UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 19, 2013
MANPOWERGROUP INC.
(Exact name of registrant as specified in its charter)
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Wisconsin
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1-10686
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39-1672779
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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100 Manpower Place
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Milwaukee, Wisconsin
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53212
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(Address of principal executive offices)
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(Zip Code)
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Registrant's telephone number, including area code: (414) 961-1000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Securities Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 2.02 Results of Operations and Financial Condition
On April 19, 2013, we issued a press release announcing our results of operations for the three months ended March 31, 2013. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Exhibits.
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Exhibit No.
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Description
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| 99.1 |
Press Release dated April 19, 2013
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| 99.2 |
Presentation materials for April 19, 2013 conference call
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
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MANPOWERGROUP INC.
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Dated: April 19, 2013
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By:
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/s/ Michael J. Van Handel
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Michael J. Van Handel
Executive Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit No.
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Description
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| 99.1 |
Press Release dated April 19, 2013
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| 99.2 |
Presentation materials for April 19, 2013 conference call
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Exhibit 99.1
FOR IMMEDIATE RELEASE Contact:
Mike Van Handel
+1.414.906.6305
ManpowerGroup Reports 1st Quarter 2013 Results
MILWAUKEE, April 19, 2013 -- ManpowerGroup (NYSE: MAN) today reported that net earnings for the three months ended March 31, 2013 were $23.9 million, or 31 cents per diluted share, compared to net earnings of $40.2 million, or 50 cents per diluted share, a year earlier. Revenues for the first quarter were $4.8 billion, a decrease of 6% from the prior year period.
Included in the first quarter results is a restructuring charge, primarily related to office consolidations and severance costs of $34.8 million ($25.3 million after tax or 32 cents per diluted share). Net earnings in the first quarter were negatively impacted by 1 cent per diluted share, as foreign currencies were slightly weaker compared to the prior year period.
Jeffrey A. Joerres, ManpowerGroup Chairman and CEO, said, “The first quarter performance was largely attributed to slightly stronger than anticipated revenues and tax credits. Additionally, our recalibration of our cost base is advancing ahead of schedule. Those efforts, which are focused on simplifying our business, were initially rolled out in the fourth quarter of 2012 and continued into the first quarter, resulting in the restructuring charge in the quarter. Our team has done an outstanding job dealing with the high levels of uncertainty in Europe and has continued to address client and prospect needs with our unique suite of solutions.
“We anticipate second quarter earnings per share will range between 84 cents to 92 cents before restructuring charges. We do not expect changes in currency rates to have a significant impact in the quarter based on current exchange rates.”
In conjunction with its first quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on April 19, 2013 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://www.manpowergroup.com/investors.
Supplemental financial information referenced in the conference call can be found at http://www.manpowergroup.com/investors.
About ManpowerGroup
ManpowerGroup™ (NYSE: MAN) is the world leader in innovative workforce solutions that ensure the talent sustainability of the world’s workforce for the good of companies, communities, countries, and individuals themselves. Specializing in solutions that help organizations achieve business agility and workforce flexibility, ManpowerGroup leverages its 65 years of world of work expertise to create the work models, design the people practices and access the talent sources its clients need for the future. From staffing, recruitment, workforce consulting, outsourcing and career management to assessment, training and development, ManpowerGroup delivers the talent to drive the innovation and productivity of organizations in a world where talentism is the dominant economic system. Every day, ManpowerGroup connects more than 630,000 people to work and builds their experience and employability through its relationships with 400,000 clients across 80 countries and territories. ManpowerGroup’s suite of solutions is offered through ManpowerGroup™ Solutions, Manpower®, Experis™ and Right Management®. ManpowerGroup was named one of the World’s Most Ethical Companies for the third consecutive year in 2013, confirming our position as the most trusted brand in the industry. See how ManpowerGroup makes powering the world of work humanly possible at www.manpowergroup.com. Follow ManpowerGroup Chairman and CEO Jeff Joerres on Twitter: Twitter.com/manpowergroupjj
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, 2012, which information is incorporated herein by reference.
