ManpowerGroup Reports 3rd Quarter 2023 Results
- ManpowerGroup repurchased $50 million of common stock during the quarter.
- The company reported strong Free Cash Flow of $245 million during the quarter.
- Solid demand was seen across Latin America and Asia Pacific Middle East.
- The experienced management team continues to drive key Diversification, Digitization, and Innovation initiatives.
- ManpowerGroup anticipates diluted earnings per share in Q4 to be between $1.17 and $1.27.
- Revenues for the third quarter decreased by 3% compared to the prior year period.
- Net earnings in the quarter were $30.3 million, a decrease from $111.3 million in the same period last year.
- Earnings per share decreased by 39% in constant currency.
- Restructuring costs, loss from the sale of the Philippines business, and currency translation losses impacted earnings per share.
- Revenues for the nine-month period decreased by 5% compared to the prior year.
- Revenues of
(-$4.7 billion 3% as reported, -5% constant currency) - Challenging operating environment in
North America andEurope primary cause for revenue decline - Gross profit margin of
17.6% . Staffing margins remained resilient; permanent recruitment demand weakened - Cost reductions and restructuring actions align operations to weaker market demand
of common stock repurchased during the quarter$50 million - Strong Free Cash Flow during the quarter of
$245 million
MILWAUKEE, Oct. 19, 2023 /PRNewswire/ -- ManpowerGroup (NYSE: MAN) today reported net earnings of
The current year quarter included restructuring costs, a small loss from the sale of our
Financial results in the quarter were also impacted by the weaker U.S. dollar relative to foreign currencies compared to the prior year period, resulting in a
Jonas Prising, ManpowerGroup Chairman & CEO, said, "Our third quarter results reflect the challenging operating environment for recruitment and resourcing in
We anticipate diluted earnings per share in the fourth quarter will be between
Net earnings for the nine months ended September 30, 2023 were
In conjunction with its third quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on October 19, 2023 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 2023 ManpowerGroup was named one of the World's Most Ethical Companies for the 14th 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, financial outlook, labor demand, the outlook for our business in key countries, the Company's strategic initiatives and technology investments, and the positioning of future growth for our brands 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, 2022, 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.
1 The prior year period included integration costs from the
2 The prior year period included integration costs from the U.S. Experis acquisition and the net loss related to the sale of our
ManpowerGroup | ||||
Results of Operations | ||||
(In millions, except per share data) | ||||
Three Months Ended September 30 | ||||
% Variance | ||||
Amount | Constant | |||
2023 | 2022 | Reported | Currency | |
(Unaudited) | ||||
Revenues from services (a) | $ 4,675.6 | $ 4,800.9 | -2.6 % | -5.4 % |
Cost of services | 3,853.7 | 3,922.4 | -1.8 % | -4.6 % |
