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): October 21, 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 1.01 Entry into a Material Definitive Agreement
On October 15, 2013, ManpowerGroup Inc. (the “Company”) amended and restated its Five Year Credit Agreement (the “Amended and Restated Agreement”) with a syndicate of lenders and Citibank, N.A., as Administrative Agent for the lenders.
The Amended and Restated Agreement amends the Company’s Five Year Credit Agreement dated October 5, 2011 to, among other things:
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Decrease the revolving commitments from $800.0 million to $600.0 million,
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Permit an increase in the aggregate revolving commitments during the term of the Amended and Restated Agreement from $600.0 million up to $800.0 million upon the Company’s request and the satisfaction of various conditions,
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Revise the termination date of the facility from October 5, 2016 to October 15, 2018,
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Permit the termination date of the facility to be extended by an additional year twice during the term of the Amended and Restated Agreement upon the Company’s request and the satisfaction of various conditions, and
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Reduce the applicable margin and the applicable percentage at certain debt ratings, however there were no changes to the applicable margin or the applicable percentage at the Company’s debt ratings as of the date of this report.
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The remaining material terms and conditions of the Amended and Restated Agreement are substantially similar to the material terms and conditions of the Company’s Five Year Credit Agreement dated October 5, 2011.
Item 2.02 Results of Operations and Financial Condition
The information in this Item 2.02, including exhibit 99.1 attached hereto, is furnished solely pursuant to Item 2.02 of Form 8-K. Consequently, such information is not deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Further, the information in this Item 2.02, including exhibit 99.1, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933.
On October 21, 2013, we issued a press release announcing our results of operations for the three- and nine-month periods ended September 30, 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
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Press Release dated October 21, 2013
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99.2
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Presentation materials for October 21, 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: October 21, 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
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Press Release dated October 21, 2013
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99.2
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Presentation materials for October 21, 2013 conference call
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Exhibit 99.1
| FOR IMMEDIATE RELEASE | Contact: | ||
| Mike Van Handel | |||
| +1.414.906.6305 | |||
| [email protected] |
ManpowerGroup Reports 3rd Quarter 2013 Results
MILWAUKEE, October 21, 2013 -- ManpowerGroup (NYSE: MAN) today reported that earnings per diluted share for the three months ended September 30, 2013 were $1.18 compared to 79 cents in the prior year period. Net earnings in the quarter were $94.7 million compared to $63.1 million a year earlier. Revenues for the third quarter were $5.2 billion, which is in line with the prior year period.
Included in the current year third quarter results is a restructuring charge, primarily related to office consolidations and severance costs, of $8.1 million ($6.2 million after tax or 8 cents per diluted share). Excluding these charges, earnings per diluted share in the quarter were $1.26. Net earnings in the third quarter were not materially impacted by changes in foreign currencies compared to the prior year period.
Jeffrey A. Joerres, ManpowerGroup Chairman and CEO, said, “We continue to experience positive momentum in all of the established strategic focus areas. Our strong results for the third quarter were driven by more positive revenue trends and operational leverage achieved through our re-calibration efforts. Our European operations’ revenue experienced slow but steadily improving trends throughout the quarter. Our team across the world remains positive and all of our brands are well positioned as we enter the fourth quarter.
“We are anticipating the fourth quarter of 2013 diluted earnings per share to be in the range of $1.18 to $1.26, which includes an estimated unfavorable currency impact of 1 cent. This is before considering anticipated restructuring charges of $12 million to $17 million,” Joerres stated.
Earnings per diluted share for the nine months ended September 30, 2013 were $2.36 compared to $1.79 per diluted share in 2012. Net earnings were $186.8 million compared to $144.3 million in the prior year. Revenues for the nine-month period were $15.0 billion, a decrease of 3 percent from the prior year in reported U.S. dollars and in constant currency. Earnings for the nine month period in 2013 include restructuring costs of 58 cents per diluted share. Earnings in the prior year nine month period include restructuring costs and legal settlement costs of 25 cents per diluted share. Additionally, 2013 nine month results were unfavorably impacted 2 cents per diluted share due to changes in foreign currencies compared to the prior year.
