MAN - Earnings call transcript Q3 2021

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Operator

Welcome to the ManpowerGroup Third 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

third 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 third and then we before Jack within the of the Relations included I'll start your Chief quarter Financial manpowergroup.com. we for quarter, we language. highlights McGinnis, then the will call through website Jack thoughts share the And But session. me have through by now remarks some of the our Safe will fourth before go start, for today. Harbor cover

Jack McGinnis

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

Jonas Prising

Jack. Thanks,

operating pleased of to provider one And held business. group the part privately and announcement ettain North of and August, announce investor are call is recently October our resourcing X, services largest special Experis very and late IT the Following was now since of America. timely as in successful ettain our acquisition. the in completion we

later the in this care about business will Diversification, our digital U.S. DDI our the of In and the diversification workspace the good strategy, our call. IT sectors, little and transformation diversification Innovation, geographic services the health I Digitization talk practice in addition acquisition more our component increases in also of in and to strength improves this progress and a financial expanding areas.

In Turning currency. financial was revenue $X.X year-over-year results. to quarter, our the billion, in XX% up constant third

profit $XXX million. quarter for operating Our the was

and restructuring Mexico up as was Mexico had the prior impact margin Operating in restructuring year-over-year $XXX X.X%. was excluding in Mexico transaction million. quarter. economic a global and acquisition costs, Excluding recovery ettain Reported year. significantly was excluding per The third Reported operating significantly profit $X.XX significant year. costs, margin costs, both was share above after acquisition pandemic profit the X.X%. and continued $X.XX and diluted earnings prior was and profit financial acquisition the And were after operating restructuring operating the

workers. more That XX ManpowerGroup in ease, levels for in in by a the of become difficult hiring pandemic, have challenges year-on-year. reporting progress of supply strong market the it to contribute into various in more XX markets, exacerbating the countries the workforce XX,XXX Outlook in and to factor not some the back QX XX third impacting than more the Delta the chain seen labor countries. The years. XX rate shortages more highest All the in to off the about also are impact variant recovery are worker have Concerns reporting markets. making countries parts many caused we related industries. employers again in intentions levelling meet coming And many some demand. industries of and strong demand than to visible at improved manufacturers also evident and hiring said, see Employment is in rollouts we hiring many vaccine quarter, our countries, This during of intentions continue Survey very in employers pandemic-related demand strong As restrictions

access fully in strategic recovery. operational we global the impact the services call, business effects workforce of earnings economic quarter challenges and the human solutions Companies the the and And participated need and into to With second variant strong once transitory world we for outlook our remain over the as on discussed normalize. in and Delta our capital their objectives the them meet we demand optimistic view chain to and their services, today confident of pandemic demand goods As help the we and factors. meet and skilled all supply future. the

Jack McGinnis

guidance a above Revenues improvement in our the in in disruptions. Delta third Gross the margin and guidance range. slowdown our rate notably due range in in Jonas. currency came the France to came by Thanks, below just sector quarter automotive chain variant profit disruptions, constant of driven well supply in

year operating the adjusted prior profit significant increase the by heavily was period, from a impacted was As $XXX pandemic. which representing million,

pre-pandemic our quarter low-margin the of XX%. to profit new organic Due a adjusted end was same increased more regulations of at X% of revenue down days net billing was revenues adjusted trend detail, was on of Australia. As basis operating after revenue and our currency organic and which constant dispositions slightly Breaking margin days in adjusting Comparing the below in lower impact Mexico X.X%, XX%. XXXX third an constant the increase guidance. to exiting the levels, top due on currency X%, into which basis, than the revenue the quarter of this our second trend slightly bit by a impact were currency arrangement positive of the to about adjusted is levels fewer impact our days, for

transaction Slide the and to to share related Earnings $X.XX $X.XX, bridge acquisition restructuring Turning related costs EPS X. which Mexico included per on costs. was $X.XX to

Excluding of negative lower-than-expected our had improved exceeded of performance added midpoint, $X.XX; rate effective favorable our from these that operational our the guidance which other expenses, foreign $X.XX; a which added was results Walking and tax slightly adjusted midpoint rates, exchange $X.XX; slightly range. included impact which $X.XX, of better-than-expected guidance currency $X.XX. EPS costs, a

gross at our profit detail. Looking margin in

less point point and Underlying from as this basis improvement was from contributed year margin the drove lower year A hiring direct Management Right improvement staffing margin basis point services, our markets. adjustments lower margin improvement Other the partially in in an Latin favorable offset recruitment XX.X%. favorable of XX adjustments reduction business in MSP were direct GP basis in consulting XX XX margin Permanent at activity our adjustments increase. a and came Europe, managed a Experis as basis largest XX strong career a in reduction. service from prior cost cost included France. America basis margin and business adjustments XX point GP current than gross of year by XX transition accrual point Our basis points mix across contributed

