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, 2023

☐ 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 1, 2023
Common Stock, $.01 par value		48,808,805

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	5
	Consolidated Statements of Cash Flows	6
	Consolidated Statements of Shareholders' Equity	7-8
	Notes to Consolidated Financial Statements	9-23
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24-41
Item 3	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4	Controls and Procedures	42

PART II	OTHER INFORMATION
Item 1A	Risk Factors	43
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 5	Other Information	43
Item 6	Exhibits	44

SIGNATURES		45

PART I - FINANCIAL INFORMATION

Item 1 – Financial Statements (unaudited)

ManpowerGroup Inc.

Consolidated Balance Sheets (Unaudited)

(in millions)

ASSETS


	September 30, 2023		December 31, 2022
Cash and cash equivalents	$	571.1	$	639.0
Accounts receivable, less allowance for doubtful accounts of $102.8 and $109.3, respectively		4,600.2		5,137.4
Prepaid expenses and other assets		165.3		158.0
Total current assets		5,336.6		5,934.4

Other Assets:
Goodwill		1,620.1		1,628.1
Intangible assets, less accumulated amortization of $492.7 and $468.3, respectively		523.6		549.5
Operating lease right-of-use assets		400.1		365.7
Other assets		588.8		540.5
Total other assets		3,132.6		3,083.8

Property and Equipment:
Land, buildings, leasehold improvements and equipment		510.9		584.9
Less: accumulated depreciation and amortization		391.3		472.7
Net property and equipment		119.6		112.2
Total assets	$	8,588.8	$	9,130.4

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, 2023			December 31, 2022
Current Liabilities:
Accounts payable	$	2,578.2		$	2,831.4
Employee compensation payable		226.0			271.7
Accrued liabilities		563.6			572.6
Accrued payroll taxes and insurance		644.5			746.7
Value added taxes payable		401.8			462.7
Short-term borrowings and current maturities of long-term debt		13.6			26.6
Total current liabilities		4,427.7			4,911.7

Other Liabilities:
Long-term debt		948.5			959.9
Long-term operating lease liability		306.2			266.6
Other long-term liabilities		493.1			534.1
Total other liabilities		1,747.8			1,760.6

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 118,378,414 and 118,028,009 shares, respectively		1.2			1.2
Capital in excess of par value		3,505.0			3,484.2
Retained earnings		3,968.7			3,868.5
Accumulated other comprehensive loss		(483.1	)		(458.7	)
Treasury stock at cost, 69,266,511 and 67,468,433 shares, respectively		(4,589.1	)		(4,447.9	)
Total ManpowerGroup shareholders’ equity		2,402.7			2,447.3
Noncontrolling interests		10.6			10.8
Total shareholders’ equity		2,413.3			2,458.1
Total liabilities and shareholders’ equity	$	8,588.8		$	9,130.4

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,
	2023		2022		2023		2022
Revenues from services	$	4,675.6	$	4,800.9	$	14,284.0	$	15,018.3
Cost of services		3,853.7		3,922.4		11,736.7		12,321.5
Gross profit		821.9		878.5		2,547.3		2,696.8
Selling and administrative expenses		752.1		717.0		2,252.0		2,215.9
Operating profit		69.8		161.5		295.3		480.9
Interest and other expenses, net		15.1		4.7		34.4		14.1
Earnings before income taxes		54.7		156.8		260.9		466.8
Provision for income taxes		24.4		45.5		87.6		141.7
Net earnings	$	30.3	$	111.3	$	173.3	$	325.1
Net earnings per share – basic	$	0.61	$	2.15	$	3.46	$	6.18
Net earnings per share – diluted	$	0.60	$	2.13	$	3.42	$	6.10
Weighted average shares – basic		49.5		51.7		50.1		52.6
Weighted average shares – diluted		50.1		52.3		50.7		53.3

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

ManpowerGroup Inc.

Consolidated Statements of Comprehensive Income (Unaudited)

(in millions)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
Net earnings	$	30.3		$	111.3		$	173.3		$	325.1
Other comprehensive income (loss):
Foreign currency translation		(50.8	)		(147.9	)		7.2			(305.9	)
Translation adjustments of long-term intercompany loans		(0.5	)		(0.4	)		(0.6	)		1.1
Adjustments on derivative instruments, net of income taxes of $8.5, $15.5, $0.5 and $36.2, respectively		28.6			86.4			(27.9	)		158.0
Unrealized adjustment on interest rate swap		(0.1	)		(0.1	)		(0.3	)		1.9
Defined benefit pension plans and retiree health care plan, net of income taxes of $0.2, $0.2, $0.2 and $0.5, respectively		(0.8	)		0.3			(2.8	)		1.1
Total other comprehensive loss		(23.6	)		(61.7	)		(24.4	)		(143.8	)
Comprehensive income	$	6.7		$	49.6		$	148.9		$	181.3

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,
	2023			2022
Cash Flows from Operating Activities:
Net earnings	$	173.3		$	325.1
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		64.3			63.9
Loss on sales of subsidiaries, net		1.3			3.9
Deferred income taxes		12.3			1.5
Provision for doubtful accounts		5.4			7.2
Share-based compensation		20.0			29.2
Changes in operating assets and liabilities:
Accounts receivable		460.2			195.9
Other assets		(51.3	)		5.3
Other liabilities		(451.0	)		(342.8	)
Cash provided by operating activities		234.5			289.2

Cash Flows from Investing Activities:
Capital expenditures		(55.1	)		(55.9	)
Acquisition of businesses, net of cash acquired		—			(16.4	)
Net proceeds from the sales of subsidiaries and property and equipment		2.6			7.0
Cash used in investing activities		(52.5	)		(65.3	)

Cash Flows from Financing Activities:
Net change in short-term borrowings		(13.7	)		(1.5	)
Net repayments of revolving debt facility		—			(75.0	)
Proceeds from long-term debt		0.7			421.1
Repayments of long-term debt		(0.7	)		(412.1	)
Payments for debt issuance costs		—			(2.4	)
Proceeds from derivative settlement		—			2.0
Payments of contingent consideration for acquisitions		—			(1.7	)
Proceeds from share-based awards		1.8			0.4
Payments to noncontrolling interests		(0.6	)		(1.0	)
Other share-based award transactions		(10.3	)		(8.4	)
Repurchases of common stock		(129.8	)		(245.0	)
Dividends paid		(73.1	)		(71.2	)
Cash used in financing activities		(225.7	)		(394.8	)

Effect of exchange rate changes on cash		(24.2	)		(149.4	)
Change in cash and cash equivalents		(67.9	)		(320.3	)

Cash and cash equivalents, beginning of period		639.0			847.8
Cash and cash equivalents, end of period	$	571.1		$	527.5

Supplemental Cash Flow Information:
Interest paid	$	63.2		$	30.9
Income taxes paid, net	$	141.7		$	150.9
Non-cash operating activity: Right-of-use assets obtained in exchange for new operating lease liabilities	$	107.2		$	37.5

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

ManpowerGroup Inc.

Consolidated Statements of Shareholders' Equity (Unaudited)

(in millions, except share and per share data)


	ManpowerGroup Shareholders
	Common Stock
	Shares Issued		Par Value		Capital in Excess of Par Value		Retained Earnings		Accumulated Other Comprehensive Loss			Treasury Stock			Non- Controlling Interests		Total
Balance, December 31, 2022		118,028,009	$	1.2	$	3,484.2	$	3,868.5	$	(458.7	)	$	(4,447.9	)	$	10.8	$	2,458.1
Net earnings								77.8										77.8