- Earnings call transcript Q3 2022

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Operator

Welcome to the ManpowerGroup Third Quarter Earnings Results Conference Call. [Operator Instructions] This call will be recorded.

If you have any objections, please disconnect at this time. And now I will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. Sir, you may begin.

Jonas Prising

quarter for third the to conference XXXX. call Welcome

McGinnis me today. Chief Financial with Jack Officer, Our is

For Jack we at Investor the go Relations start your within going highlights section remarks convenience, by and of have of the third the included the I guidance start our Jack some website then harbor some share and Q&A will before our through fourth we manpowergroup.com. quarter, will cover the through prepared for I of results will session, language. and concluding safe quarter our XXXX. quarter will now the thoughts of

Jack McGinnis

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

Jonas Prising

Thanks, Jack.

forefront ago, our business shortages, leadership on to Top agenda team. from outside morning also economic outlook. they Bucks Milwaukee remain and team, month, here growth we and their leaders and the talent inspiring included before They headline with and was culminating tonight. navigate to an capital I'll maybe brought an conclusion an with from technology contribution ManpowerGroup Just thought an one since every last the so for skill innovation with market. what global be our in little years and championship The leader's talent together transformation not XXX would energizing leadership our starts we're the first a another cover remiss at rapid Bucks spent that also perspective season, . us inside event and me of likely as perspective. that I and tech leaders out time providing uncertain NBA and energizing time Milwaukee is leaders human our on of when our which innovation mention a clients the strategy, this labor global the this of customer We couple disruption, in clients our and It shared leadership later share more hearing on their pandemic. Go

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

still holding a to was million, and $X.XX leaders despite margin million, share was labor they was $XXX headwinds. $X.XX Our on for markets EBITA $XXX reflecting constant basis. costs, acquisition increased economic up currency adjusted X.X% our integration Earnings in year-over-year diluted margin EBITA Adjusted basis increasing Adjusting year-over-year. our well and the constant clients, confirm EBITA was earnings X.X%. are reported in Reported What and EBITA from adjusted currency. growth the XX% U.S. quarter I hear talk on that an XX% the of per was for share per

to and conflict and the are the inflation, Ukraine-Russia own energy been to same At creation job remain other and confidence, banks global impact concern increases. unemployment growing as have some as market. employer central the labor rate top a significant prices on interest respond the better-than-expected a quarterly ManpowerGroup Outlook in economy risks elevated with having Employment forward-looking Survey illustrate in low and time, Our continue Europe indicators, historically resilient such U.S.

and into cooling skills to but ahead. know concerns some industries we see today, that may demand demand increasing markets employer major continue solid translate We in our across talent

higher-margin the and blend been point, years see We to sustainable remain and our RPO right strengthen to demand diversified strong continue of two our have our back growth. competitive will see businesses also the lives. reap technology quickly ever, opportunity and than prioritize And Jack building In our both investments. well uncertainty I'll We're across solid that which to continue clients for navigate to more last our business of technology now we and this if overall over servicing placement continue control, position. we to demand continue permanent for is us to more benefits skills come sectors. the above and people, beginning to as results. will across taught it later, permanent mix what levels market take can turn brands to you and strategy, DDI remains people, our offerings. The The To our laser-focused now demand the of our our I executing never of supporting and candidates we ready pivot short, to through on we we've and to to pre-pandemic temporary hiring activity, in employers

Jack McGinnis

quarter Jonas. constant Gross came in margin range. the range. in the profit our above third below guidance Revenues came just currency Thanks, in guidance our midpoint of

prior million, adjusted, X% increase constant As organic an was increase basis. in year currency a constant period EBITA or $XXX currency XX% on the representing from a

of particularly basis points activity was and year-over-year as result is basis the movements based margin foreign XX on dollar, local against lower our businesses not impact businesses, the It in came note impact euro, Due currencies. improvement currency cash item strengthening range, of year-over-year our into organically. and the dollars. translation at significant to results. points significant the within have largely an end continued translation U.S. on to of a guidance to foreign is representing our flow does or accounting important X.X% And reporting EBITA the our currency adjusted, a in As result, that operate XX

increase exchange currency currency revenue related and growth rates. acquisitions, rates, swing about constant foreign Our reported the Due a XX% to negative currency the constant revenue X%. for net of translation drove the After our dollar U.S. the revenue increased impact adjusting impact of increasing adjusted between trend about slightly in the to at modest revenue of days, revenue brand Manpower result slightly more in guidance Europe. organic particularly growth and lower The compared the a X% was X% midpoint. anticipated than trend of the Northern was more days X% billing our

