Welcome to ManpowerGroup’s Second Quarter Earnings Results Conference Call. This call will be recorded. If you have any objections, please disconnect at this time. And now, I will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. Sir, you may begin.

Good morning. Welcome to the second quarter conference call for 2020. On the call with me today is our Chief Financial Officer, Jack McGinnis. For your convenience, we have included our prepared remarks within the Investor Relations section of our website at manpowergroup.com. We will start by going through some of the highlights of the second quarter, then Jack will go through the operating results and the segments, our balance sheet and cash flow and guidance for the third quarter. I will then share some concluding thoughts before we start our Q&A session. Before we proceed, Jack will now cover the Safe Harbor language.

Good morning, everyone. This conference call includes forward-looking statements, including statements regarding the impact of the COVID-19 pandemic, which are subject to known and unknown risks and uncertainties. These statements are based on management’s current expectations or beliefs. Actual results might differ materially from those projected in the forward-looking statements. We assume no obligation to update or revise any forward-looking statements. Slide 2 of our earnings release presentation includes additional forward-looking statement considerations and important information regarding previous SEC filings and reconciliation of non-GAAP measures.

Thanks, Jack. Since our last earnings call, the world has continued to be impacted by the health crisis which is now also a global economic and social crisis. Some countries in Latin America and parts of the U.S. continue to deal with the pandemic at elevated levels. Elsewhere in the world, the impact of the pandemic has been contained and economies are slowly reopening. With the easing of the lockdowns, people are gradually returning to a lifestyle which we know is very different from pre-pandemic life and workplace. The effects of COVID-19 made the second quarter one of the most challenging quarters in our company’s history, but we were pleased to see gradual business improvement as the quarter progressed. Having said that, we recognized that we still have a long way to go to get back to normal levels of business activity. We are taking this opportunity to continue our drive towards the highest efficiency while still preparing for growth when the economy rebounds and ensuring we make investments to position the business for profitable growth in the long-term. You will see in our Q2 financials that we have partially offset the significant gross profit declines with aggressive SG&A reductions and generated an operating profit excluding the impairment charges. In this environment, we believe it is critical to control every cost and we are doing just that, mindful too to ensure the organization can also seize the opportunities for growth. The plans that we put in place in March at the start of the crisis were executed throughout the second quarter. This involved significant cost and collection actions that will continue during the third quarter. In the second quarter, revenue was $3.7 billion, down 28% year-over-year in constant currency. On a same day organic basis, our underlying constant currency revenue decreased 27%, reflecting the sudden drop in activity that began in March and continued in the second quarter. On a reported basis, we recorded an operating loss for the quarter of $50 million. Excluding impairment, operating profit was $23 million, down 88% in constant currency. Reported operating profit margin was down 370 basis points from the prior year and after excluding the impairment charges, operating profit margin was positive 0.6%, down 310 basis points from the prior year excluding prior year special items. Reported loss per share of $1.10 reflects the impact of impairment charges, which had a $1.22 negative impact and a discrete tax item that had an impact of $0.06. Excluding the special items, our earnings per share was positive $0.18 for the quarter representing a decrease of 91% in constant currency. During the quarter, we experienced some of the most turbulent and uncertain market conditions in modern history, reflecting the unprecedented speed and magnitude of the shutdowns. Effects were felt across the world in March and April and quickly impacted labor markets, resulting in rapidly rising unemployment as well as high levels of government-supported furloughs. What started as a quick freeze to our global economies and labor markets is inevitably going to take much longer to thaw around the world. Consequently, we expect the improvement in labor market conditions will be slow and gradual. By the start of the second quarter, we saw the biggest workforce shift and reallocation of skills since World War II, with skills needs shifting from aviation and hospitality to driving and information security at an unprecedented scale. Despite the fastest shift from almost full employment to multi-decade high levels of unemployment or furlough levels, at levels at or worse than those of the Great Recession, we are also already seeing evidence that this crisis is accelerating the technical and soft skills transformations that we have been tracking and predicting for some time. Acute skills shortages in tech, cybersecurity, software development, and data analytics for example continue unabated, reinforcing that the need for a skills revolution is here in force. We are confident that the investments we have been making in diversification, digitization, and innovation in recent years position us very well to weather the pandemic and also help us emerge stronger from these crises to take advantage of the market opportunities when they present themselves. We are confident in our strategy to improve the diversification of our business through the growth of Experis, our professional resourcing and IT expertise. We believe this will serve to provide higher growth following the pandemic as companies accelerate technology investments. Our new Talent Solutions brand that combines our global market-leading RPO, MSP, and Right Management offerings is helping our clients with customized workforce solutions in this downturn and preparing their organizations for the return of economic growth. Investments in our technology roadmap and tools for remote working and stronger collaboration are allowing us to create more value for our candidates and clients to help them shape their future of work, while also building our ability to operate our business in different ways. Our Innovation and Assessment Centers of Excellence are enabling us to access the data and identify fast-changing skills demands. They are developing predictive performance, up-skilling and re-skilling Academy, and MyPath programs that help progress people from one role to the next, from declining industries to growth sectors, to close the skills gaps and address the economic and social impacts of the pandemic. Finally, we believe organizations globally will increasingly recognize the value of operational and strategic workforce flexibility delivered through our staffing brands, particularly Manpower, as they have had to adjust to unprecedented and unpredictable changes in market conditions during the pandemic. I would now like to turn it over to Jack to take you through the financials and country performance details.

