MANPOWERGROUP INC. ManpowerGroup Third Quarter Results | October 18, 2019
FORWARD-LOOKING STATEMENT
This presentation contains statements, including financial projections, that are forward-looking in nature. These statements are based on management's current expectations or beliefs, and are subject to known and unknown risks and uncertainties regarding expected future results. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the ManpowerGroup Inc. Annual Report on Form 10-K dated December 31, 2018, 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. Any forward-looking statements in this presentation speak only as of the date hereof.
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.
October 2019 | 2 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Consolidated Financial Highlights
As | As | Q3 Financial Highlights | ||||||||||
Reported | Adjusted(1) | |||||||||||
3% | 3% | Revenue $5.2B | ||||||||||
0% CC | 0% CC | |||||||||||
40 bps | 40 bps | Gross Margin 16.0% | ||||||||||
0% | 14% | Operating Profit $217M | ||||||||||
3% CC | 11% CC | ($187M as adjusted) | ||||||||||
10 bps | 40 bps | OP Margin 4.1% | ||||||||||
(3.6% as adjusted) | ||||||||||||
0% | 21% | EPS$2.42 | ||||||||||
2% CC | 18% CC | ($1.92 as adjusted) | ||||||||||
(1) As Adjusted figures exclude the impact of the gain of $30M from our Greater China IPO.
October 2019 | 3 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
EPS Bridge - Q3 vs. Guidance Midpoint
+0.50
$2.42
-0.03 | -0.03 | +0.06 | +0.01 | -0.01 | ||
$1.92 | $1.92 | |||||
Q3 Guidance | Operational | Currency | Tax Rate | WAS | Argentina | Q3 As | Greater China Q3 Reported |
Midpoint | Performance | (33.6% vs | Translation | Adjusted | IPO Gain | ||
35.5%) | Loss |
October 2019 | 4 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Consolidated Gross Margin Change
-0.1% | |
16.4% | -0.1% |
-0.2% | |
16.0%
Q3 2018 | Staffing/ | Permanent | Solutions | Q3 2019 |
Interim | Recruitment |
October 2019 | 5 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Business Line Gross Profit - Q3 2019(1)
$840M | Growth | ||||||||
4% | -6% | ||||||||
-3% OCC | |||||||||
14% | -5% | ||||||||
4% OCC | |||||||||
63% | -8% | ||||||||
19% | 0% OCC | ||||||||
0% | |||||||||
2% OCC |
-6%-1% OCC
█Manpower █Experis █ManpowerGroup Solutions █Right Management █ManpowerGroup - Total
(1) Business line classifications can vary by entity and are subject to change as service requirements change.
October 2019 | 6 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
SG&A Expense Bridge - Q3 YoY
(in millions of USD)
-21.0
673.9
-8.4 | +9.2 | -30.4 |
653.7 |
623.3
Q3 2018 | Currency | Acquisitions / | Operational | Q3 2019 | Q3 2019 | Q3 2019 |
Reported | Dispositions, net | Impact | As Adjusted | Greater China | Reported | |
12.4% | 12.5%(1) | IPO Gain | 11.9% | |||
% ofRevenue | % ofRevenue | % ofRevenue |
- This was unfavorably impacted 10 bps due to the effect of currency exchange rates on our business mix. In constant currency, SG&A as adjusted was 12.4% of Revenue.
October 2019 | 7 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Americas Segment
(20% of Revenue)
As | Q3 Financial Highlights | |||||
Reported | ||||||
3% | Revenue $1.1B | |||||
6% CC | ||||||
7% | OUP $55M | |||||
9% CC | ||||||
20 bps | OUP Margin 5.1% | |||||
Operating Unit Profit (OUP) is the measure that we use to evaluate segment performance. OUP is equal to segment revenues less direct costs and branch and national headquarters operating costs.