Turning to the per included was $X.XX, EPS which to U.S. share $X.XX Experis Bridge. integration Reported the earnings costs. related acquisition

softer positive was to a of $X.XX slightly which from Excluding positive integration shares of costs, our had share guidance adjusted the $X.XX, our $X.XX, was Walking $X.XX guidance, the quarter worse euro impact a that a positive weakness impact. than expenses lower of the had performance particularly during foreign quarter, currency included due to weighted and improved EPS due our impact results effective other tax average in rate, the midpoint, which operational repurchases had $X.XX. pound $X.XX a and impact and

organic of in brand Within RPO as significant Talent Manpower X% our line. Next, basis, Year-over-year, on revenue to growth Solutions an reported markets revenue growth and strong quarter. see trends brand constant third the our currency continue the Experis Solutions, by business of revenue growth revenue brand key permanent The remain across revenue we Talent the XX%. reported of hiring X%. let's review reported growth in

Our the levels anniversaried growth period. MSP revenue quarter as saw significant revenue of in we in year business decline a prior the slight

second an the revenue While quarter. improvement more from the Right decline representing in Management experienced a significant slight decline

Looking at gross detail. our in margin profit

at increase, margin XX.X%. higher-margin growth U.S. a came which margin strong Our gross business Staffing Experis included XX in in contributed basis in point

contributed as activity In items a basis contributed a basis improvement XX addition, hiring point the margin largest GP added Solutions XX represented other Experis continued points. basis XX improvement points. strong acquisition our be basis positive separately U.S. XX across of Permanent and Talent points recruitment markets. to

business Moving line. on profit to gross our by

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

the basis X% profit our gross During currency constant organic grew year-over-year. an quarter, consolidated on by

decrease Organic currency reported our currency reflects permanent prior and as constant gross Our currency by profit in increase profit discussed XX% continued increased gross decrease year-over-year. which in Right higher-margin Manpower slight was as strong year-over-year. Management. the growth in gross strong performance period This anniversaried slight in Talent driven in a partially MSP we in XX% brand strength was growth Solutions of a year-over-year. Organic in in well profit solutions constant the X% the constant increased earlier, recruitment. by brand year This offset in Experis an RPO strong of as organic

SG&A Our quarter was the $XXX million. expense in

Americas operational percentage of the $XX integration growth business, in the organic million. acquisition XX% basis. Experis, currency offset businesses constant SG&A sectors SG&A and costs of costs, costs on in increases opportunity the comprised and an was constant Adjusted XX.X% revenue incremental reflects of organic sales an acquired Revenue growth various in consolidated of currency in the basis Excluding was quarter represented $XX as $XX expense net and related a on X% on of to of XX% quarter. was additional currency currency X% consisted an billion, changes XX% constant segment Manpower. million. and currency million, investment personnel underlying increase continued a RPO OUP in markets basis. recruiters of $X.X by The reflecting or primarily This The of in $XX million revenue. higher third constant higher

adjusted $XXX revenues. increase OUP million U.S. was Americas $XX Revenue the million, adjusted, X.X%. the in segment segment, was prior is comprising of margin or X% country a the As organically XX% to largest year. U.S. representing The OUP was days the and XX% compared in

As business our of $XX an OUP the million organic XX%. was integration in adjusted U.S. acquisition to increase exclude representing for costs, quarter,

As X.X%. adjusted, OUP was margin

quarter. growth quarter. quarter. the the the brand Within some Manpower complete up consistent of XX% revenues. Manpower brand gross trend second softening X% in a another of U.S. comprise prior experienced the profit Talent transition the Within business the of of a This perform Within Right growth growth the third had growing in growth U.S. permanent in The slight the anniversaried in XX% we and as levels in were had business The strong Management, continued MSP quarter during Manpower acquired in quarter. third U.S., Experis final recorded and Experis wrapping quarter. the U.S., The RPO the U.S. programs of trend the saw activities as X% to X% the contributed XX% the but hiring as IT by In Experis revenues the period U.S. fourth active anniversary the revenue prior U.S. for the revenue reflects which increased lower revenue in of we largely profit demand. quarter, driven early year in from compared the brand XX% a quarter, of to profit Solutions Experis in quarter. we and skills in year increased to XX% career in continued with the in Revenue by significant the approximately integration the solid revenue Talent activity quarter, gross rate organically. expect with well. decline in period. gross the record the Solutions during as was in quarter comprised comprised began during activity U.S. low Experis, growth growth is offset U.S. the very fourth U.S.,