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

the XX% quarter, the brand profit. During gross Manpower of comprised

Our Talent Experis Solutions comprised Professional business XX%. comprised XX%, and

of flat of Management currency increased an our represented organic growth profit our on year-over-year. on During a XXXX on an organic XXXX basis on Experis Gross the basis. a This increased organic of an trend constant Right increase global Compared XX% Talent Manpower gross basis. levels, constant XX% an this gross represented brand during profit Solutions of XX%. Organic quarter. currency MSP organic the of third currency quarter, from quarter and year-over-year quarter to profit quarter decrease year-over-year basis. constant in X% from in XXXX pre-pandemic brand currency XX% the of includes reported RPO, constant the organic third our offerings. constant This the an an market-leading third represented currency from currency constant

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

which through quarter. the business, entire MSP growth continued double-digit pandemic, has Our gross experience in grown the to profit in

profit in significant Management strengthens, our continues Right the experienced run-off XX% of and U.S. the see in business As gross outplacement reduction to year-over-year. primarily in recovery activity, a

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

currency represented quarter. to initiatives. Americas million. and comprised charges in in $X acquisition of based and the was $XX recruiters of talent of a profit reflects billion, restructuring market quarter sales million changes well current in revenue. of XX% the a as increased an increase was gross in year, increase ongoing underlying currency in constant in excluding an XX% expenses acquisition third a on increases year, currency Mexico XX% investment higher Excluding prior in loss as dispositions restructuring XX.X% in This million. consisted activity of constant and basis. on of The Revenue operational incremental and as X% revenue and SG&A charges costs technology costs segment from $X the and SG&A consolidated and The constant OUP of costs restructuring the $XX was after percentage currency. compares

margin OUP million, $XX Americas increase was Mexico and OUP the and is representing X.X%. XX% the million, year. in Revenue prior ettain compared was in XX% the largest Excluding the The to revenues. was of U.S. segment country segment, U.S. acquisition comprising costs $XXX an costs, restructuring

year-over-year business Right career quarter year current charges for the businesses. prior in at $XX in Excluding the million improvements the Management's U.S. run-off, ettain acquisition by flat OUP from our decreases costs other restructuring in across offset all and was year, is placement as

was acquisition the OUP Excluding X.X%. costs, margin

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

Manpower the brand growth we Experis in double-digit quarter, XX% the anticipate gross in the comprise during labor IT The and grew continues revenues. quarter revenues business quarter. experienced U.S. summer shortage continued approximately the Within While to U.S., fourth months. strong of XX% U.S. quarter. quarter in the recover, profit the in third XX% U.S. Experis of comprised through Experis the organic in the into the skills the second continued

to U.S. The RPO, in in continue and gross Career to U.S. the of organic increases on was a XX% improvement perform we hiring of to million as the underlying range contributed the growth of in U.S. the in run quarter. the using of compared well Separately, a transition MSP economy quarter, year-over-year. market experienced encouraged the experienced continued current double-digit the This off fourth guidance. trends revenue of the to by ettain as professional Solutions This revenues are and within our for strengthens, levels levels revenue quarter. business range convenience Talent record $XXX business the significantly in X% and expect million decline quarter. the in ettain, experienced our $XXX X% midpoint which to services. X% growth the revenue We we revenue which in our represents fourth to IT to reductions Experis in by Right XXXX profit strengthen. programs growth driven revenue continued In the in ongoing U.S. X% an which Management estimate for basis, in presence U.S. activity acquisition recent contributed of the

of The not specialized considered operation revenue have services. we prohibits reduction decline constant in more severe in was business taken Mexico in actions certain the legislation, a by temporary actual right-sized labor was originally decline The the in driven demand impact quickly regulations. currency regulation staffing XX% which experienced quarter new The the from our the anticipated. of Our this clients quarter. for of from the third new than restructuring have types

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

be We year-over-year. also will as We revenues. increased decrease believe XXXX the estimate workforce constant fourth Mexico in there their of in XX% Revenue adjust to XX% clients quarter. X.X% opportunities in revenues during by strategies. Canada currency may over additional Mexico revenue represented quarter our time that XX% approximately

was recovery comprised XX% Southern in currency. Europe XX%. period third constant the Delta and quarter increased $XX margin XXXX, Revenue $X.X chain $XXX in constant OUP equaled comprised in quarter, the in for growing currency. Automotive quarter supply in French OUP the in the came X% France margin the variant XX% down Europe of and were and revenue in the of in billion, X.X%. Southern was business. to slowed rate and million, the segment revenue of quarter. constraints consolidated OUP OUP same in the XX% Southern X.X%. was at million France Compared our revenue Europe revenues

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

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

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

the quarter, XX% revenues constant UK in During grew currency.

