Earnings call transcript Q4 2022

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Operator

Welcome to ManpowerGroup’s fourth quarter earnings results conference call.

At this time, all participants are in a listen-only mode until the Q&A session of today’s conference. This call will be recorded.

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

Now I’ll turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. begin. may you Sir,

Jonas Prising

fourth call the XXXX. quarter to for conference Welcome

the with Jack and included Our of within Officer, manpowergroup.com. is website our Relations me at our remarks have Chief Financial we McGinnis today, section convenience, for prepared Investor your

Q&A some going share we the quarter, of through the highlights quarter XXXX. first some quarter results before and session. I I’ll then through of our will then Jack concluding start thoughts start of by the will go fourth the guidance for

now will Safe language. Jack cover Harbor the

Jack McGinnis

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

Slide cause differ X in non-GAAP release and made earnings reconciliation regarding call factors measures. further actual statements forward-looking of our presentation identifies of and information our that results may this materially, to

Jonas Prising

Thanks Jack.

complements Forum before Davos, teams the three as last From forward-looking This leadership with with and our insights as our the our in road global world spent for clients Europe our time environment the own weeks, on data Switzerland. annual these time Economic the well in I near World teams, strategic Over annual across get current outlook. with real meeting and shows, leaders, the attending and we conversations our clients term current on research. environment business

demand this overall certain they workers softening on skills, flow contingent on and or and are economic and recruitment that is they said, focused increased in hiring chain talent. employers demand with and good talent supply sales result, order their outlook also in cycles markets see for permanent professional order resulting as labor caution are an through we employers talent, and to whether various recruiting headcount by uncertain The headwinds brands. in and in more adding as critical caution remain for extended still to economic behaviors. a of and exercising flow holding and highly sectors strong in We see business softer are due skilled That while opportunities markets

our down fourth in to year-over-year Turning financial the revenue quarter $X.X results, currency. constant was billion, in X%

was an year-over-year X% earnings which and the EBITA currency was was X.X% the for million. review, basis. share the Our costs U.S. basis quarter and in X.X%. cover reported year-over-year. financial in currency. constant Reported EBITA adjusted trend flat million, restructuring for constant diluted a was costs, reported EBITA $X.XX adjusted items Adjusting acquisition representing was we per share EBITA $XXX and margin Adjusted in on on other margin integration will Earnings special $X.XX per a $XXX increased

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

earnings to in and XX%. was and the reported $XXX was $XX.X adjusted, of a increase EBITA X% billion currency constant As increased year share for represented constant per million. Revenues currency $X.XX

million, $XXX currency constant a which was EBITA year-over-year. represented adjusted, As XX% increase

demand experienced and In in the quarter markets, and Europe. in softening we in the especially fourth some US sectors

conducted in extent and hiring year-over-year. to lesser intent to continue energy life XX,XXX Europe with ManpowerGroup intent in forward-looking a expected weaker XXXX more QX is sciences, especially in indicates emerging approximately XX quarterly quarter-over-quarter and U.S., Outlook in both momentum Survey in hiring employers which the softening countries, hiring of good in Employment than own that was for Our and IT, November, finance,

as of a workforces recalibration post While see as the company headlines we may result their a pandemic. be dominated layoffs, tech hiring more bullish by of this

margin brake others have pedal, industries, to and within business, services, higher environment, into tap above good Experis our In our management, in the more the these business, skills demand such Manpower even for on are companies IT more all market foot seeing are RPO, the while we our as opportunities. and this MSP areas begin delivering of brakes we within there wider skills hovering focused cautious spectrum remain of their and right

I will it through turn you to Jack to now take the over results.

Jack McGinnis

Thanks Jonas.

quarterly Slide range. the the the to Gross our back in at Going margin range. fourth X, end results currency in midpoint the our revenues in guidance came profit guidance of low came at on quarter of constant

compared million, the $XXX year currency prior As in flat adjusted, period. to EBITA was constant

X.X% came below in just was guidance year-over-year. adjusted, As was EBITA margin flat and our range and

currency to reporting continued result, note currencies a translation impact businesses within foreign a U.S. largely based strengthening It not does year-over-year our that our into cash the translation accounting the item dollar, movements of significant businesses results. to and as activity on flow our on currency have to impact operate local is an and foreign important Due is dollars. in

and the for constant adjusting foreign After currency swing currency impact growth reported related dollar decreased a Foreign U.S. translation our the drove currency trend X%. between XX% of exchange revenue rates, rate. constant the negative revenue

revenue revenue fourth particularly the across impact a to Europe our compared quarter deteriorating fewer flat dispositions America. billing percent of guidance was trend and revenue quarter, North reflected a and environment about midpoint. Due during at lower days, in decreasing the net to The plus-X% of half the the organic days-adjusted

other costs. related a pension per X, sale Turning and to and Hungary which of on the of loss earnings business consisting the consisting the final our acquisition, from of reported Experis included $X.XX share bridge impairment restructuring costs, $X.XX, charges special costs to items non-cash settlement was on and U.S. Slide EPS integration goodwill

other Excluding was the items, special $X.XX. costs adjusted EPS and restructuring