October 2019 | 8 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Americas - Q3 Revenue Growth YoY
- of Segment Revenue
60% | US | 2% |
2% | ||
14% | Mexico | -2% |
1% |
9%Canada
17%Other3%
Average Daily
Revenue Growth - CC
1%
0%
19%
21% 19%
15%
Revenue Growth | Revenue Growth - CC | |
October 2019 | 9 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Southern Europe Segment
(45% of Revenue)
As | Q3 Financial Highlights | |||
Reported | ||||
1% | Revenue $2.4B | |||
5% CC | ||||
4% | OUP$117M | |||
0% CC | ||||
20 bps | OUP Margin 5.0% | |||
October 2019 | 10 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Southern Europe - Q3 Revenue Growth YoY
- of Segment Revenue
59%France
16%Italy
8%Spain
5%Switzerland
12%Other
-5%-1%
-8%
-4%
0%
0%
Average Daily | ||
Revenue Growth - CC | ||
-2% | ||
-5% | ||
7% | 13% | 10% |
Acquired April 2019
1%
3%
Revenue Growth Revenue Growth - CC
October 2019 | 11 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Northern Europe Segment
(22% of Revenue)
As | Q3 Financial Highlights | |||||
Reported | ||||||
10% | Revenue $1.2B | |||||
5% CC | ||||||
47% | OUP $21M | |||||
44% CC | ||||||
130 bps | OUP Margin 1.8% | |||||
October 2019 | 12 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Northern Europe - Q3 Revenue Growth YoY
- of Segment Revenue
33%
18%
20%
12%
9%
8%
UK | -1% |
Germany | -21% |
-17% | |
Nordics | -10% |
-3% | |
Netherlands(1) | -24% |
-20% |
Belgium | -8% |
-4% | |
Other |
Average Daily
Revenue Growth - CC
4% 3%
-19%
-4%
-21%
-5%
6%
9%
Revenue Growth | Revenue Growth - CC | |
- On an organic basis, revenue for the Netherlands decreased 20% or-16% in constant currency. (ADR in organic constant currency is -18%).
October 2019 | 13 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
APME Segment
(12% of Revenue)
As | As | Q3 Financial Highlights | |||||
Reported | Adjusted(1) | ||||||
13% | 13% | Revenue $622M | |||||
13% CC | 13% CC | ||||||
65% | 29% | OUP $53M | |||||
64% CC | 29% CC | ($23M as adjusted) | |||||
410 bps | 80 bps | OUP Margin 8.6% | |||||
(3.7% as adjusted) |
(1) Excludes the impact of the Greater China IPO gain of $36M.
October 2019 | 14 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
APME - Q3 Revenue Growth YoY
Average Daily
% of SegmentRevenue Growth - CC
Revenue
40% | Japan | 13% | 9% | |||
8% | ||||||
16% | Australia | -31% | -26% | |||
-26% | ||||||
44% | Other (1) | -21% | ||||
-20% | ||||||
Revenue Growth | Revenue Growth - CC | ||
(1) On an organic basis excluding Greater China, revenue for APME Other increased 19% or +21% in constant currency.
October 2019 | 15 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Right Management Segment
(1% of Revenue)
As | Q3 Financial Highlights | |||||||
Reported | ||||||||
3% | Revenue $48M | |||||||
5% CC | ||||||||
14% | OUP $8M | |||||||
16% CC | ||||||||
150 bps | OUP Margin 15.5% | |||||||
October 2019 | 16 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Cash Flow Summary - 9 Months YTD
(in millions of USD) | 2019 | 2018 | ||
Net Earnings | 327 | 398 | ||
Non-cash Provisions and Other | 149 | 91 | ||
Change in Operating Assets/Liabilities | 19 | (187) | ||
Capital Expenditures | (36) | (40) | ||
Free Cash Flow | 459 | 262 | ||
Change in Debt | 6 | 168 | ||
Acquisitions of Businesses, including Contingent | ||||
Considerations, net of cash acquired | 63 | (27) | ||
Deconsolidation of Subsidaries | (58) | - | ||
Other Equity Transactions | (1) | (13) | ||
Repurchases of Common Stock | (152) | (299) | ||
Dividends Paid | (65) | (66) | ||
Effect of Exchange Rate Changes | (44) | (38) | ||
Other | 7 | 7 | ||
Change in Cash | 215 | (6) | ||
October 2019 | 17 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Balance Sheet Highlights
Total Debt
(in millions of USD)
Total Debt to
Total Capitalization
1,750
1,500