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

million, East constant currency We expect the in the constant in revenue. increased fourth during $XXX improvement revenue OUP grew in constant second days-adjusted revenue was currency The in margin currency. XX% quarter. currency. million. see Nordics, the $XX In the which X.X%. Belgium to quarter, XX% total Revenue represents Revenue experienced of ongoing was the Asia In grew in revenues Germany currency, growth in grew X% improvement X% XX% in constant Middle XX% Netherlands revenue XX% an from OUP quarter. in growth the of to quarter. comprises Pacific constant in Japan rate and segment the company in

continues and turn business client constant second Australia market Japan quarter. to during fourth reflecting balance single-digit a revenue in growth low-margin to ongoing arrangement exit we cash high in the quarter. expect in the revenue of in and now XX% Our I'll currency, lead Revenues flow growth, the sheet. down were the

reflecting million significant flow nine in million compared receivable year, period. first the accounts prior year, the months equaled the year in declines the prior free During $XXX to of $XXX cash

and days the million third $XXX the during quarter $XXX the outstanding was flat of prior represented end, exceeded Our million for sales current cash flow representing strong at cash flow year cash period period of free At third $XX days. million free year-over-year Capital million, nine-month collections. quarter. XX expenditures $XX quarter

not did any share we quarter, have repurchases. third the During

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

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

X, of Our $X.XX in On billion, at of the $X.XX balance and of to of a quarter million. net ettain. cash fund October sheet we was $XXX with strong of acquisition resulting total utilized position million cash cash debt billion end $XXX

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

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

we million credit ettain the revolving did unused $XXX our acquisition. X for Although remained September on draw October XX, facility conjunction million $XXX at in with the funding of

down months. we to previously this the next As indicated, intend XX pay we over

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

per continues to that impacting trends exist to emergence those chain largest are incremental the share approximately our acquisition impact quarter that fourth beyond On be supply an variants our ettain. does not the to markets. no range will guidance costs per of include to or and of of material COVID-XX-related $X any additional be $X.XX This disruptions, million including assume operations. includes costs and forecasting the of difficulties integration additional currency $X transaction $X.XX clients impact unfavorable from basis, in million, out ongoing $X.XX adverse broken the impact Our $X in of which separately we a of $X.XX, in earnings foreign today, from of million which share positive

This days the constant in adjusting after net organic improvement growth growth organic of X% for range our compared organic between billing X% fourth revenues, ettain an rate, driven by XXXX range of impact currency constant The is A the trend. decline the decrease X%. range acquisitions is quarter X%. guidance constant the and revenue is midpoint. growth estimated and quarter minor a constant represent the ettain, outlook to Our quarter an third for X% to growth in at And of in minus fourth resulting would currency X%. of revenue our from X% currency guidance midpoint between days-adjusted currency impact our X% representing in and minus

the help margin Since with months be are annually. We ahead, million in currently up accounting EBITA be estimate will forward, asset acquisition profit final will prior will before of to estimate $XX amortization for amortization, also amortization to be purchase XX that significant finalized quarter at operating going during disclosing that compared improvement. basis or ettain assess more contributing points will ettain the we approximately Although year, intangible EBITA, the midpoint the financial be performance. the fourth XX points basis underlying we the

quarter year, profit up contributing points We will quarter XX the the rate that the improvement. the be operating during XX fourth to XX%. basis basis to margin fourth at be ettain estimate prior effective midpoint points our the the tax with expect compared of in We

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

Jonas Prising

Thank you, companies investment the during Jack. pandemic means are requiring the in future. The and capabilities and organizations acceleration for skills of new digitization technology by

years, intentions the are we of shortages labor of have levels highest result market employers a seen to it as in unlikely able some intentions these hiring all be the many will for fulfill is at skills. While

most to with at are offerings they capabilities through and believe for Experis the create the Manpower, our opportunity And and Solutions competitive. pools the is strategy, scale. their second XX% looking high future workforce and this are survey find they for diversification Our organizations building that innovation has In also capabilities quarter, Talent cannot ahead, to upskilling through global skills response, brands. we at Talent ensure and reskilling, focusing the skills our XX-year need. talent recent talent sourcing investing We of in are workforce to shortages employers for on an us. and remain found strengthening they in existing are talent with the the We're stating looking consecutive Shortage a the