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

and the by brand our review the brand Experis year-over-year let’s to on brand basis, reported continue an permanent Next, see solid across hiring RPO of in X%. revenue remained revenue growth trends revenue organic line. was currency we Year-over-year constant of key Within growth Talent during revenue Solutions the X%, as Solutions, decline Talent the flat, quarter. Manpower reported business markets our

on as Management extremely business while decline volumes compared year. revenue MSP saw Our outplacement low double-digit lower the the quarter margin a higher percentage experienced to modest in prior quarter the activity, revenue reduced the we increase in in Right levels certain a

Staffing MSP a XX digit margin by basis Management hiring margin gross XX contributed Manpower year-over-year. Project basis and increases contributed our gross contributed represented career Talent profit detail, at increase businesses. margin basis gross transition driven solutions-related points. and margin as activity increase. RPO, point Looking at single XX our a basis Talent of in in point XX.X%. and improvement recruitment, items our GP Solutions a to including services basis other point came resulted Permanent contributed Right high in points margin a within positive profit Experis XX XX within in other Solutions improvement,

by and the profit, our comprised brand line, profit gross XX% gross Talent professional our XX%, during Manpower onto Experis business the of quarter comprised Moving business Solutions comprised XX%.

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

year-over-year. strong brand constant Our year-over-year. currency in Manpower both growth reflects improvement by increased profit in recruitment. in growth X% digit organic constant profit significant improved in higher Experis was XX% This the RPO currency in Organic reported in during solid and an our as MSP quarter. and we gross experienced margin solutions Solutions X% as gross driven in Talent GP This mix double margin GP increased business brand constant the gross of percentage in of Management. well year-over-year. growth Right profit permanent as increase currency Organic growth

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

and is organic areas invest restructuring was Excluding the basis, special in reflects reductions the and The X% increases million. of of in million, of percentage currency down expenses in revenue of SG&A while a year-over-year basis. a currency in to million and XX.X% on offset an consisted represented skills opportunities, operational specialty acquisitions $XX $X by Solutions, of growth slowing costs Adjusted notably on changes other of of in constant Experis, incremental demand Manpower. third net we as quarter. dispositions currency growth Talent items, from $XX related most of balance quarter higher to the in continue costs in same This cost constant underlying X% fourth which costs SG&A businesses the

loss I’ll of impairment goodwill on sale review. costs, Europe part million. totaled restructuring small a modest $X and costs segment discuss Integration Northern as

acquisition integration well comprised $XX the basis. includes was the small in Revenue on the flat U.S. completion Reported period and the on of billion, The some integration, segment was restructuring year Americas as of compared consolidated $X.X as million $X final revenue. acquisition million to a constant currency XX% prior OUP of costs quarter costs.

and was margin adjusted, As X.X%. $XX million OUP OUP was

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

for to exclude decrease and the U.S. million adjusted restructuring of As business acquisition integration our $XX in OUP quarter, XX%. costs, a was representing

OUP As was margin adjusted, X.X%.

to quarter. XX% a Revenue comprised fourth days-adjusted in in the above basis during on the range Manpower XX X% the quarter, the quarter profit the the gross U.S. brand Manufacturing in during decreased Manpower the rate October representing of PMI for growth from the decreased decline in X% third U.S., in quarter. during the steadily the the Within from a December. brand XX U.S.

Manpower experienced the course quarter. back business Our of during demand the pull U.S. in a progressive

quarter. anniversaried a in revenues. the growth Experis the revenue The the U.S. activities growth we integration for the skills U.S. brand basis the our very X% U.S. Experis represented acquired days-adjusted XX% in XX% during business successfully The Experis quarter. completed approximately of profit on U.S., strong were Within as Experis in gross in IT comprised period. of year-ago comprised

a of of fourth U.S. we and experienced was the revenue by decrease X% This quarter the in U.S. the and in permanent the prior programs year. anniversaried Solutions in in Talent quarter. a RPO softened driven contributed the as in decline gross revenues XX% growth hiring in dramatic profit

in are quarter programs levels. were current RPO environment, pre-pandemic revenues slowing RPO fourth well above Although the

the Right revenue revenue Experis to which revenue U.S. The saw within RPO. increases. the expect compared as a and fourth softening modest across year-over-year the significant as quarter a we quarter U.S. drove outplacement decline margin we slightly first rate reflects the reduced activity in further decline business represents XXXX, In MSP trend some Management business current lower higher and environment of of activity, our Manpower, while some

Southern comprised Europe Southern Revenue $XXX was OUP came representing the million consolidated of a business XX% for $X.X currency. in decrease constant billion, in X% in Europe in Europe the Southern Reported quarter. organic revenue revenue in at the quarter.

As adjusted, X.X%. was margin OUP

in X% increased XX% the organic France of days-adjusted in segment comprised the and Europe revenue constant Southern currency. quarter

OUP for adjusted, $XX increase business As was quarter, X%. in representing the organic an of million our France

As adjusted, OUP margin was X.X%.

based and business to the further growth from impacts France chain Russia-Ukraine softening. in inflationary XXXX pressures. operate continues a Activity broader in low in indicates on The supply January ongoing environment war very

revenue to be France We trends. are estimating the first slight growth January based year-over-year the in on for currency activity growth constant flat quarter rate to

equaled X% in Revenue on $XXX equaled OUP constant a reflecting days-adjusted X.X%. in was $XX of million increase quarter, an OUP margin Italy the million basis. and currency

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

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

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

a decline decreased days-adjusted slightly on U.K. During a quarter This revenues third higher of trend. from X% reflects currency constant rate the quarter, the basis.

