say, on the you very our But as can us it's are keeping

is high. So for talent competition the

So other we our and and see attract manage it normally the would to on how recruit retain able is well. probably know hand, more we've churn been to people. and this But than do. we business, And we

mitigate say. are those So I impacts where tight but I we you But of on course, the managing from would overall, it a reasonably perspective, in supply depends, it workforce is a think to world. are market well,

Operator

from of Thank the you. And Tobey is of question the line Sommer Securities. next Truist

line Your open. is now

Jasper Bibb

can in Good process follow and Jasper wanted going look in up the guidance on Bibb more Company morning. back for forward? margin cost Like guidance bringing close we be SG&A. the base to the looking fourth of what as where is quarter SG&A on is XQ for like should to I there Tobey. pretty This the

Jack McGinnis

this Jack. is Jasper,

us our down did during And been to now we've very that would we in do ratio, recovery, recovery sharply investing the took seen the cost that say we manage well. I what and So in you've pandemic, growth. very

FTEs. expect and would continuing X%. should back compare the continues we second still as the down in quarter, when improve the you about to average, first invest expect, year-over-year, And our I to we so quarter, FTEs when look second first be we recover, quarter will the I continue demand at were X% in about that On to that. up we're to in quarter, And

key that the will we're carefully. that think I managing be very

about pandemic, ratio. lot So recovery during talked the we a the

Now it's all about GP flow-through.

that GP line. bottom of we're down fall So a seeing amount the to that year-over-year, incremental good

forward. invest, continue to that we but to flow-through going we'll get carefully to And ensure GP so that we continue do will good

flow-through carefully ensure expect will still should you dollars that GP we'll in through, with coming we continue to that So to do that down increase dollars. there's to profit operating costs up take good but

Jasper Bibb

respect then driving they rebound, MSP are think solutions programs, new clients and wins more management cost Folks Solutions there, it. as got rethink to looking cetera? with you like et your client Talent or a structures, do to cyclical beyond like what's RPO their And adopt talent

Jonas Prising

of to they ramping the down ramping that, significant clients, need. But our Jasper, onset Talking up. and reminded are they indicating a clearly the pandemic both have now, have the right need flexibility, sudden yes, them also to of

outsourcing the So Talent see we capital penetration human and really of terms in Solutions our solutions, as this offerings as market offerings RPO another such under impetus our for brand.

been as very and strong we've of of progress So because continued the above a whole now MSP offering. levels the our very solutions is offerings talent RPO those and encouraged XXXX by strong resurgence the and on based of progress,

certainly progress during rebound, the we were for scale as of pipeline, feel the in current we've in and So cyclical about prior that outlook we that we Talent and quarters about this talked made Solutions had the from of good terms is that the client new the and but benefiting that forward well. very our wins we pandemic think going

Operator

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

Your line is now open.

Gary Bisbee

guys. Hi, morning. Good

but what And U.K. of quickly you if like other of come behind. factors, clearly how key are just that think back are question, that Americas determining more Is like already any, of the those ones XXXX? first a markets, XXXX, ahead ahead, I versus has And the business trending gating of are the ahead? are the some factors? what variables market just sort to it's markets it a interesting the and yet looks lot So Italy, said few are in that well the

Jonas Prising

pandemic. starting point degree to depths which The hit is the they and were during the probably the

perspective, went France making how but is, decline they countries their So to our way globally. XXXX as of back earlier, Jack levels, also from its the industry steepest noted all deep hit and is

see hit, compared strengths how of you to and of then and severity after that, what point was things specific and what the others impacted around the drop make the the able little would industries, remarks, then certain our I would is recovery hard quickly lockdowns be, and the having quicker. markets those conditions, market deep the that, lockdowns be deep to finally, sectors are quickly That would are initially? are And all of average, back? So some we of noted how markets broad-based is starting on was how the way have and much reason this market But what speed of was the rates, in the and how as and why combined, the said important various they that, make how recover And a released. bit manufacturing and services. were how most confidence the prepared But aspect their the say those vaccination business you the did and across disparity. market is sort

is across of it all So bit on against, and depends XXXX, a we recovery mentioned. those is speed the factor -- operate a markets of especially that I common where factors the the

Gary Bisbee

but workers from implications, if U.S., countries the then what it's hospitality to example, to work been some there's wanting discussed during having moved reports perform? lot jobs, shifting think that maybe the industries there's industries want shifts where press seeing And I from for not hiring lot? a to that any, people go other of others, Great. you Are are into the workers of And been where Okay. of for to the of type your business back pandemic. in around in sort outside a more been

Jonas Prising

market ending of and a it's or where some labor First post U.S. we still probably parts, year highly that's pandemic. anomalies have that are market open pandemic, of level all, very market I'd say that impacted within certainly related churn, even pandemic hopefully, a the of still in It to normal the with the unique. a is in dynamics the labor bit labor significant dynamic, a little

at and, the that much to lesser at market other Overall, as is think a I we a of is are accelerated try it that markets. whole people may our what specific opportunities to that between now, skill the a employers. phenomena sets of industries degree, hallmark industries the in a task an to only and those see one So those not with our and applicable as demand so to really and be for is meeting the very of of skilled And we fact moving right workers from provide specific multiple finding one have, labor needs hallmarks, we although understand industry, to as matching workers. can what industries, workers we but U.S. the somewhat good are pace are

that factor at and our to what is offer or market think sets So start impacted effects not another industry do long will movement adjust what mentioned to But attract frankly you're outlook movement done remarks, as that, it at. remaining going can will heavily is for once increased that's quite has what practices that between is But a need looking the where Certainly, for workers. workers supply, to our hiring ability this we are start in to impair dissipate industry term really And is with the industries the employment do as But of talent. they seeing coming If over impacting the that's the is better the hospitality pandemic conditions decrease. they rather they we and industries. they in compete churn certain us U.S., are I is and flow pay that their lingering and and the in happening as find as try earlier, the ability to in we and mentioned expect is will industry the they've I over point, prepared the applicable, normalize their gainful the to don't uncertain, quarters. to and understandable skill this to between logical. now. that everything impacting this

