MANPOWERGROUP INC. ManpowerGroup Third Quarter Results | October 20, 2020
FORWARD-LOOKING STATEMENT
This presentation contains statements, including statements regarding the anticipated financial and operational impacts of the COVID-19 pandemic and related economic conditions and the Company's efforts to respond to such impacts, 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, 2019, as well as the risks and uncertainties arising from the COVID-19 global pandemic and related governmental actions that are included under the heading "Risk Factors" in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, 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.
October 2020 | 2 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Consolidated Financial Highlights
As | Q3 Financial Highlights | |||||||||||||
Reported | As Adjusted(1) | |||||||||||||
13% | 13% | Revenue $4.6B | ||||||||||||
14% CC | 14% CC | |||||||||||||
20 bps | 20 bps | Gross Margin 15.8% | ||||||||||||
72% | 37% | Operating Profit $62M | ||||||||||||
72% CC | 38% CC | ($117M as adjusted) | ||||||||||||
280 bps | 100 bps | OP Margin 1.3% | ||||||||||||
(2.6% as adjusted) | ||||||||||||||
-93% | -38% | EPS $0.18 | ||||||||||||
-93% CC | -39% CC | ($1.20 as adjusted) | ||||||||||||
- As Adjusted figures exclude the impact of restructuring charges of $49.9M ($42.1M net of tax), the $5.8M ($5.2M net of tax) loss from dispositions of subsidiaries and a discrete tax item of $12M in Q3 2020; while Q3 2019 excludes the impact of the gain of $30M from our Greater China IPO.
October 2020 | 3 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
EPS Bridge - Q3 vs. Guidance Midpoint
(1)
(1) Represents unfavorable impacts of $0.21 related to discrete tax item and $0.09 related to the loss from dispositions of subsidiaries.
October 2020 | 4 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Consolidated Gross Margin Change
-0.2% | |||
16.0% | -0.3% | +0.1% | |
+0.2% | |||
15.8% | |||
Q3 2019 | Underlying | Permanent | Career | Other and | Q3 2020 |
Staffing/ | Recruitment | Transition | Accrual | ||
Interim | Adjustments |
October 2020 | 5 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Business Line Gross Profit - Q3 2020(1)
Trend
-15%-17% OCC
-18%-19% OCC
-1%
-2% OCC
-14%
-16% OCC
█ Manpower | █ Experis | Talent Solutions █ ManpowerGroup - Total | |
█ |
(1) Business line classifications can vary by entity and are subject to change as service requirements change.
October 2020 | 6 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
SG&A Expense Bridge - Q3 YoY
(in millions of USD)
- Reported ratio is unfavorably impacted 10 bps due to the effect of currency exchange rates on our business mix. In constant currency, SG&A as reported was 14.4% of revenue.
October 2020 | 7 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Americas Segment
(20% of Revenue)
As | Q3 Financial Highlights | |||||
Reported | As Adjusted(1) | |||||
15% | 15% | Revenue $929M | ||||
11% CC | 11% CC | |||||
47% | 19% | OUP $32M | ||||
44% CC | 16% CC | ($48M as adjusted) | ||||
200 bps | 20 bps | OUP Margin 3.4% | ||||
(5.2% as adjusted) |
(1) Excludes the impact of restructuring costs of $16.7M ($12.6M net of tax) in Q3 2020.
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 2020 | 8 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Americas - Q3 Revenue Trend YoY
- of Segment Revenue
62%
12%
9%
17%
US
Mexico -20%
Canada
Other -20%
Revenue Trend
Average Daily
Revenue Trend - CC
-13%
-13%-14%(1)
-9%-9%
-11%
-10%-11%
-6%
Revenue Trend - CC
(1) On an organic basis, revenue and ADR for the US decreased 15% and 16%, respectively.
October 2020 | 9 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Southern Europe Segment
(46% of Revenue)
As | Q3 Financial Highlights | |||||
Reported | As Adjusted(1) | |||||
10% | 10% | Revenue $2.1B | ||||
15% CC | 15% CC | |||||
38% | 27% | OUP $72M | ||||
41% CC | 30% CC | ($85M as adjusted) | ||||
150 bps | 90 bps | OUP Margin 3.4% | ||||
(4.0% as adjusted) |
- Excludes the impacts of restructuring costs of $7.6M ($5.9M net of tax) and the $5.8M ($5.2M net of tax) loss from dispositions of subsidiaries in Q3 2020.
October 2020 | 10 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Southern Europe - Q3 Revenue Trend YoY
- of Segment Revenue
57% France
17% Italy
9% Spain
6% Switzerland
11% Other
-13%
-17%
-7%
-11%
-4%
-5%
-11%
-12%
-15%
Average Daily
Revenue Trend - CC
-17%
-12%
1% -6%
-13%
Revenue Trend | Revenue Trend - CC | |
October 2020 | 11 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Northern Europe Segment
(21% of Revenue)
As | Q3 Financial Highlights | |||||
Reported | As Adjusted(1) | |||||
19% | 19% | Revenue $948M | ||||
22% CC | 22% CC | |||||
N/A | 93% | OUP -$23M | ||||
92% CC | ||||||
(+$2M as adjusted) | ||||||
440 bps | 180 bps | OUP Margin -2.4% | ||||
(+0.2% as adjusted) |
(1) Excludes the impact of restructuring costs of $24.1M ($22.6M net of tax) in Q3 2020.