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Results of Operations
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(In millions, except per share data)
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Three Months Ended March 31
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% Variance
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Amount
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Constant
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2013
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2012
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Reported
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Currency
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(Unaudited)
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Revenues from services (a)
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$ | 4,768.9 | $ | 5,096.4 | -6.4 | % | -5.8 | % | ||||||||
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Cost of services
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3,978.8 | 4,249.0 | -6.4 | % | -5.7 | % | ||||||||||
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Gross profit
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790.1 | 847.4 | -6.8 | % | -6.2 | % | ||||||||||
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Selling and administrative expenses
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735.7 | 753.6 | -2.4 | % | -1.9 | % | ||||||||||
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Operating profit
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54.4 | 93.8 | -42.0 | % | -40.5 | % | ||||||||||
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Interest and other expenses
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11.5 | 11.8 | -2.3 | % | ||||||||||||
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Earnings before income taxes
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42.9 | 82.0 | -47.7 | % | -46.0 | % | ||||||||||
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Provision for income taxes
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19.0 | 41.8 | -54.5 | % | ||||||||||||
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Net earnings
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$ | 23.9 | $ | 40.2 | -40.6 | % | -38.7 | % | ||||||||
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Net earnings per share - basic
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$ | 0.31 | $ | 0.50 | -38.0 | % | ||||||||||
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Net earnings per share - diluted
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$ | 0.31 | $ | 0.50 | -38.0 | % | -36.0 | % | ||||||||
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Weighted average shares - basic
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77.1 | 80.2 | -3.9 | % | ||||||||||||
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Weighted average shares - diluted
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78.2 | 80.9 | -3.3 | % | ||||||||||||
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(a) Revenues from services include fees received from our franchise offices of $5.3 million and $5.4 million for the three months ended March 31, 2013 and 2012, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $234.7 million and $253.9 million for the three months ended March 31, 2013 and 2012, respectively.
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ManpowerGroup
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Operating Unit Results
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(In millions)
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Three Months Ended March 31
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% Variance
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Amount
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Constant
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2013
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2012
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Reported
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Currency
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(Unaudited)
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Revenues from Services:
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Americas:
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United States (a)
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$ | 706.1 | $ | 735.8 | -4.0 | % | -4.0 | % | ||||||||
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Other Americas
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386.9 | 402.5 | -3.9 | % | -1.4 | % | ||||||||||
| 1,093.0 | 1,138.3 | -4.0 | % | -3.1 | % | |||||||||||
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Southern Europe:
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France
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1,145.2 | 1,291.8 | -11.3 | % | -11.8 | % | ||||||||||
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Italy
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257.9 | 267.5 | -3.6 | % | -4.1 | % | ||||||||||
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Other Southern Europe
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193.4 | 195.2 | -0.9 | % | -1.9 | % | ||||||||||
| 1,596.5 | 1,754.5 | -9.0 | % | -9.6 | % | |||||||||||
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Northern Europe
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1,370.3 | 1,444.0 | -5.1 | % | -5.6 | % | ||||||||||
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APME
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632.5 | 680.0 | -7.0 | % | -1.4 | % | ||||||||||
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Right Management
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76.6 | 79.6 | -3.8 | % | -2.5 | % | ||||||||||
| $ | 4,768.9 | $ | 5,096.4 | -6.4 | % | -5.8 | % | |||||||||
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Operating Unit Profit:
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Americas:
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United States
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$ | 7.4 | $ | 6.9 | 7.9 | % | 7.9 | % | ||||||||
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Other Americas
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8.7 | 15.3 | -43.1 | % | -43.6 | % | ||||||||||
| 16.1 | 22.2 | -27.4 | % | -27.7 | % | |||||||||||
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Southern Europe:
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France
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14.3 | 5.5 | 161.9 | % | 165.4 | % | ||||||||||
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Italy
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11.7 | 14.5 | -19.5 | % | -19.9 | % | ||||||||||
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Other Southern Europe
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2.3 | 3.5 | -33.8 | % | -35.4 | % | ||||||||||
| 28.3 | 23.5 | 20.7 | % | 21.1 | % | |||||||||||
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Northern Europe
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10.6 | 43.9 | -75.8 | % | -75.6 | % | ||||||||||
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APME
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14.8 | 19.6 | -25.2 | % | -19.4 | % | ||||||||||
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Right Management
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2.0 | 2.5 | -18.4 | % | -7.5 | % | ||||||||||
| 71.8 | 111.7 | |||||||||||||||
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Corporate expenses
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(24.4 | ) | (26.3 | ) | ||||||||||||
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Intangible asset amortization expense
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(8.4 | ) | (9.0 | ) | ||||||||||||
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Reclassification of French business tax
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15.4 | 17.4 | ||||||||||||||
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Operating profit
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54.4 | 93.8 | -42.0 | % | -40.5 | % | ||||||||||
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Interest and other expenses (b)
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(11.5 | ) | (11.8 | ) | ||||||||||||
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Earnings before income taxes
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$ | 42.9 | $ | 82.0 | ||||||||||||
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(a) In the United States, revenues from services include fees received from our franchise offices of $3.2 million for both the three months ended March 31, 2013 and 2012. These fees are primarily based on revenues generated by the franchise offices, which were $155.1 million and $164.4 million for the three months ended March 31, 2013 and 2012, respectively.