In conjunction with its third quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on October 21, 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. Any forward-looking statement in this release speaks only as of the date on which it is made. The company assumes no obligation to update or revise any forward-looking statements.
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ManpowerGroup
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||||||||||||||||
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Results of Operations
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(In millions, except per share data)
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Three Months Ended September 30
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% Variance
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Amount
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Constant
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|||||||||||||||
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2013
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2012
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Reported
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Currency
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|||||||||||||
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(Unaudited)
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||||||||||||||||
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Revenues from services (a)
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$ | 5,188.8 | $ | 5,172.3 | 0.3 | % | -0.3 | % | ||||||||
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Cost of services
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4,335.2 | 4,316.1 | 0.4 | % | -0.3 | % | ||||||||||
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Gross profit
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853.6 | 856.2 | -0.3 | % | -0.8 | % | ||||||||||
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Selling and administrative expenses
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691.2 | 737.6 | -6.3 | % | -6.6 | % | ||||||||||
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Operating profit
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162.4 | 118.6 | 37.1 | % | 35.8 | % | ||||||||||
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Interest and other expenses
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5.4 | 10.1 | -45.5 | % | ||||||||||||
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Earnings before income taxes
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157.0 | 108.5 | 44.7 | % | 43.4 | % | ||||||||||
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Provision for income taxes
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62.3 | 45.4 | 37.1 | % | ||||||||||||
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Net earnings
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$ | 94.7 | $ | 63.1 | 50.2 | % | 49.8 | % | ||||||||
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Net earnings per share - basic
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$ | 1.21 | $ | 0.79 | 53.2 | % | ||||||||||
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Net earnings per share - diluted
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$ | 1.18 | $ | 0.79 | 49.4 | % | 49.4 | % | ||||||||
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Weighted average shares - basic
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78.4 | 79.5 | -1.4 | % | ||||||||||||
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Weighted average shares - diluted
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80.0 | 80.0 | 0.0 | % | ||||||||||||
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(a) Revenues from services include fees received from our franchise offices of $6.6 million and $6.4 million for the three months ended September 30, 2013 and 2012, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $285.4 million and $270.5 million for the three months ended September 30, 2013 and 2012, respectively.
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ManpowerGroup
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Operating Unit Results
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(In millions)
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Three Months Ended September 30
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% Variance
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Amount
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Constant
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|||||||||||||||
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2013
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2012
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Reported
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Currency
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|||||||||||||
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(Unaudited)
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||||||||||||||||
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Revenues from Services:
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Americas:
