Earnings call transcript Q1 2023

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Operator

Welcome to ManpowerGroup’s first 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 will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. begin. may you Sir,

Jonas Prising

first call the XXXX. quarter to for conference Welcome

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

website convenience, prepared Investor our remarks your within manpowergroup.com. For we the Relations have section included our at of

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

language. will cover now Safe Harbor Jack the

Jack McGinnis

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

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

Jonas Prising

Jack. Thanks

we in increased trend earnings demand essential started trend for major on this for of a Europe focused demand and In XXXX. were maintaining This year our modest uncertainty. markets due services quarter following U.S. first remained most in organizations during quarter, that the with headcount staffing most in reported though services to a further, seeing in decrease the demand the staffing notably that slowing softening continued early experience augmenting for we also continued of into economic softening talent, previous call, to

reducing their hiring, their and economic demand with intentional for slowdowns. for have companies workforce, seeing line dynamics market, labor period focus towards and we we delaying of across contingent in their skills bullish After now shifting months of U.S. seen a strong specialist roles, various decisions recalibrating past industries after a hiring in more more in-demand hiring workforces remarkably are

they the in permanent playing staffing the critical to need this parts we in in a their are U.S. environment by in businesses. continue lower is their resources activity Although in volumes support resulting this and our specialist replenishing workforce and environment, cautious delivering of role clients Europe, of big in-demand also

Asia that important America be is offset to the trends note U.S. robust East challenging in the Latin business and the quite continued and Middle Pacific, more and to environment in It diversified talk Europe, about geographically I’ll market finished America that presence. Latin the just and review in illustrating meetings business the of our more Asia later. advantage helped I ground on and our businesses,

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

Our reported an was X.X%. margin was EBITA decrease million, quarter for representing EBITA X.X% $XXX EBITA XX% for was Adjusting margin currency year-over-year. $XXX Reported costs, constant adjusted the in was EBITA million. and restructuring

an a reported basis. constant per $X.XX on share Adjusted diluted per and $X.XX year-over-year Earnings in were share earnings were adjusted currency. on basis down X%

have indicated that must environment, continue, the core clients for business Our need and skills. slowing different underscoring more advanced despite the transformation

are continue plan Spain of Employment among at strong by talent for including the the is largest evidenced record permanent mission critical France, shortages ManpowerGroup own our Our roles markets, Italy, U.K., data This many quarterly given in others. talent employers Nordics, in-demand in to Survey for recruitment levels. Japan, demand shows growth hiring ongoing and

to Jack now on more to share pass will I details the financials.

Jack McGinnis

Thanks Jonas.

our profit the end Gross range. of guidance between low in constant midpoint range. margin and the came quarter first the of our came high in at currency end guidance the in Revenues

representing in an XX% million, compared the year As decrease was constant adjusted, prior currency to period. $XXX EBITA

year-over-year. basis guidance came points range, decline As representing adjusted, the EBITA midpoint and of our margin was at in XX X.X% of

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

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

and Organic the of trend revenue environment Europe. days-adjusted the first our the quarter revenue guidance deteriorating quarter, compared The at decreased particularly X% to during a lower in the reflected minus-X.X% across midpoint. U.S.

X, Turning was per restructuring included related earnings share $X.XX to Slide the EPS to reported bridge $X.XX, costs. on which

softer guidance a to impact. guidance a a restructuring Excluding $X.XX, midpoint, due effective costs, our impact operational impact the other $X.XX, costs, positive that plan rate Walking from euro results of currency was tax of $X.XX during had and the $X.XX. a our strengthening lower adjusted included included our increased better which pound of and pension performance interest expenses, had foreign negative was the the EPS than $X.XX a related quarter, which

markets on and saw decline lower revenue Year-over-year organic the Solutions by volumes in was decline RPO Experis key brand review hiring of permanent anniversary Manpower The line. year. modest of revenue Talent reported brand year Experis we X%. the in exceptional a year-over-year an Talent prior anniversaried basis, driven by significant of Within our period. let’s declined currency the enterprise reported business X%, Next, in Solutions, from growth we as The revenue as brand clients prior by our the across decline levels a constant we decline X%. revenue

the to as year. volumes saw in margin the business levels quarter quarter prior declines higher we revenue lower low Management the MSP while reduced Our activity, certain Right in the outplacement significant on compared experienced revenue in growth

quarter. Staffing experienced Talent reduction detail, came GP transition direct as a within Solutions to XX point cost increase gross Permanent period. points. Looking margin primarily Right the adjustments demand a represented at contributed basis continued our year contributed XX contributed U.S. both XX recruitment, XX contributed Favorable the expansion. exceptional our career point reduced basis Solutions margin improvement, and as of in a points in permanent margin activity from prior basis in Management including in RPO positive Talent items basis and XX profit margin margin at Experis levels points Manpower the in gross other at hiring the XX.X%. staffing basis