year-over-year We to the first revenue expect a fourth similar trend compared quarter in quarter. the

improvement decreased currency quarter days-adjusted in third significant fourth Germany, the X% quarter, In trend. in revenues the a constant from

revenue expecting We continue progressed Germany slightly and quarter fourth improvements. improve year-over-year business to Overall, to actions we mix and on our various quarter compared trend trend. improved take a in have are operational focused the business first initiatives to the

Northern in decline in a was the prolonged The slight in on of The constant Netherlands currency revenue Netherlands, this basis. of rates fourth same which the third quarter decrease trend increased businesses in the charge from X% Having days-adjusted the Europe. the year our recently one expect in have of is revenues in taken the updated in our have actions assessment improvement interest Based non-cash economic further improvement smaller quarter we XXXX. concluded on conditions, at impairment impairment said and we goodwill and a profitability million. that, which end we improved $XX worsening Netherlands various

total was of margin revenue. constant million The currency and comprises segment X%. OUP as adjusted grew X% In company Pacific $XX Middle the East XX% Asia was OUP $XXX revenue in to quarter, million.

is grew market constant business basis. quarter. XX% represented the the APME revenues remain continued in XX% our segment with the the largest growth of Our strong in XX% Japan a Japan Revenue days-adjusted which in very or and pleased Japan, on in of expect consistent in we We revenue quarter. first segment performance currency,

and I’ll balance now cash sheet. turn to flow

XXXX, XX in day In $XXX million year. end, days the to increased compared million to year outstanding full In $XXX year a prior represented flow sales to free $XXX half flow compared year. At free million equaled fourth the prior $XXX quarter, cash million in the days. cash about

the $XX During fourth represented capital quarter, million. expenditures

XXX,XXX repurchased for of stock shares we quarter $XX million. fourth the During

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

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

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

Our strong during debt mid-XXXX, facilities XXXX unchanged very and we a sheet. with the balance executed our quarter. debt profile duration successfully enter lengthening the credit in note euro After with remained

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

January in the continue the on anticipates Based activity date, environment through trends first quarter challenging cautious quarter. the will that is and forecast our fourth to and

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

of rate the disclosed slide. our bottom estimates the translation currency have foreign guidance at We

fourth but year-over-year currency increase guidance that constant for impact there a range no this X% decrease. dispositions, is midpoint. days the X% currency flat in bringing on trend This increase same quarter constant from to between days-adjusted decrease the decrease the revenue a of at X% is a basis. an is the represents and X.X% of decrease midpoint Our revenue represents billing at an There acquisitions meaningful and

business margin be that quarter This prior during XXXX the full estimate We the mix for the country the expect tax basis EBITA for first latest XX.X% of earnings. XX and quarter be at to points our decrease the French quarter be down We to to to tax the in estimate the midpoint compared last effective the our I of reflects enacted year and first of year. that XX%. mentioned rate

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

I it will Jonas. now back to turn

Jonas Prising

Thank you Jack.

As would our opportunities we XXXX wrap of and in roadmap, to provide up strategy reporting investments continued our long DDI together innovation, and our to update like capture and our I diversification, capabilities and which on begin create are an with strengthening term technology value. digitization - plans XXXX, sustainable margin higher acceleration

happen. talent our market to excellent making and we’re have shifting higher they clients our strategy diversification, our within margin as mix quickly the all On across of progress businesses to and shifts adapt ensuring brands, to workforce

very starting and our rapid and U.S. successful our into Experis with in a business, position XXXX also the strong are very and we our services of ettain the integration pleased are acquisition We professional IT of resourcing with market. completion

strength see brand in growing also on the to positioning We global us IT resourcing Experis capitalize market. globally, professional the

in the Our as by been status recent Talent Solutions MSP industry XXXX offerings Everest Experis RPO in in discussed performer leadership and also recognized both has Group, and and quarters. star

speak. technology in Last pleased had we make report continue digitization, roadmap. on XX I all PowerSuite flight to cloud-enabled front our communicated to in of as we will more and excellent in additional this major on we XXXX, that markets. implementations XXXX, six XX end leading progress platform. substantially industry-leading our in we I completed By the PowerSuite we office that On markets have year, businesses of markets am in have implemented are

in have markets, During XXXX our more position further our various strengthened we in Associate and other being leadership key XXXX. app mobile app in France countries with advanced added

top which three to clients candidate business - insights in is strengthening BXC of candidate for place to our to a talent Italy, critical France, data is high. our shortages and enterprise remain a experience, and time business improving strategy U.S. – our lake when global our Our further markets, at all

processes. projects cloud-enabled back efficiencies Our also our driving office infrastructure are and improving

we and On the learning technology recruitment to AI-based here too and productivity tools and making insight-driven stack engine our are associates our progress recruiter of the accelerating growth, on most our PowerSuite talent our candidates, data for great adoption the innovation, clients. deployment enhance to to and leveraging and machine activities are that be for more create best quickly find on focus match value and

talent our focused associates. our being brands internal to differentiate value our of employees at offerings and increasingly services, on we expanding across engine higher our scale As we creators continue by for talent are and

academy experts industry skills and and our talent Our in talent be to training and recruiting including is IT. verticals, key own new