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||||||||||||||||
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United States (b)
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$ | 761.8 | $ | 760.8 | 0.1 | % | 0.1 | % | ||||||||
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Other Americas
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382.0 | 388.3 | -1.6 | % | 3.4 | % | ||||||||||
| 1,143.8 | 1,149.1 | -0.5 | % | 1.2 | % | |||||||||||
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Southern Europe:
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France
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1,420.7 | 1,392.0 | 2.1 | % | -3.6 | % | ||||||||||
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Italy
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269.7 | 246.8 | 9.3 | % | 3.3 | % | ||||||||||
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Other Southern Europe
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227.9 | 189.2 | 20.4 | % | 12.5 | % | ||||||||||
| 1,918.3 | 1,828.0 | 4.9 | % | -1.0 | % | |||||||||||
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Northern Europe
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1,448.1 | 1,426.9 | 1.5 | % | -0.3 | % | ||||||||||
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APME
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601.4 | 688.2 | -12.6 | % | -1.2 | % | ||||||||||
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Right Management
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77.2 | 80.1 | -3.6 | % | -1.8 | % | ||||||||||
| $ | 5,188.8 | $ | 5,172.3 | 0.3 | % | -0.3 | % | |||||||||
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Operating Unit Profit: (a)
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Americas:
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United States
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$ | 34.3 | $ | 24.5 | 39.8 | % | 39.8 | % | ||||||||
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Other Americas
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11.4 | 10.9 | 4.9 | % | 7.9 | % | ||||||||||
| 45.7 | 35.4 | 29.1 | % | 30.0 | % | |||||||||||
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Southern Europe:
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France
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58.4 | 36.4 | 60.7 | % | 51.5 | % | ||||||||||
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Italy
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10.7 | 9.4 | 14.4 | % | 8.4 | % | ||||||||||
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Other Southern Europe
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4.0 | 2.2 | 79.8 | % | 67.2 | % | ||||||||||
| 73.1 | 48.0 | 52.5 | % | 43.9 | % | |||||||||||
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Northern Europe
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50.3 | 42.5 | 18.3 | % | 16.8 | % | ||||||||||
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APME
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19.2 | 20.8 | -7.2 | % | 4.9 | % | ||||||||||
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Right Management
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4.5 | 5.6 | -20.9 | % | -13.0 | % | ||||||||||
| 192.8 | 152.3 | |||||||||||||||
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Corporate expenses
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(21.9 | ) | (24.5 | ) | ||||||||||||
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Intangible asset amortization expense
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(8.5 | ) | (9.2 | ) | ||||||||||||
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Operating profit
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162.4 | 118.6 | 37.1 | % | 35.8 | % | ||||||||||
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Interest and other expenses (c)
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(5.4 | ) | (10.1 | ) | ||||||||||||
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Earnings before income taxes
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$ | 157.0 | $ | 108.5 | ||||||||||||
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(a) On a consolidated basis, the French business tax is reported in provision for income taxes, in accordance with the current accounting guidance on income taxes. Prior to the second quarter of 2013, we internally reviewed the financial results of our French operations including the French business tax within OUP given the operational nature of these taxes. While we continue to view this tax as operational, during the second quarter of 2013 we changed our internal reporting to exclude the French business tax from the OUP of our France reportable segment. Therefore our France reportable segment OUP now excludes the business tax and we no longer need to show the business tax amount separately to reconcile to the consolidated results. All previously reported segment results have been restated to conform to the current year presentation. This change in segment reporting has no impact on our reporting of consolidated results.