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

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

of Profit was activity in Gross in year. the in MSP levels driven year Right increased constant mid while the the currency growth year year. Talent in Our period, percentage profit RPO slight X% we reported the decline permanent Management. hiring constant Manpower currency quarter. profit in Solutions over-year. year-over gross profit digit as an decreased our high brand gross in experienced to a decreased organic of in Experis X% prior increase currency in record in significant X% in gross brand Organic Organic This year over quarter during anniversary single by range GP constant

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

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

constant segment was revenue. billion, of million $X and currency to decrease year quarter was period Revenue of prior XX% costs. of Americas on X% comprised consolidated basis. Reported OUP The restructuring includes the the representing $XX million a compared in $X.X a

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

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

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

margin was As OUP adjusted, X.X%.

brand on profit Revenue the the brand decrease PMI the the the XX quarter. fourth U.S. in decline during in March. to Manufacturing decreased decline during for in Manpower range a in quarter. to the X% quarter first from a the comprised gross the days-adjusted XX% basis Manpower December XX% XX representing continued of Within range during U.S. the from the the U.S., quarter, the in

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

days-adjusted growth U.S., approximately basis, Within IT as the of The U.S. XX% XX% organically we of profit revenues. Experis U.S. On in of peak period. a in in XXXX gross decreased the Experis revenue brand XX% comprised anniversaried skills the XX% in the Experis quarter. year ago comprised

ago the growth As levels dramatic year referenced activities period for clients, in current are the earlier, period. lower which from experienced enterprise

XX% in in contributed lower hiring revenues revenue exceptional quarter Talent permanent in year. in the at the in in Solutions of decrease levels of growth first This quarter. as we as gross the by was driven experienced the anniversaried decline profit U.S. XX% programs prior RPO and a the U.S. continued

activity quarter revenues levels. Although is pre-pandemic first well environment, in lower RPO the were above current RPO

In Right revenue margin activity, drove the quarter second the year-over-year U.S. Management compared as some of slightly within we The a the first trend revenue increases. lower MSP saw as activity quarter business expect decline U.S. similar decline we of revenue rate reduced our higher outplacement to to business in XXXX, significant while

in the southern XX% organic an X% OUP excluding representing comprised minor for during some restructuring. revenue Europe currency. in business margin quarter, $XX southern was Europe decrease at Southern consolidated came revenue billion, Revenue our the representing in million constant OUP Europe quarter. of $X.X X.X% in of a

the and $XX OUP flat in and organic OUP revenue representing billion $X.X days-adjusted XX% was France margin constant basis. the organic in currency of currency. our decrease X% segment France constant million quarter was a revenue in business in the an X.X%. on southern for Europe comprised equaled quarter, quarter of the was

the We for revenue decrease France are estimating slight year-over-year. be trend to the currency year-over-year in quarter constant a second

margin flat year-over-year growth equaled in Italy on OUP $XXX of reflecting constant days-adjusted constant currency estimate a in and a the We that OUP trend Italy decrease million quarter. second in Revenue revenue basis. X.X%. was have X% in quarter, slight to the $XX will equaled million a currency

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

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

days-adjusted XX% this During basis. constant fourth decline from of rate revenues higher quarter same currency quarter, a X% decreased the basis. on reflects U.K. on the of a This decrease

the in first quarter decline We revenue compared to second the lower expect a slightly rate of quarter.

Germany, quarters our constant In increased quarter, days-adjusted in X% two currency the Manpower in driven business. by representing revenues improvement consecutive of

and require Our Germany managed attention performance. business services to significant Proservia improve actions to continues management

process of a We first are we are in business performing growth a quarter expecting the in further periods. the improved revenue of detailed provide quarter the future update compared in slightly will year-over-year to the evaluation second Overall, and trend. Proservia

The Netherlands basis. X% of this of quarter currency trend in our The slightly same decrease northern a businesses is revenue on smaller quarter Europe. rate minus-X% than the was first days-adjusted of one fourth decline constant higher the of in

Pacific-Middle In East $XXX company revenue in million. revenue. grew of quarter, total X% to constant Asia currency comprises The XX% segment the

million X.X%. exclude restructuring, $X.X Australia adjusted OUP Restructuring and As margin was $XX charges to business. of to million OUP related was our

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

equaled quarter, a flow the end days. to million decreased quarter, prior day I’ll balance first now of $XX to XX about In year. flow cash turn $XXX million the At days half to the first sheet. in compared the and free outstanding cash sales

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

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

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

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

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

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

that date, Next, our challenging and and I'll continue the quarter for review and second second to Europe. to on our the Based of the forecast outlook trends cautious the quarter XXXX. anticipates be activity is first April in in U.S. quarter will

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

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

guidance decrease currency constant of the between and range X% X% represents a Our X% midpoint at revenue is a and decrease.