Experis markets, our MyPath of in coaching role-ready best Promoter we now talent our need, transformation for intensive Net find Scores, higher XX the rates, consultants, associates or in increasing recruiter skills, workspace so stronger almost which across services our Manpower Experis markets, cloud tech boosted the temporary across margin productivity, specializations. Academy, achieving can clients and business and specialist especially higher and GP Our employability XXX,XXX XX has infrastructure, active driving reassignment digital and create is providing training and

at a In engage addition local as well. many training in to this, we country more initiatives level

our by science-based validated as be whom reduction in work ESG people We survey, governance. important We in Disclosure or rating A-minus to an to and with recognized are Working Change associates target for year’s planet, increasingly is they excellent and targets. impact prosperity, clients, this ESG plans, XXXX principles also choose our associated driven our emission earned and of the with. making our progress World Project across employees with to Carbon initiative

the fourth Jones for score, year, Index Responsible the on Journal’s the the Wall Sustainalytics for Street recognized included by Companies Drucker the with and Dow environment, our industry-leading half of which top within Institute, Managed of one reinforces our year, highly a maintained by ranked in America’s the be and all Most in Sustainability as Newsweek as XXth areas were Companies XXX leading our Top organization proud. and teams and should talented governance, satisfaction, for strong responsibility, innovation Best scoring social, corporate the of social customer reputation We performance

lower broader in see translated support skills will services to we continue still demand industry good seen economic months. offerings. This expect our markets, over however, margin the the have closing, for into higher that which our we for environment In we demand past continue; soften has verticals and some growth in specific

are many very the done We of see will confident adjust and as forward. going our opportunity, to market in times manage past, market resources ability dichotomy in as the evolve have we we this we our

term, increase, landscape, this be will tech our remain that the will of changing, and transformation Longer clients’ will fast and convinced workforce value more the and post-pandemic even blend people of we right needs grow, building data insights in critical.

our that value to growth more leverage confident strategies opportunities and to creation. and and us are accelerate DDI these excellent positions We progress profitable

call now the Q&A. open to to Operator? I’d like

Operator

you Thank much. so

begin the session. Q&A now [Operator will We instructions]

Our first question Andrew for Morgan. today is of JP Steinerman from

open. is line Your

Andrew Steinerman

how a that pay spreads what’s factor, likely figure at Jack, terms could that. bill and staff to basis was you up fourth quarter? same mix trend the the are so bit talk we’re first XX is Hi there environment just driving little softening how quarter doing, Despite of in a everybody. and gross I back about Is wanted points, margins, X. into to hoping Slide look demand still

Jack McGinnis

I’d Thank talk be that. to Yes, you to Andrew. happy

margin We call, volumes year-over-year that hold the can staffing the so basis about pricing volumes the all the that item contribution the of the Despite on large big up XXX is pressure staffing well. and to say you to very across I’d see plus we continues our having markets. talked on see biggest margin, points.

portfolio. making staffing there we about the is been a side. to overall the talking I’d mix is that of that say component the have well as on adjustments been We’ve

another were of our divesting we’ve move countries this talk talk some that businesses made You’ve in us hurdle one of about dispositions at in seen not about you release saw us and of of of of there some terms the rates, the Europe. in

markets is but mix terms part well. talent. staffing it, been it about to of in pricing the perform So of what in continue say of overall is continued very we’ve margins bigger the environment strong I’d for just part and basis, the reflected labor is that On demand the an talking

of The record of is continue terms as Experis of mix Talent mix, other having as well. of an the overall at the it percentage in the and and part and well, that’s Solutions brand be business, impact to levels

basis, fairly steady terms say on an fourth sequentially I’d quarter from the of from--you overall third spreads holding to in the know, quarter.

bill perm, that again levels, Then to having very big contributing still have very seeing year-over-year, year-over-year prepared in and we growth, perm change can although of starting forth, improvement. a so so off at not we growth with solid a remarks about We’re pay record spreads perm in in line overall the slow to impact high really and is that pricing. positive with margin digit noted single terms that GP see talked as in well you

item, statement other called in we’ve out, there, you from can non-resourcing the the and can activity work, you side. good of services. side, see points services XX other very solutions basis see The Experis, The

Management the did year, year-over-year from contributed to say that on I’d we prior a lows improvement, activity and record as had Right margin rebound well. to and Andrew, margin positive outplacement impact MSP Lastly, start in

Andrew Steinerman

That Jack. much. sense, makes Thank you so

Operator

Thank you.

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

open. is line Your

Jeff Silber

much. so you Thank

not, in prepared demand. are on could off get to holding before areas color what that that? if cost You that looking terms doing a your of are about in was reductions cost for little of reduction wondering continue, and I in these was, you where talked on expected bit if more remarks slower we

Jack McGinnis

talk Yes I’d to happy be Jeff, to that.

