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MarketScreener Homepage  >  Equities  >  Nyse  >  ManpowerGroup Inc.    MAN

MANPOWERGROUP INC.

(MAN)
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ManpowerGroup : Q3 2020 Presentation

10/20/2020 | 08:30am EST

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)

  1. 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)

  1. 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)

  1. 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)

  1. 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

  1. 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.
  2. Under the $600M agreement, we have an option to increase the total availability under the facility by an additional $200M.
  3. 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

Disclaimer

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


© Publicnow 2020
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Financials (USD)
Sales 2020 17 622 M - -
Net income 2020 53,9 M - -
Net cash 2020 100 M - -
P/E ratio 2020 71,4x
Yield 2020 2,44%
Capitalization 5 213 M 5 213 M -
EV / Sales 2020 0,29x
EV / Sales 2021 0,26x
Nbr of Employees 28 000
Free-Float 48,6%
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Mean consensus OUTPERFORM
Number of Analysts 14
Average target price 82,00 $
Last Close Price 90,61 $
Spread / Highest target 10,4%
Spread / Average Target -9,50%
Spread / Lowest Target -36,0%
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NameTitle
Jonas Prising Chairman & Chief Executive Officer
John Thomas McGinnis Chief Financial Officer & Executive Vice President
Ganesh Ramakrishnan Chief Technology Officer
Randy Herold Chief Information Security & Privacy Officer
Michael J. van Handel Director
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