1,250
1,000
750
500
250
0
30%
20%
10%
0%
1,075 | 1,056 | |||||||||||||||||||||||||||||||||||||||
1,073 | Total Debt | |||||||||||||||||||||||||||||||||||||||
948 | 1,030 | |||||||||||||||||||||||||||||||||||||||
825 | Net Debt (Cash) | |||||||||||||||||||||||||||||||||||||||
855 | ||||||||||||||||||||||||||||||||||||||||
483 | 490 | |||||||||||||||||||||||||||||||||||||||
303 | ||||||||||||||||||||||||||||||||||||||||
259 | ||||||||||||||||||||||||||||||||||||||||
227 | 223 | |||||||||||||||||||||||||||||||||||||||
125 | ||||||||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | Q1 | Q2 | Q3 | ||||||||||||||||||||||||||||||||||
2019 | ||||||||||||||||||||||||||||||||||||||||
28% | 28% | 28% | ||||||||||||||||||||||||||||||||||||||
27% | ||||||||||||||||||||||||||||||||||||||||
25% | 25% | |||||||||||||||||||||||||||||||||||||||
24% | ||||||||||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | Q1 | Q2 | Q3 |
2019 |
October 2019 | 18 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Debt and Credit Facilities - September 30, 2019
(in millions of USD)
Interest | Maturity | Total | Remaining | |||
Rate | Date | Outstanding | Available | |||
Euro Notes - €500M | 1.809% | Jun 2026 | 540 | - | ||
Euro Notes - €400M | 1.913% | Sep 2022 | 434 | - | ||
Revolving Credit Agreement(1) | 3.02% | Jun 2023 | - | 599 | ||
Uncommitted lines and Other (2) | Various | Various | 56 | 257 | ||
Total Debt | 1,030 | 856 |
- The $600M agreement requires that we comply with a Leverage Ratio (netDebt-to-EBITDA) of not greater than 3.5 to 1 and a Fixed Charge Coverage Ratio of not less than 1.5 to 1, in addition to other customary restrictive covenants. As defined in the agreement, we had a net Debt-to-EBITDA ratio of 0.76 and a fixed charge coverage ratio of 5.16 as of September 30, 2019. As of September 30, 2019, there were $0.5M of standby letters of credit issued under the agreement.
- Represents subsidiary uncommitted lines of credit & overdraft facilities, whichtotal $313.0M. Totalsubsidiary borrowings are limited to $300M due to restrictions in our Revolving Credit Facility, with the exception of Q3 when subsidiary borrowings are limited to $600M.
October 2019 | 19 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Fourth Quarter 2019 Outlook
Revenue | Total | Down 3-5% (Flat/Down 2% CC) |
Americas | Up 1-3% (Up 3-5% CC) | |
Southern Europe | Up 1-3% (Up 4-6% CC) | |
Northern Europe | Down 9-11% (Down 5-7% CC) | |
APME | Down 16-18% (Down 16-18% CC) | |
Right Management | Flat/Down 2% (Flat/Up 2% CC) | |
Gross Profit Margin | 16.1 - 16.3% | |
Operating Profit Margin | 3.6 - 3.8% | |
Tax Rate | 33.0% | |
EPS | $2.00 - $2.08(unfavorable $0.07 currency) | |
October 2019 | 20 | ManpowerGroup |
ManpowerGroup 2019 Third Quarter Results
Key Take Aways
Our third quarter performance and earnings reflect a continuation of many of the same trends we experienced in the second quarter, against a backdrop of slowing economic growth globally and continued tight labor markets in many countries.
We continue to make the necessary investments to diversify our business mix, digitize all aspects of our operations and continuously innovate to create new value.
Our market leading geographic diversification and our leadership in innovative workforce solutions continues to set us apart from our competitors.
Overall global demand for our services and workforce solutions remains stable. In this uncertain environment, the need for strategic and operational flexibility remains crucial and we are focused on driving profitable growth based on these opportunities.
October 2019 | 21 | ManpowerGroup |
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ManpowerGroup Inc. published this content on 18 October 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 October 2019 13:04:03 UTC