successful program MyPath is providing Through access and Our great building clients this. to XXX,XXX talent example of pool future the MyPath, a date associates. over lives has Manpower and of we're high-potential to impacted the our

in Another global six innovation Paris is Tech our our recent now in learning in-demand to Experis and Career learning at the and to is AI. active AI-driven and it platform this data in match Experis scan can machine earlier market, with partnership consultants of markets. Career Viva roles. conference IT example Accelerator FutureFit launched pathways Accelerator, year Experis the our dynamic Using developed

our upskilling preparing and and leading developing, most. We learning our the are employers and learning own grow partners us accredited tech need expertise. curated from learning Machine with by providing training world's skills attracting, people consults content helping our clients technical is the also tech people's

pipeline they're So how whom and Survey, in internal levels them better to than our either on both despite our in of the with pandemic. we during even This their match sustainable the people year-over-year innovate where and could to investment job in the provide capability higher in to and we employment. see better humans of is predicting our recent create and in experienced our brands market invest provide for and That's performance benefit the Annual or meaningful the organizations by machines we the of reflected People also benefit an of many continue pleased work individuals careers skills engagement best the we challenges at assessing example to talent a for do find the own. to for employee are

our opportunities call I'd with the very as grateful the like even strong open see culture for we And Operator? for very for advantage improvement, well organization. are positioning Q&A. growth. to further us future a for competitive and now of proud We this

Operator

Thank you.

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

Your open. line is

Andrew Steinerman

Andrew. Hi, Jonas. It's

so, it's the help will sort is U.S. levels term? near about of Do and the ongoing how You're and labor your this will medium-term Manpower shortage feel question you But the in the about And near of wage very labor why continue term, when? supply improve my at supply. if during to of and term. clear skill near really regardless U.S. comments lower companies really final

Jonas Prising

will And do answer that is labor improve. the yes. supply Good morning, Andrew. the feel We

judge you feel we of reflected these seen, clearly when say And industries are course near Delta around to see of lack can that issues. talent what transitory really term, the we've but school near pandemic. it's surges is the is, that very term Now effects hard that that hesitations the child you of see we COVID-XX variant across on care and the the

that So to being choose back in from cases, and because to workforce are get people pleased Having middle to is that during week we've the we're the a over gradual. September pandemic. over associates a of regards some seen as improvement were the the of labor actually of can't an use now said to that, some situation not to support they get And back into -- where that workers. in programs promising improvement the still has normalized October, see to market in phase government back implemented the coming over we onwards, week the slowly week supply is sign been that able take with

Andrew Steinerman

quarter guide that how And much supply? the in fourth the assumed U.S., U.S. about labor for is

Jack McGinnis

Yes.

a assume Andrew. during gradual the we fourth quarter, So, improvement

say I'd Manpower the side, Jonas' point. improvement gradual to So, on

So, we the through We've been in fourth encouraged estimated have that step-up recent continuing the quarter. weeks. by

remarks third quarter very, into very in very part as the I in the addressed and that double-digit well. the growth Experis fourth was business good think business quarter. the strong U.S. other the we anticipate our of we prepared growth And

Operator

Thank you.

next Our Markets. of is Jeff Silber Capital of line from question BMO the

Your line is open.

Jeff Silber

Thank you so much.

I it may I in As to talk to you country. wanted has easy generally, what question, been? wage inflation. or that your But trends know clients? have And a about difficult inflation every follow-up talk how been through can pass wage about to the to differ Andrew's

Jonas Prising

there our those robust in strong, able to although good able finding well. our a we've in mentioned trends value to to on the And our to as in to is U.S., people able staffing our quite pass we profit side. And it margins we've strong and significantly and the been it provide the inflation inflation gross able been is on such, less that been prior as has wage to are to wage for as Morning, price pass customers. of because been and capabilities generally customers. in that to inflation calls, Jeff. increase our you've so in on as seen us Yes, particular, Europe, we've And the of improve And clients. thing we've wage

Jack McGinnis

And to terms Jeff, happening I best would to just our add that, the through. what's the on margin is in indicators pass one staffing side that of of ability

the was the utilization so significantly in saw staffing basis said our you The underlying as was But markets, Sweden up anniversary Germany saw flavor so the bridge, points. year-over-year. little up of was that seeing we overall well. our we of was what as And staffing to we're up U.S. margin XX in issues. was up a UK of you largest some in up margin. give bench

inflation So, it through on our broad-based that -- the to to wage seeing are is pass clients. we side. good improvement indicates we're able that some And staffing margin that

Jeff Silber

hear. to great That's right. All

investments You would And sales is in countries? countries in guess, others? in -- demand front-running you're those and relative expected investments where making sort your recruiters continued mentioned talent. specific in those that also about to remarks prepared increase any I of, there Are

