ManpowerGroup Reports 4th Quarter 2023 Results
- Solid demand in LATAM and APME
- Resilient staffing margins
- Progress in Diversification, Digitization, and Innovation agenda
- Confidence in ability to navigate the challenging environment
- Anticipated diluted earnings per share in the first quarter
- Restructuring costs and non-cash charges reduced earnings per share
- Revenues of $18.9 billion for the year ended December 31, 2023
- Challenging operating environment in North America and Europe
- Net losses of $1.73 per diluted share for the fourth quarter
- Impact of non-cash charges, restructuring costs, and currency translation losses
- Decrease of 5% in constant currency for the full year period
Insights
The reported revenue decline and net losses for ManpowerGroup reflect the ongoing challenges in the global staffing industry, particularly in North America and Europe. The restructuring charges and non-cash goodwill impairment signal a strategic adjustment to the company's operations, possibly indicating a shift away from underperforming segments, such as the German Proservia business. The resilience of staffing margins amidst these conditions suggests a robust operational framework, although the stability of permanent recruitment at lower levels could be a cause for concern regarding future revenue streams.
The repurchase of common stock during the quarter could be seen as a move to signal confidence to the market and provide support to the share price. However, investors should be cautious as stock repurchases reduce the company's cash reserves. The forward guidance including anticipated diluted earnings per share for the next quarter, despite being lower than previous periods, provides a transparent outlook for investors, although the exclusion of several charges could lead to a less comprehensive understanding of the company's financial health.
It's also crucial to note the impact of currency fluctuations on international companies like ManpowerGroup. The stronger U.S. dollar has negatively affected reported revenues and earnings, which is an important consideration for investors evaluating the company's performance in a global context.
The economic backdrop of ManpowerGroup's financial results is characterized by a divergent global economic landscape, with sustained demand in Latin America and the Asia Pacific Middle East regions contrasting with the challenging environments in North America and Europe. This regional disparity reflects broader macroeconomic trends, such as varying rates of economic recovery post-pandemic, differing fiscal and monetary policies and geopolitical uncertainties affecting business confidence and hiring practices.
The company's anticipation of future earnings amidst this environment suggests an expectation of either stabilizing or improving conditions. However, the potential for continued currency headwinds could pose ongoing challenges. The mention of digitization and innovation in their strategic agenda highlights an emphasis on adapting to technological advancements and evolving market needs, which could be critical for long-term sustainability and growth within the industry.
ManpowerGroup's performance must be contextualized within the competitive landscape of the staffing and workforce solutions industry. The reported decrease in revenues and net losses may affect its market positioning relative to competitors who may be experiencing different growth trajectories. The company's focus on diversification and digitization suggests an attempt to capture new market segments and enhance operational efficiency, which could be pivotal in gaining a competitive edge.
Investor sentiment may be influenced by the company's proactive measures, such as stock repurchases and restructuring initiatives, which could be interpreted as strategic realignment for future profitability. However, the market will likely continue to scrutinize the company's ability to navigate currency impacts and regional economic variances. The solid demand in LATAM and APMEG regions could present opportunities for expansion and increased market share, which would be an important factor for investors to monitor.