The billing is slight X% X% the revenue impact than less as days and comparable of last slightly this This and quarter on lower the year. days-adjusted stepped organic QX currency same trend down QX to basis midpoint. the the the is at year-over-year acquisitions net the is constant from decrease first growth rate same in decrease

the XXX year. at the to be We expect prior midpoint basis quarter during our down EBITA second compared margin points to the

that the rate estimate effective quarter for XX%. We the be second will tax

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

will to it back Jonas. turn I now

Jonas Prising

Thanks Jack.

we Although brands. within and on our becoming pillars by market strengthen higher to on digitization make our the strategy initiatives progress business technology leading the in is doubling all environment our of more and strategic services a supported our are mix platform diversification, down to value shifting innovation challenging, capabilities

gross We business, Right leaves our remain to and economic Experis the business the while levels brands diversifying profit well in of levels geographic on balance margin is Talent continue with higher sheet profit from growth. profit cycles. Solutions, and significant us are well activity in to and making footprint up weather Talent our currently with our above gross make year strong together progress Solutions industry-leading countercyclical Within down dollars. our Management experiencing period, prepared This strong although gross pre-pandemic RPO levels prior peaks MSP XX%

celebrating especially Asia clients As and with regions America, very I for of evident leaders are to of mentioned, anniversary and successful pleasure our our business most had very our is I America continues conducive Business Latin across the businesses, economic I conditions strong. in temporary both where demand recently be the increased an staffing time just to of week services. where This our the outlook Latin last spent Chile. in in XXth

in is supply largest record global profit strong the of reopens, largest China fifth the business growth chains revenue APME resilient As region extremely normalize business the Japan, has very our post-pandemic globally, in also bright. outlook and track growth. and is APME and regions our been a and continuing

team, predicting which data of has is quarters trends our fact, the to have In on laser have been business tracking based consecutive growth Japan who had XX remarkable. and Congratulations constant currency focused leadership for many been sectors Japanese and years. growth, the the on we

Canada, Right Matrix Global Career Leader outplacement to QX and main all Management XXXX. launch planning with provides personalized technology creation the Specific Star was coaching, the PowerSuite and and development that Furthermore, our of the delighted U.S., Services to end on-boarded virtual up-skilling in be internal PowerSuite highly and Assessment, for in the digitization, we’re named the we Right platform Management for platform Management expanded global investments resources, recent BXC for U.K. with Right in in Transition curated Everest and Group’s transitions services Performer services. Next by a operations with Australia, of offerings This delivery career talent map matching. its of further Outplacement of redeployment and strategic digital PEAK job help road self scoring and a

have anniversary, economic This of at and our to helping year, and our forefront innovation technologies, history XXth workers new XXXX, social shifts we been and we celebrate throughout trends. adapt businesses the

take to advantage hesitated move new quickly have opportunities. never of to We

is help will clients set our across lies, team of geographic markets diversified in and work. win us to world of continue our the changing and growth poised to pivot leadership experienced apart candidates and Our solutions where to breadth

belief a recognized more power for were Our and has of around for all the societies Ethisphere we in only driving one to sustainable meaningful change that decade central be time, a the as and the remains the positive playing world. in the critical Companies change the for we role than communities industry XXth Most World's in firm to employment do. to Ethical the March, world by recognized In

that and and for down remains base team thanking As a priorities we driver our our focused our on the always, know path I’d entire to like ManpowerGroup and of success contributions. great doubles forward, by their close that our is on key employee efforts

our purpose our create and for in sustainable value strategy DDI long foundation Our capabilities we to shareholders. our remains lay strengthen being star, north the how disciplined and execution to is term will our continue our and

like line I open now would to for Operator? the Q&A.

Operator

Thank you.

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

from comes question Baird. first Our Mark Marcon from

now is line open. Your

Mark Marcon

pace quarter you ended Good that the extent of the Two can markets the change the to first just the weakness, That’s worse U.K.? questions. showing particularly morning or was than, what Jonas One, February, like U.S. describe March say, Jack. and question. just the in big unfolded, up as

Jonas Prising

the Well, quick down the followed up declines came segments, Mark. seen most the from the U.K. enterprise we’ve catch really client over and last so five closely U.S. the by pulling quarter. in U.K., down quarter, what evolve to the saw had and morning step Good during biggest businesses we during frankly. U.S. quickly, larger the we of step The quite saw that and back, our quarters that’s U.S. the European

want give maybe color little specifics? you more a bit Jack, do on to But

Jack McGinnis

Yes, sure, be happy to.

