ManpowerGroup Reports 1st Quarter 2024 Results
- Revenues decreased by 7% as reported and 5% in constant currency compared to the prior year period
- Gross profit margin was 17.3% as reported, 17.5% as adjusted
- SG&A expenses decreased by 6% as reported and 5% in constant currency year-over-year
- $50 million of common stock was repurchased during the quarter
- Net earnings were $0.81 per diluted share compared to $1.51 per diluted share in the prior year period
- Net earnings in the quarter were $39.7 million compared to $77.8 million a year earlier
- Challenging environment in North America and Europe, solid demand in Latin America and Asia-Pacific
- Run-off losses related to Proservia Germany business and currency translation losses impacted earnings per share
- Earnings per share decreased by 39% in constant currency excluding the mentioned losses
- Anticipated diluted earnings per share in the second quarter between $1.24 and $1.34
- Estimated unfavorable currency impact of 7 cents in the second quarter
- Excludes restructuring costs and Argentina related impact of non-cash currency translation losses
- 7% decrease in revenues compared to the prior year period
- Net earnings decreased significantly from the prior year period
- Impact of run-off losses and currency translation losses on earnings per share
- Worse than estimated foreign currency impact on revenues
- Anticipated unfavorable currency impact in the second quarter
- Excludes unfavorable operating losses for the run-off Proservia Germany business in guidance
Insights
ManpowerGroup's 1st quarter financial summary indicates a contraction in revenues by
The decline in net earnings to
The disclosed geographic disparities in market demand reflect broader economic trends, where North America and Europe are experiencing a tepid environment, in contrast to Latin America and Asia-Pacific, which are seeing more robust activity. For investors, this underscores the importance of geographic diversification within ManpowerGroup's portfolio. The stabilization of staffing and permanent recruitment in struggling regions suggests that the market has potentially reached an equilibrium point, although the pace of recovery remains uncertain.
The forward guidance, which includes unfavorable currency impact and excludes operating losses from the Proservia Germany business, sets a cautious tone for forthcoming quarters. This projection signifies that currency volatility continues to pose a risk to multinational companies like ManpowerGroup. For investors, understanding these external factors is vital in assessing the company's performance against market expectations.
- Revenues of
$4.4 billion 7% as reported, -5% constant currency) - Continuation of challenging environment in
North America andEurope during the quarter, solid demand inLatin America andAsia-Pacific region - Gross profit margin of
17.3% as reported,17.5% as adjusted. Staffing margins remained strong; permanent recruitment trends were stable at lower levels - Good management of SG&A (-
6% as reported, -5% constant currency year-over-year) $50 million - Strong cash flow during the quarter
The quarter included run-off losses related to the run-off Proservia Germany business and a minor loss for
Financial results in the quarter were also impacted by the U.S. dollar relative to foreign currencies compared to the prior year period. The first quarter earnings per share guidance estimated a negative
Jonas Prising, ManpowerGroup Chairman & CEO, said, "Employers in
We anticipate diluted earnings per share in the second quarter will be between
In conjunction with its first quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on April 18, 2024 at 7:30 a.m. central time (8:30 a.m. eastern time). Prepared remarks for the conference call, webcast details, presentation and recordings are included within the Investor Relations section of manpowergroup.com.
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 70 countries and territories and has done so for 75 years. We are recognized consistently for our diversity – as a best place to work for Women, Inclusion, Equality, and Disability, and in 2024 ManpowerGroup was named one of the World's Most Ethical Companies for the 15th time – all confirming our position as the brand of choice for in-demand talent. For more information, visit www.manpowergroup.com.
Forward-Looking Statements
This press release contains statements, including statements regarding economic and geopolitical uncertainty, trends in labor demand and the future strengthening of such demand, financial outlook, including any residual costs resulting from the wind-down of the Proservia business in
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.
