SEC Filing | ManpowerGroup Inc.

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10-Q

United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended:

September 30, 2021

☐ Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from: ______to______

Commission file number: 1-10686

MANPOWERGROUP INC.

(Exact name of registrant as specified in its charter)


	Wisconsin	39-1672779
	(State or other jurisdiction of incorporation)	(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

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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
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. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


		Shares Outstanding
Class		at November 5, 2021
Common Stock, $.01 par value		54,239,893

ManpowerGroup Inc.

INDEX


		Page Number
PART I	FINANCIAL INFORMATION
Item 1	Financial Statements (unaudited)
	Consolidated Balance Sheets	3-4
	Consolidated Statements of Operations	5
	Consolidated Statements of Comprehensive Income (Loss)	6
	Consolidated Statements of Cash Flows	7
	Consolidated Statements of Shareholders' Equity	8-9
	Notes to Consolidated Financial Statements	10-26
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27-45
Item 3	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4	Controls and Procedures	45

PART II	OTHER INFORMATION
Item 1A	Risk Factors	46
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 5	Other Information	47
Item 6	Exhibits	48

SIGNATURES		49

PART I - FINANCIAL INFORMATION

Item 1 – Financial Statements (unaudited)

ManpowerGroup Inc.

Consolidated Balance Sheets (Unaudited)

(in millions)

ASSETS


	September 30, 2021		December 31, 2020
Cash and cash equivalents	$	1,612.6	$	1,567.1
Accounts receivable, less allowance for doubtful accounts of $124.0 and $128.1, respectively		5,091.4		4,912.4
Prepaid expenses and other assets		154.7		186.9
Total current assets		6,858.7		6,666.4

Other Assets:
Goodwill		1,206.6		1,225.8
Intangible assets, less accumulated amortization of $433.3 and $425.4, respectively		232.2		248.6
Operating lease right-of-use assets		360.4		400.7
Other assets		675.6		651.6
Total other assets		2,474.8		2,526.7

Property and Equipment:
Land, buildings, leasehold improvements and equipment		598.3		614.7
Less: accumulated depreciation and amortization		479.5		479.6
Net property and equipment		118.8		135.1
Total assets	$	9,452.3	$	9,328.2

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

ManpowerGroup Inc.

Consolidated Balance Sheets (Unaudited)

(in millions, except share and per share data)

LIABILITIES AND SHAREHOLDERS’ EQUITY


	September 30, 2021			December 31, 2020
Current Liabilities:
Accounts payable	$	2,829.5		$	2,527.4
Employee compensation payable		260.0			231.8
Accrued liabilities		553.0			602.1
Accrued payroll taxes and insurance		718.0			752.0
Value added taxes payable		506.0			551.1
Short-term borrowings and current maturities of long-term debt		482.9			20.4
Total current liabilities		5,349.4			4,684.8

Other Liabilities:
Long-term debt		582.6			1,103.5
Long-term operating lease liability		268.5			305.1
Other long-term liabilities		768.6			781.2
Total other liabilities		1,619.7			2,189.8

Shareholders’ Equity:
ManpowerGroup shareholders' equity
Preferred stock, $.01 par value, authorized 25,000,000 shares, none issued		—			—
Common stock, $.01 par value, authorized 125,000,000 shares, issued 117,758,023 and 117,555,991 shares, respectively		1.2			1.2
Capital in excess of par value		3,434.0			3,402.5
Retained earnings		3,591.8			3,388.8
Accumulated other comprehensive loss		(444.6	)		(397.3	)
Treasury stock at cost, 63,520,656 and 61,990,021 shares, respectively		(4,109.0	)		(3,954.2	)
Total ManpowerGroup shareholders’ equity		2,473.4			2,441.0
Noncontrolling interests		9.8			12.6
Total shareholders’ equity		2,483.2			2,453.6
Total liabilities and shareholders’ equity	$	9,452.3		$	9,328.2

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

ManpowerGroup Inc.