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(b) In the United States, revenues from services include fees received from our franchise offices of $4.2 million and $3.9 million for the three months ended September 30, 2013 and 2012, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $181.6 million and $175.8 million for the three months ended September 30, 2013 and 2012, respectively.
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| (c) The components of interest and other expenses were: | 2013 | 2012 | ||||||||||||||
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Interest expense
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$ | 7.9 | $ | 10.3 | ||||||||||||
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Interest income
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(0.9 | ) | (1.5 | ) | ||||||||||||
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Foreign exchange (gain) loss
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(0.3 | ) | 0.3 | |||||||||||||
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Miscellaneous (income) expense, net
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(1.3 | ) | 1.0 | |||||||||||||
| $ | 5.4 | $ | 10.1 | |||||||||||||
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ManpowerGroup
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||||||||||||||||
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Results of Operations
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(In millions, except per share data)
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||||||||||||||||
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Nine Months Ended September 30
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% Variance
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Amount
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Constant
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|||||||||||||||
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2013
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2012
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Reported
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Currency
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|||||||||||||
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(Unaudited)
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||||||||||||||||
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Revenues from services (a)
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$ | 14,998.4 | $ | 15,475.4 | -3.1 | % | -3.0 | % | ||||||||
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Cost of services
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12,518.3 | 12,910.1 | -3.0 | % | -3.0 | % | ||||||||||
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Gross profit
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2,480.1 | 2,565.3 | -3.3 | % | -3.2 | % | ||||||||||
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Selling and administrative expenses
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2,135.2 | 2,258.5 | -5.5 | % | -5.3 | % | ||||||||||
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Operating profit
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344.9 | 306.8 | 12.4 | % | 12.9 | % | ||||||||||
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Interest and other expenses
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27.2 | 33.2 | -17.8 | % | ||||||||||||
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Earnings before income taxes
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317.7 | 273.6 | 16.1 | % | 16.6 | % | ||||||||||
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Provision for income taxes
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130.9 | 129.3 | 1.2 | % | ||||||||||||
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Net earnings
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$ | 186.8 | $ | 144.3 | 29.5 | % | 30.8 | % | ||||||||
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Net earnings per share - basic
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$ | 2.41 | $ | 1.81 | 33.1 | % | ||||||||||
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Net earnings per share - diluted
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$ | 2.36 | $ | 1.79 | 31.8 | % | 33.0 | % | ||||||||
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Weighted average shares - basic
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77.6 | 79.9 | -2.9 | % | ||||||||||||
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Weighted average shares - diluted
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79.2 | 80.6 | -1.7 | % | ||||||||||||
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(a) Revenues from services include fees received from our franchise offices of $18.0 million and $17.9 million for the nine months ended September 30, 2013 and 2012, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $792.4 million and $794.4 million for the nine months ended September 30, 2013 and 2012, respectively.
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ManpowerGroup
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Operating Unit Results
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(In millions)
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Nine Months Ended September 30
