ManpowerGroup(MAN) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2024, revenue was $4.4 billion, down 3% year-over-year in constant currency [16] - Reported EBITA for the quarter was$ 76 million, while adjusted EBITA was $94 million, representing a decrease of 12% in constant currency year-over-year [17][21] - Adjusted earnings per share decreased 27% year-over-year in constant currency, with reported EPS at$ 0.47 and adjusted EPS at $1.02 [17][19] Business Line Data and Key Metrics Changes - On an organic constant currency basis, the Manpower brand declined 1%, Experis declined 6%, and Talent Solutions increased by 6% [23] - Talent Solutions' RPO business experienced a year-over-year revenue increase, while MSP recorded strong double-digit revenue growth [23][24] - Right Management saw a year-over-year revenue decline as outplacement activity began to slow [23] Market Data and Key Metrics Changes - Revenue in the Americas segment was$ 1.1 billion, representing a 7% increase compared to the prior year period on a constant currency basis [29] - Southern Europe revenue was $2 billion, representing a 3% decrease in constant currency [34] - Northern Europe revenue declined 16% in constant currency, with the U.K. market experiencing a 22% decrease [37][38] Company Strategy and Development Direction - The company aims to exploit opportunities in AI by providing re-skilling and upskilling solutions to clients and candidates [12][52] - The DDI Strategy focuses on Diversification, Digitization, and Innovation to strengthen EBITA and grow revenues [51][52] - The company is adjusting to current market conditions while maintaining investments in technology and digitization [54] Management's Comments on Operating Environment and Future Outlook - Management noted improved sentiment regarding the U.S. economic outlook but expressed concerns over European economic growth [9][10] - The company anticipates continued challenges in Europe, particularly in Northern Europe, while seeing some encouraging performance in the U.S. [15][46] - The first quarter of 2025 is expected to be challenging, with revenue guidance indicating a decrease of 5% to 9% [48][49] Other Important Information - Free cash flow for the full year 2024 was$ 258 million, with a strong finish in Q4 at $236 million [43] - The company repurchased 552,000 shares for$ 34 million during the fourth quarter [44] - The balance sheet ended with cash of $509 million and total debt of$ 953 million [45] Q&A Session Summary Question: Can you explain the bridge between the adjusted EPS and the first quarter guidance? - Management explained that the sequential drop in EPS is driven by EBITDA margin changes and revenue impacts from net dispositions and fewer working days [57][60][64] Question: What actions will the company take if macro conditions remain poor? - Management indicated that they have already taken actions in Northern Europe, reducing FTEs in line with revenue trends, while maintaining capacity for future growth [70][72] Question: Are there any use cases for GenAI and competitive threats? - Management noted that many companies are investing in AI but have yet to see meaningful impact at scale, emphasizing the importance of human capabilities alongside technology [76][78] Question: Is there an increase in orders in the U.S. post-election? - Management observed a change in tone and optimism among employers but noted that it has not yet translated into increased demand [86][88] Question: What is the outlook for Europe, particularly France? - Management highlighted the contrasting performance between Northern and Southern Europe, with Northern Europe facing significant challenges [92][94][96]