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(b) The components of interest and other expenses were:
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| 2013 | 2012 | |||||||||||||||
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Interest expense
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$ | 10.7 | $ | 10.6 | ||||||||||||
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Interest income
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(0.9 | ) | (1.8 | ) | ||||||||||||
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Foreign exchange loss (gain)
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0.4 | (0.2 | ) | |||||||||||||
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Miscellaneous expense, net
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1.3 | 3.2 | ||||||||||||||
| $ | 11.5 | $ | 11.8 | |||||||||||||
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Consolidated Balance Sheets
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(In millions)
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Mar. 31
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Dec. 31
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2013
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2012
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(Unaudited)
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ASSETS
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Current assets:
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Cash and cash equivalents
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$ | 583.4 | $ | 648.1 | ||||
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Accounts receivable, net
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4,042.0 | 4,179.0 | ||||||
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Prepaid expenses and other assets
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180.4 | 172.9 | ||||||
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Future income tax benefits
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80.0 | 60.6 | ||||||
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Total current assets
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4,885.8 | 5,060.6 | ||||||
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Other assets:
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Goodwill and other intangible assets, net
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1,352.8 | 1,371.9 | ||||||
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Other assets
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386.9 | 395.3 | ||||||
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Total other assets
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1,739.7 | 1,767.2 | ||||||
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Property and equipment:
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Land, buildings, leasehold improvements and equipment
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690.9 | 704.1 | ||||||
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Less: accumulated depreciation and amortization
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513.1 | 519.3 | ||||||
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Net property and equipment
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177.8 | 184.8 | ||||||
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Total assets
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$ | 6,803.3 | $ | 7,012.6 | ||||
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Current liabilities:
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Accounts payable
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$ | 1,470.0 | $ | 1,466.5 | ||||
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Employee compensation payable
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174.2 | 210.7 | ||||||
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Accrued liabilities
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493.9 | 533.8 | ||||||
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Accrued payroll taxes and insurance
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597.3 | 685.7 | ||||||
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Value added taxes payable
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437.5 | 472.5 | ||||||
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Short-term borrowings and current maturities of long-term debt
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302.2 | 308.0 | ||||||
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Total current liabilities
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3,475.1 | 3,677.2 | ||||||
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Other liabilities:
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Long-term debt
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448.9 | 462.1 | ||||||
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Other long-term liabilities
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378.2 | 372.5 | ||||||
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Total other liabilities
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827.1 | 834.6 | ||||||
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Shareholders' equity:
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Common stock
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1.1 | 1.1 | ||||||
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Capital in excess of par value
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2,890.1 | 2,873.2 | ||||||
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Retained earnings
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1,125.4 | 1,101.5 | ||||||
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Accumulated other comprehensive (loss) income
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(6.9 | ) | 34.4 | |||||
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Treasury stock, at cost
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(1,508.6 | ) | (1,509.4 | ) | ||||
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Total shareholders' equity
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2,501.1 | 2,500.8 | ||||||
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Total liabilities and shareholders' equity
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$ | 6,803.3 | $ | 7,012.6 | ||||
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Consolidated Statements of Cash Flows
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(In millions)
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Three Months Ended
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March 31
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2013
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2012
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(Unaudited)
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Cash Flows from Operating Activities:
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Net earnings
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$ | 23.9 | $ | 40.2 | ||||
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Adjustments to reconcile net earnings to net cash used in operating activities:
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Depreciation and amortization
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24.2 | 24.3 | ||||||