- Revenues of
$4.6 billion 4% as reported, -5% constant currency) - Continuation of challenging environment in
North America andEurope during the quarter, solid demand in LATAM and APME - Gross profit margin of
17.5% . Staffing margins remained resilient; permanent recruitment trends were stable at lower levels in second half of the year - Non-cash goodwill impairment charge of
$55 million $90 million $50 million
The current year quarter included restructuring costs, and certain non-cash charges including goodwill and other impairment charge, pension settlements and
Financial results in the quarter were also impacted by the stronger
Jonas Prising, ManpowerGroup Chairman & CEO, said, "Our fourth quarter and full year results reflect a challenging operating environment in
We anticipate diluted earnings per share in the first quarter will be between
Net earnings for the year ended December 31, 2023 were
In conjunction with its fourth quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on January 30, 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 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, 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 Argentina is required to be treated as a hyperinflationary economy and the currency translation losses reflect the devaluation of the Argentine peso during the quarter. |
2 The prior year period included restructuring costs, integration costs from the |
3 The foreign currency impact to earnings per share was |
4 The prior year period included integration costs from the |
ManpowerGroup | ||||
Results of Operations | ||||
(In millions, except per share data) | ||||
Three Months Ended December 31 | ||||
% Variance | ||||
Amount | Constant | |||
2023 | 2022 | Reported | Currency | |
(Unaudited) | ||||
Revenues from services (a) | $ 4,630.5 | $ 4,809.2 | -3.7 % | -5.2 % |
Cost of services | 3,819.8 | 3,933.6 | -2.9 % | -4.4 % |
Gross profit | 810.7 | 875.6 | -7.4 % | -8.7 % |
Selling and administrative expenses, | 795.1 | 724.8 | 9.7 % | 7.7 % |
Goodwill impairment charges (b) | 55.1 | 50.0 | N/A | N/A |
Selling and administrative expenses | 850.2 | 774.8 | 9.7 % | 7.7 % |
Operating (loss) profit | (39.5) | 100.8 | -139.2 % | -134.8 % |
Interest and other expenses, net | 15.5 | 10.5 | 48.2 % | |
(Loss) earnings before income taxes | (55.0) | 90.3 | -160.8 % | -155.1 % |
Provision for income taxes | 29.5 | 41.6 | -28.9 % | |
Net (loss) earnings | $ (84.5) | $ 48.7 | -273.7 % | -257.5 % |
Net (loss) earnings per share - basic | $ (1.73) | $ 0.96 | -281.0 % | |
Net (loss) earnings per share - diluted | $ (1.73) | $ 0.95 | -283.4 % | -266.2 % |
Weighted average shares - basic | 48.7 | 50.8 | -4.0 % | |
Weighted average shares - diluted | 48.7 | 51.4 | -5.3 % | |
(a) Revenues from services include fees received from our franchise offices of | ||||
(b) The goodwill impairment charges for the three months ended December 31, 2023 and 2022 relate to our investment | ||||
ManpowerGroup | ||||
Operating Unit Results | ||||
(In millions) | ||||
Three Months Ended December 31 | ||||
% Variance | ||||
Amount | Constant | |||
2023 | 2022 | Reported | Currency | |
(Unaudited) | ||||
Revenues from Services: | ||||
| ||||
United States (a) | $ 702.3 | $ 819.4 | -14.3 % | -14.3 % |
Other Americas | 372.3 | 362.6 | 2.7 % | 17.7 % |
1,074.6 | 1,182.0 | -9.1 % | -4.5 % | |
| ||||
| 1,209.7 | 1,194.9 | 1.2 % | -4.1 % |
| 415.1 | 412.5 | 0.6 % | -4.6 % |
Other Southern Europe | 487.0 | 493.8 | -1.4 % | -3.7 % |
2,111.8 | 2,101.2 | 0.5 % | -4.1 % | |
| 913.7 | 972.6 | -6.1 % | -10.1 % |
APME | 552.2 | 578.5 | -4.5 % | -2.7 % |
4,652.3 | 4,834.3 | |||
Intercompany Eliminations | (21.8) | (25.1) | ||
$ 4,630.5 | $ 4,809.2 | -3.7 % | -5.2 % | |
Operating Unit Profit (Loss): | ||||
| ||||
| $ 17.7 | $ 41.5 | -57.4 % | -57.4 % |
Other Americas | 18.2 | 16.3 | 11.9 % | 37.6 % |
35.9 | 57.8 | -37.9 % | -30.6 % | |
| ||||
| 46.0 | 58.2 | -21.0 % | -25.4 % |
| 30.7 | 29.4 | 4.1 % | -1.5 % |
Other Southern Europe | 14.1 | 18.2 | -21.8 % | -22.1 % |
90.8 | 105.8 | -14.1 % | -18.2 % | |
| (81.4) | 15.5 | -622.3 % | -609.2 % |
APME | 21.6 | 22.9 | -5.4 % | -2.3 % |
66.9 | 202.0 | |||
Corporate expenses | (42.9) | (42.2) | ||
Goodwill impairment charges (b) | (55.1) | (50.0) | ||
Intangible asset amortization expense | (8.4) | (9.0) | ||
Operating (loss) profit | (39.5) | 100.8 | -139.2 % | -134.8 % |
Interest and other expenses, net (c) | (15.5) | (10.5) | ||
(Loss) Earnings before income taxes | $ (55.0) | $ 90.3 | ||
(a) In | ||||
(b) The goodwill impairment charges for the three months ended December 31, 2023 and 2022 relate to our investment in | ||||
(c) The components of interest and other expenses, net were: | ||||
2023 | 2022 | |||
Interest expense | $ 20.0 | $ 15.2 | ||
Interest income | (9.7) | (7.9) | ||
Foreign exchange loss | 7.6 | 3.0 | ||
Miscellaneous (income) loss | (2.4) | 0.2 | ||
$ 15.5 | $ 10.5 | |||
ManpowerGroup | ||||
Results of Operations | ||||
(In millions, except per share data) | ||||
Year End December 31 | ||||
% Variance | ||||
Amount | Constant | |||
2023 | 2022 | Reported | Currency | |
(Unaudited) | ||||
Revenues from services (a) | $ 18,914.5 | $ 19,827.5 | -4.6 % | -4.0 % |
Cost of services | 15,556.5 | 16,255.1 | -4.3 % | -3.7 % |
Gross profit | 3,358.0 | 3,572.4 | -6.0 % | -5.5 % |
Selling and administrative expenses, | 3,047.1 | 2,940.7 | 3.6 % | 3.8 % |
Goodwill impairment charges (b) | 55.1 | 50.0 | N/A | N/A |
Selling and administrative expenses | 3,102.2 | 2,990.7 | 3.7 % | 3.8 % |
Operating profit | 255.8 | 581.7 | -56.0 % | -53.3 % |
Interest and other expenses, net | 49.9 | 24.6 | 102.8 % | |
Earnings before income taxes | 205.9 | 557.1 | -63.0 % | -60.0 % |
Provision for income taxes | 117.1 | 183.3 | -36.1 % | |
Net earnings | $ 88.8 | $ 373.8 | -76.3 % | -74.3 % |
Net earnings per share - basic | $ 1.78 | $ 7.17 | -75.1 % | |
Net earnings per share - diluted | $ 1.76 | $ 7.08 | -75.1 % | -73.1 % |
Weighted average shares - basic | 49.8 | 52.2 | -4.6 % | |
Weighted average shares - diluted | 50.4 | 52.8 | -4.5 % | |
(a) Revenues from services include fees received from our franchise offices of | ||||
(b) The goodwill impairment charges for the years ended December 31, 2023 and 2022 relate to our investment | ||||
ManpowerGroup | ||||
Operating Unit Results | ||||
(In millions) | ||||
Year End December 31 | ||||
% Variance | ||||
Amount | Constant | |||
2023 | 2022 | Reported | Currency | |
(Unaudited) | ||||
Revenues from Services: | ||||
| ||||
United States (a) | $ 2,961.6 | $ 3,499.3 | -15.4 % | -15.4 % |
Other Americas | 1,453.2 | 1,436.4 | 1.2 % | 14.2 % |
4,414.8 | 4,935.7 | -10.6 % | -6.8 % | |
| ||||
| 4,867.1 | 4,785.0 | 1.7 % | -1.0 % |
| 1,708.8 | 1,706.9 | 0.1 % | -2.5 % |
Other Southern Europe | 1,939.4 | 2,044.4 | -5.1 % | -5.7 % |
8,515.3 | 8,536.3 | -0.2 % | -2.4 % | |
| 3,748.0 | 4,048.3 | -7.4 % | -7.3 % |
APME | 2,322.3 | 2,387.3 | -2.7 % | 1.9 % |
19,000.4 | 19,907.6 | |||
Intercompany Eliminations | (85.9) | (80.1) | ||
$ 18,914.5 | $ 19,827.5 | -4.6 % | -4.0 % | |
Operating Unit Profit (Loss): | ||||
| ||||
| $ 100.4 | $ 219.2 | -54.2 % | -54.2 % |
Other Americas | 65.2 | 63.4 | 2.9 % | 20.3 % |
165.6 | 282.6 | -41.4 % | -37.5 % | |
| ||||
| 188.3 | 226.7 | -17.0 % | -19.3 % |
| 124.7 | 122.9 | 1.5 % | -1.1 % |
Other Southern Europe | 44.7 | 63.4 | -29.4 % | -27.7 % |
357.7 | 413.0 | -13.4 % | -15.2 % | |
| (116.7) | 42.4 | -375.0 % | -363.8 % |
APME | 92.6 | 87.8 | 5.6 % | 11.6 % |
499.2 | 825.8 | |||
Corporate expenses | (153.7) | (157.0) | ||
Goodwill impairment charges (b) | (55.1) | (50.0) | ||
Intangible asset amortization expense | (34.6) | (37.1) | ||
Operating profit | 255.8 | 581.7 | -56.0 % | -53.3 % |
Interest and other expenses, net (c) | (49.9) | (24.6) | ||
Earnings before income taxes | $ 205.9 | $ 557.1 | ||
(a) In | ||||
(b) The goodwill impairment charges for the years ended December 31, 2023 and 2022 relate to our investment in | ||||
(c) The components of interest and other expenses, net were: | ||||
2023 | 2022 | |||
Interest expense | $ 79.7 | $ 46.9 | ||
Interest income | (34.2) | (17.9) | ||
Foreign exchange loss | 21.8 | 11.9 | ||
Miscellaneous income | (17.4) | (16.3) | ||
$ 49.9 | $ 24.6 | |||
ManpowerGroup | |||
Consolidated Balance Sheets | |||