Thanks, Jonas. Revenue in the second quarter represented a reported decline of 30% year-over-year and on a constant currency basis, represented a decrease of 28%. Net dispositions contributed about 1% of the revenue decrease, and billing days were largely the same year-over-year. This results in an organic constant currency days-adjusted revenue decline of 27% in the second quarter and compares to the first quarter decline of 7% on a similar basis and reflects the material impact of the COVID-19 crisis which began to impact our business in March. As investors are interested in the pace of any improvement driven by the impacts of reopening activities, I am including more information in my remarks regarding the monthly progression during the quarter. Our organic revenue trend during the quarter on a constant currency billing days adjusted basis included a monthly year-over-year revenue decline of 31% in April, 26% in May, and 24% in June. The improvement in the rate of decrease during the quarter reflects the reopening of economies largely in May as governments lifted lockdown requirements. I will give more details on large country trends when I cover the regional segments. Our gross profit margin was down 80 basis points year-over-year and reflected a higher mix of enterprise client business, higher rates of sickness and absenteeism in certain countries at the beginning of the quarter, and significantly lower permanent recruitment fees as a result of the COVID-19 crisis. Our second quarter performance resulted in an operating profit decline, excluding impairment charges, of 88%. This reflects the material operational de-leveraging experienced during a period in which government lockdowns and restrictions were at full force. This resulted in an operating profit margin of 0.6%, excluding impairment charges. As we did not provide guidance for Q2, our EPS bridge walks from the prior year quarter to the current year quarter. On a reported basis, earnings per share was a loss of $1.10, which included impairment charges, which had a $1.22 negative impact and discrete tax items which had a $0.06 negative impact. Excluding these non-cash special items, earnings per share was $0.18. Excluding the impact of the special items, our effective tax rate was 38%. This higher than usual rate reflects the outsized impact of the French Business Tax within tax expense that I mentioned last quarter. Looking at our gross profit margin in detail, our gross margin came in at 15.4%. Staffing/interim margin represented a decrease of 40 basis points, and the significant decline in permanent recruitment fees drove an additional 40 basis points gross margin decline as a result of the COVID-19 crisis impact on hiring activity. Our staffing margin reflects a higher weighting of enterprise clients in our mix, as well as the higher rate of sickness at the beginning of the quarter offset by reduced direct costs in certain countries due to government crisis response programs and our execution of various bill pay yield initiatives in the current environment. Next, let’s review our gross profit by business line. During the quarter, the Manpower brand comprised 59% of gross profit, our Experis professional business comprised 24%, and Talent Solutions brand comprised 17%. During the quarter, our Manpower brand reported an organic constant currency gross profit decrease of 37%. Gross profit in our Experis brand declined 20% year-over-year during the quarter on an organic constant currency basis. Although organically Experis revenues were only down in the high single-digits to low double-digits percentage range during the quarter, the almost 50% drop in perm gross profit combined with a higher mix shift to enterprise clients and a lower utilization of consultants within our Germany IT end-user support business drove a more significant gross profit decline. In our two largest Experis markets, this reflects a gross profit decline of 14% in the U.S. and 23% in the UK. Talent Solutions includes our global market-leading RPO, MSP, and Right Management offerings. Organic gross profit declined 12% in constant currency, which was driven by RPO. As we mentioned last quarter, beginning in mid-March, we experienced a sharp reduction in RPO activity as many client programs initiated hiring freezes in light of the COVID-19 crisis, and this double-digit percentage decline continued through the second quarter. Our MSP business has been very resilient during the crisis and experienced growth in the low single-digit percentages in gross profit year-over-year during the quarter. Our Right Management business experienced a decline in gross profit of 4% in organic constant currency during the quarter, which included a mid-single-digit increase in outplacement gross profit, which was offset by reduced talent management consulting. Our reported SG&A expense in the quarter was $627 million, including the $73 million of impairment charges. The impairment charges include a $67 million goodwill impairment for Germany and a $6 million impairment of capitalized software in the U.S. Although we have made good progress in executing various initiatives within our Germany business, the ongoing decline within the manufacturing sector, particularly automotive, has made it extremely difficult to project the pace of recovery and the timing of improvement in our German business results. As a result of the increased uncertainty in the outlook of the manufacturing sector in Germany, we impaired the remaining balance of our Germany goodwill during the quarter. After excluding