October 20, 2017

ManpowerGroup Reports 3rd Quarter 2017 Results

MILWAUKEE, Oct. 20, 2017 /PRNewswire/ -- ManpowerGroup (NYSE: MAN) today reported that net earnings per diluted share for the three months ended September 30, 2017 were $2.04 compared to $1.87 in the prior year period. Net earnings in the quarter were $137.7 million compared to $129.2 million a year earlier. Revenues for the third quarter were $5.5 billion, an increase of 7% from the year earlier period.

Financial results in the quarter were impacted by stronger foreign currencies relative to the U.S. dollar compared to the prior year period.  On a constant currency basis, revenues increased 4% and net earnings per diluted share increased 6%.  Earnings per share in the quarter were positively impacted 6 cents by changes in foreign currencies compared to the prior year.

Jonas Prising, ManpowerGroup Chairman & CEO, said, "We made good progress with solid results in the third quarter and we are well positioned to finish 2017 with strong performance. Our market-leading global footprint and extensive portfolio of workforce solutions continue to resonate well with our clients and candidates.  We expect the broad-based global improvement in both employer hiring intentions and economic growth to provide us with good opportunities for continued profitable growth.

"We are anticipating the fourth quarter of 2017 diluted net earnings per share to be in the range of $2.01 to $2.09, which includes an estimated favorable currency impact of 12 cents," Prising stated.

Net earnings for the nine months ended September 30, 2017 were $329.1 million, or $4.84 per diluted share compared to net earnings of $316.3 million, or $4.42 per diluted share in the prior year. The year to date period included restructuring costs which reduced earnings per share by 41 cents and discrete income tax benefits in the first quarter which increased earnings per share by 19 cents. Revenues for the nine-month period were $15.4 billion, an increase of 5% from the prior year in reported U.S. dollars and in constant currency.  Foreign currency exchange rates had no impact on earnings per share for the nine-month period in 2017.

In conjunction with its third quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on October 20, 2017 at 7:30 a.m. CDT (8:30 a.m. EDT). Interested parties are invited to listen to the webcast and view the presentation by logging on to http://investor.manpowergroup.com/ in the section titled "Investor Relations."

Supplemental financial information referenced in the conference call can be found at http://investor.manpowergroup.com/ .

About ManpowerGroup

ManpowerGroup (NYSE: MAN), the leading global workforce solutions company, helps organizations transform in a fast-changing world of work by sourcing, assessing, developing and managing the talent that enables them to win. We develop innovative solutions for over 400,000 clients and connect 3+ million people to meaningful, sustainable work across a wide range of industries and skills. Our expert family of brands - Manpower®, Experis®, Right Management® and ManpowerGroup® Solutions - creates substantially more value for candidates and clients across 80 countries and territories and has done so for nearly 70 years. In 2017, ManpowerGroup was named one of the World's Most Ethical Companies for the seventh consecutive year and one of Fortune's Most Admired Companies, confirming our position as the most trusted and admired brand in the industry. See how ManpowerGroup is powering the future of work: www.manpowergroup.com

Forward-Looking Statements

This news release contains statements, including earnings projections, that are forward-looking in nature and, accordingly, are subject to risks and uncertainties regarding the Company's expected future results. The Company's actual results may differ materially from those described or contemplated in the forward-looking statements. Factors that may cause the Company's actual results to differ materially from those contained in the forward-looking statements can be found in the Company's reports filed with the SEC, including the information under the heading 'Risk Factors' in its Annual Report on Form 10-K for the year ended December 31, 2016, which information is incorporated herein by reference.

ManpowerGroup

Results of Operations

(In millions, except per share data)







Three Months Ended September 30




% Variance




Amount

Constant


2017

2016

Reported

Currency


(Unaudited)

Revenues from services (a)

$5,464.8

$5,088.2

7.4%

4.3%






Cost of services 

4,564.2

4,229.9

7.9%

4.7%






  Gross profit

900.6

858.3

4.9%

2.1%






Selling and administrative expenses

672.7

647.2

3.9%

1.3%






  Operating profit

227.9

211.1

7.9%

4.4%






Interest and other expenses

10.9

11.4

-5.0%







  Earnings before income taxes

217.0

199.7

8.7%

5.3%






Provision for income taxes

79.3

70.5

12.4%







  Net earnings

$   137.7

$   129.2

6.6%

3.5%






Net earnings per share - basic

$     2.06

$     1.89

9.0%







Net earnings per share - diluted

$     2.04

$     1.87

9.1%

5.9%






Weighted average shares - basic

66.8

68.4

-2.4%







Weighted average shares - diluted 

67.6

69.0

-2.1%




(a)

Revenues from services include fees received from our franchise offices of $6.4 million and $6.3 million for the three months ended September 30, 2017 and 2016, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $272.9 million and $273.1 million for the three months ended September 30, 2017 and 2016, respectively.