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Deferred income taxes
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2.7 | (0.8 | ) | |||||
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Provision for doubtful accounts
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5.9 | 5.0 | ||||||
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Share-based compensation
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6.5 | 6.9 | ||||||
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Excess tax benefit on exercise of share-based awards
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(0.3 | ) | - | |||||
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Changes in operating assets and liabilities, excluding the impact of acquisitions:
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Accounts receivable
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20.2 | 34.4 | ||||||
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Other assets
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(17.1 | ) | (16.7 | ) | ||||
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Other liabilities
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(128.3 | ) | (114.0 | ) | ||||
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Cash used in operating activities
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(62.3 | ) | (20.7 | ) | ||||
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Cash Flows from Investing Activities:
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Capital expenditures
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(12.8 | ) | (19.7 | ) | ||||
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Acquisitions of businesses, net of cash acquired
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- | (1.5 | ) | |||||
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Proceeds from sales of property and equipment
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0.6 | 0.1 | ||||||
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Cash used in investing activities
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(12.2 | ) | (21.1 | ) | ||||
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Cash Flows from Financing Activities:
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Net change in short-term borrowings
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2.2 | 9.5 | ||||||
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Proceeds from long-term debt
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- | 0.1 | ||||||
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Repayments of long-term debt
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(0.3 | ) | (8.4 | ) | ||||
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Proceeds from share-based awards
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10.2 | 3.5 | ||||||
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Other share-based award transactions, net
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1.0 | (4.5 | ) | |||||
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Cash provided by financing activities
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13.1 | 0.2 | ||||||
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Effect of exchange rate changes on cash
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(3.3 | ) | 14.6 | |||||
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Change in cash and cash equivalents
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(64.7 | ) | (27.0 | ) | ||||
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Cash and cash equivalents, beginning of period
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648.1 | 580.5 | ||||||
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Cash and cash equivalents, end of period
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$ | 583.4 | $ | 553.5 | ||||
Exhibit 99.2
ManpowerGroup First Quarter Results April 19, 2013
Forward-Looking Statement This presentation includes forward-looking statements, including earnings projections which are subject to risks and uncertainties. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the ManpowerGroup Inc. Annual Report on Form 10-K dated December 31, 2012, which information is incorporated herein by reference, and such other factors as may be described from time to time in the Company’s SEC filings. *
As Reported Excluding Non-recurring Items Q1 Financial Highlights 6% 6% Revenue $4.8B 6% CC 6% CC Revenue $4.8B 0 bps 0 bps Gross Margin 16.6% 42% 5% Operating Profit $54M 41% CC 3% CC Operating Profit $54M 70 bps 10 bps OP Margin 1.1% 38% 26% EPS $.31 36% CC 28% CC EPS $.31 Throughout this presentation, the difference between reported variances and Constant Currency (CC) variances represents the impact of currency on our financial results. Constant Currency is further explained on our Web site. Consolidated Financial Highlights * (1) Excludes the impact of restructuring charges of $34.8M (1)
EPS Bridge – Q1 vs. Guidance Midpoint (1) Includes charges as follows: Americas ($5.9M), Southern Europe ($1.2M), Northern Europe ($17.1M), APME ($2.4M), Right Management ($3.8M), Corporate ($4.4M) (1) *
(in millions) OUP as Reported Restructuring OUP Excluding Restructuring Americas 16.1 5.9 22.0 1.5% 2.0% Southern Europe 28.3 1.2 29.5 1.8% 1.9% Northern Europe 10.6 17.1 27.7 0.8% 2.0% APME 14.8 2.4 17.2 2.3% 2.7% Right Management 2.0 3.8 5.8 2.7% 7.6% Corporate expenses (24.4) 4.4 (20.0) Intangible asset amortization expense (8.4) (8.4) Reclassification of French business tax 15.4 15.4 Operating Profit 54.4 34.8 89.2 1.1% 1.9% Operating Unit Profit by Segment Q1 2013 *
Simplification Plan Savings Total annualized SG&A reduction of $125M (4%) by December 2013. All regions and corporate impacted. Targeted 2013 P/L savings of $80M. Restructuring charges of $50M - $60M in 2013. (Millions) *
Consolidated Gross Margin Change *
* $790M Growth in CC % Business Line Gross Profit – Q1 2013 █ Manpower █ Experis █ ManpowerGroup - Total █ ManpowerGroup Solutions █ Right Management
SG&A Expense Bridge – Q1 YoY (in millions of USD) *
As Reported Excluding Non-recurring Items Q1 Financial Highlights 4% 4% Revenue $1.1B 3% CC 3% CC Revenue $1.1B 27% 1% OUP $16M 28% CC 0% CC OUP $16M 50 bps 0 bps OUP Margin 1.5% * (1) Americas Segment (23% of Revenue) Included in these amounts is the US, which had revenue of $706M (-4%) and OUP of $7.4M (+7.9%) or $10.0M (+46%) excluding restructuring charges in Q1 2013. Excludes the impact of restructuring charges of $5.9M in Q1 2013. Operating Unit Profit (OUP) is the measure that we use to evaluate segment performance. OUP is equal to segment revenues less direct costs and branch and national headquarters operating costs. (2)
Americas – Q1 Revenue Growth YoY * Revenue Growth - CC Revenue Growth % of Segment Revenue 65% 13% 6% 16%
As Reported Excluding Non-recurring Items Q1 Financial Highlights 9% 9% Revenue $1.6B 10% CC 10% CC Revenue $1.6B 21% 26% OUP $28M 21% CC 26% CC OUP $28M 50 bps 60 bps OUP Margin 1.8% * (1) Southern Europe Segment (33% of Revenue) Included in these amounts is France, which had revenue of $1.1B (-12% CC) and OUP of $14M (+165% CC). On an organic basis, France revenue decreased 13% in CC. Excludes the impact of restructuring charges of $1.2M in Q1 2013. (2)
Southern Europe – Q1 Revenue Growth YoY * Revenue Growth - CC Revenue Growth % of Segment Revenue 72% 16% 5% 7% (1) (1) On an organic basis, France revenue decreased 12% (-13% in CC).
