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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 20, 2020

 

MANPOWERGROUP INC.

(Exact name of registrant as specified in its charter)

 

Wisconsin		1-10686		39-1672779
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

100 Manpower Place
Milwaukee, Wisconsin		53212
(Address of principal executive offices)		(Zip Code)

 

Registrant's telephone number, including area code:  (414) 961-1000

 

(Former name or former address, if changed since last report.)

 

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:

 

☐		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value	MAN	New York Stock Exchange

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ 

 

 

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Item 2.02 Results of Operations and Financial Condition

 

The information in this Item 2.02, including exhibit 99.1 attached herto, 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 20, 2020, we issued a press release announcing our results of operations for the three and nine months ended September 30, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Item 9.01.

Exhibits

 

Exhibit No.		Description
99.1		Press Release dated October 20, 2020
99.2		Presentation materials for October 20, 2020 Conference Call
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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SIGNATURE

 

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.

 

					MANPOWERGROUP INC.
Dated:		October 20, 2020			By:		/s/ John T. McGinnis
					Name:		John T. McGinnis
					Title:		Executive Vice President and Chief Financial Officer

 

 

 

Exhibit 99.1

 

 

 

ManpowerGroup Reports 3^nd Quarter 2020 Results

 

 

 

MILWAUKEE, October 20, 2020 -- ManpowerGroup (NYSE: MAN) today reported net earnings of $0.18 per diluted share for the three months ended September 30, 2020 compared to $2.42 per diluted share in the prior year period.  Net earnings in the quarter were $10.3 million compared to $146.1 million a year earlier.  Revenues for the third quarter were $4.6 billion, a 13% decline from the prior year period.  

The current year quarter included restructuring costs and other special items consisting of a discrete tax item and a loss on dispositions. The restructuring costs and other special items reduced earnings per share by $1.02 in the current quarter. Excluding the restructuring charges and other special items, earnings per share was $1.20 per diluted share in the quarter.  The prior year period included a special item related to the gain from the Greater China IPO which increased earnings per share by 50 cents.

Financial results in the quarter were also impacted by the weaker U.S. dollar relative to foreign currencies compared to the prior year period. Reported earnings per share in the quarter were not impacted by changes in foreign currencies compared to the prior year, but adjusted earnings per share excluding restructuring costs and other special items were positively impacted two cents.  On a constant currency basis, revenues decreased 14.5%. Excluding the impact of the restructuring costs and other special items, on a constant currency basis, net earnings per diluted share decreased 39%.

 

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Days Sales Outstanding improved by 3 days year over year reflecting our continued focus on collections and working capital management.  

Jonas Prising, ManpowerGroup Chairman & CEO, said, “As the global recovery took hold in the third quarter we experienced strengthening demand for our services reflecting the diversity of our offerings and strength of our digital capabilities. We also continued to advance strategic initiatives in the quarter including restructuring activities to improve efficiency, adjustments to our country portfolio to improve profitability, and ongoing execution of our digitization initiatives.  All of these actions are improving our business for further progress as we gradually recover from the current crisis.  I would like to thank our talented teams around the world for their contribution to these results, their unwavering support to clients and candidates as well as their commitment to creating a positive social impact.”

“We anticipate diluted earnings per share in the fourth quarter will be between $1.06 and $1.14, which includes an estimated favorable currency impact of 3 cents.”

Net losses for the nine months ended September 30, 2020 were $52.4 million, or net loss of $0.90 per diluted share compared to net earnings of $326.9 million, or net earnings of $5.40 per diluted share in the prior year. The year to date period included special items and restructuring costs which reduced earnings per share by $3.09. The prior year-to-date period included special items and restructuring costs which increased earnings per share by 5 cents. Revenues for the nine-month period were $12.9 billion, a decrease of 17% from the prior year or a decrease of 16% in constant currency. Earnings per share for the nine-month period were negatively impacted 1 cent by changes in foreign currencies compared to the prior year, or 2 cents excluding the special items and restructuring costs.  

In conjunction with its third quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on October 20, 2020 at 7:30 a.m. CDT (8:30 a.m. EDT). Prepared remarks for the conference call are included within the Investor Relations section of our website at manpowergroup.com. 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 hundreds of thousands of organizations every year, providing them with skilled talent while finding meaningful, sustainable employment for millions of people across a wide range of industries and skills. Our expert family of brands – Manpower, Experis and Talent Solutions – creates substantially more value for candidates and clients across more than 75 countries and territories and has done so for over 70 years. We are recognized consistently for our diversity - as a best place to work for Women, Inclusion, Equality and Disability and in 2020 ManpowerGroup was named one of the World's Most Ethical Companies for the eleventh year - all confirming our position as the brand of choice for in-demand talent.