we it, remarks, bit talked about balance. is prepared in of I’d still way a say the it guess I the as a

when year-over-year being our so certain largely areas continue of are sequentially, back in we where investing headcount where fourth up there softness, we still quarter, so are in so quarter. to the good We growth invest. are still we actually But earlier and you for are markets look is and we’re at--we pulling holding down. Experis year-over-year; in about seeing a well, at areas is lot the talked end I fairly and the look when perm when growth headcount the and third from year, in That’s but the of SG&A down look we momentum at FTEs up the due opportunities, to

softness, If be would seeing. and North you look down we’ve can across part before, slightly. adjustments, in would on talked in where both adjustments U.S. in those Europe, markets to Germany about those parts the some this in America made we’ve some that so as reacting some where seen well, you making that in adjustments the expect Europe, based of would you as you construction see headcount of we’re of we’re in the sectors we’ve Across see, well, trends The that and Canada, Norway business. like

that. quarter we’ll to and the Manpower I’d in in But we markets, pressure still do on that We’ll across about so the making we as adjustments, more key think to forward. Manpower pockets, that based in if dollars uneven continue choppy in seeing the expect a continues GP although and the the indicates grew and those all to on about that you pockets, that talked specialty. overall and about slowing, bit and we’re we’re going the there should certainly opportunity still, we say go forward, basis, on But investment has be to you point do very overall, good adjustments are we’ve those make seeing that environment we’re trends there where an in side, even to going brands, your continue been it’s

the The restructuring right-sizing basis, in restructuring. in would America, overall U.S., were the reflect quarter Latin I did some and Mexico. some did we an announce on small very in slight dollars small very that that

As In in as Europe, continue we’ve done Germany and expect, capture well, the and small made you monitor levels. earlier, as so quarter, adjustments those Northern in took right-sizing small of some in going small we France some there as terms would activity some and slight forward Norway, the mentioned trends we’ll adjustments, would restructuring we that in I to well. overall

Jeff Silber

Jack. really I was helpful, it. that right, appreciate All

Moving on should the onto Is know update us about everybody’s favorite you’re number XX%, of to French something forward? impact business that I that use--I going good topic, a not tax. the know XXXX, use, you which an that that but taxes, gave is is talking we

Jack McGinnis

great French point. business The that will pass budget France in, have of year us--we of Yes, so say reduction for That’s the XXXX, the as locked XX% did full part Government tax does did that XXXX. for the the take updated We’ll if so. which We’ve takes which of which that is well, the benefit, about X.X% a maybe or being also as the up that mix it XX%. tad equation conservative. part country of earnings, is ends to see

take that confirmation for decrease, in of it’s when budget be X.X% the about will approved go business ’XX. the to we would end us XXXX when remove final and of That final be the But to the another if passed, to French XXXX, ’XX. gets XX%, of further currently projecting tax, would down are they at XX.X% part that which

that. would out update passed the in the budget greater certainty quarter comes intended. watch in certainly the and as we’ll that that fall, be to got that, around We’ll have if when preliminary continue very We’ll but fourth good that

Jeff Silber

so Okay, Thanks much. great.

Operator

Thank you.

Our Manav from of Patnaik Barclays. next question is

open. line Your is

Ronan Kennedy

Kennedy actually on Ronan Manav. my good Thank This morning. you questions. for is taking Hi, for

mistaken, I’m to seeing no signs little Last deterioration. commentary was demand, not quarter, indicative of solid if of the

but economic demand solid acknowledged, of commentary in was that economic indicative were now and the risks for increasing uncertainty broader it’s While softening, services uncertain outlook. some, lower the demand, not markets, all

visibility, with what the year out first timing play standpoint of happened to a should expect and and in you Can versus consideration that? the happen? your even that quarter did from remainder of how How to in the and assess we expectations, quarter regards your

Jonas Prising

morning. prior pass. and to call the talked degree good some uncertainties The in came to risks about Ronan, Sure we

to the see pronounced time really have brand, as For Ukraine but the we Manpower brand, QX first the broadly held of U.S. soften as see demand more clearly across war, U.S. the on, three to softening much quarters and shouldn’t started but year, the surprise. the started when that and Europe for after was a we especially the the come

particular. know, As brand, are at is in below year good PMI the really see PMIs Manpower brand across a that demand softening Manpower Both the the this we XX indicator. all for and and could U.S. occurring you in during in time, Europe the

of At softening, big seeing quarter. is see due brand this true in up clearly sectors. of The but leading across GP just the we holding all across in of point, terms various industrial growth in differentiation more with having Manpower still as the the our and for is and brands, said impact Jack slowdown same spoken the way about, the between it an visible really having Talent it’s fourth of has we’re that, that to activity Experis, well, Solutions

Jack McGinnis

to results in quarter activity Ronan, I point. that, think XX, we’d we of I on add third would just our October couple weeks just October that had when a released at

December, I as with and there U.S., temporary would data fairly a industry happened think December, industry well - you that in December. significant business and year-over-year market France workers and through to from what Certainly seen in terms trend the have in negative particularly down at ended quarter. month in was December see well, up in that what November our November went the they of step the data November in compared and as the data, actually held of October of you’ll if you look labor the on change happening some

in say your actually When on we environment that. October December moved that XX, point, from November stable But to went we clearly the out anticipated what did we and happened away environment, a and changed.