take we talked at as that a quarter saw a I’d on It so the U.S. the the expect Specifically higher tad into ended was be course guide, as so quarter, quarter. that of second quarter slightly, slightly if higher building rate the we deterioration the minus-XX, that we might and average through higher than rate, similar about trend that, the the of bit I the a of the look was quarter over gradual we U.S., for say the end that you

the U.K. fairly throughout - you quarter. the constant know, think I

think started quarter the was look even through I way, average pretty you throughout and the so for U.K. quarter, the at entire carried quarter. softer that a the it when that entire just little for the

As being half look for to the kind U.K. we up stable as see it slightly kind or maybe down that for perhaps forward a next really of look at trend. we of we quarter, just percent

third think the be exit the just quarter Italy second the into quarter. us on market Italy, actually Italy quarter flattish, we of flipside over for strengthened a I’d and course first take saw and maybe the bit the would on from say trend which quarter. closer than do the We the actually we to better good, was will our where forecast, likely that Italy biggest

Mark Marcon

Great, U.S., and then were with the terms of a back and was mentioned really second year obviously either pull the quarters? to you are within Experis the what basis and could Experis periods with what that clients high regards potentially pulling terms comparison broad-based even and back the ago. How enterprise in that even Experis how go-forward expectations business, over your globally, to the a regards unfold on U.S. in of or from third

Jonas Prising

Mark, mention, focused year growth it the high U.S. you pull after very and the period, clients. is prior back in on as rates the enterprise comes that seeing Well we’re in

about Experis Our declines, what for is we’re Experis good although than enterprise so the on convenience some business we better, U.S. feel lower the holding seeing the declines business up side, in much in substantially it’s seeing and

that the an U.K. saw other was The down enterprise step perspective same market from the

will efforts, benefiting to pulling because good that for Experis opportunities their significant continue around feel clients, are as brand forward. digital globally, we to growth technology be two although benefit is going see so Excluding extremely going to else we undergoing showed still very about they digital back strong continue good Experis and markets, going investments transformation, Experis the everywhere forward, from which in those a

convenience lesser Experis also the they really particular we Mark. feel seeing here of we’re feel degree a in the U.K., from well, good had in prospects we back but a U.S. in businesses about business spending as very strong ago, good very and, the pulling to about is What our year the and

Mark Marcon

Okay.

Jack McGinnis

in overall only holding a particularly seeing up additional very about in decreases which slides, the the across holding Mark, basis, was the really the acquisition, ettain just look we so well actually global in add, business, certain so in there’s little GP convenience that we a and on would as U.K., and as X% well, dollars, the performing quite actually the on and a context. driven, enterprise an I up to--you GP growth and said, we’re chart talked includes decline in little bigger Experis which modest although Jonas just well, are pockets, some financial that down showed when good know, is services, it’s overall U.S. more is you context.

Mark Marcon

EBIT in I can holding occurring? the--with squeeze what’s EBIT if and up, incremental with then line in but on the one, materially and are below. in Is What’s guidance just deleveraging revenue one falling or guidance Great, expectations SG&A the our is that terms profit it the last is with gross driver driver the overall, profit the the there are of investments off? just gross guidance

Jack McGinnis

Mark thanks for question. that Yes,

would You the say context know, I the is deleveraging.

the seeing are basis currency into quarter. a second revenue constant trend lower a on We

As up in fourth GP you of XX% well growth talked come guidance is but I the which quarter, SG&A and growth down down, SG&A the good expect our midpoint, that rate Organically, our news we said, at was as SG&A--and quarter. holding in margin say prepared you coming down part down--was a at about was second should rate the rate, is remarks. the the quite as X% for from continue should to X% growth to is

a said, all not our it’s reduction being broad-based that with business. of across parts But

still As the we trends, quite you we’re still in parts, so business from can the various is see as said and holding investing. well up GP dollar

first invest quarter services, we advantage a the very business some good businesses. Experis We’re platform, some looking in strategic and for about revenues, seeing at--you in expect we technology us. digitization growth investment and did from talked we still still continue second are based our but to that will dollars think financial We so trend, of the in that in there’s parts that’s pockets really and emphasize good know, decline the should of you on the quarter GP the happening

leading had that and we office doing believe We the back so and of global to in investment we’re platform office, continued front more and digitization the although a as we’re market’s technology not based on equates a doing environment all than steady second as will certain the where broad-based, SG&A areas. taking in fact quarter, holding the to improve result, the up still relatively an that reductions well trend well, we’re we’re continue dramatic in

Mark Marcon

thank Great, you.

Operator

Thank you.

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

Your line is now open.