special charges from both years, SG&A expense was $554 million, a decrease of $120 million from the prior year. On a constant currency basis, excluding special charges, SG&A expenses were down 16% compared to the prior year. Excluding the special charges, SG&A expenses as a percentage of revenue in the quarter represented 14.8%, which reflected significant de-leveraging on the material drop in revenues during the quarter. As a result of strong cost management actions across all of our businesses, the impact of the revenue and gross profit declines was significantly offset by SG&A decreases, which after excluding impairment charges, allowed us to post an operating profit for the quarter. I will now turn to cash flow and balance sheet. Free cash flow defined as cash from operations less capital expenditures equaled $577 million for the first 6 months of the year. This compared to underlying free cash flow in the prior year of $149 million after excluding the sale of the France CICE receivable. During the second quarter, we were very successful in receivable collections while incurring lower payroll costs on lower activity. Our improved cash flow also benefited from certain government payment deferral measures introduced as part of the COVID-19 crisis. The impact of these benefits is maturing, and during the second half of the year, we expect lower levels of free cash flow in the third and fourth quarters. At quarter end, days sales outstanding decreased by about 1 day. In this environment, one of our top priorities is maintaining strong cash flows from collection activities. To date, we have not experienced a significant deferral of cash receipts from clients and are watching this very carefully and ensuring our collection teams are appropriately staffed to diligently pursue payments as per original payment terms. Capital expenditures represented $19 million during the first 6 months of the year. During the quarter, our Board declared a semi-annual dividend of $1.09 keeping the amount stable with our 2019 levels, which was paid on June 15. We did not purchase any shares of stock during the second quarter, and our year-to-date purchases stand at 871,000 shares of stock for $64 million. As of June 30, we have 5.9 million shares remaining for repurchase under the 6 million share program approved in August of 2019. Our balance sheet was strong at quarter end with cash of $1.4 billion and total debt of $1.05 billion, resulting in a net cash position of $384 million. Our debt ratios remain comfortable at quarter end with total gross debt to trailing 12 months EBITDA of 1.88 and total debt to total capitalization at 29%. As I mentioned, the cash increases associated with collecting out our accounts receivable and timing of certain payments will begin to reverse in the second half of the year. Our debt and credit facilities did not change in the quarter and the earliest euro note maturity is not until September of 2022. In addition, our revolving credit facility for $600 million remained unused. Now, I will turn to the segment results. The Americas segment comprised 23% of consolidated revenue. Revenue in the quarter was $837 million, a decrease of 17% in constant currency. OUP excluding impairment charges equaled $26 million and represented a decrease of 51% in constant currency from the prior year. The $6 million of impairment charges related to capitalized software in the U.S. The U.S. is the largest country in the Americas segment, comprising 62% of segment revenues. Revenue in the U.S. was $516 million, down 21% compared to the prior year. Adjusting for billing days and franchise acquisitions, this represented a 23% decrease year-over-year. The year-over-year monthly organic days-adjusted revenue trend during the quarter was a 24% decline in April, a 22% decline in May, and a 23% decline in June. During the quarter, excluding the impairment charge, OUP for our U.S. business decreased 59% to $15 million, and OUP margin was 3.0%, a decrease of 280 basis points from the prior year. Within the U.S., the Manpower brand comprised 31% of gross profit during the quarter. Revenue for the Manpower brand in the U.S. was down 31% in the quarter or down 35% when adjusted for billing days and franchise acquisitions. The Experis brand in the U.S. comprised 34% of gross profit in the quarter. Within Experis in the U.S., IT skills now comprise approximately 80% of revenues. Revenues within our IT vertical within Experis U.S. declined 8% during the quarter, and total Experis U.S. revenues declined 12% as the Finance and Engineering verticals experienced more significant decreases. Talent Solutions in the U.S. contributed 35% of gross profit and experienced a 3% revenue decline in the quarter. As indicated earlier, our RPO business has experienced significant client hiring freezes in late March, which continued throughout the second quarter as a result of the COVID-19 crisis. The RPO declines were offset by low single-digit percentage revenue increases in MSP and mid-single-digit increases in Right Management. On an overall basis, based on July activity to date, our U.S. business is experiencing a revenue decline of about 22% and reflects a slightly improving trend in Manpower and a continuation of late second-quarter trends in the Experis and Talent Solutions businesses. Our third quarter forecast for the U.S. is cautious based on the uncertainty of the path of the recovery based on additional restrictions being introduced in certain states based on recent health concerns. Provided there are no significant reversals