Jonas Prising

good of because the we advantage is is global And global markets strong opportunity our to broad-based recovery about of such, recovery. grow. effects supply we're the and recruiters feel some we these want XXXX, going still have be delayed feel the recovery. to clear as continue growth very of those to effect due to know pretty investments we and into the number as be in And to as opportunities. Jeff, ready good most a that Overall, markets in chain of demand of issues, and but take COVID-XX And salespeople, pandemic well about is we the the

good U.S., So well the Italy, Japan. we very be France, they markets, feel UK clearly, about major as the as the

in markets advantage the are the have we those So we and confident feel take why are good. speaking, say, that to ahead. talent of would that's I optimistic those looking we're making opportunities. But we sure And biggest place where generally

Operator

Thank you.

Our next of Hamzah question Jefferies. the line from is of Mazari

line Your is open.

Hamzah Mazari

issues. of on the France. thoughts I My issues? terms know seeing as your morning. you customers for when And you Good that is chain Any in mentioned transitory. in that call would question Any you? mentioned you to automotive chain areas just other supply out I that it's normalizes know supply

Jonas Prising

the automotive supply terms other Hamzah. of tell, when impacting hard chain It's will manufacturers, Thanks, sort the is out to that's a this that demand, chain Clearly, chip industries. surge but of issue that's think the main also caused I issues supply in And and around we're of why seeing a of shortages. lot course, themselves issues. the pandemic

a of it's got demand. the overall, overloaded surge big with indicator So It's in positive growth. economic just that supply the chains

we're this of different So able from of advantage take and itself this that's the different will sure be take for terms in preparing we our will some what well and that being product. normalize. industries And time to come I'm expect work exactly to to for through, it as as different business opportunities that. But time, over

Jack McGinnis

And that, to I add Hamzah. just would

last page we've industry our verticals, release. at of the look updated our you earnings If that in

seeing in this a trend. see can has we've bit what come been on auto based You down

So some in look at see verticals the separately. mentioned of bigger like ones bigger we've about revenues. past, we've some construction overall of can see our out you say in of the about markets but talked if X% percentage, that auto manufacturing France where and our And But remarks. as broken Germany, you as the I'd and can of is other in course, prepared the a you pharma,

stage. a same chain those supply this issues We at haven't seen from

the So I'd we say continue to sector, predominantly on and automotive focused watch it.

Hamzah Mazari

one is have two. in relative seeing the European has I just ask any the competitive changes dynamic Very helpful. it And reason only growth is peers I there. much just if higher yourself to out European you and your your other follow-up of my you're question guess looks And peer. like

Or curious just dynamic there? read if any changes I'm to the you're in not into really seeing so, And anything there's competitive out there?

Jonas Prising

But not in industries We're overall, competition our major the we're the geographically as And in dynamic. mix, rational. but as in changes. It's all the seeing country. well related to changes both or industries any competitive is seeing not always any industry within business as intense, really within

Jack McGinnis

The to would our could a from only thing I add and some the of look that competitors, would I be at that is mix logistics. specifically driver,

opportunities. Some That competitors over-weighted of could the But with focused some is GP on may that explain compared be on being very logistics differences. a to us near-term said, margin what bit we're side.

So, we're to much as on very careful want regarding low-margin work we take well. how

Operator

you. Thank

Our McVeigh line the of Kevin next Suisse. Credit question is from of

open. is line Your

Jonas Prising

Kevin?

Kevin McVeigh

run-off apologize any think Is to I Jonas, I'm around that the Or on of help of free supply is up wage debate level wage I more labor wages is kind of benefits? would from a helps way some way about the sorry. question. seeing Jonas, there been for Thanks to of what what Because a level draw in think like about that. think of there the mute. perspective? was there's any that rising U.S., just labor of incremental it supply? constraints things that. some of do lot you're the so much obviously, you

Jonas Prising

are of attract where the it in depends really think in on you world you it's are local and are And other competing talent from. U.S. the what in to industries I you trying terms Kevin, where very

about think think a don't level. to I so, wage it's And practical certain very

see wage was are If that that for years minimum three look or the today, instance, can forward market you rates idea you just two at from that be to the legislated adjusted. you fast discussion, of pay years $XX has recall, where and needing

the very high. around wages think is I transparency

is and rates would today know looking what they're pay labor paid the they're more. They are at what you and this opportunities. else. because have they in that market know and opportunities paid getting somewhere increase exactly wages being why see And changing that's good, jobs workers higher the So quit workers nearby

somewhat. more and we've in remarks, this to supply there with we benefits effect as child many make and we last shortages prepared concerns that states mentioned forward, care will health time we what this seeing driven is are over of of labor care, wage Now Wage in effect it a And our people's elder still pandemic that. but increases around easier, the quarters. normalize will be we the fully run-off the and transitory over unemployment the as the own on go increases we're on be anticipate back than sidelines and that seen are going still in supply and some this the we the we the over well now. that will millions this that people into time, many effect that delay this will come think ease that workforce And know that talent surge are increases markets. shortages will expect the by help we as right that or But labor the of the in seeing

