ManpowerGroup(MAN) - 2024 Q3 - Quarterly Results

Executive Summary & Highlights This section covers Q3 2024 performance, strategic initiatives, and the CEO's outlook for the fourth quarter Third Quarter 2024 Highlights The company reported lower Q3 2024 revenues and earnings amid challenges in North America and Europe | Metric | Q3 2024 | Q3 2023 | | :-------------------------------- | :------ | :------ | | Revenues (Millions USD) | $4,530.2 | $4,675.6 | | Revenues (constant currency) | -2% | | | Net earnings (Millions USD) | $22.8 | $30.3 | | Diluted EPS (USD) | $0.47 | $0.60 | | Adjusted Diluted EPS (constant currency) | $1.29 (-8%) | | | Gross profit margin | 17.3% | | | SG&A reductions (reported & constant currency adjusted) | -5% | | - The company faced a challenging environment in North America and Europe, with good demand in Latin America and the Asia-Pacific region[1] - The U.S. business launched innovative Manpower branch offices inside select Walmart locations[1] - An agreement was reached to sell the South Korea business, which will operate as a Manpower Franchise[1] - $29 million of common stock was repurchased during the quarter[1] CEO Commentary & Outlook The CEO addressed the cautious environment, cost actions, and provided Q4 earnings guidance - The operating environment in North America and Europe remains cautious, with demand levels largely stabilized at lower levels[2] - The company has taken additional cost actions based on the extended duration of the current operating environment[2] - The management team continues to drive Diversification, Digitization and Innovation initiatives[2] | Metric | Q4 2024 Guidance | | :-------------------------------- | :--------------- | | Diluted EPS | $0.98 - $1.08 | | Estimated unfavorable currency impact | 1 cent | | Exclusions | Restructuring costs, Argentina related non-cash currency translation losses | Company Overview This section describes ManpowerGroup's global workforce solutions business and provides legal disclaimers About ManpowerGroup ManpowerGroup is a leading global workforce solutions company operating through several expert brands - ManpowerGroup (NYSE: MAN) is a leading global workforce solutions company[3] - The company helps organizations transform by sourcing, assessing, developing, and managing talent[3] - It operates through its brands: Manpower, Experis, and Talent Solutions across more than 70 countries and territories[3] - The company was recognized for diversity and named one of the World's Most Ethical Companies for the 15th time in 2024[3] Forward-Looking Statements & Non-GAAP Measures This section contains disclaimers on forward-looking statements and the use of non-GAAP metrics - The press release contains forward-looking statements regarding economic uncertainty, labor demand, financial outlook, and strategic initiatives[4] - Actual results may differ materially due to numerous factors, including those found in the Company's SEC reports under 'Risk Factors'[4] - The Company assumes no obligation to update or revise any forward-looking statements[5] - Non-GAAP financial measures are referenced, with reconciliations to GAAP available on the company's Investor Relations website[5] Financial Performance - Three Months Ended September 30, 2024 This section details the consolidated and segmented financial results for the third quarter of 2024 Consolidated Results of Operations The company saw a decline in Q3 revenues and net earnings, though operating profit slightly increased | Metric | Q3 2024 (Millions USD) | Q3 2023 (Millions USD) | % Variance Reported | Constant Currency % | | :-------------------------------- | :--------------------- | :--------------------- | :------------------ | :------------------ | | Revenues from services | $4,530.2 | $4,675.6 | -3.1% | -1.8% | | Cost of services | $3,748.1 | $3,853.7 | -2.7% | -1.5% | | Gross profit | $782.1 | $821.9 | -4.8% | -3.7% | | Selling and administrative expenses | $711.3 | $752.1 | -5.4% | -4.4% | | Operating profit | $70.8 | $69.8 | 1.5% | 4.5% | | Interest and other expenses, net | $11.6 | $15.1 | -23.3% | | | Earnings before income taxes | $59.2 | $54.7 | 8.3% | 6.4% | | Provision for income taxes | $36.4 | $24.4 | 49.2% | | | Net earnings | $22.8 | $30.3 | -24.7% | -26.1% | | Net earnings per share - diluted | $0.47 | $0.60 | -21.6% | -23.0% | | Weighted average shares - diluted | 48.1 | 50.1 | -4.0% | | Operating Unit Results (Revenue & Profit by Segment) Segment performance varied, with declines in Europe and the U.S. offset by strength in Other Americas | Segment | Q3 2024 Revenue (Millions USD) | Q3 2023 Revenue (Millions USD) | Reported % Change | Constant Currency % Change | Q3 2024 Operating Profit (Millions USD) | Q3 2023 Operating Profit (Millions USD) | Reported % Change | Constant Currency % Change | | :-------------------- | :----------------------------- | :----------------------------- | :---------------- | :------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :------------------------- | | Americas | | | | | | | | | | United States | $697.4 | $730.2 | -4.5% | -4.5% | $22.3 | $24.5 | -9.0% | -9.0% | | Other