Jeff Silber

so you Thank much.

and wondering bit us You’ve by color given the color we by more if some client size. U.K. and geography I’m by Europe. can specifically little get in a vertical industry

Jonas Prising

Jeff, as talent. As very you for about to grow, heard America we The labor remarks, the Asia just opportunities business as clients recently, they’re and our in Asia looking continuing are - are our plentiful. and America are our having feel prepared Latin good markets Latin Pacific well tight still and visited in

in in overall, in second to decreases and we quarter as the When continuation a our to modest you in has it decline that trend projections as Europe that’s prepared comes well. and on of XXXX and a Europe really the into now heard into path first first remarks, well demand as of as talk see the U.S., started of been quarter our the about us a

holding on lot France, having made but worsening perm numbers and we onto what economic in their deciding down, from discuss, the enterprise for we of very frankly workforces, we’re the amongst us that They The looking similar good growth U.S. the our are and because very just why staffing slowdowns. biggest Nordics that they clients economic is and back you times, very which seen a still that others, Japan, heard Spain, expect perm Italy, you’ve geography past contingent economic as pulling U.K., have see comes outlook they preparing is so are the to is part what the uncertain. are of would in strong, step demand

market Europe tends dynamic up as a more That’s the in faster the and The we much would a is something story. also to economic really U.S. the shifts react at to quicker is pace, which cycle. labor U.S. caught to expect

Jack McGinnis

Yes, and would add-- I Jeff, just

Jeff Silber

Jeff. ahead, go Please sorry. Jonas--I’m

Jack McGinnis

in we’re Experis side, been, about U.K., sector No - and and the A Jeff, add holding lot the technology a verticals clients. of that’s big vertical third since but talked really of as a is you enterprise up you the just - I has public U.K., U.K. that’s perspective, in a fairly That’s is about the the Experis big would specifically it terms well, industry more enterprise the biggest second know, add business. just an mentioned U.K. from would market, the enterprise bit more and Enterprise the market. that’s probably the pressure pressure I technology within on the of We is in where the seeing. on side that. clients

Jeff Silber

the That’s we and that in kind get helpful, well? color Europe of and can actually U.S. as That was my question.

Jack McGinnis

Yes, I’d similar. say in U.S., the

say I’d the story side, we’ve and Experis. very similar as enterprise pressures for talked, seeing on I think the we’re

cautious technology the enterprise terms on clients, there’s of behavior where think I demand. that’s more in

Auto France, - across stable. U.S. to that we actually Germany, auto. the big not side, the the I’d think in auto looked improving enterprise and across trends back, strong I seeing and verticals coming and say trends, convenience, as we’re markets there both specifically, be and on continues would Europe we’re food very are large fairly but financial auto so strength Nordics, and be, in that’s manufacturing seeing in is we’re - in seeing services, other the

of and I’d to and correlates say terms Then terms enterprise we as going construction, the it’s and areas transportation, seeing of logistics, what that not generally I’d consistent generally manufacturing last more in to pressure, globally Jonas are with what where not said quarter, are about pressure, we’re say that more be auto well. trends talked seeing PMI in related food

Jeff Silber

so Okay, that’s helpful. Jeff. much, Thanks really

Operator

Thank you.

question next Northcoast Research. Kartik Mehta from Our from comes

Your line open. is

Kartik Mehta

Thank you. Good morning.

all. dollars you’ve thinking indicated, you gross done your and right-size need if ability good think you year, what this if profit on as then I’m as continue trends the think in to forward just kind of especially. maintain the the side go might gross job throughout to as at the about way SG&A margin, you you gross business Jack, we happen a and maintaining the margin,

Jack McGinnis

be QX I know, pull would you talked in that Kartik. case, see nicely margin we despite you that held margins news that thanks quarter is on really GP that the a continues GP see and continuing. last about good the good - that and about say that margin. the--you in quite feel the for to a We guidance can so demand, back in trend’s the staffing can Yes, the up that, from walk lot

very going we Perm factors talked - as in some think growth, to our good. was U.S. we’ve very those and but of still was That a exceptional Perm result of about, we’re of the is continuing. margin, of right? think be paying strong off just perm, of to I Asia made markets, strong the markets, and investment continues lot that that’s U.S., a about still--as trends be the and European in see us GP for is currently. of lot one Jonas really we in anniversarying very the outside in perm

going of the I year-over-year of to I the part margin, to natural equation. go staffing of a it’s think think peak the are part we part We levels. to come bit year, as clients year, still in trends, look at forward so mix in a of equation, actually all-time record expect GP be continue perm so the to last it’s of dollars we when our to equation the substantial of terms the will perm the anniversary pretty record some of think QX but continue perm I hit through as GP overall off

market an as up Jonas is pie, we’ll margin talked still - margin, holding about, and becoming is, We bigger about talked so to that that that’s the terms and staffing the and it. labor have of positive to that’s quite think we piece for going more from even is feel the environment overall well, in for convenience I that pressure continuing in to see talent, bit pressure continue about talent is little But more optimistic forward. so the means good pricing monitor pretty side of staffing news helping and enterprise a