Ronan Kennedy

helpful, That’s you. thank very

but to in just and line obviously to there. other puts were of the question, the the to quarter a potential are takes ultimately then the downside first it margins the is Andrew’s well, function touched overall, what or for response earnings? But top as guidance Then declines and on margins upside and for

Jack McGinnis

talk happy that. Yes, to to

up for XX you year-over-year. holding that’s first at points up at still margin, very GP - basis see think XX.X% well, so I quarter midpoint the we’re still can say, the for I’d

good staffing margin, still had pricing we margins, I still that on on anticipating think environment, seeing changing. solid the and we earlier based don’t GP see and question

growth year-over-year record is activity basis various contributing terms markets, and we perm margin. in coming see GP off so still slowing there that in good lows still to is a on the Although sequentially, trends of perm

it’s straightforward. bottom line, actually on think pretty I the

down in are the ended trends. I quarter, operational the flat to although in mentioned first have minus-X.X%. a minus-X, more first in stepped we days-adjusted basis. in adjust with we the at first the mentioned, in it’s revenue that quarter, seeing you down currency quarter, takes We days a as when about decrease We at leverage so days, on for constant it so up organic the I midpoint

It’s are really are the lower down. which falling volumes into translating dollars, GP that lower

contributing to quarter, of the minus-XX the by points EBITA making are margin but driven the really first that adjustments, volumes. the is We in year-over-year basis

Ronan Kennedy

it. Thank you, appreciate

Operator

you. Thank

Our of next question is from Baird. Marcon Mark

Your line is open.

Mark Marcon

and morning Good that is RPO, a Jack, GP? thanks as of percentage taking for where my questions.

Jack McGinnis

of the so little go coming perm to a now XX% bit happen. slightly quarter, and levels, above--just that in lower more in the in happening and as that of the includes the below XX%, XX.X%. forward, that an it’s Mark, talked fourth now, the GP to as would down On quarter, activity as we total perm and coming you’ll down is We’ve above at about so in we brands we past, that percentage that a basis second Experis. Manpower staffing our it from to expected. like also settle levels we includes was expect range, well see just even talk we about overall, At in that’s continue the in somewhere overall expected perm historical as record but to that and perm maybe as RPO, that had that point,

Mark Marcon

bit continuing settling further would a mentioned to--grew on worldwide and Yes, a if and that you the basis is although expect you Where are in little to on U.S. caution? it bit talked about RPO the growth in as as a what you during RPO if side, economy the fourth more a little it the more to range go quarter, there’s you the seeing percentage, softens declined it

Jack McGinnis

the did happy our growth took so quarter. some those digits very--Poland are us overall as terms and so revenues, all the well, double which growth to up U.K. well. as quarter. well supporting global larger for a be U.S. growth be RPO had growth of RPO, despite very France of that is to drivers. in I’d fourth the the strong very, our in great strong very main had in about that We markets in us being - very had growth RPO in down would Overall was fourth Sure, had and operation Japan RPO talk The that. RPO saw they RPO strong

went would year-over-year levels I of that away outlook, we the in But some for rates as some activity from of hard would think number perm’s and come than if very have markets. very, year. it’s to expect volumes we terms environment, anyone to staffing point holding some say despite perm in down in holding get move the forward, record to of high well rates the we growth say. would anniversaries better further continue, again In we fairly the would continue of imagined as still prior a as in seeing we your and the of back I’d it’s been ever have this of up pressure up we’re we quarters,

edge to it’s down but growth that that soon. monitor by holding it Will our encouraged negative say so in if to key down? up markets. continue very Yes, anytime fact hard have come far of we’re just the into it’s but will trends, territory to many We’ll those rate

Mark Marcon

great. That’s

better to with seem just regards France, up at what Can regards markets Jonas, - bit you talk a you key about areas you’re Europe, you hearing generally you’re clients speaking Davos. U.K., from in to in that the holding be were to just hearing what Italy, pond and of of over for on things, course are speaking? would caution year, we the How and a the not side months thinking about little bit broadly areas next of what you just this Europe, it but the three are there? here than to relates the as what Germany, with were little imagine

Jonas Prising

dichotomy The discussions of our down hire. somewhat, of same pulling reductions, and intent may what their of is in also despite larger corporations big read the to that to clearly you sales to is speaks into cycles so longer, be demand. going the terms clients They are a clients up, continuing But conclusions other are they terms skills Sure the most times skill about are the longer exactly heading that are tech set, going not companies to Mark. they the hire, both feel take of specific workforce softening in bit continuing hire recruitment and hire, year. they needing and papers hiring in to this they’re with having very they’re but

environment. the that sets, some we skill feel logistics, Construction to notably the side, been are one has rate softer becoming softer. of the in interest On due

You have holding brakes, we’re others, are demand brakes. we globally, financial so where the in in customers time between this are tech on they’re well still companies, tapping services as hitting the not they’re really Europe where is tapping and that as balancing the brakes,

saying the pandemic they to clients Some that big need have issues thinking what a fulfill brake see their order during and they they’re XXXX. that they would many deteriorate over supply they to and further, through about the if working chain environment have book the foot do

tell leads it reflected and is into same all encouraging that a translate quite way is has unusual, but in It’s of as what’s our you softening can still in because economy not strong markets, know, at the this time uneven, but quite labor the to you yet all very industry course labor places still going. it’s of where predict don’t broader it it’s environment demand reduction overall for in market. We in some a know with is outlooks constructive particular see but skills will. Manpower it industrial as We difficult what but note to the we the down, come degree to

are pandemic fresh. bring with have to talent speaking are very, and with the because spoke of the on we very looking still memory companies they Most

the back pre-announced to wanted think softening You demand. to, recession has past be may hold this experienced, the and past others may some means that we onto absorbed most the business more that see activity, otherwise. still and productivity good of feeling over still technical reasonably well, good see the of because reduced really or perm we workers, parts have the alluded recessions, very as they in most be slowdown of ever it and in Jack the Employers

but It’s it goes, good had it the in we’re hard tell, to I mix, higher in seeing, that as as evolves skill developing sets and feel was Davos diversified we can that I’d we about the based this ready We’ll optimistic in we manage resilience resilience more good to whichever feel business predict, higher Manpower way where than you more tone say some also skill on and but our trends expected. it we’re sets. really manage have

Mark Marcon

hear, to That’s thank good you.