Americas | $353.1 | $381.1 | -7.3% | 13.1% | $13.8 | $13.4 | 3.4% | 9.0% | | Southern Europe | | | | | | | | | | France | $1,179.7 | $1,209.9 | -2.5% | -3.3% | $41.7 | $47.9 | -13.0% | -13.5% | | Italy | $419.1 | $413.7 | 1.3% | 0.5% | $27.4 | $27.0 | 1.1% | -0.1% | | Other Southern Europe | $496.8 | $485.1 | 2.4% | 2.1% | $6.7 | $9.5 | -27.5% | -25.7% | | Northern Europe | $828.3 | $914.2 | -9.4% | -11.0% | $(25.7) | $(30.6) | 16.1% | 18.7% | | APME | $562.8 | $564.8 | -0.3% | 1.6% | $23.0 | $24.2 | -5.5% | -1.9% | - Effective January 1, 2024, segment reporting was realigned to include the Puerto Rico business within Other Americas[8] Financial Performance - Nine Months Ended September 30, 2024 This section presents the consolidated and segmented financial results for the first nine months of 2024 Consolidated Results of Operations The first nine months of 2024 showed a decrease in revenues and net earnings versus the prior year | Metric | 9M 2024 (Millions USD) | 9M 2023 (Millions USD) | % Variance Reported | Constant Currency % | | :-------------------------------- | :--------------------- | :--------------------- | :------------------ | :------------------ | | Revenues from services | $13,454.2 | $14,284.0 | -5.8% | -3.6% | | Cost of services | $11,122.5 | $11,736.7 | -5.2% | -3.0% | | Gross profit | $2,331.7 | $2,547.3 | -8.5% | -6.6% | | Selling and administrative expenses | $2,093.9 | $2,252.0 | -7.0% | -5.4% | | Operating profit | $237.8 | $295.3 | -19.5% | -15.6% | | Interest and other expenses, net | $28.7 | $34.4 | -16.6% | | | Earnings before income taxes | $209.1 | $260.9 | -19.8% | -16.8% | | Provision for income taxes | $86.5 | $87.6 | -1.2% | | | Net earnings | $122.6 | $173.3 | -29.3% | -26.6% | | Net earnings per share - diluted | $2.53 | $3.42 | -26.0% | -23.2% | | Weighted average shares - diluted | 48.5 | 50.7 | -4.4% | | Operating Unit Results (Revenue & Profit by Segment) Most segments saw revenue and profit declines over nine months, with Northern Europe most affected | Segment | 9M 2024 Revenue (Millions USD) | 9M 2023 Revenue (Millions USD) | Reported % Change | Constant Currency % Change | 9M 2024 Operating Profit (Millions USD) | 9M 2023 Operating Profit (Millions USD) | Reported % Change | Constant Currency % Change | | :-------------------- | :----------------------------- | :----------------------------- | :---------------- | :------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :------------------------- | | Americas | | | | | | | | | | United States | $2,074.8 | $2,180.9 | -4.9% | -4.9% | $61.7 | $77.6 | -20.6% | -20.6% | | Other Americas | $1,076.5 | $1,159.3 | -7.1% | 14.2% | $45.6 | $52.1 | -12.4% | -2.4% | | Southern Europe | | | | | | | | | | France | $3,483.9 | $3,657.4 | -4.7% | -5.0% | $115.1 | $142.3 | -19.1% | -19.2% | | Italy | $1,258.3 | $1,293.7 | -2.7% | -3.0% | $88.8 | $94.0 | -5.6% | -5.9% | | Other Southern Europe | $1,432.7 | $1,452.4 | -1.4% | -0.4% | $25.0 | $30.6 | -18.0% | -15.3% | | Northern Europe | $2,535.9 | $2,834.3 | -10.5% | -11.7% | $(28.1) | $(35.3) | 20.5% | 20.8% | | APME | $1,639.3 | $1,770.1 | -7.4% | -1.8% | $67.9 | $71.0 | -4.4% | 3.4% | Components of Interest and Other Expenses, Net (9M) | Metric | 9M 2024 (Millions USD) | 9M 2023 (Millions USD) | | :-------------------- | :--------------------- | :--------------------- | | Interest expense | $67.0 | $59.7 | | Interest income | $(24.4) | $(24.5) | | Foreign exchange loss | $5.2 | $14.2 | | Miscellaneous income | $(19.1) | $(15.0) | | Total | $28.7 | $34.4 | Financial Position & Cash Flows This section outlines the company's balance sheet and cash flow statements as of September 30, 2024 Consolidated Balance Sheets The balance sheet reflects a decrease in total assets, liabilities, and shareholders' equity | Metric | Sep 30, 2024 (Millions USD) | Dec 31, 2023 (Millions USD) | | :-------------------------------- | :-------------------------- | :-------------------------- | | Cash and cash equivalents | $410.9 | $581.3 | | Accounts receivable, net | $4,592.8 | $4,830.0 | | Total current assets | $5,182.6 | $5,572.1 | | Total assets | $8,478.3 | $8,830.2 | | Total current liabilities | $4,525.0 | $4,799.7 | | Long-term debt | $999.7 | $990.5 | | Total liabilities and shareholders' equity | $8,478.3 | $8,830.2 | | Total ManpowerGroup shareholders' equity | $2,176.1 | $2,223.3 | Consolidated Statements of Cash Flows Operating cash flow decreased significantly in the first nine months of 2024 compared to 2023 | Cash Flow Activity | 9M 2024 (Millions USD) | 9M 2023 (Millions USD) | | :-------------------------------- | :--------------------- | :--------------------- | | Net earnings | $122.6 | $173.3 | | Cash provided by operating activities | $61.6 | $234.5 | | Cash used in investing activities | $(41.9) | $(52.5) | | Cash used in financing activities | $(178.8) | $(225.7) | | Repurchases of common stock | $(106.0) | $(129.8) | | Dividends paid | $(73.5) | $(73.1) | | Effect of exchange rate changes on cash | $(11.3) | $(24.2) | | Change in cash and cash equivalents | $(170.4) | $(67.9) | | Cash and cash equivalents, end of period | $410.9 | $571.1 |