ManpowerGroup Reports 3rd Quarter 2018 Results

MILWAUKEE, Oct. 19, 2018 /PRNewswire/ -- ManpowerGroup (NYSE: MAN) today reported that net earnings per diluted share for the three months ended September 30, 2018 were $2.43 compared to $2.04 in the prior year period. Net earnings in the quarter were $158.0 million compared to $137.7 million a year earlier. Revenues for the third quarter were $5.4 billion, a decrease of 1% from the year earlier period.

Financial results in the quarter were impacted by the stronger U.S. dollar relative to foreign currencies compared to the prior year period. On a constant currency basis, revenues increased 1% and net earnings per diluted share increased 21%. Earnings per share in the quarter were negatively impacted 4 cents by changes in foreign currencies compared to the prior year.

Jonas Prising, ManpowerGroup Chairman & CEO, said, "Our third quarter results reflect a more challenging economic environment than we had anticipated, in particular for some countries in Europe. While we are cautious on our outlook, we are confident in our ability to manage in a more uncertain environment. We believe our market leading global footprint and diversified business mix, enabled by technology, will continue to serve us well as access to human capital and workforce agility remains a strategic priority for employers globally.

"We are anticipating the fourth quarter of 2018 diluted net earnings per share to be in the range of $2.15 to $2.23, which includes an estimated unfavorable currency impact of 5 cents. This includes an estimated one-time negative impact of 27 cents related to reduced gross profit in France," Prising stated.

Net earnings for the nine months ended September 30, 2018 were $398.4 million, or $6.03 per diluted share compared to net earnings of $329.1 million, or $4.84 per diluted share in the prior year. The year to date period included restructuring costs which reduced earnings per share by 45 cents. The prior year to date period included restructuring costs which reduced earnings per share by 41 cents and discrete income tax benefits which increased earnings per share by 19 cents. Revenues for the nine-month period were $16.6 billion, an increase of 8% from the prior year in reported U.S. dollars or 4% in constant currency. Earnings per share for the nine-month period were positively impacted 19 cents by changes in foreign currencies compared to the prior year, or 23 cents excluding the restructuring costs.

In conjunction with its third quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on October 19, 2018 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 hundreds of thousands of organizations every year, providing them with skilled talent while finding meaningful, sustainable employment for millions of people 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 70 years. In 2018, ManpowerGroup was named one of the World's Most Ethical Companies for the ninth year and one of Fortune's Most Admired Companies for the sixteenth year, 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, 2017, which information is incorporated herein by reference.

                               
            ManpowerGroup


                           
            Results of Operations


                         
      (In millions, except per share data)




                                                 Three Months Ended September 30



                                                                                            % Variance



                                           
            
              Amount            Constant


                                    2018                          2017             Reported       Currency

                                                                                                      ---

                                      
            (Unaudited)


     Revenues from
      services (a)              $5,418.7                      $5,464.8                -0.8%            1.3%




     Cost of services            4,528.1                       4,564.2                -0.8%            1.3%





       Gross profit                890.6                         900.6                -1.1%            1.0%




     Selling and
      administrative
      expenses                     673.9                         671.9                 0.3%            2.5%





       Operating profit            216.7                         228.7                -5.2%           -3.4%




     Interest and other
      expenses                      11.8                          11.7                 0.4%





       Earnings before
        income taxes               204.9                         217.0                -5.5%           -4.0%




     Provision for income
      taxes                         46.9                          79.3               -40.7%




       Net earnings               $158.0                        $137.7                14.7%           16.6%





     Net earnings per
      share -basic                 $2.45                         $2.06                18.9%





     Net earnings per
      share -diluted               $2.43                         $2.04                19.1%           21.1%





     Weighted average
      shares -basic                 64.5                          66.8                -3.5%





     Weighted average
      shares -diluted               65.0                          67.6                -3.9%




               (a)  Revenues from services
                include fees received from our
                franchise offices of $6.2
                million and $6.4 million for
                the three months ended
                September 30, 2018 and 2017,
                respectively. These fees are
                primarily based on revenues
                generated by the franchise
                offices, which were $278.7
                million and $272.9 million for
                the three months ended
                September 30, 2018 and 2017,
                respectively.