__________________________ |
1 |
2 The prior year period included restructuring costs which reduced earnings per share by |
ManpowerGroup | ||||
Results of Operations | ||||
(In millions, except per share data) | ||||
Three Months Ended March 31 | ||||
% Variance | ||||
Amount | Constant | |||
2024 | 2023 | Reported | Currency | |
(Unaudited) | ||||
Revenues from services (a) | $ 4,403.3 | $ 4,752.3 | -7.3 % | -5.5 % |
Cost of services | 3,639.6 | 3,889.2 | -6.4 % | -4.4 % |
Gross profit | 763.7 | 863.1 | -11.5 % | -10.1 % |
Selling and administrative expenses | 697.8 | 745.2 | -6.4 % | -5.1 % |
Operating profit | 65.9 | 117.9 | -44.1 % | -41.7 % |
Interest and other expenses, net | 8.4 | 7.5 | 12.2 % | |
Earnings before income taxes | 57.5 | 110.4 | -47.9 % | -45.3 % |
Provision for income taxes | 17.8 | 32.6 | -45.4 % | |
Net earnings | $ 39.7 | $ 77.8 | -49.0 % | -46.4 % |
Net earnings per share - basic | $ 0.82 | $ 1.53 | -46.2 % | |
Net earnings per share - diluted | $ 0.81 | $ 1.51 | -46.2 % | -43.5 % |
Weighted average shares - basic | 48.3 | 50.9 | -5.1 % | |
Weighted average shares - diluted | 48.9 | 51.6 | -5.1 % | |
(a) | Revenues from services include fees received from our franchise offices of |
ManpowerGroup | ||||
Operating Unit Results | ||||
(In millions) | ||||
Three Months Ended March 31 | ||||
% Variance | ||||
Amount | Constant | |||
2024 | 2023(a) | Reported | Currency | |
(Unaudited) | ||||
Revenues from Services: | ||||
| ||||
United States (b) | $ 680.4 | $ 741.6 | -8.3 % | -8.3 % |
Other Americas | 356.0 | 388.6 | -8.4 % | 12.5 % |
1,036.4 | 1,130.2 | -8.3 % | -1.1 % | |
| ||||
| 1,119.3 | 1,169.3 | -4.3 % | -5.4 % |
| 404.3 | 422.2 | -4.2 % | -5.4 % |
Other Southern Europe | 457.7 | 476.4 | -3.9 % | -3.3 % |
1,981.3 | 2,067.9 | -4.2 % | -4.9 % | |
| 870.3 | 967.6 | -10.1 % | -12.1 % |
APME | 535.1 | 605.9 | -11.7 % | -4.8 % |
4,423.1 | 4,771.6 | |||
Intercompany Eliminations | (19.8) | (19.3) | ||
$ 4,403.3 | $ 4,752.3 | -7.3 % | -5.5 % | |
Operating Unit Profit: | ||||
| ||||
| $ 12.0 | $ 30.0 | -60.2 % | -60.2 % |
Other Americas | 14.1 | 18.6 | -24.1 % | -15.2 % |
26.1 | 48.6 | -46.4 % | -43.0 % | |
| ||||
| 33.1 | 44.9 | -26.3 % | -27.2 % |
| 27.4 | 30.7 | -10.7 % | -11.8 % |
Other Southern Europe | 9.4 | 14.3 | -34.0 % | -31.9 % |
69.9 | 89.9 | -22.2 % | -22.7 % | |
| 0.0 | 5.0 | -99.9 % | -108.6 % |
APME | 19.9 | 21.1 | -6.1 % | 3.3 % |
115.9 | 164.6 | |||
Corporate expenses | (41.7) | (37.9) | ||
Intangible asset amortization expense | (8.3) | (8.8) | ||
Operating profit | 65.9 | 117.9 | -44.1 % | -41.7 % |
Interest and other expenses, net (c) | (8.4) | (7.5) | ||
Earnings before income taxes | $ 57.5 | $ 110.4 | ||
(a) | Effective January 1, 2024, our segment reporting was realigned to include our |
(b) | In |
(c) | The components of interest and other expenses, net were: |
2024 | 2023 | |
Interest expense | $ 20.4 | $ 18.7 |
Interest income | (8.1) | (8.1) |
Foreign exchange loss | 2.4 | 3.1 |
Miscellaneous income | (6.3) | (6.2) |
$ 8.4 | $ 7.5 | |
ManpowerGroup | |||
Consolidated Balance Sheets | |||
(In millions) | |||
Mar. 31, | Dec. 31, | ||
2024 | 2023 | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 604.8 | $ 581.3 | |
Accounts receivable, net | 4,458.5 | 4,830.0 | |
Prepaid expenses and other assets | 186.5 | 160.8 | |