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% Variance
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Amount
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Constant
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|||||||||||||||
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2013
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2012
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Reported
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Currency
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|||||||||||||
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(Unaudited)
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||||||||||||||||
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Revenues from Services:
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||||||||||||||||
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Americas:
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||||||||||||||||
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United States (b)
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$ | 2,216.4 | $ | 2,259.8 | -1.9 | % | -1.9 | % | ||||||||
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Other Americas
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1,156.1 | 1,180.0 | -2.0 | % | 0.8 | % | ||||||||||
| 3,372.5 | 3,439.8 | -2.0 | % | -1.0 | % | |||||||||||
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Southern Europe:
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France
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3,886.5 | 4,111.4 | -5.5 | % | -8.1 | % | ||||||||||
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Italy
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806.0 | 788.3 | 2.2 | % | -0.4 | % | ||||||||||
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Other Southern Europe
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624.3 | 574.5 | 8.7 | % | 4.7 | % | ||||||||||
| 5,316.8 | 5,474.2 | -2.9 | % | -5.7 | % | |||||||||||
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Northern Europe
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4,217.2 | 4,286.7 | -1.6 | % | -2.5 | % | ||||||||||
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APME
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1,857.2 | 2,031.1 | -8.6 | % | -0.2 | % | ||||||||||
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Right Management
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234.7 | 243.6 | -3.6 | % | -2.1 | % | ||||||||||
| $ | 14,998.4 | $ | 15,475.4 | -3.1 | % | -3.0 | % | |||||||||
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Operating Unit Profit: (a)
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||||||||||||||||
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Americas:
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||||||||||||||||
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United States
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$ | 72.3 | $ | 39.1 | 84.8 | % | 84.8 | % | ||||||||
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Other Americas
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32.0 | 36.7 | -12.9 | % | -12.6 | % | ||||||||||
| 104.3 | 75.8 | 37.6 | % | 37.7 | % | |||||||||||
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Southern Europe:
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||||||||||||||||
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France
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129.0 | 93.9 | 37.4 | % | 33.3 | % | ||||||||||
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Italy
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37.1 | 36.5 | 1.6 | % | -0.9 | % | ||||||||||
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Other Southern Europe
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7.5 | 8.7 | -13.5 | % | -18.4 | % | ||||||||||
| 173.6 | 139.1 | 24.8 | % | 21.1 | % | |||||||||||
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Northern Europe
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94.1 | 125.6 | -25.1 | % | -25.4 | % | ||||||||||
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APME
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54.2 | 62.2 | -12.8 | % | -3.5 | % | ||||||||||
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Right Management
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13.9 | 5.2 | 168.6 | % | 186.9 | % | ||||||||||
| 440.1 | 407.9 | |||||||||||||||
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Corporate expenses
|
(69.9 | ) | (73.7 | ) | ||||||||||||
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Intangible asset amortization expense
|
(25.3 | ) | (27.4 | ) | ||||||||||||
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Operating profit
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344.9 | 306.8 | 12.4 | % | 12.9 | % | ||||||||||
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Interest and other expenses (c)
|
(27.2 | ) | (33.2 | ) | ||||||||||||
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Earnings before income taxes
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$ | 317.7 | $ | 273.6 | ||||||||||||