                                   
              ManpowerGroup


                               
              Operating Unit Results


                                   
              (In millions)




                                                      Three Months Ended September 30



                                                                                                 % Variance



                                                                    Amount            Constant


                                     2018                              2017             Reported       Currency

                                                                                                           ---

                                        
              (Unaudited)



     Revenues from Services:



       Americas:


            United States  (a)     $633.2                            $659.9                -4.0%           -4.0%


            Other Americas          406.8                             401.6                 1.3%           11.7%


                                  1,040.0                           1,061.5                -2.0%            1.9%




       Southern Europe:


            France                1,460.6                           1,481.7                -1.4%           -0.6%


            Italy                   410.2                             386.1                 6.3%            7.2%


            Other Southern
             Europe                 460.8                             450.6                 2.2%            4.3%


                                  2,331.6                           2,318.4                 0.6%            1.7%





        Northern Europe           1,287.1                           1,367.9                -5.9%           -3.9%



       APME                        713.0                             665.4                 7.2%           10.3%


        Right Management             47.0                              51.6                -8.9%           -7.5%


                                 $5,418.7                          $5,464.8                -0.8%            1.3%






     Operating Unit Profit:



       Americas:


            United States           $33.2                             $43.5               -23.7%          -23.7%


            Other Americas           18.1                              16.0                12.7%           21.7%


                                     51.3                              59.5               -13.8%          -11.4%




       Southern Europe:


            France                   78.8                              77.6                 1.5%            2.3%


            Italy                    25.7                              24.2                 6.0%            6.7%


            Other Southern
             Europe                  17.1                              16.2                 6.1%            8.3%


                                    121.6                             118.0                 3.1%            4.0%





        Northern Europe              40.5                              49.8               -18.6%          -16.8%



       APME                         32.4                              27.4                18.1%           20.9%


        Right Management              6.5                               8.1               -19.1%          -18.2%


                                    252.3                             262.8


      Corporate expenses           (26.3)                           (25.3)


      Intangible asset
       amortization
       expense                      (9.3)                            (8.8)


          Operating profit          216.7                             228.7                -5.2%           -3.4%


      Interest and other
       expenses (b)                (11.8)                           (11.7)


          Earnings before
           income taxes            $204.9                            $217.0




               (a)  In the United States,
                revenues from services include
                fees received from our franchise
                offices of $3.7 million and $3.9
                million for the three months
                ended September 30, 2018 and
                2017, respectively. These fees
                are primarily based on revenues
                generated by the franchise
                offices, which were $169.9
                million and $164.3 million for




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

                                                            2018          2017




                      Interest expense                    $10.2         $12.6



                      Interest income                     (1.5)        (1.2)


                       Foreign exchange loss                 3.0           0.1


                       Miscellaneous expenses, net           0.1           0.2



                                                           $11.8         $11.7


                                
              ManpowerGroup


                            
              Results of Operations


                          
        (In millions, except per share data)




                                                  Nine Months Ended September 30



                                                                                            % Variance



                                                                 Amount          Constant


                                  2018                              2017           Reported       Currency

                                                                                                      ---

                                     
              (Unaudited)


     Revenues from
      services (a)           $16,598.0                         $15,396.8               7.8%            3.6%




     Cost of services         13,899.3                          12,846.7               8.2%            3.9%





       Gross profit            2,698.7                           2,550.1               5.8%            2.2%




     Selling and
      administrative
      expenses                 2,119.9                           1,998.3               6.1%            2.4%





       Operating profit          578.8                             551.8               4.9%            1.3%




     Interest and other
      expenses                    38.4                              38.5              -0.5%





       Earnings before
        income taxes             540.4                             513.3               5.3%            1.5%




     Provision for income
      taxes                      142.0                             184.2             -22.9%




       Net earnings             $398.4                            $329.1              21.0%           17.2%





     Net earnings per
      share -basic               $6.08                             $4.89              24.3%





     Net earnings per
      share -diluted             $6.03                             $4.84              24.6%           20.7%





     Weighted average
      shares -basic               65.6                              67.3              -2.6%





     Weighted average
      shares -diluted             66.1                              68.1              -2.8%




               (a)  Revenues from services include
                fees received from our franchise
                offices of $17.6 million and $17.5
                million for the nine months ended
                September 30, 2018 and 2017,
                respectively. These fees are
                primarily based on revenues
                generated by the franchise
                offices, which were $789.4 million
                and $759.3 million for the nine
                months ended September 30, 2018
                and 2017, respectively.