Gross profit | 821.9 | 878.5 | -6.4 % | -9.0 % |
Selling and administrative expenses | 752.1 | 717.0 | 4.9 % | 2.0 % |
Operating profit | 69.8 | 161.5 | -56.8 % | -57.9 % |
Interest and other expenses, net | 15.1 | 4.7 | 215.6 % | |
Earnings before income taxes | 54.7 | 156.8 | -65.1 % | -65.8 % |
Provision for income taxes | 24.4 | 45.5 | -46.2 % | |
Net earnings | $ 30.3 | $ 111.3 | -72.8 % | -73.3 % |
Net earnings per share - basic | $ 0.61 | $ 2.15 | -71.6 % | |
Net earnings per share - diluted | $ 0.60 | $ 2.13 | -71.7 % | -72.2 % |
Weighted average shares - basic | 49.5 | 51.7 | -4.1 % | |
Weighted average shares - diluted | 50.1 | 52.3 | -4.1 % | |
(a) Revenues from services include fees received from our franchise offices of |
ManpowerGroup | ||||
Operating Unit Results | ||||
(In millions) | ||||
Three Months Ended September 30 | ||||
% Variance | ||||
Amount | Constant | |||
2023 | 2022 | Reported | Currency | |
(Unaudited) | ||||
Revenues from Services: | ||||
| ||||
United States (a) | $ 752.6 | $ 886.6 | -15.1 % | -15.1 % |
Other Americas | 358.7 | 353.2 | 1.6 % | 13.3 % |
1,111.3 | 1,239.8 | -10.4 % | -7.0 % | |
| ||||
| 1,209.9 | 1,159.5 | 4.4 % | -3.4 % |
| 413.7 | 395.1 | 4.7 % | -3.1 % |
Other Southern Europe | 485.1 | 485.2 | 0.0 % | -3.7 % |
2,108.7 | 2,039.8 | 3.4 % | -3.4 % | |
| 914.2 | 954.1 | -4.2 % | -9.5 % |
APME | 564.8 | 586.9 | -3.8 % | -1.6 % |
4,699.0 | 4,820.6 | |||
Intercompany Eliminations | (23.4) | (19.7) | ||
$ 4,675.6 | $ 4,800.9 | -2.6 % | -5.4 % | |
Operating Unit Profit: | ||||
| ||||
| $ 25.4 | $ 54.7 | -53.5 % | -53.5 % |
Other Americas | 12.5 | 16.4 | -24.2 % | -14.0 % |
37.9 | 71.1 | -46.7 % | -44.4 % | |
| ||||
| 47.9 | 56.6 | -15.5 % | -21.8 % |
| 27.0 | 29.0 | -6.5 % | -13.5 % |
Other Southern Europe | 9.5 | 14.7 | -36.1 % | -35.8 % |
84.4 | 100.3 | -15.9 % | -21.5 % | |
| (30.6) | 12.8 | -341.0 % | -332.1 % |
APME | 24.2 | 23.4 | 3.4 % | 7.3 % |
115.9 | 207.6 | |||
Corporate expenses | (37.4) | (37.0) | ||
Intangible asset amortization expense | (8.7) | (9.1) | ||
Operating profit | 69.8 | 161.5 | -56.8 % | -57.9 % |
Interest and other expenses, net (b) | (15.1) | (4.7) | ||
Earnings before income taxes | $ 54.7 | $ 156.8 | ||
(a) In | ||||
(b) The components of interest and other expenses, net were: | ||||
2023 | 2022 | |||
Interest expense | $ 21.0 | $ 10.7 | ||
Interest income | (8.0) | (4.4) | ||
Foreign exchange loss | 6.0 | 3.8 | ||
Miscellaneous income | (3.9) | (5.4) | ||
$ 15.1 | $ 4.7 | |||
ManpowerGroup | ||||
Results of Operations | ||||
(In millions, except per share data) | ||||
Nine Months Ended September 30 | ||||
% Variance | ||||
Amount | Constant | |||
2023 | 2022 | Reported | Currency | |
(Unaudited) | ||||
Revenues from services (a) | $ 14,284.0 | $ 15,018.3 | -4.9 % | -3.6 % |
Cost of services | 11,736.7 | 12,321.5 | -4.7 % | -3.5 % |
Gross profit | 2,547.3 | 2,696.8 | -5.5 % | -4.4 % |
Selling and administrative expenses | 2,252.0 | 2,215.9 | 1.6 % | 2.5 % |
Operating profit | 295.3 | 480.9 | -38.6 % | -36.3 % |
Interest and other expenses, net | 34.4 | 14.1 | 143.1 % | |
Earnings before income taxes | 260.9 | 466.8 | -44.1 % | -41.6 % |
Provision for income taxes | 87.6 | 141.7 | -38.2 % | |
Net earnings | $ 173.3 | $ 325.1 | -46.7 % | -44.3 % |
