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ManpowerGroup Reports 2nd Quarter and First Half 2017 Results

Jul 24, 2017

MILWAUKEE, July 24, 2017 /PRNewswire/ -- ManpowerGroup (NYSE: MAN) today reported that net earnings for the three months ended June 30, 2017 were $117.0 million, or $1.72 per diluted share compared to net earnings of $115.4 million, or $1.60 per diluted share in the prior year period.  Revenues for the second quarter were $5.2 billion, an increase of 3% from the prior year period.

ManpowerGroup. (PRNewsFoto/ManpowerGroup) (PRNewsFoto/)

The current year quarter included restructuring charges which reduced earnings per share by 10 cents.

Financial results in the quarter were impacted by the stronger U.S. dollar relative to several foreign currencies compared to the prior year period.  On a constant currency basis, revenues increased 6% and earnings per share increased 9%.  Earnings per share in the quarter were negatively impacted 3 cents by changes in foreign currencies compared to the prior year, or 4 cents excluding the restructuring charges. 

ManpowerGroup Chairman & CEO Jonas Prising said, "We are pleased with our strong second quarter results. The labor markets continue to improve in Europe and across the globe, which is a good foundation for continued profitable growth as we head into the second part of 2017.

"The improving market conditions were spread across the geographies where we operate, and revenue growth was strong in a number of our countries, with our teams in France, Italy, Mexico and Poland leading the way.        

"We anticipate the third quarter diluted earnings per share to be in the range of $1.90 to $1.98, which includes an estimated favorable currency impact of 2 cents," Prising stated.

Net earnings for the six months ended June 30, 2017 were $191.4 million, or $2.80 per diluted share compared to net earnings of $187.1 million, or $2.57 per diluted share in the prior year. The year to date period included restructuring charges which reduced earnings per share by 41 cents and discrete income tax benefits in the first quarter which increased earnings per share by 19 cents. Revenues for the six-month period were $9.9 billion, an increase of 3% from the prior year or an increase of 6% in constant currency.  Foreign currency exchange rates had an unfavorable impact of 6 cents per share for the six-month period.

In conjunction with its second quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on July 24, 2017 at 7:30 a.m. CDT (8:30 a.m. EDT). Interested parties are invited to listen to the webcast and view the presentation by logging on to http://investor.manpowergroup.com/ in the section titled "Investor Relations."

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 over 400,000 clients and connect 3+ million people to meaningful, sustainable work across a wide range of industries and skills. Our expert family of brands – Manpower®, Experis®, Right Management® and ManpowerGroup® Solutions – creates substantially more value for candidates and clients across 80 countries and territories and has done so for nearly 70 years. In 2017, ManpowerGroup was named one of the World's Most Ethical Companies for the seventh consecutive year and one of Fortune's Most Admired Companies, confirming our position as the most trusted and admired brand in the industry. See how ManpowerGroup is powering the future of work: www.manpowergroup.com

Forward-Looking Statements

This news release contains statements, including earnings 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 the information under the heading 'Risk Factors' in its Annual Report on Form 10-K for the year ended December 31, 2016, which information is incorporated herein by reference.

 

ManpowerGroup

Results of Operations

(In millions, except per share data)







Three Months Ended June 30




% Variance




Amount

Constant


2017

2016

Reported

Currency


(Unaudited)

Revenues from services (a)

$       5,174.8

$      5,022.1

3.0%

5.6%






Cost of services 

4,313.1

4,161.4

3.6%

6.3%






  Gross profit

861.7

860.7

0.1%

2.5%






Selling and administrative expenses

667.1

664.7

0.3%

2.8%






  Operating profit

194.6

196.0

-0.7%

1.4%






Interest and other expenses

10.4

10.3

1.6%







  Earnings before income taxes

184.2

185.7

-0.8%

1.2%






Provision for income taxes

67.2

70.3

-4.4%







  Net earnings

$          117.0

$        115.4

1.4%

3.4%






Net earnings per share - basic

$            1.74

$          1.61

8.1%







Net earnings per share - diluted

$            1.72

$          1.60

7.5%

9.4%






Weighted average shares - basic

67.4

71.6

-5.9%







Weighted average shares - diluted 

68.0

72.3

-5.8%











(a)

Revenues from services include fees received from our franchise offices of $5.8 million and $5.7 million for the three months ended June 30, 2017 and 2016, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $247.3 million and $261.2 million for the three months ended June 30, 2017 and 2016, respectively.