Kartik Mehta

continue think should talked and be. thoughts your to it, I’m if decelerate, you could you the and outlook And about you on--I right-size that you then know need there wondering on SG&A, as to what business the that at look Jack,

Jack McGinnis

Yes, absolutely.

to and our more significant I GP actions, we in is GP record cost SG&A should dollars, track goal That declines case, so of into move the declines, that dollar GP reductions. see dollar means the our recovery going move half offset is in think if we’re expect with for dramatic do playbook management. we and declines our to into you ratio

we’re in quarter we’re into QX of current Now in grew with environment that still reduction broad-based on is in X%, chart, the dollars moving GP we said, pretty in overall environment disclosed we dramatic the being even a and first of as it’s a the context the on though the GP modest yet based so decrease, the the environment. not business, parts various balanced territory SG&A still

degree greatest preserve However, to margin possible. if appropriate the we what environment do should we’ll will--you to expect we that we’ll do, the actions direction, moves always and take in

continues It’s really to on going the to environment depend unfold. how

the We parts that are balance so to react the seen see broader are investing, but pull of have that be accordingly. we’ll changes, still pretty it’s if already holding in it a in we business broad and more going other up parts backs, well, of doing we’re business

Kartik Mehta

meeting and be France, of last and I’m talked on considering you clients that the And your thoughts how impacting Jonas the some business, question, wondering just if know, they - seen unrest in at one you about have that with might all. Europe,

Jonas Prising

well. strikes there workers since reforms and learnings the debate get term their rather from our do The broad-based the France their actually on the strikes as been haven’t makes unrest assignments, the to very you’ve difficult manage it to France. little business means that assignments Well we but for so the been pension the far and pandemic are long workers impact it of in but our had impact and day many that it in interruptions, some very to able an well, have for has seen, work as remotely business in Kartik, that able to around that, has had the all

decision pressured job debate the we’ve place, difficult softening is has its that a points with good on growth, past, a data following a France of of as the with PMI, to major protests slightly reforms The market flattish we’ve from in good very the that strikes see seen conducive those a it a as trend generally we in other very and that although path French really then that on hope in good the impact its and but reasonably in well team good down and reform good is to is seen on future. now growth as not was The doing going we terms managed the can team pension well. seen to increase and to very feel demand, continue environment encouraging the you’ve in way, France calm French

Kartik Mehta

you it. both, Thank appreciate

Operator

you. Thank

Our comes from JP of the Stephanie next of Morgan. question Yee line

Your line is open. now

Stephanie Yee

stepping for Hi, good morning. I’m in Steinerman. Andrew

comment the wondering were second and in kind you’re on if it better in coming any you slight In deceleration than quarter, maybe France like a trends the on on I the the March did Just was France what the can of and expecting decrease or front. what revenue we’re particular. you April a now wage first seemed or were quarter, pricing question France in into impact seeing expecting quarter.

Jack McGinnis

the anticipating the little quarter, and would to based guidance, question. the on basis, Yes, what France, a exited for the during we seeing we’ve thanks overall some been of close here on pressure that take the quarter weeklies slightly in the on to Stephanie, I flattish trends based second quarter April. down we into more in say an

cautious, up would progressive bit Easter that a forth, have that’s down we’re okay step I the the have being been held I’d a France what’s weeklies quarters, say so a bit a of terms has on couple we’ve little although so timing we guidance happening. some of last over fact the which April, and impacts with mismatch the we seeing; caveat only some it’s weekly and point do say fair but trend year-over-year in on the based QX, in in our seen versus

that of item pay so an look about wage margin, is second in we I environment overall improvement your spreads when pricing think the of of and margin feel France. up France good in terms holding spreads at getting we feel year-over-year, well, related staffing we and and part basis on was at bill good to in quite France and so bill pay terms inflation,

Stephanie Yee

Thank great. Okay, you.

Operator

you. Thank

Our next question comes from George Tong of Goldman Sachs.

Your line is now open.

George Tong

thanks. morning. Good Hi,

dynamics You pull macro in you’re discuss delayed a with back mentioned macro the guide? and what how hiring the past past in and in cycles perspective, compares economic this EU your hiring into U.S. with you back you’ve slowdowns. From assumptions in decisions embedding seen can pull line and XQ

Jonas Prising

slowdown we’ve does couldn’t softening XX-year George, Hey Is now and our we correct? to markets experienced perfectly, in but you asking this hear compare cycles that demand history. you’re I that prior think how in the

George Tong

Yes, that’s right.