Net earnings per share - basic | $ 3.46 | $ 6.18 | -44.0 % | |
Net earnings per share - diluted | $ 3.42 | $ 6.10 | -44.0 % | -41.5 % |
Weighted average shares - basic | 50.1 | 52.6 | -4.8 % | |
Weighted average shares - diluted | 50.7 | 53.3 | -4.9 % | |
(a) Revenues from services include fees received from our franchise offices of |
ManpowerGroup | ||||
Operating Unit Results | ||||
(In millions) | ||||
Nine Months Ended September 30 | ||||
% Variance | ||||
Amount | Constant | |||
2023 | 2022 | Reported | Currency | |
(Unaudited) | ||||
Revenues from Services: | ||||
| ||||
United States (a) | $ 2,259.3 | $ 2,679.9 | -15.7 % | -15.7 % |
Other Americas | 1,080.9 | 1,073.8 | 0.7 % | 13.0 % |
3,340.2 | 3,753.7 | -11.0 % | -7.5 % | |
| ||||
| 3,657.4 | 3,590.1 | 1.9 % | 0.0 % |
| 1,293.7 | 1,294.4 | -0.1 % | -1.8 % |
Other Southern Europe | 1,452.4 | 1,550.6 | -6.3 % | -6.4 % |
6,403.5 | 6,435.1 | -0.5 % | -1.9 % | |
| 2,834.3 | 3,075.7 | -7.8 % | -6.5 % |
APME | 1,770.1 | 1,808.8 | -2.1 % | 3.4 % |
14,348.1 | 15,073.3 | |||
Intercompany Eliminations | (64.1) | (55.0) | ||
$ 14,284.0 | $ 15,018.3 | -4.9 % | -3.6 % | |
Operating Unit Profit: | ||||
| ||||
| $ 82.7 | $ 177.7 | -53.5 % | -53.5 % |
Other Americas | 47.0 | 47.1 | -0.2 % | 14.4 % |
129.7 | 224.8 | -42.3 % | -39.3 % | |
| ||||
| 142.3 | 168.5 | -15.6 % | -17.3 % |
| 94.0 | 93.5 | 0.6 % | -1.0 % |
Other Southern Europe | 30.6 | 45.2 | -32.5 % | -29.9 % |
266.9 | 307.2 | -13.1 % | -14.2 % | |
| (35.3) | 26.9 | -231.5 % | -221.3 % |
APME | 71.0 | 64.9 | 9.4 % | 16.5 % |
432.3 | 623.8 | |||
Corporate expenses | (110.8) | (114.8) | ||
Intangible asset amortization expense | (26.2) | (28.1) | ||
Operating profit | 295.3 | 480.9 | -38.6 % | -36.3 % |
Interest and other expenses, net (b) | (34.4) | (14.1) | ||
Earnings before income taxes | $ 260.9 | $ 466.8 | ||
(a) In | ||||
(b) The components of interest and other expenses, net were: | ||||
2023 | 2022 | |||
Interest expense | $ 59.7 | $ 31.7 | ||
Interest income | (24.5) | (10.0) | ||
Foreign exchange loss | 14.2 | 8.9 | ||
Miscellaneous income | (15.0) | (16.5) | ||
$ 34.4 | $ 14.1 | |||
ManpowerGroup | |||
Consolidated Balance Sheets | |||
(In millions) | |||
Sep. 30, | Dec. 31, | ||
2023 | 2022 | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 571.1 | $ 639.0 | |
Accounts receivable, net | 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, net | 523.6 | 549.5 | |
Operating lease right-of-use asset | 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 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
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 | |||
Common stock | 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 | (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 | |
ManpowerGroup | ||||
Consolidated Statements of Cash Flows | ||||
(In millions) | ||||
Nine Months Ended | ||||
September 30, | ||||
2023 | 2022 | |||
(Unaudited) | ||||
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) | ||
Acquisitions of businesses, net of cash acquired | - | (16.4) | ||
Proceeds from the sale 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 | ||
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SOURCE ManpowerGroup
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