Operator

Thank you.

Our Research. Kartik from next Mehta is of question Northcoast

open. Your line is

Kartik Mehta

the pricing at just if what about Thank up? of brand is bit of competition you. all Is I’m Jack, you brands? across about little talked competition pressures, pricing competition Manpower brands a wondering, I’m Were and the because additional kind other holding and up. you is think the maybe overall currently. wondering comments that holding seeing holding look some you of you are up? brand, the some

Jack McGinnis

Yes, Kartik. thanks

point there quarter, had You that have good very I and margin, case. to that staffing the I good why improvement very be would they’re starting should seeing not know, volumes, so actually clarified question, are in a could on margin, a if see actually understand staffing Manpower on on fourth is pressure it’s most margin they some actually and the the pressure

about up and with in up that say big on up margin, very are Experis No, being volumes contributor think holding quite the I’d a and side, at trends look margins XX is on Manpower side, we’ve was Manpower that. Despite down, points line pricing holding well for when very talked that to we well, holding quarters. basis well, the in well recent as the it’s I staffing

slowing that translating pressure is environment, despite we’re Manpower pressure on the think is on into some seeing side. good not some of the the the news I of in margins

Kartik Mehta

kind and and your I’m all Davos and digits a you would Jonas, of like and maybe you’re Then Jack, but what mid-single and outlook if little down seems and to year that. the wondering statistics, conversations trip Jack - what with had your would for you’ve that’s it’s clients, correct, the you anticipate it’s It inflation? the for your just probably bit, anticipate Europe, for business wage looking come at and

Jonas Prising

reminder, business our as higher a inflation positive because is into it and clearly through bill know, been perspective, a as at looking our You translates we’ve from wage many, inflation, wage rates. just actually effect

Our to continue by that good, not model the or we of inflation expect direction perspective, the economic not last benefits hard business to an six decline although inflation to and down, to is pressures from gauge. are your negatively months, the from Obviously pace impacted actually inflationary seen it come you’ve is high wage over it. wage inflation, as question,

down coming want that in wage manage of are to they they time one-time demands, bonuses, incentives, are all obviously responding But kinds average you business. down, competitive employers is say they for these at and to is large, wage come contained, speak on their wages because it trying going to remain are to through expectation one-time I speak, their and still - not are increases their this wage on quite in assumption is to to we their hiring if effects would which so be market average the inflation why over

wage a to decline that but our to seen based while. to for it take the inflation to certainly wage But still--it’s gradual nine continue We inflation and would expectations slow on last over are come going the months, we’ve overall, we moderate. expect there’s down, think still

Kartik Mehta

really you much. very it. appreciate Thank I

Operator

Thank you.

Sommer question of Securities. next is from Truist Our Tobey

Your line is open.

Jasper Bibb

is on the first looks gross This margin strong Jasper headwinds talked good The morning. of really about. Hey, some Bibb for quarter Tobey. guidance despite we’ve for the

the and company. think any the that of businesses year? we historically, for placement of your have some pattern should permanent weakest over the course the margins of on impact easily quarter declining of margins about margin the I seasonal balance the the think might year that’s been How over

Jack McGinnis

we Thanks Jasper. Yes, you’re I some think pressure. typically right - traditionally, see do

stepped take that, were last though, points, basis it’s to QX slowing. have up terms rate counter points continuing pricing, into is I contribute, in bit. up margin, XXX We well, we feel pretty a that’s and catch good right? progressively moment, quarter. to increase I margin starting on is the to just year-over-year, up comps quarters, No, business based as we XX the of mentioned basis we think over mix terms sequentially first of--as the and and The that number of in the I in would staffing of of the earlier, pretty perm say at the

the we As we of future about talk to I the year, margins. think say generally, GP half out, don’t we higher that look it second see quarters, typically fair bit but is typically a

keep year an earlier. the that we XXXX, that then market, a as to overall will this If to think mentioned in perm impact perm definitely we’ll close see and the contribution on have we’ll item I that eye perm and is slows of come down. more dramatically, start

stabilize, as is news to traditional forward. questions, good already continues GP, that the percentage should to a to we margin go on get as that GP as contribution talked think previous I of less and we’re the back have more start about seeing perm, volatility of levels in as we

I’d what say, Jasper. That’s

Jasper Bibb

revenue managers labor makes Then Europe contracting half for still of I most of the how reticent more, PMI environment this seen in over temp differences in in roughly first been that Europe two month years? has any the to shortages we’ve past given go, in are people they speak year-over-year flat second ’XX, month are the and you using Could guess, sense. let your guidance for to the but organic quarter. Thanks, is