 

ManpowerGroup

Operating Unit Results

(In millions)







Three Months Ended September 30




% Variance




Amount

Constant


2017

2016

Reported

Currency


(Unaudited)

Revenues from Services:





  Americas:





      United States  (a)

$   659.9

$   723.7

-8.8%

-8.8%

      Other Americas

401.6

383.7

4.7%

3.6%


1,061.5

1,107.4

-4.1%

-4.5%

  Southern Europe:





      France

1,481.7

1,277.8

16.0%

10.2%

      Italy

386.1

299.0

29.1%

22.7%

      Other Southern Europe

450.6

389.5

15.7%

9.8%


2,318.4

1,966.3

17.9%

12.0%






  Northern Europe

1,367.9

1,300.1

5.2%

1.5%

  APME

665.4

650.9

2.2%

3.6%

  Right Management 

51.6

63.5

-18.8%

-19.6%


$5,464.8

$5,088.2

7.4%

4.3%






Operating Unit Profit:





  Americas:





      United States

$     43.6

$     41.0

6.4%

6.4%

      Other Americas

16.0

14.0

14.9%

13.2%


59.6

55.0

8.6%

8.1%

  Southern Europe:





      France

77.1

68.9

11.9%

6.3%

      Italy

24.2

18.4

31.5%

25.0%

      Other Southern Europe

16.2

13.7

18.0%

13.3%


117.5

101.0

16.3%

10.7%






  Northern Europe

49.4

53.9

-8.3%

-11.9%

  APME

27.4

25.3

7.8%

9.1%

  Right Management 

8.1

8.8

-7.8%

-8.3%


262.0

244.0



Corporate expenses

(25.3)

(23.9)



Intangible asset amortization expense

(8.8)

(9.0)



    Operating profit

227.9

211.1

7.9%

4.4%

Interest and other expenses (b)

(10.9)

(11.4)



    Earnings before income taxes

$   217.0

$   199.7





(a)

In the United States, revenues from services include fees received from our franchise offices of $3.9 million and $4.1 million for the three months ended September 30, 2017 and 2016, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $164.3 million and $179.8 million for the three months ended September 30, 2017 and 2016, respectively.



(b)  The components of interest and other expenses were:


2017

2016

        Interest expense

$      9.7

$      9.2

        Interest income

(1.2)

(1.0)

        Foreign exchange loss

0.1

-

        Miscellaneous expenses, net

2.3

3.2


$     10.9

$     11.4

 

ManpowerGroup

Results of Operations

(In millions, except per share data)







Nine Months Ended September 30




% Variance




Amount

Constant


2017

2016

Reported

Currency


(Unaudited)

Revenues from services (a)

$15,396.8

$14,698.0

4.8%

5.5%






Cost of services

12,846.7

12,205.2

5.3%

6.0%






  Gross profit

2,550.1

2,492.8

2.3%

3.0%






Selling and administrative expenses

2,000.6

1,954.0

2.4%

3.3%






  Operating profit

549.5

538.8

2.0%

2.0%






Interest and other expenses

36.2

34.4

5.1%







  Earnings before income taxes

513.3

504.4

1.8%

1.8%






Provision for income taxes

184.2

188.1

-2.1%







  Net earnings

$     329.1

$     316.3

4.1%

4.1%






Net earnings per share - basic

$      4.89

$      4.46

9.6%







Net earnings per share - diluted

$      4.84

$      4.42

9.5%

9.5%






Weighted average shares - basic

67.3

70.9

-5.1%







Weighted average shares - diluted

68.1

71.6

-5.0%




(a)

Revenues from services include fees received from our franchise offices of $17.5 million and $17.2 million for the nine months ended September 30, 2017 and 2016, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $759.3 million and $762.1 million for the nine months ended September 30, 2017 and 2016, respectively.

 

ManpowerGroup

Operating Unit Results

(In millions)







Nine Months Ended September 30




% Variance




Amount

Constant


2017

2016

Reported

Currency


(Unaudited)

Revenues from Services:





  Americas:





      United States  (a)

$  1,992.7

$  2,152.1

-7.4%

-7.4%

      Other Americas

1,151.9

1,082.2

6.4%

7.5%


3,144.6

3,234.3

-2.8%

-2.4%

  Southern Europe:





      France

3,975.5

3,608.8

10.2%

10.2%

      Italy

1,047.0

861.9

21.5%

21.5%

      Other Southern Europe

1,235.5

1,114.7

10.8%

9.8%


6,258.0

5,585.4

12.0%

11.9%






  Northern Europe

3,888.3

3,836.3

1.4%

4.1%

  APME

1,941.2

1,841.7

5.4%

5.5%

  Right Management 

164.7

200.3

-17.8%

-16.7%


$15,396.8

$14,698.0

4.8%

5.5%






Operating Unit Profit:





  Americas:





      United States

$     114.6

$     103.8

10.5%

10.5%

      Other Americas

41.4

39.4

5.1%

6.2%


156.0

143.2

9.0%

9.3%

  Southern Europe:





      France

197.4

183.6

7.5%

7.2%

      Italy

70.0

57.3

22.1%

22.4%

      Other Southern Europe

41.4

34.1

21.6%

20.7%


308.8

275.0

12.3%

12.1%






  Northern Europe

93.6

124.2

-24.6%

-24.8%

  APME

70.8

66.8

5.8%

6.1%

  Right Management 

25.4

32.8

-22.5%

-22.1%


654.6

642.0



Corporate expenses

(79.5)

(76.2)



Intangible asset amortization expense

(25.6)

(27.0)



    Operating profit

549.5

538.8

2.0%

2.0%

Interest and other expenses (b)

(36.2)

(34.4)



    Earnings before income taxes

$     513.3

$     504.4





(a)

In the United States, revenues from services include fees received from our franchise offices of $11.0 million and $11.1 million for the nine months ended September 30, 2017 and 2016, respectively.  These fees are primarily based on revenues generated by the franchise offices, which were $487.6 million and $511.5 million for the nine months ended September 30, 2017 and 2016, respectively.