 

ManpowerGroup

Operating Unit Results

(In millions)







Three Months Ended June 30




% Variance




Amount

Constant


2017

2016

Reported

Currency


(Unaudited)

Revenues from Services:





  Americas:





      United States  (a)

$              671.3

$              725.3

-7.4%

-7.4%

      Other Americas

385.6

355.7

8.3%

10.6%


1,056.9

1,081.0

-2.2%

-1.5%

  Southern Europe:





      France

1,356.3

1,252.2

8.3%

11.0%

      Italy

366.5

299.8

22.2%

25.2%

      Other Southern Europe

412.9

379.4

8.8%

9.7%


2,135.7

1,931.4

10.6%

12.9%






  Northern Europe

1,281.7

1,322.3

-3.1%

2.3%

  APME

643.4

614.6

4.7%

5.2%

  Right Management 

57.1

72.8

-21.6%

-19.8%


$           5,174.8

$           5,022.1

3.0%

5.6%






Operating Unit Profit:





  Americas:





      United States

$                44.6

$                40.0

11.4%

11.4%

      Other Americas

13.0

13.8

-6.0%

-4.6%


57.6

53.8

7.0%

7.3%

  Southern Europe:





      France

70.2

67.5

4.0%

6.2%

      Italy

27.6

22.8

21.0%

24.0%

      Other Southern Europe

12.5

12.0

5.2%

5.9%


110.3

102.3

7.9%

10.1%






  Northern Europe

32.9

37.8

-13.0%

-9.0%

  APME

23.3

22.2

4.7%

5.5%

  Right Management 

8.5

14.5

-41.4%

-40.9%


232.6

230.6



Corporate expenses

(29.6)

(25.6)



Intangible asset amortization expense

(8.4)

(9.0)



    Operating profit

194.6

196.0

-0.7%

1.4%

Interest and other expenses (b)

(10.4)

(10.3)



    Earnings before income taxes

$              184.2

$              185.7











(a)

In the United States, revenues from services include fees received from our franchise offices of $3.6 million for both the three months ended June 30, 2017 and 2016. These fees are primarily based on revenues generated by the franchise offices, which were $155.6 million and $170.9 million for the three months ended June 30, 2017 and 2016, respectively.




(b)    The components of interest and other expenses were:


2017

2016

          Interest expense

$                  9.1

$                  9.2

          Interest income

(1.2)

(0.8)

          Foreign exchange losses

0.2

0.7

          Miscellaneous expenses, net

2.3

1.2


$                10.4

$                10.3

 

ManpowerGroup

Results of Operations

(In millions, except per share data)







Six Months Ended June 30




% Variance




Amount

Constant


2017

2016

Reported

Currency


(Unaudited)

Revenues from services (a)

$      9,932.0

$     9,609.8

3.4%

6.1%






Cost of services

8,282.5

7,975.3

3.9%

6.7%






  Gross profit

1,649.5

1,634.5

0.9%

3.5%






Selling and administrative expenses

1,327.9

1,306.8

1.6%

4.2%






  Operating profit

321.6

327.7

-1.9%

0.4%






Interest and other expenses

25.3

23.0

10.2%







  Earnings before income taxes

296.3

304.7

-2.8%

-0.5%






Provision for income taxes

104.9

117.6

-10.8%







  Net earnings

$         191.4

$        187.1

2.3%

4.6%






Net earnings per share - basic

$           2.83

$          2.59

9.3%







Net earnings per share - diluted

$           2.80

$          2.57

8.9%

11.3%






Weighted average shares - basic

67.5

72.2

-6.4%







Weighted average shares - diluted

68.3

72.9

-6.4%













(a) 

Revenues from services include fees received from our franchise offices of $11.1 million and $10.9 million for the six months ended June 30, 2017 and 2016, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $486.4 million and $489.0 million for the six months ended June 30, 2017 and 2016, respectively.

 

ManpowerGroup

Operating Unit Results

(In millions)







Six Months Ended June 30




% Variance




Amount

Constant


2017

2016

Reported

Currency


(Unaudited)

Revenues from Services:





  Americas:





      United States  (a)

$         1,332.8

$          1,428.4

-6.7%

-6.7%

      Other Americas

750.3

698.5

7.4%

9.6%


2,083.1

2,126.9

-2.1%

-1.3%

  Southern Europe:





      France

2,493.8

2,331.0

7.0%

10.2%

      Italy

660.9

562.9

17.4%

20.9%

      Other Southern Europe

784.9

725.2

8.2%

9.7%


3,939.6

3,619.1

8.9%

11.8%






  Northern Europe

2,520.4

2,536.2

-0.6%

5.4%

  APME

1,275.8

1,190.8

7.1%

6.5%

  Right Management 

113.1

136.8

-17.3%

-15.4%


$          9,932.0

$          9,609.8

3.4%

6.1%






Operating Unit Profit:





  Americas:





      United States

$               71.0

$               62.8

13.1%

13.1%

      Other Americas

25.4

25.4

-0.4%

2.4%


96.4

88.2

9.2%

10.0%

  Southern Europe:





      France

120.3

114.7

4.9%

7.8%

      Italy

45.8

38.9

17.7%

21.2%

      Other Southern Europe

25.2

20.4

23.9%

25.7%


191.3

174.0

10.0%

12.9%






  Northern Europe

44.2

70.3

-37.1%

-34.6%

  APME

43.4

41.5

4.6%

4.3%

  Right Management 

17.3

24.0

-27.9%

-27.1%


392.6

398.0



Corporate expenses

(54.2)

(52.3)



Intangible asset amortization expense

(16.8)

(18.0)



    Operating profit

321.6

327.7

-1.9%

0.4%

Interest and other expenses (b)

(25.3)

(23.0)



    Earnings before income taxes

$             296.3

$             304.7














(a)

In the United States, revenues from services include fees received from our franchise offices of $7.1 million and $7.0 million for the six months ended June 30, 2017 and 2016, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $323.3 million and $331.7 million for the six months ended June 30, 2017 and 2016, respectively.