Jonas Prising

The either in Employers the create more that in workforce is of seen. in of a side some may weakness to activity they and, use flexible Talent the or degree we terms the in Manpower and definitely economic talent volatility terms workforce, Experis to mean we lesser respond also of these Solutions through to in activity. decreases able demand say be and solutions outlook have in their they flexibility cycle the have us their and provide side quickly helping letting economic prefer which to I’d increases that outlook some careful the that offset a and to conditions uncertainty go. about are

see. I think what that’s we

provide be that by They looking talent. and them they and continue influenced increasingly talent, to are to us finding have help definitely the difficulties to in

pleased isn’t the As they this Experis available of perspective from are talent prepared re-skilling up-skilling you’ve in a with our increasing that heard from well opportunity see as market. We also very as perspective. remarks, from both Manpower capabilities a an tremendous as our and

Manpower we trends tougher great missing advantage America demographic Experis with both market, talent create in Europe lower and and are the that scale. in tap in into North are to time clearly over at ability to the competitive a skills be the to and think getting for is going As rates, birth pools

Jack McGinnis

difference item, but the in minus-X% technical bigger And Days than currency guidance point QX flat Jasper, a compared more an X.X% that the are in days, when of just issue for you to I so are days, relatively days. to in think due quarter more down to so constant is minus-X% usual that we the on first overall your it a it’s so takes are down ’XX, adjust basis. X.X% about to there sequentially, about QX,

mentioned Europe, you in keep we seeing slight as down in remarks, markets, the that’s step that. a those about some days, only we we in prepared mind of are for in so are just the In to thing you France in Italy, as think seeing--when adjust and

Jasper Bibb

questions, the taking for Thanks there. guys. detail the Appreciate

Operator

Thank you.

Our next George Tong of from question Sachs. is Goldman

Your line is open.

George Tong

Good thanks. Hi, morning.

placement quarter? to trends perm for contingent how particularly contingent compare demand caution You changing relative you perm Can mentioned in recruitment. their more customers are trends, exiting the exercising both and quickly are

Jonas Prising

down especially that so up for You labor contingent countries. is you staffing, volatility quicker Perm Manpower. in in see a are some holding than onto we perm verticals still very at market staffing strong that than and point perm, some it can Manpower the see industry of is holding connected to and is better this coming certain

George Tong

Great.

You in a flows, order on terms performance? market perspective. indicated in various seeing in France softening that end France what activity cycles, points growth you Can and in from elaborate to of further January you’re sales

Jonas Prising

say tracking we’re market. to well Well, that I would

but one months and countries, but the some is of the well of low back prism one well of level. steady, an countries is markets the as value it so workforce good as actually skill I never seen couple industry sets constructive slowdown, cycles, holding also and relates is the Solutions. few seeing and sales that to of Manpower You’ve times as some would the as levels, offerings, other data we, a to recruitment to very we’re there where a say so. longer transformation last pre-pandemic same that is environment still Talent longer our then opportunities our higher is close still where saw the to at cycles, higher It it in over soften France you in recently, phenomenon came within continuing

slight down, a perspective. manageable as step that about, from something is All of but our still this talked indicates Jack

George Tong

thank you. Great,

Operator

you. Thank

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

is line open. Your

Heather Balsky

Hi, for could you taking I hoping my questions. a Germany. was talk you about little thank bit

in turn of mentioned business. initiatives you’re there some you on remarks that to prepared the was that. You I elaborate about the could taking hoping

Then I’m that curious about the in you’re underlying environment seeing market.

Thanks. of some end markets. those as in out you’re slowing, some seeing curious that call but didn’t what where You seeing you’re one just

Jonas Prising

Well, we’re third quarter improvement market fourth way is low, still the to that I still lot between were think work We are steady. the see competing the pleased and our overall make it to that holding sequentially is should. quarter. of rates a and doing there is sure Unemployment an business the

to improvement. expect see We continue to an

to we’re work improvement, Heather, improvement of across up to also go as is see As in initiatives the and all lot overall, we level we’ve a Germany pleased exposure really that hoping first Germany to of automotive the sure to bit own we’re in that better. the countries, have of in do, of at do the recover of But continued if a holding but that’s working that market. our where talked us to could are sector Proservia softer business we we to our competing the place giving prior make we’re we a in about in have the lost still signs and see our Even work right have some highest is the to market that have business segments move we think to lot diversify in forward, calls, our business a into ground. German also quarter, in I

Heather Balsky

business. reopening another China I if non-material you, of the there we risk all just disruption if back I’m that know, is to any or there with curious potential was couple question, a and of calls, just China just then of lockdowns. reopening, Thank benefit if is your from know--you go

Jonas Prising

of services and in on in overall, Chinese benefit go we Well benefit managed as covering should demand rest for might pressure that of go and the but Manpower way energy might Kong be beneficial for evolution. know, Chinese turn as such, right, China for the which and expect mean that would from demand will demand also terms again. increase start resources the market, of you probably direction will a costs be products to that PMIs the that listed positive world economy But the I our other Hong the in world, overall up. that improves, creating when growing company Certainly side, would has have and positive, business and through the the it is it for a will Chinese

effect economic might impact, opposed From but environment which improving our contributes. China’s to of there own to growth an business as a an perspective, be not secondary

Heather Balsky

you thank it, Got very much.

Operator

Thank you.

Jonas Prising

earnings to Thank rest of the end up brings call, we to fourth again we when everyone. speaking week. of us a That catch you quarter Thanks look April. our with good the forward in Have and you everyone.

Operator

Thank you for participation. your

now. disconnect may You

ManpowerGroup (MAN) 31 Jan 232022 Q4 Earnings call transcript