(b)  The components of interest and other expenses were:



2017

2016

        Interest expense

$      28.1

$      27.9

        Interest income

(3.4)

(2.5)

        Foreign exchange losses

0.4

1.6

        Miscellaneous expenses, net

11.1

7.4


$      36.2

$      34.4

 

ManpowerGroup

Consolidated Balance Sheets

(In millions)






Sep. 30


Dec. 31


2017


2016


(Unaudited)

ASSETS




Current assets:




  Cash and cash equivalents

$   666.9


$   598.5

  Accounts receivable, net

5,181.0


4,413.1

  Prepaid expenses and other assets

125.7


121.3

      Total current assets

5,973.6


5,132.9





Other assets:




  Goodwill

1,322.0


1,239.9

  Intangible assets, net

288.1


294.4

  Other assets

843.7


759.7

      Total other assets

2,453.8


2,294.0





Property and equipment:




  Land, buildings, leasehold improvements and equipment

623.9


567.0

  Less:  accumulated depreciation and amortization

469.6


419.7

      Net property and equipment

154.3


147.3

             Total assets

$8,581.7


$7,574.2





LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




  Accounts payable

$2,233.3


$1,914.4

  Employee compensation payable

228.7


208.1

  Accrued liabilities

462.9


398.6

  Accrued payroll taxes and insurance

707.2


649.2

  Value added taxes payable

541.4


448.7

  Short-term borrowings and current maturities of long-term debt

452.7


39.8

      Total current liabilities

4,626.2


3,658.8





Other liabilities:




  Long-term debt

470.6


785.6

  Other long-term liabilities

762.2


683.4

      Total other liabilities

1,232.8


1,469.0





Shareholders' equity:




  ManpowerGroup shareholders' equity




    Common stock

1.2


1.2

    Capital in excess of par value

3,291.7


3,227.2

    Retained earnings 

2,558.2


2,291.3

    Accumulated other comprehensive loss

(290.6)


(426.1)

    Treasury stock, at cost

(2,927.8)


(2,731.7)

       Total ManpowerGroup shareholders' equity

2,632.7


2,361.9

  Noncontrolling interests

90.0


84.5

          Total shareholders' equity

2,722.7


2,446.4

             Total liabilities and shareholders' equity

$8,581.7


$7,574.2

 

ManpowerGroup

Consolidated Statements of Cash Flows

(In millions)






Nine Months Ended


September 30,


2017


2016


(Unaudited)

Cash Flows from Operating Activities:




  Net earnings

$329.1


$316.3

  Adjustments to reconcile net earnings to net cash provided by operating activities:




      Depreciation and amortization

62.3


64.0

      Deferred income taxes

40.4


36.4

      Provision for doubtful accounts

13.7


14.5

      Share-based compensation

21.4


21.0

      Excess tax benefit on exercise of share-based awards

-


(0.1)

  Changes in operating assets and liabilities, excluding the impact of acquisitions:




      Accounts receivable

(399.5)


(277.3)

      Other assets

(7.5)


(54.1)

      Other liabilities

227.6


281.8

            Cash provided by operating activities

287.5


402.5





Cash Flows from Investing Activities:




  Capital expenditures

(40.2)


(42.6)

  Acquisitions of businesses, net of cash acquired

(27.3)


(56.9)

  Proceeds from the sale of investments, property and equipment

11.9


3.5

            Cash used in investing activities

(55.6)


(96.0)





Cash Flows from Financing Activities:




  Net change in short-term borrowings

(2.4)


(3.9)

  Proceeds from long-term debt

0.1


-

  Repayments of long-term debt

(0.3)


(6.3)

  Payments of contingent consideration for acquisitions

(12.9)


(2.9)

  Proceeds from share-based awards and other equity transactions

40.8


5.5

  Other share-based award transactions

(18.2)


(6.6)

  Repurchases of common stock

(178.0)


(462.6)

  Dividends paid

(62.2)


(60.8)

            Cash used in financing activities

(233.1)


(537.6)





Effect of exchange rate changes on cash

69.6


3.7

Change in cash and cash equivalents

68.4


(227.4)





Cash and cash equivalents, beginning of period

598.5


730.5

Cash and cash equivalents, end of period

$666.9


$503.1

 

ManpowerGroup. (PRNewsFoto/ManpowerGroup) (PRNewsFoto/)

 

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