Southern billion, comprised $X at of X% X.X%. currency. the Europe Southern organic and consolidated $XX the quarter in increased was OUP in Europe of in X.X%. in XX% quarter. in the revenue Revenue OUP quarter revenue currency. France margin $XXX margin constant million the in X% million decrease XX% was representing segment OUP revenue in and equaled a Southern comprised constant Europe was OUP came and

logistics chain relatively in steady and throughout revenue Although quarter. supply Russia-Ukraine the construction the the France stabilized quarter, to slightly during with and impact sectors related better-than-expected continue experiencing the automotive, third France disruptions rate a growth trend

constant the an revenue reflecting $XX and Italy the rate days be France million the expecting X% currency. million increase in quarter was margin to $XXX third currency year-over-year quarter rate. are fourth equaled in Revenue of the We similar OUP adjusted growth constant for in equaled growth to OUP in quarter, X.X%.

fourth quarter year Italy the third a currency As will revenue lower we in that significant prior growth in compared we have to revenue slightly estimate the period, anniversary the quarter. trend to continue constant

OUP revenue Revenue quarter. million X.X%. the Our margin XX% Segment a was X% Northern of $XXX organic in consolidated constant and represented OUP decline currency. in million represented Europe comprised of $XX

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

an X% decreased revenues constant certain the margin basis. with to replaced U.K. resilient fee-based includes as increased exit of work. sector quarter, a business arrangements, the higher as low-margin well exposure on During This currency public

the the in third expect trend decline. quarter. Germany, compared fourth in slightly We improved a in revenue the quarter revenues third to currency quarter constant decreased In XX%

one the remains on automotive our impacting supply chain impact have management war. of past, the continued workforce sector from and to disruptions the most of we outsized discussed difficult in Germany Russia-Ukraine As the the the due regulations of markets the bench brought

business to various we We the Middle expecting was level Overall, XX% have constant of revenue margin Germany total actions quarter, business our decline improvements. improved the taken operational and Pacific on progressing East of are to and and are third improve $XX OUP Asia initiatives million XX% fourth mix, a in revenue. focused quarter, compared company the in revenue million. OUP $XXX grew to segment quarter. The comprises In was X%. slightly currency

year. days the grew and expect we in flow $XXX compared months in of XX% constant I'll year-to-date, cash and quarter, flow $XXX nine very in end, expenditures XX% the Capital free continued represented revenue sales remain our day basis. the flow quarter segment very sheet. consistent in the prior in just strong In million now on the In represented represented $XX business, Our fourth or equaled $XXX base million which turn XX APME quarter. in strong At the the growth compared outstanding largest and million free million under of adjusted during in year. cash Japan pleased the We segment cash was days. Japan $XXX quarter. in with one million to increased Revenue balance third revenues XX% to currency the at prior a to performance market quarter. third Japan

stock quarter, we third for million. the X.XX shares $XX million of During repurchased

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

with debt of equaled cash debt Our $XXX balance quarter million. $XXX million at ended and of the end. sheet million total Net $XXX quarter

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

the of at credit the the when line announced acquisition, the and effective Euro $XX we agreement XXXX which the an Experis U.S. remaining issuance rate credit facility on was In drawn with maturing time Our Note June of we X.XXX%. communicated debt interest reflects new quarter. summary during in accordance the repaid we million, revolving

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

assume supply Europe are war-related to which chain impact that the for to per per in in or including fourth COVID-XX energy-related continues additional no of guidance of share $X.XX On an Russia-Ukraine basis, those forecasting we impacts, currency and unfavorable share. quarter the exist be material beyond includes earnings that Our $X.XX, today. disruptions foreign $X.XX underlying range to

the We impact acquisition portion estimates $X the translation have to disclosed This to operations. be million guidance our include foreign projected currency of from out costs will million, slide. rate $X not the broken continue ongoing final at the of separately bottom our of of does which integration

now days of with midpoint. along days, increase guidance represents range organic the growth and have revenue a growth rate our third of This currency constant lower we of U.S. represents the the anniversaried midpoint the X% constant from at and currency is the stable slightly X% a an revenue increase. number between the represents X% Organic Our the impact growth revenue decrease trend net on acquisition, basis, X% basis. Experis quarter as and same at dispositions a billing a increases of adjusted

for expect our during fourth estimate that We effective both XX%. XXXX prior midpoint the of be quarter and tax compared year. rate year margin be fourth basis to points the EBITA at full XX up to the We the quarter to the the

part French abolish proposal consider in the the reduce preliminary XXXX. business time. rate If The our down XX% remaining tax has to the our finalized XXXX, preliminary XXXX, budget X.X% announced intends bringing by this by approximately business the rate drafted, the rate initiative and to has is also tax CVAE, the intention tax to X.X% as to then by effective the as French potential in XXXX tax, current for that global we tax this budget, French provision consolidated the fully XXXX, France XXXX. to As in remaining XX.X% rate at XX% tax reduce as known global another of government bringing effective in

potential this on any earnings monitor including on we'll an year-end to continue developments provisions call. will and update proposal, We our provide any offsetting