of reopening activity across the U.S., in the third quarter, we expect an overall rate of decline in the U.S. of minus 24% to minus 19%, which reflects modest improvement in Manpower and a continuation of the current Experis and Talent Solutions trends. Our Mexico operation experienced revenue decline of 10% in constant currency in the quarter. The constant currency revenue trend during the quarter included a 5% decline in April, a 14% decline in May during the height of the restrictions and a 12% decline in June. The business environment in Mexico continues to be challenging as a result of the COVID-19 crisis and we expect a similar revenue trend for the third quarter as experienced in the second quarter as certain lockdown restrictions continue to be in effect in Mexico as well as many of the other Latin American countries as the crisis impacted these countries later than other regions. Revenue in Canada declined 4% in constant currency during the quarter. The days-adjusted revenue trend during the quarter included a decline of 5% in April and May, which improved to a 3% decline in June. We are pleased with the performance of our Canada business in a very challenging environment. We expect the revenue decline in the third quarter to be similar to the second quarter decline in Canada. Revenue in the other countries within the Americas declined 12% in constant currency. Southern Europe revenue comprised 39% of consolidated revenue in the quarter. Revenue in Southern Europe came in at $1.5 billion, a decrease of 38% in constant currency. OUP equaled $12 million and represented a decrease of 90% from the prior year in constant currency and OUP margin was down 440 basis points, driven by France and Italy as a result of the severe impacts of the COVID-19 crisis. France revenue comprised 50% of the Southern Europe segment in the quarter and was down 47% from the prior year in constant currency. The year-over-year monthly days-adjusted revenue trend during the quarter was a 62% decline in April, a 49% decline in May, and a 33% decline in June. OUP was a loss of $2 million. OUP improved over the course of the quarter and France regained profitability in June as the rate of revenue decline improved above the 40% decline threshold. We have taken significant actions in France to reduce our costs during this period of materially reduced activity. Our French business took significant cost actions, and this resulted in an SG&A reduction of 23% during the second quarter. Although improvement has been steady in France, the rate of improvement in the revenue trend has slowed. During July activity to date, the business is currently experiencing a year-over-year decline of about 30%. We are cautiously estimating a slow and gradual improvement in the rate of decline for the third quarter of between minus 30% and minus 25%. Revenue in Italy equaled $269 million in the quarter, representing a decrease of 30% in constant currency after adjusting for billing days. The year-over-year monthly days-adjusted revenue trend during the quarter was a 41% decline in April, a 31% decline in May, and a 20% decline in June. The material decrease in permanent recruitment activity that we noted in March and April continued throughout the quarter leading to a 55% decline in permanent recruitment gross profit during the quarter. OUP declined 63% in constant currency to $11 million and OUP margin decreased 340 basis points to 4.1%. We have taken significant action in Italy to reduce costs during this crisis, which reduced SG&A significantly in the quarter. We estimate that Italy will continue to see slow and gradual improvement in the rate of revenue decline during the third quarter, with a decline within a range of minus 18% to minus 13%. Revenue in Spain decreased 13% on a days-adjusted constant currency basis from the prior year in the quarter. We expect a slight improvement in the rate of revenue decline in Spain for the third quarter. Having anniversaried the purchase of our Manpower Switzerland Franchise in early April 2019, we are now breaking out the revenue trend of our entire Switzerland business. On a days-adjusted basis in constant currency, our Switzerland business experienced a revenue decline of 19% in the second quarter. The business experienced an improving trend from the April low point, and the rate of improvement is now more gradual. We expect a slight improvement in the rate of decline during the third quarter from the second quarter trend. Our Northern Europe segment comprised 23% of consolidated revenue in the quarter. Revenue declined 24% in constant currency to $866 million. OUP was flat for the quarter. A very challenging environment in Germany, Sweden, and the Netherlands was offset by reduced profits in the UK, Norway, Belgium, and Poland. Our largest market in the Northern Europe segment is the UK, which represented 35% of segment revenue in the quarter. During the quarter, UK revenues decreased 22% in constant currency. The UK bottomed out in May and has experienced gradual improvement since that point. The year-over-year monthly days-adjusted constant currency revenue trend during the quarter was a 17% decline in April, a 26% decline in May, and a 23% decline in June. We estimate that the UK will continue to see slow and gradual improvement in the rate of revenue decline during the third quarter with a decline in the range of minus 20% to minus 15%. In Germany, revenues declined 32% on a constant currency adjusted for billing days basis in the second quarter. The year-over-year monthly days-adjusted