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(a) On a consolidated basis, the French business tax is reported in provision for income taxes, in accordance with the current accounting guidance on income taxes. Prior to the second quarter of 2013, we internally reviewed the financial results of our French operations including the French business tax within OUP given the operational nature of these taxes. While we continue to view this tax as operational, during the second quarter of 2013 we changed our internal reporting to exclude the French business tax from the OUP of our France reportable segment. Therefore our France reportable segment OUP now excludes the business tax and we no longer need to show the business tax amount separately to reconcile to the consolidated results. All previously reported segment results have been restated to conform to the current year presentation. This change in segment reporting has no impact on our reporting of consolidated results.
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||||||||||||||||
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(b) In the United States, revenues from services include fees received from our franchise offices of $11.2 million and $10.9 million for the nine months ended September 30, 2013 and 2012, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $512.0 million and $520.8 million for the nine months ended September 30, 2013 and 2012, respectively.
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||||||||||||||||
| (c) The components of interest and other expenses were: | 2013 | 2012 | ||||||||||||||
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Interest expense
|
$ | 28.9 | $ | 31.1 | ||||||||||||
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Interest income
|
(2.7 | ) | (4.7 | ) | ||||||||||||
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Foreign exchange losses
|
1.5 | 0.6 | ||||||||||||||
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Miscellaneous (income) expense, net
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(0.5 | ) | 6.2 | |||||||||||||
| $ | 27.2 | $ | 33.2 | |||||||||||||
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ManpowerGroup
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||||||||
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Consolidated Balance Sheets
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||||||||
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(In millions)
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||||||||
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Sep. 30
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Dec. 31
|
|||||||
|
2013
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2012
|
|||||||
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(Unaudited)
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||||||||
|
ASSETS
|
||||||||
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Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 488.7 | $ | 648.1 | ||||
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Accounts receivable, net
|
4,294.1 | 4,179.0 | ||||||
|
Prepaid expenses and other assets
|
158.9 | 172.9 | ||||||
|
Future income tax benefits
|
69.5 | 60.6 | ||||||
|
Total current assets
|
5,011.2 | 5,060.6 | ||||||
|
Other assets:
|
||||||||
|
Goodwill and other intangible assets, net
|
1,373.9 | 1,371.9 | ||||||
|
Other assets
|
549.1 | 395.3 | ||||||
|
Total other assets
|
1,923.0 | 1,767.2 | ||||||
|
Property and equipment:
|
||||||||
|
Land, buildings, leasehold improvements and equipment
|
708.9 | 704.1 | ||||||
|
Less: accumulated depreciation and amortization
|
537.0 | 519.3 | ||||||
|
Net property and equipment
|
171.9 | 184.8 | ||||||
|
Total assets
|
$ | 7,106.1 | $ | 7,012.6 | ||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable
|
$ | 1,552.8 | $ | 1,466.5 | ||||
|
Employee compensation payable
|
216.4 | 210.7 | ||||||
|
Accrued liabilities
|
524.8 | 533.8 | ||||||
|
Accrued payroll taxes and insurance
|
621.1 | 685.7 | ||||||
|
Value added taxes payable
|
505.3 | 472.5 | ||||||
|
Short-term borrowings and current maturities of long-term debt
|
40.3 | 308.0 | ||||||
|
Total current liabilities
|
3,460.7 | 3,677.2 | ||||||
|
Other liabilities:
|
||||||||
|
Long-term debt
|
476.2 | 462.1 | ||||||
|
Other long-term liabilities
|
375.8 | 372.5 | ||||||
|
Total other liabilities
|
852.0 | 834.6 | ||||||
|
Shareholders' equity:
|
||||||||
|
Common stock
|
1.1 | 1.1 | ||||||
|
Capital in excess of par value
|
2,966.1 | 2,873.2 | ||||||
|
Retained earnings
|
1,252.8 | 1,101.5 | ||||||
|
Accumulated other comprehensive income
|
75.3 | 34.4 | ||||||
|
Treasury stock, at cost
|
(1,501.9 | ) | (1,509.4 | ) | ||||
|
Total shareholders' equity
|
2,793.4 | 2,500.8 | ||||||
|
Total liabilities and shareholders' equity
|
$ | 7,106.1 | $ | 7,012.6 | ||||
|
ManpowerGroup
|
||||||||
|
Consolidated Statements of Cash Flows
|
||||||||
|
(In millions)
|
||||||||
|
Nine Months Ended
|
||||||||
|
September 30
|
||||||||
|
2013
|
2012
|
|||||||
|
(Unaudited)
|
||||||||
|
Cash Flows from Operating Activities:
|
||||||||
|
Net earnings
|
$ | 186.8 | $ | 144.3 | ||||
|
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:
|
||||||||
|
Depreciation and amortization
|