(b)      The components of interest and other expenses were:


2017

2016

           Interest expense

$                18.4

$                18.7

           Interest income

(2.2)

(1.5)

           Foreign exchange losses

0.3

1.6

           Miscellaneous expenses, net

8.8

4.2


$                25.3

$                23.0

 

ManpowerGroup

Consolidated Balance Sheets

(In millions)






Jun. 30


Dec. 31


2017


2016


(Unaudited)

ASSETS




Current assets:




  Cash and cash equivalents

$     573.1


$     598.5

  Accounts receivable, net

4,927.4


4,413.1

  Prepaid expenses and other assets

120.6


121.3

      Total current assets

5,621.1


5,132.9





Other assets:




  Goodwill

1,291.9


1,239.9

  Intangible assets, net

290.3


294.4

  Other assets

781.3


759.7

      Total other assets

2,363.5


2,294.0





Property and equipment:




  Land, buildings, leasehold improvements and equipment

606.4


567.0

  Less:  accumulated depreciation and amortization

451.5


419.7

      Net property and equipment

154.9


147.3

             Total assets

$   8,139.5


$  7,574.2





LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




  Accounts payable

$   2,172.3


$  1,914.4

  Employee compensation payable

192.6


208.1

  Accrued liabilities

405.6


398.6

  Accrued payroll taxes and insurance

664.6


649.2

  Value added taxes payable

485.8


448.7

  Short-term borrowings and current maturities of long-term debt

435.8


39.8

      Total current liabilities

4,356.7


3,658.8





Other liabilities:




  Long-term debt

454.8


785.6

  Other long-term liabilities

728.6


683.4

      Total other liabilities

1,183.4


1,469.0





Shareholders' equity:




  ManpowerGroup shareholders' equity




    Common stock

1.2


1.2

    Capital in excess of par value

3,278.6


3,227.2

    Retained earnings 

2,420.5


2,291.3

    Accumulated other comprehensive loss

(324.7)


(426.1)

    Treasury stock, at cost

(2,863.6)


(2,731.7)

       Total ManpowerGroup shareholders' equity

2,512.0


2,361.9

  Noncontrolling interests

87.4


84.5

          Total shareholders' equity

2,599.4


2,446.4

             Total liabilities and shareholders' equity

$   8,139.5


$  7,574.2

 

ManpowerGroup

Consolidated Statements of Cash Flows

(In millions)






Six Months Ended


June 30,


2017


2016


(Unaudited)

Cash Flows from Operating Activities:




  Net earnings

$     191.4


$     187.1

  Adjustments to reconcile net earnings to net




    cash provided by operating activities:




      Depreciation and amortization

40.7


42.6

      Deferred income taxes

26.1


29.8

      Provision for doubtful accounts

10.0


9.2

      Share-based compensation

14.8


14.9

      Excess tax benefit on exercise of share-based awards

-


(0.1)

  Changes in operating assets and liabilities, excluding




    the impact of acquisitions:




      Accounts receivable

(258.8)


(182.8)

      Other assets

36.0


62.9

      Other liabilities

87.8


98.5

            Cash provided by operating activities

148.0


262.1





Cash Flows from Investing Activities:




  Capital expenditures

(25.5)


(30.8)

  Acquisitions of businesses, net of cash acquired

(21.2)


(41.2)

  Proceeds from the sale of investments, property and equipment

3.1


2.4

            Cash used in investing activities

(43.6)


(69.6)





Cash Flows from Financing Activities:




  Net change in short-term borrowings

(4.2)


(15.0)

  Repayments of long-term debt

(0.2)


(6.0)

  Payments of contingent consideration for acquisitions

(12.9)


(2.9)

  Proceeds from share-based awards and other equity transactions

34.1


1.9

  Other share-based award transactions

(16.3)


(3.2)

  Repurchases of common stock

(115.8)


(290.5)

  Dividends paid

(62.2)


(60.8)

            Cash used in financing activities

(177.5)


(376.5)





Effect of exchange rate changes on cash

47.7


(0.2)

Change in cash and cash equivalents

(25.4)


(184.2)





Cash and cash equivalents, beginning of period

598.5


730.5

Cash and cash equivalents, end of period

$     573.1


$     546.3

 

SOURCE ManpowerGroup

For further information: Jack McGinnis, +1.414.906.7977, jack.mcginnis@manpowergroup.com


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