                                   
              ManpowerGroup


                               
              Operating Unit Results


                                   
              (In millions)




                                                      Nine Months Ended September 30



                                                                                                % Variance



                                                                     Amount          Constant


                                      2018                              2017           Reported       Currency

                                                                                                          ---

                                         
              (Unaudited)



     Revenues from Services:



       Americas:


            United States  (a)    $1,890.0                          $1,992.7              -5.2%           -5.2%


            Other Americas         1,225.1                           1,151.9               6.4%           11.8%


                                   3,115.1                           3,144.6              -0.9%            1.1%




       Southern Europe:


            France                 4,397.1                           3,975.5              10.6%            3.3%


            Italy                  1,266.8                           1,047.0              21.0%           12.9%


            Other Southern
             Europe                1,413.7                           1,235.5              14.4%            8.4%


                                   7,077.6                           6,258.0              13.1%            5.9%





        Northern Europe            4,097.9                           3,888.3               5.4%           -0.3%



       APME                       2,158.0                           1,941.2              11.2%            9.7%


        Right Management             149.4                             164.7              -9.3%          -11.1%


                                 $16,598.0                         $15,396.8               7.8%            3.6%






     Operating Unit Profit:



       Americas:


            United States            $98.1                            $114.3             -14.2%          -14.2%


            Other Americas            52.8                              41.4              27.6%           33.6%


                                     150.9                             155.7              -3.1%           -1.5%




       Southern Europe:


            France                   209.5                             198.9               5.4%           -0.9%


            Italy                     82.8                              70.0              18.2%           10.3%


            Other Southern
             Europe                   48.7                              41.4              17.7%           13.8%


                                     341.0                             310.3               9.9%            3.6%





        Northern Europe               81.8                              94.7             -13.7%          -16.0%



       APME                          87.5                              70.8              23.4%           22.0%


        Right Management              23.4                              25.4              -7.8%           -8.8%


                                     684.6                             656.9


      Corporate expenses            (79.0)                           (79.5)


      Intangible asset
       amortization
       expense                      (26.8)                           (25.6)


          Operating profit           578.8                             551.8               4.9%            1.3%


      Interest and other
       expenses (b)                 (38.4)                           (38.5)


          Earnings before
           income taxes             $540.4                            $513.3




               (a)  In the United States, revenues from services include
                fees received from our franchise offices of $10.8 million
                and $11.0 million for the nine months ended September 30,
                2018 and 2017, respectively. These fees are primarily
                based on revenues generated by the franchise offices,
                which were $485.6 million and $487.6 million for the nine
                months ended September 30, 2018 and 2017, respectively.




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

                                                         2018       2017




                      Interest expense                 $37.1      $36.4



                      Interest income                  (4.1)     (3.4)


                       Foreign exchange loss              2.8        0.4


                       Miscellaneous expenses, net        2.6        5.1


                                                        $38.4      $38.5


                                           
              ManpowerGroup


                                    
              Consolidated Balance Sheets


                                           
              (In millions)




                                                                     Sep. 30   Dec. 31


                                                                        2018       2017



                                                  
              (Unaudited)



     
                ASSETS


                   Current assets:


        Cash and
         cash
         equivalents                                                  $682.6     $689.0


        Accounts
         receivable,
         net                                                         5,331.3    5,370.5


        Prepaid
         expenses
         and other
         assets                                                        150.4      111.7


            Total
             current
             assets                                                  6,164.3    6,171.2





     
                Other assets:


        Goodwill                                                     1,315.6    1,343.0


        Intangible
         assets, net                                                   256.0      284.0


        Other assets                                                   839.4      927.7


            Total other
             assets                                                  2,411.0    2,554.7




                   Property and equipment:


        Land,
         buildings,
         leasehold
         improvements
         and
         equipment                                                     627.5      633.4


        Less:
         accumulated
         depreciation
         and
         amortization                                                  477.5      475.7


            Net property
             and
             equipment                                                 150.0      157.7


                   Total assets                                     $8,725.3   $8,883.6





                   LIABILITIES AND SHAREHOLDERS' EQUITY


                   Current liabilities:


        Accounts
         payable                                                    $2,248.7   $2,279.4


        Employee
         compensation
         payable                                                       212.6      230.6


        Accrued
         liabilities                                                   447.7      490.9