revenue trend during the quarter was a 33% decline in April and a 32% decline in both May and June. Our German business has not experienced a rate of recovery that many of our other European businesses have experienced, as the manufacturing sector and particularly automotive continue to be experiencing extremely challenging conditions. I previously mentioned the impairment of the remaining balance of goodwill related to our Germany business during the quarter. Our German business took significant cost actions during the quarter that reduced SG&A by 25% year-over-year, which partially offset the significant loss in gross profit. As a result of the ongoing challenges within the manufacturing sector, we expect only a slight improvement in the rate of revenue decline during the third quarter. In the Nordics, revenues declined 22% on a days-adjusted constant currency basis. The two primary businesses in the Nordics are Norway and Sweden. On a days-adjusted constant currency basis, Norway experienced a decline of 17% and Sweden declined 28%. Both countries leveraged government programs to reduce headcount during the quarter, which resulted in significant decreases in SG&A year-over-year. During the third quarter, for the Nordics overall, we expect a moderate improvement in the rate of revenue decline experienced in the second quarter. Revenue in the Netherlands decreased 24% in constant currency on a days-adjusted basis during the second quarter. The Netherlands also took out significant costs during the second quarter, which significantly offset reduced gross profit. During the third quarter, we expect a slight improvement in the rate of decline from the second quarter. Belgium experienced a days-adjusted revenue decline of 37% in constant currency during the second quarter. We expect a moderate improvement during the third quarter in the rate of revenue decline from the second quarter. Other markets in Northern Europe had a revenue decrease of 11% in constant currency. We expect these markets to experience a slight improvement in the rate of decline during the third quarter. The Asia-Pacific Middle East segment comprises 15% of total company revenue. In the quarter, revenue decreased 19% in constant currency to $569 million. Adjusting for the deconsolidation of our Greater China operations following their initial public offering in July 2019, this represented an organic constant currency revenue decrease of 3% in the second quarter. The APME region has held up relatively well during this crisis. OUP represented $18 million in the quarter, a constant currency decrease of 40% year-over-year and after adjusting for the Greater China deconsolidation, represented an organic constant currency OUP decline of 23%. OUP margin was 3.1% and represented a decrease of 100 basis points or 80 basis points on an organic basis. Revenue growth in Japan was up 6% adjusted for billing days on a constant currency basis during the quarter. Japan instituted new legislation at the beginning of the second quarter, which increased the cost of temporary staffing. Our business managed the adoption of this legislation very well and this did not have a significant impact on our results. Our Japan business continues to perform very well, and we anticipate third quarter growth to reflect a slight decrease from the second quarter level of growth. Revenues in Australia declined 21% in constant currency adjusted for billing days during the second quarter. During the third quarter, we expect a moderate improvement in the rate of revenue decline from the second quarter. Revenue in other markets in Asia-Pacific, Middle East was down 37% in constant currency and adjusting for dispositions, this represented a 7% rate of decline. The largest market in this group includes our India business, which experienced double-digit revenue declines in the second quarter in light of various COVID-19 restrictions. We estimate that other markets in APME overall will experience a slight improvement in the rate of decline in the third quarter. Next, I will review our outlook for the third quarter of 2020. We are resuming guidance as the major uncertainty associated with the government lockdowns has largely been lifted. However, our guidance assumes no major rollbacks of reopening activities in any of our largest markets. On that basis, we are forecasting earnings per share for the third quarter to be in the range of $0.59 to $0.67, which includes a negative impact from foreign currency of $0.01 per share. Our constant currency revenue guidance range is between a decline of 20% to a decline of 18%. The midpoint constant currency decline of 19% also equals the organic days-adjusted rate of decline as billing days are essentially the same year-over-year and impacts of the U.S. franchise acquisitions are very slight. This represents an improvement of 8% from the organic days-adjusted constant currency decline of 27% in the second quarter. We expect our operating profit margin during the third quarter to be down 190 basis points compared to the prior year quarter reflecting steadily improving performance in what will continue to be an extremely challenging environment. This reflects continued strong cost actions, but at lower levels of year-over-year SG&A reductions as activity levels progressively increase. We expect our income tax rate in the third quarter to approximate 41%, which reflects the outsized impact of the French Business Tax effect that I discussed last quarter. As usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares to be 58.5 million.