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

Jonas Prising

Jack. Thanks,

Our the of last we component and strategy. diversification. digitization on progress focused Innovate share call, will around I Digitized, our our Diversified Today,

gross Our and Talent business profit, in mix our representing continues higher-value our to XX% XX% shift Experis from up brands XXXX. of our higher-margin with businesses, towards Solutions,

Our good in temporary margins of brand is in this our in as one both Manpower key gross strategy. U.S. reflected part our Experis for acquisition and of specialized Group celebrated the sets, diversification we towards opportunities and a to is brand, since year the well. improved it month, Attain earlier perm skill diversify staffing also that seeing And

contribution professionals our is gross excellent all-time and Experis are space upskilling Academy. now largest strong performer Assessment, charge Experis contributions in and as the Those our by and named path IT as AI-enabled including PEAK capabilities recognized well Experis staffing leading which analysts. career Matrix of highlighted in and personalized breadth tools U.S. capabilities, also delivery have our contingent that We cloud and of ManpowerGroup very pleased strengthening offerings, proprietary in offerings the into in for was Accelerator IT Career resourcing U.S. the the industry applications resourcing star been one Experis Everest a recently positioned services an solution Group's provider IT XX% provided and integration the solutions and year-to-date. both infrastructure business the market global has transformation, our high with enterprise and of profit Experis workspace, of digital of as team the Experis in leader

predictive Assessment. our strategy brand. our we [indiscernible] our TAPFIN-Managed once again consecutive acknowledgment recognized MSP, ninth to for business year technology recently global have received this Everest and platform This accelerate performer our is continue Service been Talent leader of global we've the Talent Solutions diversification in innovation, growth PEAK and to that for to of Matrix are IntelliReach, diverse our self-service to Solutions uncertainty, the achieving market our star to manage enables expertise more addition priority value societal offerings trends stakeholders. operational descriptive In mix them and more leading and with and intelligence strategic highly to Provider, With Experis brands, transformation and be including clients business, performance Group's leading program our with scoring designation turning for enable drive to top continue accelerate us and our Sustainability digital a flexibility their ESG global companies addressing business scale. data. at obtain progress workforce accelerating and

published around progress second to growing We people of direct governance. our our And principles September. prosperity progress the reduction charts by social Working and and our have Change by XX% notably, a are addressing shortages. to are annual mission and significant Plan in proud World The emissions structural skill planet, of the

the In this have leading refugees While over we ongoing years co-host committed our closing, see elsewhere outlook. to partnerships ESG solid our Summit, the hire building leveraging U.S. focusing refugees with solutions increased and where tenth similar contributions risks XX,XXX downside as global and expand markets we Doing We in our and the science-based I more and capabilities, for than are note, around capital with on Business labor next to XX three to but supporting in acknowledge a strong our commitment we Doing our the embedding well. joined plus significantly refugees Good world and Well leading expertise that for our economic initiatives demand, U.S. continued of companies through committing partnership On and business space, as human pleased Welcome and strategy to that approach, was Foundation.

With accelerator market experienced one whatever to to other like the navigate opportunities break, Operator? Our team And for we're to leadership now confident is to ability how market open knows foot have and that, the slowing I'd there changes demand. our Q&A. successfully on in the call lie the global ahead. on where

Operator

first question coming line Steinerman Our Instructions] [Operator Andrew of the is JPMorgan. from of

line Your open. is

Unidentified Analyst

for in morning. This Andrew. Stephanie sitting is good Hi,

economic in the you view, your labor if a do U.S. so, is, back will in garden tight? variety stay in post-recession? question a if hold we have And strong XXXX, of Our type recovery relatively recession does think that

Jonas Prising

it's that to very And where if is look is today. will markets that have the loosening We the the economy, believe reason in moves down Good quickly inflation expected. to as it you the rate participation to the morning, the we enough hasn't tight from labor lack U.S. should wage that from as down some is than further you The tightness, if influx it the very come significantly to this this happened of at And X.X% Workforce inflation we market see at were even labor we wage in earlier tight estimates. at not maybe most count U.S. into of for point. peaked lower various And the pre-pandemic. if in but still that, it year, And of in has those that would main of tight a - Stephanie. but ranges X% was slowdown supply. economists the either. remain bring people occurred, be have predict think

having level. U.S. the at the a what's market the shortfall in wage the So the inflation are and labor same tightness supply, and keeping of in that's we

think our as environment would navigate companies a flexibility. be that uncertainty. want still for softening labor we this operational So, market very the They of strategic business good

equipped So manage. - something we if well it we're think is it to is what that is happens, that

Unidentified Analyst

you. thank Great,

Jonas Prising

you, Thank Steph.