70.9 | 75.0 | ||||||
|
Deferred income taxes
|
(0.1 | ) | (10.9 | ) | ||||
|
Provision for doubtful accounts
|
19.1 | 18.0 | ||||||
|
Share-based compensation
|
22.8 | 22.8 | ||||||
|
Excess tax benefit on exercise of share-based awards
|
(4.5 | ) | - | |||||
|
Changes in operating assets and liabilities, excluding the impact of acquisitions:
|
||||||||
|
Accounts receivable
|
(128.8 | ) | (197.7 | ) | ||||
|
Other assets
|
(101.1 | ) | (8.9 | ) | ||||
|
Other liabilities
|
46.6 | (57.2 | ) | |||||
|
Cash provided by (used in) operating activities
|
111.7 | (14.6 | ) | |||||
|
Cash Flows from Investing Activities:
|
||||||||
|
Capital expenditures
|
(33.6 | ) | (48.6 | ) | ||||
|
Acquisitions of businesses, net of cash acquired
|
(18.2 | ) | (46.0 | ) | ||||
|
Proceeds from sales of property and equipment
|
2.6 | 2.4 | ||||||
|
Cash used in investing activities
|
(49.2 | ) | (92.2 | ) | ||||
|
Cash Flows from Financing Activities:
|
||||||||
|
Net change in short-term borrowings
|
(1.1 | ) | (8.4 | ) | ||||
|
Proceeds from long-term debt
|
3.6 | 751.6 | ||||||
|
Repayments of long-term debt
|
(268.7 | ) | (702.2 | ) | ||||
|
Proceeds from share-based awards
|
65.8 | 4.8 | ||||||
|
Other share-based award transactions, net
|
12.0 | (4.8 | ) | |||||
|
Repurchases of common stock
|
- | (44.2 | ) | |||||
|
Dividends paid
|
(35.5 | ) | (34.3 | ) | ||||
|
Cash used in financing activities
|
(223.9 | ) | (37.5 | ) | ||||
|
Effect of exchange rate changes on cash
|
2.0 | 8.4 | ||||||
|
Change in cash and cash equivalents
|
(159.4 | ) | (135.9 | ) | ||||
|
Cash and cash equivalents, beginning of period
|
648.1 | 580.5 | ||||||
|
Cash and cash equivalents, end of period
|
$ | 488.7 | $ | 444.6 | ||||
Exhibit 99.2
ManpowerGroup Third Quarter Results October 21, 2013
Forward-Looking Statements This presentation contains statements, including financial projections, that are forward-looking in nature. These statements are based on managements’ current expectations or beliefs, and are subject to known and unknown risks and uncertainties regarding expected future results. 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. Any forward-looking statements in this presentation speak only as of the date hereof. The Company assumes no obligation to update or revise any forward-looking statements. *
As Reported Excluding Non-recurring Items Q3 Financial Highlights 0% 0% Revenue $5.2B 0% CC 0% CC Revenue $5.2B 10 bps 10 bps Gross Margin 16.5% 37% 44% Operating Profit $162M 36% CC 43% CC Operating Profit $162M 80 bps 100 bps OP Margin 3.1% 49% 59% EPS $1.18 49% CC 59% CC EPS $1.18 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 * Excludes the impact of restructuring charges of $8.1M in Q3 2013. (1)
EPS Bridge – Q3 vs. Guidance Midpoint Includes restructuring charges as follows: Americas ($1.1M), Southern Europe ($0.6M), Northern Europe ($2.4M), APME ($1.1M), Right Management ($2.9M) (1) * + 0.01 + 0.10 + 0.05 - 0.01 + 0.02
(in millions of USD) OUP as Reported Restructuring OUP excluding Restructuring Americas 45.7 4.0% 1.1 46.8 4.1% Southern Europe 73.1 3.8% 0.6 73.7 3.8% Northern Europe 50.3 3.5% 2.4 52.7 3.6% APME 19.2 3.2% 1.1 20.3 3.4% Right Management 4.5 5.8% 2.9 7.4 9.5% Corporate Expenses (21.9) - (21.9) Intangible Amortization Expense (8.5) - (8.5) Operating Profit 162.4 3.1% 8.1 170.5 3.3% Operating Unit Profit by Segment Q3 2013 *
Consolidated Gross Margin Change *
* $854M Growth in CC % Business Line Gross Profit – Q3 2013 █ Manpower █ Experis █ ManpowerGroup - Total █ ManpowerGroup Solutions █ Right Management
SG&A Expense Bridge – Q3 YoY (in millions of USD) * Productivity Gain 13.2% % of Revenue 14.3% % of Revenue
SG&A Expense Bridge –YTD YoY (in millions of USD) * Productivity Gain 13.8% % of Revenue 14.4% % of Revenue
Simplification Plan Savings Cost recalibration well ahead of target. Further productivity improvement as we refine delivery opportunity. 2013 SG&A savings in P/L $80M $150M 2013 SG&A run rate reduction $125M $180M 2013 restructuring charges $50M-$60M $75-$80M Initial Revised Target Estimate
As Reported Excluding Non-recurring Items Q3 Financial Highlights 0% 0% Revenue $1.1B 1% CC 1% CC Revenue $1.1B 29% 32% OUP $46M 30% CC 33% CC OUP $46M 90 bps 100 bps OUP Margin 4.0% * (1) Americas Segment (22% of Revenue) Included in these amounts is the US, which had revenue of $762M (flat) and OUP of $34.3M (+40%). Excludes the impact of restructuring charges of $1.1M in Q3 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 – Q3 Revenue Growth YoY * Revenue Growth - CC Revenue Growth % of Segment Revenue 67% 13% 5% 15%
As Reported Excluding Non-recurring Items Q3 Financial Highlights 5% 5% Revenue $1.9B 1% CC 1% CC Revenue $1.9B 53% 54% OUP $73M 44% CC 45% CC OUP $73M 120 bps 120 bps OUP Margin 3.8% * (1) Southern Europe Segment (37% of Revenue) Included in these amounts is France, which had revenue of $1.4B (-4% CC) and OUP of $58.4M (+52% CC), or $58.6M (+52% CC) excluding the impact of restructuring charges in Q3 2013. Excludes the impact of restructuring charges of $0.6M in Q3 2013. (2)
Southern Europe – Q3 Revenue Growth YoY * Revenue Growth - CC Revenue Growth % of Segment Revenue 74% 14% 5% 7% (1) On an organic basis, Spain revenue increased 9% (3% in CC).