Thank you, Jack. From the very beginning of this crisis, the health and well-being of our people and partners, our employees, clients, and associates, has been and continues to be our top priority. I am incredibly proud of and thankful to our team for their resilience, hard work, and continued innovation to be able to deliver for our clients and candidates throughout these unprecedented and challenging times. A great example of this is the recognition we received from one of our largest global clients, honoring us with an exceptional partner award for ManpowerGroup, identifying our invaluable support to them during COVID-19, which is directly attributable to our amazing team. In times like this, when organizations seek the strategic and operational flexibility in their workforce that we can provide, as well as the simplification, efficiency, and risk mitigation they need, we are well-positioned to provide these solutions through our diversified business mix and our global brands. We are hearing more and more of companies’ intentions to move to organizations like ManpowerGroup, and we are confident that our reliable, trusted, and innovative services and solutions, along with our global scale and broad national reach together with our balance sheet strength, position us well for that shift. Before we close and move to questions, let me also reflect on our role in the social crisis we see emerging. We believe organizations need to be part of the solution to address the polarization, unrest, and racism that is playing out in many of our communities and countries. When our society is broken for some, it is eventually broken for all of us. While the business environment continues to be difficult, we are confident that ManpowerGroup is uniquely positioned to help our clients and candidates succeed now and in the longer term. We will contribute solutions within our field of expertise, which is providing meaningful and sustainable employment for millions of people across the world by matching their aspirations and skills with companies needing to become more agile and competitive in a very turbulent environment. We are committed to delivering on our values, making workplaces more equitable and inclusive, and ensuring organizations, individuals, and communities can emerge from this crisis stronger, more skilled, more competitive, and more successful than ever before. I would now like to open the call for Q&A. Operator?