Jonas Prising

a to bit we back in economic shallow by harks they strong, look data, so Clearly they’re again. of to a back the going employers the the slowdown are economic great at hold recession, to the they know through we’ve their fire decisions, meet a but be, that at products their as their careful that, tends recession and question, hiring. to services because degree indicate back it workforces look last enough economic accelerate future garden don’t abates and pandemic. a we do and we what It’s behaviors their greater They’re their anticipating current hiring talent shallower slowdowns it’s that were Recession and the cycle shorter what our recessions, the very last saw the or the aware of have but need two in a Great mean this seen slowdown-slash-recession, we we big come a past very related recessions, the power and recessions demands to if where onto and cycles to delaying the and and recession for maybe, variety really they Financial markets little when of to so - in is the our in I tight labor starts are than and growth economic

I our and why That’s exactly hearing position characterize view, our discuss SG&A. you’re Jack it’s on how our would

are good opportunities really and for at we’re drops getting But uncertainty Talent in in seeing. cautious--we’re the because on careful terms see, the and positioned the whether of very our growth we very through in we’re be we market in headwinds the that we’re economic back. higher make sure coming some cautious so the are is this to time Experis very on hiring, comes when investing demand of and productivity, We’re that we own keep we want Solutions, that but they focused perm

we our economic compare of cycles. that past environment when you Hopefully a gives little to from our bit view experience this

George Tong

Yes, Thank that’s you. very helpful.

increasing Which front, the in the levels? back the of specific margin which On [indiscernible] BPs quarter. [indiscernible] year-over-year second business you maintaining down and are spending areas XXX scaling are areas you or

Jack McGinnis

can I talk that. to George,

mark in of anniversarying basis margin year went maybe I in as EBITDA we XX environment about, operational last better we year, year improving getting have actually impact think we’re have we on by QX. and opposite and the EBITDA EBITDA declining is EBITDA where opposite in so QX, on margin it’s QX this, a coming the the points it’s--you that points, the is an was high talked others, where so from little growth the the that from we’re we other is off the different part QX overall had but down markets we basis, strength now know, dynamic from basis were degree at which to that ago remember, that to water a we’ve was in is forecasting. offset and leverage, overall our margin to certain why X.X% a for QX XXX up on context ago dramatic a to basis point an

first actions talk that say did our in taking fact In go third from down. FTE took is fourth terms FTE the the quarter, year about about quarter. quarter, of continues headcount our where sequentially an we overall from down to on of the basis, We headcount end we’re X%. the I’d end the about to down

and that again that you based expect a continue to degree, continued We the greater taken. we’ve trend on should actions to

correlated seeing demand, and on the going of revenues, parts business corporate discretionary U.S., to to the environment at we the look in that’s that have it’s going in parts Europe, the and FTEs should we’re you the that this in be we our down going to the business, If aren’t and going taking based markets that’s spend. where be as the the be the back U.K., biggest of environment markets on, pulling expect other negative in of various freezes would you functions hiring global we’re expect

decrease continues to actions as are Those take mentioned, the actions environment expect further, well. if should taking, we’re as further then the we’ll and you I

George Tong

you. thank helpful, Very

Operator

you. Thank

comes from Our Manav next Patnaik question with Barclays.

Your line open. now is

Ronan Kennedy

Hi, good on for Ronan actually Manav. questions. my you? Kennedy morning, Thanks for is This taking how are

a and Will now, then any assessment do that think as categorize be to you of quarters have turn it recession, continual do George’s to with and up response around? saying when the thoughts in a to progress? potential their as macro you question follow hovering provided brake had you there gradual would you and how garden companies to variety follow-up very quarter the variety, brakes, pedal. may used I declines, last insight the foot How things helpful potentially others the of a beginning being the If were will also to could above tap the analogy garden

how this weakened dynamics? environment, competitive, intensely it etc.? more pricing industry pressures, in competitive Is lastly, Then are

Jonas Prising

I’m you analogy we last time. used liked that glad the

think the companies I brake. would I say more are tapping

for is that you being see, that but what see sure the environment There We in we’re we’ve New companies seen really on, you companies on are still outside in conducive hiring it’s slowdowns, fire are power. the demand degree their focused talent, to make of there have hitting on we a on have--as and U.S., that still still good you labor higher markets convenience, opportunities, economic and that based the other there to don’t outlooks, skilled is more demand. the based the so so of that’s brakes terms the is very hard. going have can still tight cautious

a we’re don’t in talked the that clearly but our maintain time that the strength because we’re we’re the people areas the at important about sales we As thinking recruiters and the our it’s SG&A about, hiring in same perspective where Jack see opportunities, market. impact from hiring defensive business we

I think that’s sort of our view.