October 2020 | 12 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Northern Europe - Q3 Revenue Trend YoY
- of Segment Revenue
34%
16%
21%
12%
8%
9%
UK
Germany
Nordics
Netherlands
Belgium
Other
-18%
-22%
-28%
-32%
-13%-15%
-19%
-23%
-25%
-29%
-8%
-5%
Average Daily
Revenue Trend - CC
-22%
-32%
-15%
-23%
-29%
Revenue Trend | Revenue Trend - CC | |
October 2020 | 13 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
APME Segment
(13% of Revenue)
As | Q3 Financial Highlights | |||||
Reported | As Adjusted(1) | |||||
5% | 5% | Revenue $596M | ||||
6% CC | 6% CC | |||||
70% | 26% | OUP $17M | ||||
70% CC | 26% CC | ($18M as adjusted) | ||||
590 bps | 90 bps | OUP Margin 2.8% | ||||
(3.0% as adjusted) |
- Excludes the impact of restructuring costs of $1.5M ($1.0M net of tax) in Q3 2020 and the impact of the Greater China IPO gain of $30M in Q3 2019.
October 2020 | 14 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
APME - Q3 Revenue Trend YoY
Average Daily
% of SegmentRevenue Trend - CC
Revenue
45% | Japan | 6% | 6% | ||
5% | |||||
17% | Australia | -5% | -7% | ||
-8% | |||||
38% | Other | -12% | |||
-10% | |||||
Revenue Trend | Revenue Trend - CC | |
October 2020 | 15 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Cash Flow Summary - 9 Months YTD
(in millions of USD) | 2020 | 2019 | |||
Net (Loss) Earnings | (52) | 327 | |||
Non-cash Provisions and Other | 168 | 54 | |||
Change in Operating Assets/Liabilities | 600 | 114 | |||
Capital Expenditures | (31) | (36) | |||
Free Cash Flow | 685 | 459 | |||
Change in Debt | (29) | 6 | |||
Acquisitions of Businesses, including Contingent | |||||
Considerations, net of cash acquired | (2) | 63 | |||
Deconsolidation of Subsidaries | - | (58) | |||
Repurchases of Common Stock | (64) | (152) | |||
Dividends Paid | (63) | (65) | |||
Effect of Exchange Rate Changes | 27 | (44) | |||
Other | 8 | 6 | |||
Change in Cash | 562 | 215 |
October 2020 | 16 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Balance Sheet Highlights
Total Debt
(in millions of USD)
Total Debt
Net Debt
Net (Cash)
Total Debt to
Total Capitalization
October 2020 | 17 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Debt and Credit Facilities - September 30, 2020
(in millions of USD)
Interest | Maturity | Total | Remaining | |||
Rate | Date | Outstanding | Available | |||
Euro Notes - €500M | 1.809% | Jun 2026 | 582 | - | ||
Euro Notes - €400M | 1.913% | Sep 2022 | 468 | - | ||
Revolving Credit Agreement(1)(2) | 1.148% | Jun 2023 | - | 599 | ||
Uncommitted lines and Other (3) | Various | Various | 38 | 296 | ||
Total Debt | 1,088 | 895 |
- The $600M agreement requires that we comply with a Leverage Ratio (net Debt-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 -0.24 and a fixed charge coverage ratio of 3.33 as of September 30, 2020. (In the agreement, net debt is defined as total debt less cash in excess of $400M.) As of September 30, 2020, there were $0.5M of standby letters of credit issued under the agreement.
- Under the $600M agreement, we have an option to increase the total availability under the facility by an additional $200M.
- Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $336.6M. Total subsidiary 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 2020 | 18 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Fourth Quarter 2020 Outlook
Revenue | Total | Down 8-10% (Down 10-12% CC) |
Americas | Down 13-15% (Down 9-11% CC) | |
Southern Europe | Down 5-7% (Down 10-12% CC) | |
Northern Europe | Down 13-15% (Down 15-17% CC) | |
APME | Down 2-4% (Down 4-6% CC) | |
Gross Profit Margin | 15.8 - 16.0% | |
Operating Profit Margin | 2.3 - 2.5% | |
Tax Rate | 39.0% | |
EPS | $1.06 - $1.14 (favorable $0.03 currency) | |
October 2020 | 19 | ManpowerGroup |
ManpowerGroup 2020 Third Quarter Results
Key Take Aways
Continued improvement in year-over-year revenue trend during the quarter, marking five months of improvement since April 2020.
Our talented teams have provided critical work to help people and companies around the world respond and reset following these unprecedented crises.
Our Talent Solutions MSP offering was the only one in our industry to be recognized by Everest Group as both a Star Performer and Global Leader in its Contingent Workforce Management Index, scoring highly for vision, strategy and innovation.
The actions we are taking to digitize, diversify and innovate are positioning us for further success in 2021 and beyond.
October 2020 | 20 | ManpowerGroup |
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ManpowerGroup Inc. published this content on 20 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 October 2020 12:29:01 UTC