Operator

Thank you.

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

is line Your open.

Jeffrey Silber

if you talked the parts Thank in about necessary press I your you of that In in a of of of business you a little doing remarks, you're release, us taking actions slower your experiencing are little know but talked wondering can market prepared so something terms cost regions? demand. is Germany, in in Thanks. just type some much. taking? color other you're any the you I'm actions bit Maybe about this bit give

Jack McGinnis

I'd to that. be the question, Jeff. Jack. This for to happy talk Thanks is

a bit is of a reflects that what balancing. really So

continue lot certainly Experis to about we we're the a U.S., great there and that there continuing be U.S. growth. in and performance producers investing market capture opportunities to talked while in So

we side, On those some did flip was during the softer of that Europe so note Northern the as markets, a you bit in know, quarter.

balancing certainly, us automotive And so softened. as where talk you that are demand about We heard well. has

are to we've about that. the of balance We about actions as business And in talked taking people in our those of past, the cost. parts are two-thirds overall

So sure the rightsizing those deliver that that that into. means making workforce we're sectors against we

So we are doing that.

will to We'll monitor trends closely. very continue the We do that.

that being very, said Now markets. across European good there's, very still and some with of opportunities seeing we're our for lot us Manpower, that in a

a parts great where acknowledging the a we the workforce. we're So slowing area of taking seeing to, also sectors really appropriately perm in have And of actions as areas are be with for good make need on returns We're investing continues specializations, then that bit, to investment that been the we us. to balancing in sure well.

see continue of will that we still some but bit is softness, areas tricky a it getting this good as to environment opportunities. in So be balance a

preserve we in So that it's just getting bit trends. so are that a balance the that business seeing softer right can margin the of parts

Jeffrey Silber

company multiples? multiples I shift selective seeing come you valuation of M&A If public Okay, you done not we've of the to potential expectations terms have past. as this capital I really little in seen helpful. allocation bit that's top back the a company, but in M&A is in over sellers the the priority some correction from could Are know

Jack McGinnis

Jeff. say, I'd

existing we're prefer past, we really certainly been acquisition. you there way market. that. say with staffing It's professional in - there the But our It's like growth. there the that Experis XX environment, of organic Attain, our it's said seeing upgrade, addition today, I'd in opportunity, you tell, in terms that's changes little circumstances valuation the to months, cultural good been out we're prepared could fit business. - as as that probably the frame too strength. And a worked our Jeff, and as and are we've say whether As I'd to we remarks. we in we a a early where is be good if it's I anniversarying think We a great showed speak heard

you growth our think trends organic in at the look the holding you I if just U.S., well. business, and at look up very XX% very, if Experis

still So quite demand is It's strong. there. still out

little I valuation there's too whether changes in that So sector. going tell it's to to think a any early be significant

Jeffrey Silber

the appreciate Okay, so much. color. Thanks

Operator

you. Thank

next of question the line Manav Barclays. of is Our from Patnaik

open. is line Your

Ronan Kennedy

Hi thank is I could usually uncertainty of for that, you But good other up Ronan the the potentially temp actually Manav. Kennedy morning, then much ask, for be taking end It questions. is on bad. good for too May staffing.

get Just given the should we we to how now to are where and your current assessment about wanted as risks think backdrop the macro and outlook?

Jonas Prising

is changes but good remarks third the is across solid perform the results and for But fourth and has good in continued what of an And prepared QX, the quarter demand I QX. brands continued seen from us. referring really with we've any really demand we we're expect because really not illustrates environment our business we that covered to of demand our solid in observations in see macroeconomic growth to in fourth are well, our that The into quarter uncertainty and good all think backdrop certainly worsened. what really looking into quarter seeing point the outlook that the and you're

Ronan Kennedy

Okay, what expect I the just be cognizant into in is to like remarks a should in we - deterioration could thank are otherwise? for response XXXX in the you to there look and if we indicators And that. of what prepared kind may. see What the comments What in visibility follow-up, now. out leading the if a so question demand or