terms In a essentially what softening stance seen we’ve terms talk quarter, think at Jack based the second beginning on the a overall, quarter. around the we’re progression adopting about let but further of looking I’ll cautious of I that; slight in for of the

maybe provide like to more color? some you’d Jack,

Jack McGinnis

would is, I just our say projections. Yes, Ronan, what seeing in briefly, that we’re

these that’s You’re we in organic go to revenue decrease into how currency at--if you an the as degree terms see second so change, us ADR seeing we from slight movements revenues look a of of on constant another minus-X.X% environment. relatively the back quarter, quarter, X% and going and basis, modest we’re--you that reflecting know, the are in that’s

significantly are Parts of moving the businesses environment do length on that our talked we’re of holding - and than more European we of the as others about that we balance side, camp the actually I’d we We in seeing other we’re nicely, to lighter Italy nicely at have would of decrease now, up some are enterprise trend, seeing but put that expect--based in on continuing quarter. would some everything and definitely continue. modest quite the revenue despite perform that expect kind to decline parts

Ronan Kennedy

kind brand Thank you. in environment? by and of confirm the dynamics any weaker within macro May the insights a particular industry, I competitive

Jonas Prising

tight, say remain remains that I’d companies dynamics competitive, We so the rational. but Generally, labor pricing that are healthy. still competitive the hiring markets are know is talent strong demand and thus for environment

there Group this competitive, environment saw why in context softening well, into Europe and as skill talent, tight in quarter, Employer is U.S., market we whilst same competitive the the employer--Manpower looking on as at are globally labor as Outlook still jobs still of and the but this as always still we We’re where sets, second some that hiring here many employers frankly, solid seeing intent the good pay that’s well and spreads are Survey open as time. we in bill and, seeing a in in is and well the the environment the feel some rational are is

Ronan Kennedy

through about follow-up, you If cover weakened business capital as should even such much. a management, very and progress the think cycle--as reviews environment in the we can capital as just as quick we may, working you that? allocation, how this Thank and I the cycle, Proservia,

Jonas Prising

the talk Jack let capital allocation. I’ll about

in business where where You that is way but as German on particular mentioned seen to now. number of prepared pleased we’re solving still Proservia our our are right in this do well, that’s perform a note, brands, our Proservia have and our work see to in - remarks, on making Proservia, really working like, and some we’re in focused. we we that’s our focus you’ve is progress to would We business and Germany the in

onto the But Jack, capital like go question? maybe allocation you’d to

Jack McGinnis

that - I’ll have a in trying to know get and the are other we Yes, couple brief call. be end callers before I we

Ronan. straightforward, change continues, say fairly is strategy. allocation it in no Capital I’d

top are saw higher share you’ll We progressive have we dividend. we along and there those opportunistic, the course us us we’ll where do volumes lines. our would be to see and strategy to be Remember environment an decent The progressive dividend consider You dividend priority a when good we would a of value, continues continue is perceive our environment. do during a so this very repurchases in the the quarter.

change. Then terms and of no forth, M&A really so in

continue M&A allocation. said, for so in open back do the particularly but we keep business, the we’ve you growth, ettain as margin to of as on saw strategic think end our us in and that’s that prefer there eyes parts acquisition I shown say the what room I’d is we higher ’XX, our of past, capital with at the really and organic

Thanks.

Ronan Kennedy

it. very appreciate Thank you much,

Operator

Thank you.

comes Our last question Tobey Truist Sommer Securities. of from

now line open. Your is

Jasper Bib

is on Hey, for This Bib Tobey. good morning. Jasper

we’re because on know question Just from I time. one short me,

looks full-year rate On than year actually in rate prior second slightly some a might modeling the markets, are higher pressure, of margins when we the your tax a be tax bit the higher previously I rate, under XX%. in so know the expected? OUP first than should little half the at tax half your higher of go expectation the

Jack McGinnis

than second guidance, exactly little you’re the volatility for and quarter Jasper the No, in forecast tad - the we say a with the question. rate the seeing, country added one rate is that the a the more the is and thanks in components the right mix, quarter for we for Yes, better of to the rate. and than a that’s would guidance little I is full came we’ve which anticipated. bit first tax say would of I been the XX%, higher year bit volatility

But little feel continue like back although good all I for timing that things higher, is we XX% bit with QX the the pretty so still that, there’s said, being and year, for some would year. half XX% full considerations the to a about of use the

Jasper Bib

That my Thanks makes question. taking sense. for

Jonas Prising

first our speaking Okay, for second end the a your that Have with look the we quarter call. good our everyone quarter brings earnings. earnings of week. to again you and when forward to participation, everyone. Thanks announce us Thanks we of rest

Operator

concludes Thank you Thank for you, that and today’s participating. conference.

You may disconnect. now

ManpowerGroup (MAN) 20 Apr 232023 Q1 Earnings call transcript