As Reported Excluding Non-recurring Items Q1 Financial Highlights 5% 5% Revenue $1.4B 6% CC 6% CC Revenue $1.4B 76% 37% OUP $11M 76% CC 37% CC OUP $11M 220 bps 100 bps OUP Margin 0.8% * Northern Europe Segment (29% of Revenue) (1) Excludes the impact of restructuring charges of $17.1M in Q1 2013.
Northern Europe – Q1 Revenue Growth YoY * Revenue Growth - CC Revenue Growth % of Segment Revenue 25% 23% 12% 9% 24% 7%
As Reported Excluding Non-recurring Items Q1 Financial Highlights 7% 7% Revenue $633M 1% CC 1% CC Revenue $633M 25% 13% OUP $15M 19% CC 7% CC OUP $15M 60 bps 20 bps OUP Margin 2.3% APME Segment (13% of Revenue) * (1) Excludes the impact of restructuring charges of $2.4M in Q1 2013.
APME – Q1 Revenue Growth YoY * Revenue Growth - CC Revenue Growth % of Segment Revenue 38% 26% 36%
* Right Management Segment (2% of Revenue) As Reported Excluding Non-recurring Items Q1 Financial Highlights 4% 4% Revenue $77M 3% CC 3% CC Revenue $77M 18% 134% OUP $2M 8% CC 143% CC OUP $2M 40 bps 450 bps OUP Margin 2.7% (1) Excludes the impact of restructuring charges of $3.8M in Q1 2013
($ in millions) 2013 2012 Net Earnings 24 40 Non-cash Provisions and Other 39 35 Change in Operating Assets/Liabilities (125) (96) Capital Expenditures (13) (19) Free Cash Flow (75) (40) Change in Debt 2 1 Effect of Exchange Rate Changes (3) 15 Other 11 (3) Change in Cash (65) (27) Cash Flow Summary – Q1 *
Balance Sheet Highlights * Total Debt ($ in millions) Total Debt to Total Capitalization Total Debt Net Debt
Interest Rate Maturity Date Total Outstanding at 3/31/13 Remaining Available at 3/31/13 Euro Notes: - Euro 200M 4.86% Jun 2013 256 - - Euro 350M 4.505% Jun 2018 449 - Revolving Credit Agreement 1.48% Oct 2016 - 799 Uncommitted lines and Other Various Various 46 318 Total Debt 751 1,117 Credit Facilities ($ in millions) * Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $364.0M. Total subsidiary borrowings are limited to $300M due to restrictions in our Revolving Credit Facility, with the exception of Q3 when subsidiary borrowings are limited to $600M. (1) (2) (2) (1) The $800M agreement requires that we comply with a Leverage Ratio (Debt-to-EBITDA) of not greater than 3.5 to 1 and a Fixed Charge Coverage Ratio of not less than 1.5 to 1, in addition to other customary restrictive covenants. As defined in the agreement, we had a Debt-to-EBITDA ratio of 1.08 and a fixed charge coverage ratio of 2.78 as of March 31, 2013. As of March 31, 2013, there were $0.9M of standby letters of credit issued under the agreement.
Revenue Total Down 3-5% (Down 3-5% CC) Americas Up/Down 1% (Up/Down 1% CC) Southern Europe Down 7-9% (Down 8-10% CC) Northern Europe Down 1-3% (Down 1-3% CC) APME Down 5-7% (Down 0-2% CC) Right Management Right Management Down 2-4% (Down 1-3% CC) Gross Profit Margin Gross Profit Margin 16.6 – 16.8% Operating Profit Margin Operating Profit Margin 2.5 – 2.7% Tax Rate Tax Rate 42% EPS (before restructuring charges of $15-20M) EPS (before restructuring charges of $15-20M) $0.84 – $0.92 (no currency impact) Second Quarter Outlook * (32% excl. reclassification of France business tax)
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