Consolidated Statements of Operations (Unaudited)

(in millions, except per share data)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2021		2020		2021		2020
Revenues from services	$	5,140.6	$	4,584.8	$	15,342.1	$	12,946.1
Cost of services		4,287.6		3,859.7		12,860.9		10,920.3
Gross profit		853.0		725.1		2,481.2		2,025.8
Selling and administrative expenses, excluding goodwill impairment charge		702.5		663.5		2,062.4		1,909.7
Goodwill impairment charge		—		—		—		66.8
Selling and administrative expenses		702.5		663.5		2,062.4		1,976.5
Operating profit		150.5		61.6		418.8		49.3
Interest and other expenses, net		4.9		6.0		13.1		32.3
Earnings before income taxes		145.6		55.6		405.7		17.0
Provision for income taxes		47.9		45.3		134.4		69.4
Net earnings (loss)		97.7	$	10.3	$	271.3	$	(52.4	)
Net earnings (loss) per share – basic	$	1.80	$	0.18	$	4.96	$	(0.90	)
Net earnings (loss) per share – diluted	$	1.77	$	0.18	$	4.90	$	(0.90	)
Weighted average shares – basic		54.3		58.2		54.7		58.4
Weighted average shares – diluted		55.2		58.5		55.4		58.4

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

ManpowerGroup Inc.

Consolidated Statements of Comprehensive Income (Loss) (Unaudited)

(in millions)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2021			2020			2021			2020
Net earnings (loss)	$	97.7		$	10.3		$	271.3		$	(52.4	)
Other comprehensive (loss) income:
Foreign currency translation adjustments		(31.7	)		76.7			(99.9	)		29.1
Translation adjustments on derivative instruments, net of income taxes of $5.9, $(12.6), $16.1 and $(12.5), respectively		8.7			(25.2	)		44.1			(23.8	)
Translation adjustments of long-term intercompany loans		(0.5	)		(5.8	)		5.7			(6.2	)
Defined benefit pension plans and retiree health care plan, net of income taxes of $1.5, $0.3, $4.1 and $7.9, respectively		1.2			0.6			2.8			2.5
Pension settlement related to a U.S. plan, net of income taxes of $3.9 for 2020		—			—			—			6.6
Total other comprehensive (loss) income		(22.3	)		46.3			(47.3	)		8.2
Comprehensive income (loss)	$	75.4		$	56.6		$	224.0		$	(44.2	)

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.

ManpowerGroup Inc.

Consolidated Statements of Cash Flows (Unaudited)

(in millions)


	Nine Months Ended
	September 30,
	2021			2020
Cash Flows from Operating Activities:
Net earnings (loss)	$	271.3		$	(52.4	)
Adjustments to reconcile net earnings (loss) to net cash provided by operating activities:
Depreciation and amortization		50.9			55.4
Non-cash goodwill and other impairment charges		—			71.3
Non-cash operating lease right-of-use assets impairment		—			22.6
Deferred income taxes		(20.5	)		5.5
Provision for doubtful accounts		13.7			17.8
Share-based compensation		26.7			18.4
Changes in operating assets and liabilities, excluding the impact of acquisitions:
Accounts receivable		(354.0	)		785.8
Other assets		9.7			(15.1	)
Other liabilities		385.1			(193.6	)
Cash provided by operating activities		382.9			715.7

Cash Flows from Investing Activities:
Capital expenditures		(39.7	)		(30.5	)
Acquisition of businesses, net of cash acquired		(7.1	)		—
Proceeds from the sale of subsidiaries and property and equipment		2.2			8.0
Cash used in investing activities		(44.6	)		(22.5	)

Cash Flows from Financing Activities:
Net change in short-term borrowings		0.1			(30.6	)
Proceeds from long-term debt		0.4			2.0
Repayments of long-term debt		(2.2	)		(0.1	)
Payments of contingent consideration for acquisitions		(6.2	)		(1.7	)
Proceeds from share-based awards		5.3			7.4
Payments to noncontrolling interest		(1.2	)		(0.8	)
Other share-based award transactions		(4.6	)		(7.6	)
Repurchases of common stock		(150.1	)		(63.8	)
Dividends paid		(68.3	)		(63.2	)
Cash used in financing activities		(226.8	)		(158.4	)

Effect of exchange rate changes on cash		(66.0	)		27.1
Change in cash and cash equivalents		45.5			561.9

Cash and cash equivalents, beginning of period		1,567.1			1,025.8
Cash and cash equivalents, end of period	$	1,612.6		$	1,587.7

Supplemental Cash Flow Information:
Interest Paid	$	33.4		$	35.5
Income taxes paid, net	$	114.3		$	118.9
Non-cash operating activity: Right-of-use assets obtained in exchange for new operating lease liabilities	$	35.9		$	56.1

The accompanying Notes to Consolidated Financial Statements are an integral part of these statements.