        Accrued
         payroll
         taxes and
         insurance                                                     717.0      794.7


        Value added
         taxes
         payable                                                       525.4      545.4


        Short-term
         borrowings
         and current
         maturities
         of long-
         term debt                                                      41.2      469.4


            Total
             current
             liabilities                                             4,192.6    4,810.4




                   Other liabilities:


        Long-term
         debt                                                        1,037.5      478.1


        Other long-
         term
         liabilities                                                   685.0      737.5


            Total other
             liabilities                                             1,722.5    1,215.6




                   Shareholders' equity:


        ManpowerGroup shareholders' equity


          Common stock                                                   1.2        1.2


          Capital in
           excess of
           par value                                                 3,326.9    3,302.6


          Retained
           earnings                                                  3,060.7    2,713.0


          Accumulated
           other
           comprehensive
           loss                                                      (393.2)   (288.2)


          Treasury
           stock, at
           cost                                                    (3,270.1) (2,953.7)


             Total
              ManpowerGroup
              shareholders'
              equity                                                 2,725.5    2,774.9



         Noncontrolling
         interests                                                      84.7       82.7


                Total
                 shareholders'
                 equity                                              2,810.2    2,857.6


                   Total
                    liabilities
                    and
                    shareholders'
                    equity                                          $8,725.3   $8,883.6


                 
              ManpowerGroup


     
              Consolidated Statements of Cash Flows


                 
              (In millions)




                                                                       Nine Months Ended


                                                                       September 30



                                                     2018                2017

                                                                         ---

                                                          (Unaudited)


                    Cash Flows from Operating
                     Activities:


         Net
          earnings                                 $398.4              $329.1


         Adjustments to reconcile net
          earnings to net
          cash provided by operating
          activities:


              Depreciation
              and
              amortization                           64.8                62.3


              Deferred
              income
              taxes                                 (9.5)               40.4


              Provision
              for
              doubtful
              accounts                               15.5                13.7


             Share-
              based
              compensation                           19.5                21.4


         Changes in operating assets
          and liabilities, excluding


           the impact of acquisitions:


              Accounts
              receivable                          (140.8)            (399.5)


             Other
              assets                                 31.8               (7.5)


             Other
              liabilities                          (77.7)              227.6


                   Cash
                    provided
                    by
                    operating
                    activities                      302.0               287.5

                                                                         ---



                    Cash Flows from Investing
                     Activities:


         Capital
          expenditures                             (39.8)             (40.2)


          Acquisitions
          of
          businesses,
          net of
          cash
          acquired                                  (8.2)             (27.3)


          Proceeds
          from
          the
          sale
          of
          investments,
          property
          and
          equipment                                   7.8                11.9


                   Cash
                    used
                    in
                    investing
                    activities                     (40.2)             (55.6)

                                                                         ---



                    Cash Flows from Financing
                     Activities:


         Net
          change
          in
          short-
          term
          borrowings                                (5.0)              (2.4)


          Proceeds
          from
          long-
          term
          debt                                      583.3                 0.1


          Repayments
          of
          long-
          term
          debt                                    (408.3)              (0.3)


          Payments
          for
          debt
          issuance
          costs                                     (2.4)


          Payments
          of
          contingent
          consideration
          for
          acquisitions                             (18.6)             (12.9)


          Proceeds
          from
          share-
          based
          awards
          and
          other
          equity
          transactions                                4.7                40.8


          Payments
          to
          noncontrolling
          interests                                 (1.9)


         Other
          share-
          based
          award
          transactions                             (17.3)             (18.2)


          Repurchases
          of
          common
          stock                                   (299.2)            (178.0)


          Dividends
          paid                                     (66.0)             (62.2)


                   Cash
                    used
                    in
                    financing
                    activities                    (230.7)            (233.1)

                                                                         ---



       Effect
        of
        exchange
        rate
        changes
        on
        cash                                       (37.5)               69.6


       Change
        in
        cash
        and
        cash
        equivalents                                 (6.4)               68.4




       Cash
        and
        cash
        equivalents,
        beginning
        of
        period                                      689.0               598.5


       Cash
        and
        cash
        equivalents,
        end of
        period                                     $682.6              $666.9

                                                                         ===

View original content to download multimedia:http://www.prnewswire.com/news-releases/manpowergroup-reports-3rd-quarter-2018-results-300734085.html

SOURCE ManpowerGroup