Jonas Prising

that in Europe, below in softening both we've the in around both XX% here whilst seen the a is of And you business, and our - at. some slightly - Europe, can of good U.S. a above them those of For regions slightly PMI, lot are hovering indicator look the both PMI mark, in the U.S.

change sign I of We that So point, could some can very segments. not this concurrent We indications the we quarter. this our any we're least at fourth you on and and a our But we're employers can but one pandemic ahead any this solid, the rapidly any or outlook into of that a labor not slowdown business, cycle material some the an going point, at. seeing look be in some saw our part things from changes. tell is some as skills overall, indicator tend no demand But point, there in rapid in signs remains market hesitation emphasize at at business, downturn as into seeing to quarter. market at fourth the is the of during of economic concerns and/or with in beyond know the

Ronan Kennedy

much. it. you Thank very Appreciate

Operator

you. Thank

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

Your open. line is

Mark Marcon

some confidence good lot that really are short-term short-term regards be question, question what actually Northern Southern question, about won't you do those Hi, early a with what macro Europe improvement, X% seeing constant Can were October? up a some level you X% in or European into have long-term would Wanted to about because markets And for further ask Europe, areas exit the I'm a flat Jack constant any that the Europe knows currency of a you that environment? rates morning. currency the up to Southern to wondering. of guidance be there investors in deterioration little enable and high September worried going as and might the of be continue to a like talk extent to bit any

Jack McGinnis

to happy that, be take I'd Mark. Sure,

think short- exited quarter on you more very a term. we how the Europe, the And part. with little the I with most give Southern much in line starting you're for to I'd - on overall color yes, that's So say the quarter,

about So starting X% growth the quarter with the talked for rate overall. we France,

with level of in as think really right same line we exited that I X%.

and trends. It's seeing regarding your first half of part seeing similar we're is were with -- say what early, October -- to we half running I'd line what in the other So September. as we in in October, question of in still much second the but of pretty the

France did year and stopped, just and then. which of good in quarter the with like third that really was the a the from progressively. basically point, since leveled seen pretty for quarter. So stabilize stable first and declining in third very looked in really We the line half the as X% increases the beginning reflects some see it which it was rate our see the at out consistent And saying for we've we mentioned, good, revenue low in guide fourth quarter trend environment. And a to nice June, same France,

So I'd at say guide. Italy, holding and using it's the we're been story. that's pretty that level, similar for what

third that, year which the just with in -- second our from we much say days in based a holidays. with growth I the the overall, always maybe overall month we think just know the we when was a for, tricky quarter for quarter period. of overall, we the that X% summer exited slightly good. what the line is be at guided pretty adjusted a higher look very the as quarter look than quarter -- some just And October, level August ago was into anniversary I'd to significant But down bit we on tad growth

It's So Italy, performing well. Italy. about we good feel

anniversarying Just growth. very significant some

say that bit of you quarter. into a the trend moved give those and would Europe overall the two big that in us So a color on fourth businesses Southern the for I'd needle the are

Mark Marcon

Great. of are improvement areas the the of key be that within That some And would might over of the a just pond. you term? U.K. U.K. would of improve. the lot then people stay on short expect this different actually the to what than on mentioned side What

Jack McGinnis

Yes.

would has book the Mark, overall. item this business the does the right, good headlines development So work been I U.K. sector very our is morning say is business in about one-third public speak. that of It's overall. amount in U.K. you're even of the certainly we the as a

into. strong. part know, I'd a sector in said, that And the resilient business of that's say seasonally, on some be to fourth very pretty part of about know U.K. that's the there And a big the equation And be overall. moment, a there's us Jonas providing at you that the into confidence a going quarter, the are us business. in in -- as As for good gives questions well. U.K. I XXXX continues based uptick as to demand

we ahead. good think pretty three quarter. that that's for next know, pretty forecast going our we you fourth that next will quarter I I'd the on how have for As do we good U.K. And visibility months, a books in good feel our basis, say order the and pretty get the

think perm that's quarter very in a They the on other I is item the in had strong the quarter well. U.K. been third perm. strong recruitment, as

So I basis, on an overall think we good feel pretty that. about

the from growth replacing quarter had lower-margin that's of And the talked business start with rate. the on and well. the backing arrangements anniversary and impact of that's to a about expect the adjusting away of bit to U.K. that them bit fourth a again, arrangements. impacted some book some that have growth bit, rate, the a we in higher-margin We has and And an as