 

Forward-Looking Statements

 

 

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This news release contains statements, including statements regarding the anticipated financial and operational impacts of the COVID-19 pandemic and related economic conditions and the Company’s efforts to respond to such impacts, 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 due to numerous factors.  These factors include those 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, 2019, as well as the risks and uncertainties arising from the COVID-19 global pandemic and related governmental actions that are discussed in the Company’s Periodic Reports on Form 10-Q for the quarter ended March 31, 2020, which information is incorporated herein by reference.

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ManpowerGroup

Results of Operations

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ManpowerGroup

Operating Unit Results

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ManpowerGroup

Results of Operations

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ManpowerGroup

Operating Unit Results

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(c)     2019 includes an $80.0 million gain related to our acquisition of the remaining controlling interest of our Swiss            franchise.

 

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ManpowerGroup

Consolidated Balance Sheets

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ManpowerGroup

Consolidated Statements of Cash Flows

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ManpowerGroup Third Quarter Results | October 20, 2020 Exhibit 99.2

FORWARD-LOOKING STATEMENT This presentation contains statements, including statements regarding the anticipated financial and operational impacts of the COVID-19 pandemic and related economic conditions and the Company’s efforts to respond to such impacts, 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 due to numerous factors. These factors include those 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, 2019, as well as the risks and uncertainties arising from the COVID-19 global pandemic and related governmental actions that are included under the heading “Risk Factors” in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, which information is incorporated herein by reference. The Company assumes no obligation to update or revise any forward-looking statements. We reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include a reconciliation of these measures, where appropriate, to GAAP on the Investor Relations section of our website at manpowergroup.com.

Consolidated Financial Highlights ManpowerGroup 2020 Third Quarter Results As Reported As Adjusted(1) Q3 Financial Highlights 13% 13% Revenue $4.6B 14% CC 14% CC 20 bps 20 bps Gross Margin 15.8% 72% 37% Operating Profit $62M ($117M as adjusted) 72% CC 38% CC 280 bps 100 bps OP Margin 1.3% (2.6% as adjusted) -93% -38% EPS $0.18 ($1.20 as adjusted) -93% CC -39% CC As Adjusted figures exclude the impact of restructuring charges of $49.9M ($42.1M net of tax), the $5.8M ($5.2M net of tax) loss from dispositions of subsidiaries and a discrete tax item of $12M in Q3 2020; while Q3 2019 excludes the impact of the gain of $30M from our Greater China IPO.

(1) (3) ManpowerGroup 2020 Third Quarter Results EPS Bridge – Q3 vs. Guidance Midpoint Represents unfavorable impacts of $0.21 related to discrete tax item and $0.09 related to the loss from dispositions of subsidiaries.

Consolidated Gross Margin Change ManpowerGroup 2020 Third Quarter Results

Trend Business Line Gross Profit – Q3 2020(1) (1) Business line classifications can vary by entity and are subject to change as service requirements change. █ Manpower █ Experis █ Talent Solutions █ ManpowerGroup – Total ManpowerGroup 2020 Third Quarter Results

SG&A Expense Bridge – Q3 YoY (in millions of USD) Reported ratio is unfavorably impacted 10 bps due to the effect of currency exchange rates on our business mix. In constant currency, SG&A as reported was 14.4% of revenue. ManpowerGroup 2020 Third Quarter Results

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. Americas Segment (20% of Revenue) As Reported As Adjusted(1) Q3 Financial Highlights 15% 15% Revenue $929M 11% CC 11% CC 47% 19% OUP $32M ($48M as adjusted) 44% CC 16% CC 200 bps 20 bps OUP Margin 3.4% (5.2% as adjusted) Excludes the impact of restructuring costs of $16.7M ($12.6M net of tax) in Q3 2020. ManpowerGroup 2020 Third Quarter Results

Revenue Trend - CC Revenue Trend % of Segment Revenue Americas – Q3 Revenue Trend YoY Average Daily Revenue Trend - CC On an organic basis, revenue and ADR for the US decreased 15% and 16%, respectively. (1) ManpowerGroup 2020 Third Quarter Results

As Reported As Adjusted(1) Q3 Financial Highlights 10% 10% Revenue $2.1B 15% CC 15% CC 38% 27% OUP $72M ($85M as adjusted) 41% CC 30% CC 150 bps 90 bps OUP Margin 3.4% (4.0% as adjusted) Southern Europe Segment (46% of Revenue) ManpowerGroup 2020 Third Quarter Results Excludes the impacts of restructuring costs of $7.6M ($5.9M net of tax) and the $5.8M ($5.2M net of tax) loss from dispositions of subsidiaries in Q3 2020.