Kevin McVeigh

just then you don't of Or real in because the on quarter. I And allocation? any stock Jack. Very Was capital any ettain? think anything quick, bought helpful. thoughts that else, just

Jack McGinnis

ettain why, as And on repurchases that at acquisition. anticipation pulled about did acquisition, Because revolver No, back said we that's we of time, the we share exactly the Kevin. for the of in $XXX tap million.

that will plan covering And down over we allocation about in our we will a a to that through Our that We But repurchases that, traditional on that really next then say capital on plan I more down the perspective good incremental focus we'll doing pay said months. be assume paying the priority capital that. you incremental I resume We XXXX. do allocation did from XX be I on early dilution debt. strategy. debt. think beyond think share And feel should

Operator

you. Thank

of from Marcon Baird. of is next line question the Mark Our

is open. line Your

Mark Marcon

market? give should million. I with is us you the and to in with the better, $XXX associated like encouraging. gave the gross the bit, the if Good a your think Experis? within doing margins you melt talk quarter can morning, Wanted a all, together? for to us talk Obviously, integrating very those it's am And improve operating Experis of How that over that? ettain, how ettain $XXX IT then, growing little course for this And within and which little regards How coming year? will of figures we Can what IT Jonas bit services the about a that looks million you position to more about revenue competitive lot Jack. wondering, services. plan will first is the just

Jack McGinnis

you This little terms But terms I'll that giving overall. the then let color. Mark. of little in more of talk one, Experis and a Thanks, is bit a Jonas brand Jack. bit with start in I'll

million basically at $XXX So that ettain the revenues for guide midpoint.

And equates GP before, XX% EBITDA impact. XX%. basically, update the As an we of about the said between We did their that to margin range of is amortization $XX and in million.

anticipated, good. we than is lower that's which originally So

So, all of that equates million. $XX to an operating profit of about

that an put a at would X.X% about deal the So announcement what overall approaching XX% that basis. on of in margin line announced with EBITDA we

feel had so but We few Its with let in the just days, off we're bit of weeks, rundown great integration to business. start. kind further. numbers. good the that's a little the great business. some far the a a really early about comment And Jonas we've So meeting I'll

Jonas Prising

Experis as with good seen, has staffing very on a of meet And Thanks, many regards Yes. to business very see our as of exciting quarters. see. just it's it margin. over last good Jack. really week markets to the had new globally we think significant. improving our in improvement the the business, still one impact been our team. a And of is opportunity I it's number the of mix in And U.S. team you've Experis Experis, terms combined course, it And opportunity And to leadership the Mark,

as call, of how good special our in clients, acquisition overall in ettain we investor a both how number there's great ago, call industry number about brings as of well talked overlap weeks ettain of we with very segments very progress in the course, limited in we on terms strong pandemic. about As how feel strategy, in areas the our strength business into of fits now numbers. they Experis also and the as that of just through our on coming also we know, that seeing one are our strong practices, And are as convenience. the before that is that's did some a organic what's And Experis very you very

acquisition U.S. feel frankly, the globally and business we well. here about as and Experis good very so the in combined far the So,

Mark Marcon

guide, a at? the that And would incremental the a to the change? it fourth then quarter in of ballpark Just to what's any Mexico regards numbers relative manner had sort just performed legislative just impact, question. without if With Great. impact you to constant with what regards

Jack McGinnis

I'd see year-over-year XX%. to say down XX% about say the did trend we that Mark, we Yes, revenue

as think earlier, mentioned we Mexico country us. is for I lower-margin a

as significant top as us. impact So bottom for is on line the the on the it is line not

I'd So low-digit of I'd say millions manageable. the in say dollars. it's

So, quite perspective. manageable profit on operating an overall basis, so not headwind an that significant of a from

Operator

Thank you.

next Sommer Our the is of from of Truist. question Tobey line

Your line open. is

Tobey Sommer

Thought growth about businesses growth? acquired you for what from over of what you clients kind Is that in driving Thanks. future like capital look I'd in RPO expect those in ask to further could an And of a about double-digit you're comment the there to you that's opportunity to your MSP businesses. lines and and deploy question hearing growth businesses time?