Mark Marcon

longer-term question. lot -- initiatives. look terms some becoming the as how the very think the we of there, Experis it? of higher-margin concerns gross areas? That's a there's how of DDI from and Solutions from next Between profit, of should a in then of Talent great. But cycle, objectives? efficiency it the kind I'm gross how mix the could would a longer-term terms and up the in an percentage terms initiatives And in terms what factor we of of ever-increasing are DDI in about a longer-term Obviously, Manpower in your short-term relates when then implications coming profit margin to some And downturn. of perspective of wondering macro

John McGinnis

talk I'd that Mark. well. Yes. to Sure, be as happy to

at Solutions at the in Jonas of about our all-time XX% profit. has and as now XX%. So prepared is Experis remarks, talked gross an high at Talent Experis

quarters, highest for Experis. they expect -- I and And we that as as growth the if the Experis at And that, XX grow, Solutions business to to going continues couple continue you're today And in EBITA think it will margin that and very basis think our to expand means look to continue Talent faster, And continue if remains continue year-over-year even XX. of results overall forward, and improve I to what the had impact to market and EBITA overall. business we that that go last points I that as that's the you margin. opportunity seeing is strong. to have organically max. I think Certainly, grow The improvement, Experis.

will continue forward, to as and part continue edge to So should bigger pie and well. we of overall you as a -- that become the expect the up go and will as more that forward we'll go resilient that, make we XX% business margins, help our

key those the of So are I'd say aspects. some

remarks, technology, the see of we're indicate to You did we and starting benefits the of and talked in about some prepared DDI those.

business great substantially So that's the great done to office of all from for now, of the power accomplishment see our been cloud-based us a it starting on some and we're front is benefits. system, with new all implementations we've suite

the some combined on large we of seeing basis. mix that, are that greater overall of the with a be it also markets see on start So and productivity an to we'll and margin tailwind GP will we've implemented. shift, a recruiter bit in And overall efficiency

the a downturn. come of So downturn all should to what in of profile -- a out as equate be you we the expect next margin for recovery to those stronger

Mark Marcon

Great. you Thank much. so

Operator

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

is line open. Your

Jasper Bibb

up perm. perm you in expectations Tobey. curious, on quarter your fourth another you quarter Hi, overall good for could seeing perm guide? like are through Jasper And frame Looks morning. strong the October? for the holding for guess Bibb orders I This is maybe

Jonas Prising

of the strong now quarter. down all well overall, come expecting good coming pre-pandemic perm perm. in We're still, of are But still levels. And little anniversarying we quarters bit into prior the some this our we brands. fourth extremely seeing seeing demand a the above levels the the good are demand And we're still quarter. year demand fourth third are for to across very and But

are brands. perm continue Jack is we talked our Some that earlier about activities the across to making of on the investments that

slightly we expect of perm activities. to for very all quarter, still but growth lower good our So, see next performance

Jasper Bibb

Thanks. spend then on pulling to U.S., curious the I on been IT there? tech some in seeing in clients And how any was ask impact wanted around Experis managing I current headlines companies There's, are you're if environment. hiring.

Jonas Prising

strengths in convenience. with the work operation U.S. all kinds a the one of our companies. And Experis in great of is of presence strong We very here

market of IT shortage larger the aware, very picked the well the organizations that's skills is in means by the that organization delighted find quickly to you're talent and smaller talent. more As that up market leaves

IT that headlines very demand So talent for reading is we quickly still very actually gets right absorbed now, strong. into in the you're the what think because market,

Jasper Bibb

guys. for Thanks taking questions the

Operator

Thank you.

Bank Balsky America. Heather Our next question of is from of the line of

open. is line Your

Heather Balsky

and I little my slightly the a for think, your with you about quarter. Hi regards the talk you XQ good morning, brand growth, thank talked for in about you Manpower taking slower bit Can question. guide to

Europe, you're then curious the on hear Europe? still you're Just some industries just - love what seeing second softening kind you're seen a have of question where strength - there? And Southern seeing to in where and of you seeing where kind may what Thanks.

Jack McGinnis

Europe I guidance at Thanks, certainly you we've in business. Heather, so the the say don't by Europe, But what give brand. really if about would Yes, past, say question. for is talked I'd look we is as majority Manpower

Europe, So read-through we're for expecting. as good a of the what that's at pretty guide look you

basis, Southern talked we're on we've say little looking, a earlier, about overall fairly an Europe, I'd So bit as stable.

expanding we good still say, as large feel talked previously. about So is associates about France very anniversarying out, we're we've stable, growth. Italy but And assignment is some still looking Italy, I'd on

So Italy had margin very strong in OUP the quarter.

have very fourth well. to quarter as We strong expect Italy a

I'd the to side fourth in So continues on say look that stable fairly that quarter. to strength