Thank you, sir. The first question is coming from the line of Andrew Steinerman of JPMorgan. Your line is now open.

Hi. When I look at your France trends of July being minus 30 and then your third-quarter guide to be minus 30 to minus 25, obviously at the low end minus 30, assuming no continued improvement. But at the mid and obviously at the better end, you are assuming continued improvement in France. Can you just give us a sense of if that’s just kind of like, anecdotal or is there a good reason to assume that there will be continuing narrowing declines in France as we move through the summer into the fall?

Good morning, Andrew. Yes. In our conversations with clients and companies, they clearly are indicating a gradual and continued improvement, albeit within the context of great amounts of uncertainty overall, but we don’t see anything that’s changing the trend that we saw during the second quarters with gradual improvements. We expect that to carry on, although at a slightly lesser rate than what we saw, of course, when the lockdowns were released at the beginning of May.

Right. Is it any kind of hard to look through to September, which is really the key month for France?

Yes, September is a key month for France and for a number of other markets. We believe that from our conversations with our clients that they expect to see the continuation looking much beyond that however, becomes much more difficult. But you are right, September is an important month for us, and we are assuming that there are no further setbacks in terms of health scares that would necessitate lockdowns in our assessment of the continued gradual improvement.

I would just add to that, Andrew, that is part of the reason we have put the range in. How France returns from the holidays will be important. And we are at that midpoint that you mentioned; we are assuming progressive steady improvement at a slower pace as we ended the quarter. The range is there in case the return from the holidays is at a slower pace of recovery.

That’s very fair. Thank you.

Hi, good morning, everybody. I was wondering if you could just talk a little bit more about what you are seeing in Germany. You mentioned the lack of progress basically due to what’s occurring on the automotive front. To what extent do your clients imply or suggest or hope that things might get better in the fourth quarter or when they would expect things to improve?

Mark, the discussions with our clients are really around the near-term, and very few of them have any clear ideas of the strength of the recovery into the fourth quarter. I think that is one of the hallmarks of this situation: the high degrees of uncertainty as to the pace of the recovery in various economies because, of course, Germany is an export-intensive country. So much of their economic growth depends on the ability to export to markets that are recovering in themselves. Overall, as we said in our prepared remarks, the automotive sector is the one that is really casting a shadow over the German economy and the outlook that we have provided, really shows the continuation of a gradual and very slow if any improvement into the third quarter until we have better visibility into the fourth quarter what companies intend to do.

Okay. And then you materially reduced your SG&A. You reacted very quickly in terms of putting in place actions. Can you talk about how much capacity do you how much excess capacity do you have when things eventually get back? If we do have another series of lockdowns across the globe, how much further room do you have for SG&A reductions? Or do you have contingency plans in place if things get worse?

Yes, thanks, Mark. I will take that one. To your point, what we did on an organic constant currency basis was take costs down to 16% in the second quarter. That reflected leveraging programs in place in our biggest markets. As we look forward to your question for the third quarter, we anticipate based on our guidance, increased activity levels. With that, we see a resumption of some SG&A cost base coming back in to be able to serve that increased activity. If that doesn’t, we are monitoring that very closely. If that doesn’t materialize the way we are forecasting, then, we will take action and reduce the level of SG&A coming in so that it is falling in line with what we are seeing on the GP side. We think in terms of recovering the amount of GP dollars lost through SG&A savings. In the second quarter, we came very close to about a 40% recovery of the SG&A dollars through GP dollars through SG&A reductions. When we look to the third quarter, what our guidance is implying that although additional costs are going to be coming in to be able to serve that additional activity, we are going to continue to manage a very strong offset to GP decline. In line with the same ratio that we just experienced in the second quarter, we will just have to continue to monitor that. If there is a setback in a major market and there are significant rollbacks, we will do what we always do: reassess, and we will take additional actions if we need to. We do have contingency plans in place. We know what actions need to be taken. We have done very detailed analysis by each market, and we are prepared to take additional action if we need to should those events transpire. Right now, we are looking at the current trends, and those trends are showing some good progress in some of our key markets. We are monitoring our costs in line with that trajectory.

Terrific. Thank you.

Our next question is coming from the line of Jeff Silber of BMO Capital Markets. Your line is now open.

Thank you so much. Just a follow-up in the SG&A comments. