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Manpower Reports 2nd Quarter and First Half 2003 Results

PRNewswire-FirstCall
MILWAUKEE, Wis.
Jul 17, 2003

Manpower Inc. (NYSE: MAN) today reported that net income for the three months ended June 30, 2003 was $29.1 million, or 37 cents per diluted share, an increase of 14 percent, from $25.7 million, or 33 cents per diluted share, a year earlier. Revenues for the second quarter totaled $3.0 billion, an increase of 16 percent from the year-earlier period. Systemwide sales were $3.3 billion. Results for the second quarter were positively affected by relatively stronger foreign currencies compared to the prior year period. On a constant currency basis, earnings per diluted share for the quarter were 30 cents on a 1 percent improvement in revenues.

"Our second quarter performance was successful from a management perspective, however, we continue to be operating in a difficult economic environment in most of our markets around the world," said Jeffrey A. Joerres, Manpower Chairman and CEO. "Our operation in France made a sizable contribution to the quarter's profit, despite these challenges, and we also benefited from strong performances in Japan, Italy and Germany.

"In the second quarter we saw marginal increases in revenue on a global basis. However, in the U.S. we have yet to experience an increase in activity to indicate that we are in the midst of a meaningful upward economic turn," Joerres stated. "Based on our current trends, we anticipate third quarter earnings per share will be between 42 and 46 cents, including a 4 cent favorable impact from currency."

Net income for the six months ended June 30, 2003 totaled $44.0 million or 56 cents per diluted share, an increase of 35 percent from $32.6 million, or 42 cents per diluted share in 2002. Revenues for the six-month period were $5.7 billion, an increase of 16 percent from the prior year. Systemwide sales were $6.2 billion. On a constant currency basis, earnings per diluted share for the six-month period were 43 cents on a 2 percent improvement in revenues.

In conjunction with its second quarter earnings release, Manpower will broadcast its conference call live over the Internet on July 17, 2003 at 8:00 a.m. CDT (9:00 a.m. EDT). Interested parties are invited to listen to the webcast by logging on to http://investor.manpower.com/ .

The systemwide sales and constant currency amounts included in this press release are further explained on the attached Results of Operations. Supplemental financial information referenced in the conference call can be found at http://investor.manpower.com/ .

Manpower Inc. is a world leader in the staffing industry, providing workforce management services and solutions to customers through 4,000 offices in 63 countries. The firm annually provides employment to 2 million people worldwide and is an industry leader in employee assessment and training. Manpower also provides a range of staffing solutions and engagement and consulting services worldwide under the subsidiary brands of Brook Street, Elan, The Empower Group and Jefferson Wells. More information on Manpower Inc. can be found at the Company's Web site, www.manpower.com.

This news release contains statements, including earning projections, 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. Factors that may cause the Company's actual results to differ materially from those contained in the forward-looking statements can be found in the Company's reports filed with the SEC, including its Annual Report on Form 10-K for the year ended December 31, 2002, which information is incorporated herein by reference, and such other factors as may be described from time to time in the Company's SEC filings.

                              Manpower Inc.
                          Results of Operations
                   (In millions, except per share data)

                                            Three Months Ended June 30
                                                              % Variance
                                                           Amount   Constant
                                         2003      2002   Reported  Currency
                                                    (Unaudited)

  Systemwide sales (a)                 $3,301.6  $2,892.1    14.2%

  Revenue from services                 3,013.4   2,602.9    15.8%     1.0%
  Cost of services                      2,491.9   2,135.3    16.7%

    Gross profit                          521.5     467.6    11.6%    -2.4%

  Selling and administrative expenses     464.5     415.8    11.7%    -1.6%

    Operating profit                       57.0      51.8    10.1%    -8.5%

  Interest and other expenses               9.2       9.6    -4.1%

    Earnings before income taxes           47.8      42.2    13.4%

  Provision for income taxes               18.7      16.5    13.0%


    Net earnings                          $29.1     $25.7    13.6%    -8.1%

  Net earnings per share - basic          $0.38     $0.34    11.8%

  Net earnings per share - diluted        $0.37     $0.33    12.1%    -9.1%


  Weighted average shares - basic          77.5      75.9     2.1%

  Weighted average shares - diluted        78.3      77.5     1.0%

  (a)  Systemwide sales represents revenue from our branch offices plus
       the sales activity of locations operating under a franchise agreement
       with us.  Systemwide sales is calculated as follows:

            Revenue from services      $3,013.4  $2,602.9
            Less:  Franchise fees           5.9       6.0
            Add:  Franchise sales         294.1     295.2
            Systemwide sales           $3,301.6  $2,892.1


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                             Three Months Ended June 30
                                                             % Variance
                                                          Amount   Constant
                                        2003      2002   Reported  Currency
                                                    (Unaudited)
  Revenues from services:
    United States (a)                  $483.9     $474.9     1.9%     1.9%
    France                            1,172.0      943.3    24.3%     0.6%
    EMEA                                951.2      830.1    14.6%    -2.7%
    Other Operations                    406.3      354.6    14.6%     9.5%
                                     $3,013.4   $2,602.9    15.8%     1.0%

  Operating Unit Profit:
    United States                       $10.3       $8.3    25.8%    25.8%
    France                               41.9       32.7    27.9%     3.6%
    EMEA                                  7.6       16.7   -54.3%   -61.0%
    Other Operations                      6.5        1.6   308.4%   271.6%
                                         66.3       59.3
  Corporate expenses                      9.3        7.4
  Amortization of other intangible
   assets                                   -        0.1
      Operating profit                   57.0       51.8    10.1%    -8.5%
  Interest and other expenses (b)         9.2        9.6
      Earnings before income taxes      $47.8      $42.2

  (a)  Systemwide sales in the United States represents revenue from our
       branch offices plus the sales activity of locations operating under a
       franchise agreement with us.  Systemwide sales in the United States
       is calculated as follows:

            Revenue from services          $483.9    $474.9
            Less:  Franchise fees             4.9       5.5
            Add:  Franchise sales           248.4     254.9
            Systemwide sales               $727.4    $724.3

  (b) The components of interest and other expense (income) were:

          Interest expense                  $10.4     $10.5
          Interest income                    (2.1)     (2.1)
          Foreign exchange gains             (0.3)     (0.9)
          Miscellaneous, net                  1.2       2.1
                                             $9.2      $9.6


                                Manpower Inc.
                            Results of Operations
                     (In millions, except per share data)

                                             Six Months Ended June 30
                                                             % Variance
                                                          Amount    Constant
                                         2003      2002  Reported   Currency
                                                   (Unaudited)

  Systemwide sales (a)                 $6,241.0  $5,432.1  14.9%

  Revenue from services                 5,692.1   4,886.9  16.5%       2.1%
  Cost of services                      4,704.6   4,004.5  17.5%

    Gross profit                          987.5     882.4  11.9%      -1.8%

  Selling and administrative expenses     897.5     811.9  10.5%      -2.4%

    Operating profit                       90.0      70.5  27.7%       4.1%

  Interest and other expenses              17.8      17.6   1.6%

    Earnings before income taxes           72.2      52.9  36.4%

  Provision for income taxes               28.2      20.3  38.2%

    Net earnings                          $44.0     $32.6  35.3%       3.8%

  Net earnings per share - basic          $0.57     $0.43  32.6%

  Net earnings per share - diluted        $0.56     $0.42  33.3%       2.4%

  Weighted average shares - basic          77.4      76.0   1.8%

  Weighted average shares - diluted        78.2      77.6   0.7%

  (a)  Systemwide sales represents revenue from our branch offices plus the
       sales activity of locations operating under a franchise agreement
       with us.  Systemwide sales is calculated as follows:

            Revenue from services      $5,692.1  $4,886.9
            Less:  Franchise fees          11.9      12.3
            Add:  Franchise sales         560.8     557.5
            Systemwide sales           $6,241.0  $5,432.1


                                Manpower Inc.
                            Operating Unit Results
                                (In millions)

                                              Six Months Ended June 30
                                                              % Variance
                                                           Amount   Constant
                                         2003      2002   Reported  Currency
                                                    (Unaudited)
  Revenues from services:
    United States (a)                   $947.4    $903.6     4.8%      4.8%
    France                             2,126.6   1,710.4    24.3%      1.1%
    EMEA                               1,837.6   1,594.3    15.3%     -2.1%
    Other Operations                     780.5     678.6    15.0%     11.1%
                                      $5,692.1  $4,886.9    16.5%      2.1%

  Operating Unit Profit:
    United States                        $13.0      $3.4   287.4%    287.4%
    France                                68.8      54.9    25.3%      1.8%
    EMEA                                  17.4      27.7   -37.1%    -46.8%
    Other Operations                       8.9      (0.2)    N/A       N/A
                                         108.1      85.8
  Corporate expenses                      18.1      15.2
  Amortization of other intangible
   assets                                    -       0.1
      Operating profit                    90.0      70.5    27.7%      4.1%
  Interest and other expenses (b)         17.8      17.6
      Earnings before income taxes       $72.2     $52.9

  (a)  Systemwide sales in the United States represents revenue from our
       branch offices plus the sales activity of locations operating under a
       franchise agreement with us.  Systemwide sales in the United States
       is calculated as follows:

            Revenue from services          $947.4    $903.6
            Less:  Franchise fees            10.1      10.4
            Add:  Franchise sales           478.0     485.1
            Systemwide sales             $1,415.3  $1,378.3

  (b) The components of interest and other expense (income) were:

          Interest expense                  $20.4     $20.4
          Interest income                    (4.5)     (4.7)
          Foreign exchange gains             (1.5)     (0.7)
          Miscellaneous, net                  3.4       2.6
                                            $17.8     $17.6


                                Manpower Inc.
                         Consolidated Balance Sheets
                                (In millions)

                                                 June 30           Dec. 31
                                                   2003              2002
                                               (Unaudited)
  ASSETS
  Current assets:
    Cash and cash equivalents                     $252.1            $284.0
    Accounts receivable, net                     2,437.8           2,214.2
    Prepaid expenses and other assets               84.6              76.0
    Future income tax benefits                      77.1              79.1
        Total current assets                     2,851.6           2,653.3

  Other assets:
    Goodwill and other intangible assets, net      556.6             545.7
    Investments in licensees                        61.8              60.5
    Other assets                                   305.0             253.4
        Total other assets                         923.4             859.6

  Property and equipment:
    Land, buildings, leasehold
     improvements and equipment                    569.2             533.4
    Less:  accumulated depreciation and
     amortization                                  385.1             344.6
      Net property and equipment                   184.1             188.8
          Total assets                          $3,959.1          $3,701.7

  LIABILITIES AND SHAREHOLDERS' EQUITY
  Current liabilities:
    Accounts payable                              $521.8            $447.0
    Employee compensation payable                   96.0              96.2
    Accrued liabilities                            313.9             295.7
    Accrued payroll taxes and insurance            395.2             391.6
    Value added taxes payable                      343.4             309.0
    Short-term borrowings and current
     maturities of long-term debt                   15.4              22.8
        Total current liabilities                1,685.7           1,562.3

  Other liabilities:
    Long-term debt                                 813.5             799.0
    Other long-term liabilities                    351.2             340.5
        Total other liabilities                  1,164.7           1,139.5

  Shareholders' equity:
    Common stock                                     0.9               0.9
    Capital in excess of par value               1,710.1           1,696.2
    Accumulated deficit                           (253.5)           (289.7)
    Accumulated other comprehensive income (loss)  (65.0)           (123.7)
    Treasury stock, at cost                       (283.8)           (283.8)
        Total shareholders' equity               1,108.7             999.9
          Total liabilities and
           shareholders' equity                 $3,959.1          $3,701.7


                                Manpower Inc.
                    Consolidated Statements of Cash Flows
                                (In millions)

                                                     Six Months Ended
                                                          June 30
                                                   2003              2002
                                                        (Unaudited)
  Cash Flows from Operating Activities:
    Net earnings                                   $44.0             $32.6
    Adjustments to reconcile net
     earnings to net cash provided by operating
     activities:
        Depreciation and amortization               31.4              32.8
        Amortization of discount on
         convertible debentures                      3.8               3.6
        Deferred income taxes                        4.7               2.4
        Provision for doubtful accounts              8.0               9.1
        Changes in operating assets and
         liabilities:
          Accounts receivable                      (76.5)           (146.4)
          Other assets                             (25.8)             (4.8)
          Other liabilities                         28.1             108.8
            Cash provided by operating activities   17.7              38.1

  Cash Flows from Investing Activities:
    Capital expenditures                           (23.8)            (31.0)
    Acquisitions of business, net of
     cash acquired                                  (2.5)            (29.6)
    Proceeds from the sale of property
     and equipment                                   2.5               1.5
            Cash used by investing activities      (23.8)            (59.1)

  Cash Flows from Financing Activities:
    Net (repayments) borrowings of
     short-term facilities and long-term debt      (44.5)             17.3
    Proceeds from stock option and
     purchase plans                                 13.9              26.1
    Repurchase of common stock                        -              (30.7)
    Dividends paid                                  (7.8)             (7.6)
            Cash (used) provided by
             financing activities                  (38.4)              5.1

  Effect of exchange rate changes on cash           12.6              19.1
  Change in cash and cash equivalents              (31.9)              3.2

  Cash and cash equivalents, beginning of period   284.0             245.8
  Cash and cash equivalents, end of period        $252.1            $249.0

SOURCE: Manpower Inc.

CONTACT: Mike Van Handel, Chief Financial Officer of Manpower,
+1-414-906-6305

Web site: http://investor.manpower.com/
http://www.manpower.com/


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