I'd the you of in trend. we've on the revenue that think countries, can about - Netherlands, see Germany bench I as and be more and the flip side, continues say bit a to talked some there softness,

have to in fourth which in they're we overall decline exposures large on good prior as And we year-end to have businesses as the and say revenue period, well. think the with some show like as opportunity of slightly does U.K. we feel get on. for on in think Europe I'd there the had discussion I those level those the composition businesses segment earlier, not U.K. focused overall. I basis, based big part there's Northern an continue decline year-end a of anniversary we and would And quarter. is work year a of Germany some automotive the the to we So improved good book about But expect to a seasonal the France. on sectors we

quarter I show to think, opportunity into improvement the period. the trend third from U.K., year-end an So has slight

maybe into Nordics, And are the last Nordics businesses Nordics. and are too the much the and Norway two the we and large really - haven't its in our fourth X% So way good combined Those one that about talked third Sweden fourth a quarter, businesses quarter. say quarter. that growth overall the the into is typically same And making more the I'd overall. in have the of region strong

So expect well. mid-single-digit revenue as performance should them you from

flavor kind some that of European exposure. bit with manpower the a of a bigger of - businesses gives you of So

Heather Balsky

I quarters, appreciate curious I talked construction curious - I - are that. trending. you. how I guess Thank sort and and and was you I was those apologize. Yes, about in little about of autos a prior that? bit verticals

Sorry about that.

Jonas Prising

manufacturing the of not Heather, markets really material point. So the seeing solid. we're challenge still Construction in is at any remains across this some a improvement Europe. in automotive But demand

what change project no is to in quarter. into and there So we've quarter seen real we as fourth the this

markets. But the as fourth quarters that some the and notably broadly in saw also year, sorry, way really are to showing solid sectors e-commerce weakness is markets, segments prior demand the through our - as waning the be to into industries somewhat quarter. and had some speaking, appears logistic in we all of commercial that noticeable some automotive compared the where most weakness pandemic the in driven weakness So also same

Heather Balsky

Thank that. you, appreciate

Operator

you. Thank

question take one will of George more Tong Sachs. We Goldman from

open. is line Your

George Tong

in thanks, disruptions on France. weigh and continuing Hi the good Supply to sectors automotive, morning. construction logistics are chain

You mentioned What outlook? downside stable stable and upside your to could drive outlook. a factors

Jonas Prising

favor So there in should of things they working number be our could a occur.

and related would drop Russia, prices, obviously, Ukraine significant one, which, of hostilities very food energy first. also and of be a a cessation unlikely in first is which between to The the course, seems

that for and inflation really And increase And the rates about continued the central level a to many And they they that be worsening will enough. nominal landing hard down saying would conflict, upsides. greater. sure of more fast clear becomes happening, rates. prices difficulty see talking I'm manageable economists of and inflation much be reverse will to don't that here those and So the get a we're the are if the food risk energy the banks

note, So both all should resilient. this change terms markets opportunities, at it picture though, levels are their that what And rates. unemployment in of those of point, be the But and what worse. the very I below make the the are would would still them could labor pre-pandemic

our employers talent. results quarter. fourth hiring, reflected looking in our are for in So third They what on see keep well for the outlook is you outlook that as into both and quarter the our as

George Tong

helpful. Very

Germany the being by bench Manpower? to regulations is you You Can discuss quantify impact workforce. affecting negatively mentioned that impacted and the regulations the of the management

Jonas Prising

would just to We can't I the complex Germany regulations a really years, and say quantify it, been makes market very a but it of have navigate. there for number

that own addressing. have on we're our issues working We

very good heavy which drag a some have be time. to has now been on a and for for automotive, used us, We clearly and sector reliance a it's

that models and as the our It would need issues the it where makes that couple we past staff expect keep markets mix higher we're will and turn mentioned longer business. around. our - But all as the around. we have makes making you sickness, pulling issues, that just that we're to our market employees, we have business legislation margin have there rebalance to employees to that absenteeism pressure years, permanent as progress us bench to do but to of have addressing, we us well, changes own on have where well, over business and you due it more the takes temporary - even the But we business to it So Jack also levers occurred the is challenging. are more turn susceptible

George Tong

you. Very helpful. Thank

Operator

further any speakers, do Thank questions you. time, we At this not have on queue.

Jonas Prising

quarter third all right, everyone. Thanks, in questions, on call, everyone. thanks, we forward you speaking and thanks fourth call months. And to earnings with for our a look that and few All our your quarter earnings concludes

Operator

conference. participating for you Thank in today's

may disconnect. You now

ManpowerGroup (MAN) 20 Oct 222022 Q3 Earnings call transcript