(In millions) | |||
Dec. 31, | Dec. 31, | ||
2023 | 2022 | ||
(Unaudited) | |||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 581.3 | $ 639.0 | |
Accounts receivable, net | 4,830.0 | 5,137.4 | |
Prepaid expenses and other assets | 160.8 | 158.0 | |
Total current assets | 5,572.1 | 5,934.4 | |
Other assets: | |||
Goodwill | 1,586.8 | 1,628.1 | |
Intangible assets, net | 519.6 | 549.5 | |
Operating lease right-of-use assets | 414.0 | 365.7 | |
Other assets | 607.8 | 540.5 | |
Total other assets | 3,128.2 | 3,083.8 | |
Property and equipment: | |||
Land, buildings, leasehold improvements and equipment | 526.5 | 584.9 | |
Less: accumulated depreciation and amortization | 396.6 | 472.7 | |
Net property and equipment | 129.9 | 112.2 | |
Total assets | $ 8,830.2 | $ 9,130.4 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 2,723.0 | $ 2,831.4 | |
Employee compensation payable | 243.1 | 271.7 | |
Accrued liabilities | 693.0 | 572.6 | |
Accrued payroll taxes and insurance | 695.8 | 746.7 | |
Value added taxes payable | 432.7 | 462.7 | |
Short-term borrowings and current maturities of long-term debt | 12.1 | 26.6 | |
Total current liabilities | 4,799.7 | 4,911.7 | |
Other liabilities: | |||
Long-term debt | 990.5 | 959.9 | |
Long-term operating lease liability | 323.2 | 266.6 | |
Other long-term liabilities | 482.7 | 534.1 | |
Total other liabilities | 1,796.4 | 1,760.6 | |
Shareholders' equity: | |||
ManpowerGroup shareholders' equity | |||
Common stock | 1.2 | 1.2 | |
Capital in excess of par value | 3,514.9 | 3,484.2 | |
Retained earnings | 3,813.0 | 3,868.5 | |
Accumulated other comprehensive loss | (466.0) | (458.7) | |
Treasury stock, at cost | (4,639.8) | (4,447.9) | |
Total ManpowerGroup shareholders' equity | 2,223.3 | 2,447.3 | |
Noncontrolling interests | 10.8 | 10.8 | |
Total shareholders' equity | 2,234.1 | 2,458.1 | |
Total liabilities and shareholders' equity | $ 8,830.2 | $ 9,130.4 | |
ManpowerGroup | |||
Consolidated Statements of Cash Flows | |||
(In millions) | |||
Year Ended | |||
December 31, | |||
2023 | 2022 | ||
(Unaudited) | |||
Cash Flows from Operating Activities: | |||
Net earnings | $ 88.8 | $ 373.8 | |
Adjustments to reconcile net earnings to net cash provided by operating activities: | |||
Depreciation and amortization | 88.6 | 84.6 | |
Loss on sales of subsidiaries, net | 1.3 | 6.0 | |
Non-cash goodwill and other impairment charges | 57.3 | 50.0 | |
Deferred income taxes | (20.6) | 4.8 | |
Provision for doubtful accounts | 5.4 | 6.2 | |
Share-based compensation | 28.7 | 37.6 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 391.8 | 28.8 | |
Other assets | (45.2) | 47.5 | |
Other liabilities | (247.9) | (216.0) | |
Cash provided by operating activities | 348.2 | 423.3 | |
Cash Flows from Investing Activities: | |||
Capital expenditures | (78.2) | (75.6) | |
Acquisition of business, net of cash acquired | - | (16.4) | |
Proceeds from the sales of subsidiaries and property and equipment | 4.1 | 6.7 | |
Cash used in investing activities | (74.1) | (85.3) | |
Cash Flows from Financing Activities: | |||
Net change in short-term borrowings | (12.8) | 7.2 | |
Net repayments of revolving debt facility | - | (75.0) | |
Proceeds from long-term debt | 1.0 | 421.3 | |
Repayments of long-term debt | (4.4) | (412.2) | |
Payments for debt issuance costs | - | (2.4) | |
Proceeds from derivative settlement | - | 2.0 | |
Payments of contingent consideration for acquisitions | - | (3.8) | |
Proceeds from share-based awards | 1.8 | 0.3 | |
Payments to noncontrolling interests | (0.6) | (1.1) | |
Other share-based award transactions | (10.4) | (8.5) | |
Repurchases of common stock | (179.8) | (270.0) | |
Dividends paid | (144.3) | (139.9) | |
Cash used in financing activities | (349.5) | (482.1) | |
Effect of exchange rate changes on cash | 17.7 | (64.7) | |
Change in cash and cash equivalents | (57.7) | (208.8) | |
Cash and cash equivalents, beginning of period | 639.0 | 847.8 | |
Cash and cash equivalents, end of period | $ 581.3 | $ 639.0 | |
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SOURCE ManpowerGroup
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