Jonas Prising

in been and the And strength the as find team is very surge of have and to business. we the our world as RPO here we're for actually in back need to and a well their very that's grow. leveraging clients. continued to resonating Solutions MSP, running business, not run really serve offering. their driving U.S. has and suggest And MSP recall, we clients to RPO And solutions. seen, clients in terms only world the and of the business markets. able in a everywhere strength. so also year in good with and really insights Well, and improving continue our the across -- we've being productivity seen data both of efficiency within data Tobey. that's, our that Europe, Thanks, various play of strong year And in clients the able our a if talent strong common you've And Talent continues during really our with And dip course, but demand really that just insights MSP pandemic that to didn't course, what's you our and the ways RPO improved with RPO conversations of in their in with

our a So, the pipeline of see we really it's seeing And in today, prior we that's but capability optimistic progress because looking wins have. as to great been MSP that offerings that's implementations. we also why reflected into growth clients our And as going what future. mentioned important that have and And you're strategic RPO. very we calls, numbers and the as strong we're in operational the well of the also very RPO think provide ahead is

growth good expect we see of both to progress in these continued and So, offerings.

Tobey Sommer

outlook particularly wage the factors ask the U.S.? As Are the as I the environment well and MSP? for those and just supply, a follow-up, outlook labor as RPO in inflation could and short in influential

Jonas Prising

are effects as clients wages such of mitigate that, of visibility the scale wage are still paid. some and attractive -- driving in is to value our possible inflationary mitigate But the because the the MSP, to have an guarantee wage are inflation because as of the being clients. impact the on we much that that it's of our our clients market across in supply, them They some we do the to we to provide for you and such our part of the wages part inflation are that the is that of RPO the of use fees frankly, terms that dependent through and solution reason

Operator

you. Thank

of line question Bank of next is Our Gary Securities. the from America Bisbee of

is line open. Your

Gary Bisbee

Hey, guys, good morning.

same is when were pressuring -- impacting are bit guess, help much expectations, miss interested chain? called supply But that out? where the Any prior like how revenue prior is, versus other much how is I'm how And look those looked as those driving out little And shy a guess, is the that. expected. on so QX. a the I color So understand broader little revenue, it X% slight range I of what's can calling And labor a that? shortages and for are Most that France other delta outlook just worse. there factors it factors better outlook. Mexico than for on are in how at versus you or you segments major us any significant the worth your you I What of any really

Jack McGinnis

Jack. is this Gary,

I would definitely of guide. -- was say the half France from I'd about no, So, a force. say the definitely The driving difference

at of became more end much as at of the we really And the France, QX. the curfews anticipated. it anticipated the recovery I with visible, loosening and the to our more became said, And just factor. didn't a the we restrictions the into QX, remarks pace chain robust think is the reality specific is issues materialize prepared bigger story supply a

Now QX to from did with said, QX. all that improve France being

improvement underlying we running were into continuing improvement to did QX. see your the XXXX. improved versus They in about XX% guide, So minus that They we XX%. to And ongoing QX. question see minus

So we gradual versus XXXX to so steady levels, down see improvement. moving France X%

pulled just seeing seeing the at we're through continuing we is change And in end due to a trends levels activity using of back October on pace we're based moment. the year. we're the that main the the with think disruption I little bit the

the anticipate that as some of this in will next said, quarter. very work We and So we Jonas optimistic out. on beyond do is recovery temporary France still itself are the

be that So one. would

conversations the with demand. back more their guide, just clients the getting more definitely, Once approach us a on. terms our our I guided originally story we effect, guidance I in is was to original cautious we we of to think was saw took implementation communicated the clients than is from severe Really, mentioned, as our early anticipated. Mexico, originally though, than there what

that And are probably so ones. bigger two through. say those the came I'd

UK was our QX maybe business offset as strength mentioned, we in we business some we mentioned a As mid-September softer Manpower ended the assignments And and associates I'd would Experis on little but say on lot into Manpower UK. into I degree, terms saw October a other A that And just was some of one have good little guidance to in bit the little to pressure U.S. the softer, than increasing. would And of in say as improving that a side, mentioned as incorporating saw the We the in that by earlier. in anticipated. Manpower that Jonas side. I we we're the the of gradually softer.

trends main those I the when say drivers So, are consider the I'd revenue overall.