Southern Europe – Q3 Revenue Trend YoY Revenue Trend - CC Revenue Trend % of Segment Revenue Average Daily Revenue Trend - CC ManpowerGroup 2020 Third Quarter Results

Northern Europe Segment (21% of Revenue) ManpowerGroup 2020 Third Quarter Results As Reported As Adjusted(1) Q3 Financial Highlights 19% 19% Revenue $948M 22% CC 22% CC N/A 93% OUP -$23M (+$2M as adjusted) 92% CC 440 bps 180 bps OUP Margin -2.4% (+0.2% as adjusted) Excludes the impact of restructuring costs of $24.1M ($22.6M net of tax) in Q3 2020.

Northern Europe – Q3 Revenue Trend YoY Revenue Trend - CC Revenue Trend % of Segment Revenue Average Daily Revenue Trend - CC ManpowerGroup 2020 Third Quarter Results

APME Segment (13% of Revenue) ManpowerGroup 2020 Third Quarter Results As Reported As Adjusted(1) Q3 Financial Highlights 5% 5% Revenue $596M 6% CC 6% CC 70% 26% OUP $17M ($18M as adjusted) 70% CC 26% CC 590 bps 90 bps OUP Margin 2.8% (3.0% as adjusted) Excludes the impact of restructuring costs of $1.5M ($1.0M net of tax) in Q3 2020 and the impact of the Greater China IPO gain of $30M in Q3 2019.

APME – Q3 Revenue Trend YoY Revenue Trend - CC Revenue Trend % of Segment Revenue Average Daily Revenue Trend - CC (1) ManpowerGroup 2020 Third Quarter Results

Cash Flow Summary – 9 Months YTD ManpowerGroup 2020 Third Quarter Results

Balance Sheet Highlights Total Debt (in millions of USD) Total Debt to Total Capitalization Total Debt Net Debt Net (Cash) ManpowerGroup 2020 Third Quarter Results

Debt and Credit Facilities – September 30, 2020 (in millions of USD) (3) (1)(2) ManpowerGroup 2020 Third Quarter Results The $600M agreement requires that we comply with a Leverage Ratio (net 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 net Debt-to-EBITDA ratio of -0.24 and a fixed charge coverage ratio of 3.33 as of September 30, 2020. (In the agreement, net debt is defined as total debt less cash in excess of $400M.) As of September 30, 2020, there were $0.5M of standby letters of credit issued under the agreement. Under the $600M agreement, we have an option to increase the total availability under the facility by an additional $200M. Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $336.6M. 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. Interest Rate Maturity Date Total Outstanding Remaining Available Euro Notes - €500M 1.809% Jun 2026 582 - Euro Notes - €400M 1.913% Sep 2022 468 - Revolving Credit Agreement 1.148% Jun 2023 - 599 Uncommitted lines and Other Various Various 38 296 Total Debt 1,088 895

Fourth Quarter 2020 Outlook Revenue Total Down 8-10% (Down 10-12% CC) Americas Down 13-15% (Down 9-11% CC) Southern Europe Down 5-7% (Down 10-12% CC) Northern Europe Down 13-15% (Down 15-17% CC) APME Down 2-4% (Down 4-6% CC) Gross Profit Margin 15.8 – 16.0% Operating Profit Margin 2.3 – 2.5% Tax Rate 39.0% EPS $1.06 – $1.14 (favorable $0.03 currency) ManpowerGroup 2020 Third Quarter Results

Continued improvement in year-over-year revenue trend during the quarter, marking five months of improvement since April 2020. Our talented teams have provided critical work to help people and companies around the world respond and reset following these unprecedented crises. Our Talent Solutions MSP offering was the only one in our industry to be recognized by Everest Group as both a Star Performer and Global Leader in its Contingent Workforce Management Index, scoring highly for vision, strategy and innovation. The actions we are taking to digitize, diversify and innovate are positioning us for further success in 2021 and beyond. Key Take Aways ManpowerGroup 2020 Third Quarter Results