Total current assets | 5,249.8 | 5,572.1 | |
Other assets: | |||
Goodwill | 1,574.5 | 1,586.8 | |
Intangible assets, net | 507.8 | 519.6 | |
Operating lease right-of-use assets | 403.9 | 414.0 | |
Other assets | 628.4 | 607.8 | |
Total other assets | 3,114.6 | 3,128.2 | |
Property and equipment: | |||
Land, buildings, leasehold improvements and equipment | 518.3 | 526.5 | |
Less: accumulated depreciation and amortization | 394.1 | 396.6 | |
Net property and equipment | 124.2 | 129.9 | |
Total assets | $ 8,488.6 | $ 8,830.2 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 2,614.7 | $ 2,723.0 | |
Employee compensation payable | 215.4 | 243.1 | |
Accrued liabilities | 604.3 | 693.0 | |
Accrued payroll taxes and insurance | 668.4 | 695.8 | |
Value added taxes payable | 385.7 | 432.7 | |
Short-term borrowings and current maturities of long-term debt | 15.6 | 12.1 | |
Total current liabilities | 4,504.1 | 4,799.7 | |
Other liabilities: | |||
Long-term debt | 968.9 | 990.5 | |
Long-term operating lease liability | 315.5 | 323.2 | |
Other long-term liabilities | 512.4 | 482.7 | |
Total other liabilities | 1,796.8 | 1,796.4 | |
Shareholders' equity: | |||
ManpowerGroup shareholders' equity | |||
Common stock | 1.2 | 1.2 | |
Capital in excess of par value | 3,518.7 | 3,514.9 | |
Retained earnings | 3,852.7 | 3,813.0 | |
Accumulated other comprehensive loss | (495.5) | (466.0) | |
Treasury stock, at cost | (4,700.4) | (4,639.8) | |
Total ManpowerGroup shareholders' equity | 2,176.7 | 2,223.3 | |
Noncontrolling interests | 11.0 | 10.8 | |
Total shareholders' equity | 2,187.7 | 2,234.1 | |
Total liabilities and shareholders' equity | $ 8,488.6 | $ 8,830.2 | |
ManpowerGroup | |||
Consolidated Statements of Cash Flows | |||
(In millions) | |||
Three Months Ended | |||
March 31, | |||
2024 | 2023 | ||
(Unaudited) | |||
Cash Flows from Operating Activities: | |||
Net earnings | $ 39.7 | $ 77.8 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 21.6 | 21.0 | |
Deferred income taxes | 7.5 | 18.2 | |
Provision for doubtful accounts | 2.6 | 0.1 | |
Share-based compensation | 7.5 | 5.1 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 283.9 | 398.0 | |
Other assets | (62.5) | (37.3) | |
Other liabilities | (184.3) | (358.3) | |
Cash provided by operating activities | 116.0 | 124.6 | |
Cash Flows from Investing Activities: | |||
Capital expenditures | (11.8) | (13.2) | |
Proceeds from the sale of property and equipment | 2.1 | - | |
Cash used in investing activities | (9.7) | (13.2) | |
Cash Flows from Financing Activities: | |||
Net change in short-term borrowings | 3.7 | (10.7) | |
Proceeds from long-term debt | - | 0.2 | |
Repayments of long-term debt | (0.2) | (0.2) | |
Payments of contingent consideration for acquisitions | (1.1) | - | |
Proceeds from share-based awards | 0.4 | 1.7 | |
Other share-based award transactions | (10.3) | (9.8) | |
Repurchases of common stock | (50.0) | (30.0) | |
Cash used in financing activities | (57.5) | (48.8) | |
Effect of exchange rate changes on cash | (25.3) | 5.1 | |
Change in cash and cash equivalents | 23.5 | 67.7 | |
Cash and cash equivalents, beginning of period | 581.3 | 639.0 | |
Cash and cash equivalents, end of period | $ 604.8 | $ 706.7 | |
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SOURCE ManpowerGroup
FAQ
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