As Reported Excluding Non-recurring Items Q3 Financial Highlights 1% 1% Revenue $1.4B 0% CC 0% CC Revenue $1.4B 18% 24% OUP $50M 17% CC 22% CC OUP $50M 50 bps 60 bps OUP Margin 3.5% * Northern Europe Segment (28% of Revenue) (1) Excludes the impact of restructuring charges of $2.4M in Q3 2013.
Northern Europe – Q3 Revenue Growth YoY * Revenue Growth - CC Revenue Growth % of Segment Revenue 31% 22% 13% 10% 17% 7%
As Reported Excluding Non-recurring Items Q3 Financial Highlights 13% 13% Revenue $601M 1% CC 1% CC Revenue $601M 7% 2% OUP $19M 5% CC 11% CC OUP $19M 20 bps 40 bps OUP Margin 3.2% APME Segment (12% of Revenue) * (1) Excludes the impact of restructuring charges of $1.1M in Q3 2013.
APME – Q3 Revenue Growth YoY * Revenue Growth - CC Revenue Growth % of Segment Revenue 38% 24% 38%
* Right Management Segment (1% of Revenue) As Reported Excluding Non-recurring Items Q3 Financial Highlights 4% 4% Revenue $77M 2% CC 2% CC Revenue $77M 21% 30% OUP $4M 13% CC 36% CC OUP $4M 120 bps 250 bps OUP Margin 5.8% (1) Excludes the impact of restructuring charges of $2.9M in Q3 2013.
(in millions of USD) 2013 2012 Net Earnings 187 144 Non-cash Provisions and Other 108 105 Change in Operating Assets/Liabilities (183) (264) Capital Expenditures (34) (48) Free Cash Flow 78 (63) Change in Debt (266) 41 Acquisitions of Businesses net of cash acquired (18) (46) Proceeds from Share-Based Awards 66 5 Repurchases of Common Stock - (44) Dividends Paid (36) (34) Effect of Exchange Rate Changes 2 8 Other 15 (3) Change in Cash (159) (136) Cash Flow Summary – 9 months YTD *
Balance Sheet Highlights * Total Debt ($ in millions) Total Debt to Total Capitalization Total Debt Net Debt
Interest Rate Maturity Date Total Outstanding Remaining Available Euro Notes - € 350M 4.505% Jun 2018 473 - Revolving Credit Agreement 1.45% Oct 2016 - 799 Uncommitted lines and Other Various Various 43 404 Total Debt 516 1,203 Credit Facilities – September 30, 2013 (in millions of USD) * (1) (3) 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 0.74 and a fixed charge coverage ratio of 2.36 as of September 30, 2013. As of September 30, 2013, there were $0.9M of standby letters of credit issued under the agreement. As of October 15, 2013, we amended our revolving credit agreement to reduce the facility size to $600M and extend the termination date to October 2018. Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $446.9M. 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. (2) (2)
Revenue Total Flat/Down 2% (Up/Down 1% CC) Americas Flat/Down 2% (Flat/Up 2% CC) Southern Europe Up 3-5% (Flat/Up 2% CC) Northern Europe Up/Down 1% (Flat/Down 2% CC) APME Down 13-15% (Down 1-3% CC) Right Management Right Management Down 3-5% (Down 1-3% CC) Gross Profit Margin Gross Profit Margin 16.5 – 16.7% Operating Profit Margin Operating Profit Margin 3.2 – 3.4% Tax Rate Tax Rate 38% – 39% EPS (before restructuring charges of $12-17M) EPS (before restructuring charges of $12-17M) $1.18 – $1.26 (unfavorable $0.01 currency) Fourth Quarter Outlook *
Recalibrating Costs Simplify in Four Areas
Questions *