Jack McGinnis

the have don't update an just we vertical did And appendix Gary, I as show, And we our would to include exposure to earnings we industry. hospitality significant industry slides. add, as our

persist strong be side an workers' that So if sectors could that in. you opportunity of we from the does mentioned, supply that that trend are into some a

Operator

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

open. Your is now line

Manav Patnaik

Delta I some question variant is cause assume your just and of obviously, you but the quick guys, that for maybe had lockdowns, doesn't guidance any that. will said one it future like you sounds

how for that, since or how So this your clients just I Just lockdown? years curious potential we've for maybe be? try been I preparing you saw what presume it last guys impact be through just X.X are so, gauge could And and you was year, are see the trying that. with but thinking than we through less what saying? are what will guys to

Jonas Prising

we've the greatest governments better the degree and lockdowns to and the degree the pandemic, really for to what additional the a initial lockdowns, allowing through large part possible subsequently greatest countries But of quarter, the for are to on second continue social while of the eased some frankly, now, the focused Well, we reducing part interactions possible. excluding in work then quarter, navigated June implementing existing second some and during the in saw lockdowns. places

for there strategy France, impacted to them, the on pandemic lockdowns objective a surge certainly maintaining making that with that and had work countries we other making in is the four are Delta those much, emergencies, I for which going And way close Japan think improving. social of think vaccinated growth affect this look state are keep their which part, to unvaccinated, the But we distinction the go lower economic will true And maybe So of variance. terms their the unfortunately those And been all. countries. isolate through between as are to in seeing in the And and occurring exactly how resurgence. are of reduce to parts has as that most the if and managing you're at world is Latin forward. in And clear is that the its that latest other the or ones by vaccination their have same they course, most be instance, far the and lockdowns very of three now Europe. are their some has ability focused at is rates, and seeing, interaction. Asia-Pac not And that America going when

this Clearly, impact So increased occur lockdowns. and reducing the areas impact. interactions governments in this same would exactly apply on the where and expect why principle with times that vaccination is focus a same social navigate be any change. in exactly we if they as expect managed more material point, we expecting this in would at can we rates. as mentioned, past the available, this have summary, we point, of infections And material the that therefore, governments way; in during But don't that at to no not of difficult incentivizing vaccination expect

Operator

final came our And George of you. the line Tong from question Thank Goldman of Sachs.

George Tong

I Can wanted flux are markets most restrictions those which are describe material guidance parts business in the to today. morning. And Good the talked no on in Again, of exist question your things Hi, the the follow restrictions Obviously, beyond terms delta assumes up of impact from the or would of UK that and currently? that and impact downside risks just thanks. lockdowns you last you on though guess, your seeing material lockdowns. assumes no I you variant, right impact? about even how Asia. your now, of France frame potential guidance additional

Jonas Prising

past change. to any to I all, engine and economic would will impact guide can first and populations to well. to certainly of George, continue of restrictions the we do, as growth to keep the growth possible economic to want mentioned previous governments going they can their greatest But this is what degree response, in what clearly, the minimize if think the of my as a

lockdowns, many the in and been in those different course, customers of permanent meet quarters has seen flexibility that to ability last quarter here, of and what's progressively the strategic but serve a adapt we've for and our of the an on still and on only temporary the so. you've increased second demand operational part able over last frankly, shown quarters restrictions all eased, compared been quarter lockdowns over last been the eased to four So the that have majorly severe under over progress the prior quite really, or really to the additions to countries, and be workforce and And basis.

case. that do, that But on governments get seeing be this hard to very appears vaccinated. we would course, combination to there to the what as if believing why resurgence at be But think based people the to it's we of more this focused point, their So And stance is mentioned, be but impact. predict, won't motivate can the that keep of engine what very are similar, I are we will this a even going, to major in today, not change. on trying trying

George Tong

in seen you as then Got geographies you've And competitive changes economies begin any environment? discuss if shares key lastly, your the it. in to And market recovered? can

Jonas Prising

really in recovery, We're and of our somewhat terms speed dynamic albeit traditional of services a of of solutions. seeing a certain the maybe terms different in

the mentioned, this Jack normally, And actually a in a But of permanent permanent in recovery. some staffing above offering ahead is traditional and a recovery. actually placement permanent recruitment our bit is even in placement temporary it's of case, and synced been cases, lagging with XXXX. activity As

we've are different really we in overall traditional -- is the rational really call but market, also about somewhat So competitive, that dynamics in the from faster terms not speed. very And of is very quarters. talked and out maybe to what prior recovery, nothing similar on it I'd think remains there's

George Tong

Got it. Thank helpful. Very you.

Jonas Prising

And Thanks, of you. again earnings Thank Have earnings that you of quarter third everyone. rest call. go and very importantly speaking We with a brings QX the to the our our for box. forward on great to today, week. look us end call

Operator

all you participating. Thank you. And for today's conference. that concludes Thank

disconnect. now may You

ManpowerGroup (MAN) 20 Jul 212021 Q2 Earnings call transcript