Gary Bisbee

Okay. to just Great. from I the on clarify amortization And then wanted the acquisition.

that you. been said million part as annualized continue? now is fair? the high that And there. or You expectation that, your million So the million $X that, more guess is does had like number Is the I expense is of running XXs. before Thank $XX $X that for new

Jack McGinnis

Yes.

amortization, is based $XX rate purchase the on preliminary So accounting. annually the on our million new

months we We right that's will the now, in think pretty a finalize number. But ahead. this good

ongoing to our $X straight want a it guide line if and a an or you million so. closer to quarter an that basically where is $X from were we initial quarter, on basis improvement So about million

gave your you XXXX say, yes, line original generally, can about as use I announcement that ettain So with perspective. as well. ongoing the for I'd modeling our And holding amortization other an metrics are from in basically

Gary Bisbee

Okay.

includes the what So, number. both had acquisition the million $X total and you the previously? That's

Jack McGinnis

is $X well. as no, run just I'm the previous million will The ettain amortization, then continue sorry. no. No, our and rate

So that was more modest.

So look if in you at million. our amortization $X it was QX,

Gary Bisbee

Yes.

Jack McGinnis

will $X.X ettain, amortization in million. about million, our total anticipate that with QX So $XX so be

Operator

Thank you.

from coming is of George question line of Sachs. last Goldman Our Tong the

is Your open. line

George Tong

The I to the point is guess was dive out the terms But expect in look? quarters recovery -- many the just more the your these And you last? supply tipping happened to that shape when to of And do over in would think play headwinds of morning. Good you results? manifest could in it thanks. was how I the expect into what dynamics to evidently Hi, shortage would new. certainly you the this how you nothing impact, recovery supply would that that wanted seeing. you're that say trends chain quarter chain caused the

Jack McGinnis

say Thanks story by really it were the doing so Jack. of I the was prior wasn't the the I well based on quarters, masked say, over-performance performance -- new. really, would is all increased question. for think it I in is supply of other this the would George, you're on demand. But chain that the sectors the right,

impact large got very recoveries the So was the the became anniversary-ing the we and as particularly that much sector. third just having, in when quarter to it chain year, automotive prior the the supply we were -- the from clearer

it more was continued, a to when pronounced having. say starting to well. It starting we ago, as was clear it part. much we a because meant impact visible just stood from what as it more have very rates as we I'd to the a just much so, became were And said significant year out it became see that's anniversary easier growth it And impact some

So, prepared is more little a which I'd we the -- that's in our bit the say prominence are factors, really main it remarks. gave those why

well, In terms timeline, really of to hard say. the that's

different the think issues will I chain ease we'll of on the -- when economists a lot supply up. views have

expect is And reflection our that demand do they that as we is a our transitory. they increased discussions with the are I Jonas view are and there. of said, think customers

demand see very to and the from quarter over two. But work So these clients underlying next to timeline who is that or continue issues, an the are evolves our we'll very with strong. close basis, we'll how just

Jonas Prising

with conversations a And not outlook. that reduction this I would as add, in their delay George, in and they or a their the of just demand clients, see our all

they their and when ready. to remain very optimistic, the engaged we coming, and those be markets look us we coming, and go UK optimism you us as very, is in it of are And such So traditional will all intent in because in it's some happens that is, that themselves key very so driving elements eventually some out as play we there Manpower keeping forward. the in And so in are France, strong a don't pauses recovery on ahead confidence they our comment think very well, U.S. there. as as strong, some continuing. for as a it's -- we and are And markets, because the are we way very of but we know part have to know us look, what's

we though very there a something the somewhat, it's opportunities. we is managing recovery we is conversations good are feel from even that So, good about feel quite future the of client the and slowing but delay rate about also well, have

George Tong

in characteristics mentioned the and Very part client it. In could seen due there that the that you you the Australia, noticed exit perhaps a that what Got loss Can potentially you elsewhere be with lower-margin patterns any arrangement. in declined if of business? of helpful. loss that revenues to discuss are was, customer that

Jack McGinnis

that on able result that, that No, we actually a were with the new one an of fee as improved We arrangement pretty with one, client we net straightforward. And moved to that contract a George. that to had a is Thanks, renegotiate arrangement. had terms.

we with us. margin. good were a terms very net result in able gross for a treatment up, of which as the it's it did previously. fees business opposed client, continuing that So a to And to in shown But that change, improve have would net

straightforward. of say a that, like any client, one I trends with that. wouldn't really that's indicative So other it's and of or anything really It bit a that was one-off

Jonas Prising

thank and Thanks, with third of February you the you look earnings our to us speaking call. be And fourth then, on with to that brings soon. next and Until earnings everyone, Thank quarter joining you quarter today. XXXX, look us speaking you, which our for call. we X, to forward will end forward

Operator

Thank you participating for conference. in today's

disconnect. now may You

ManpowerGroup (MAN) 19 Oct 212021 Q3 Earnings call transcript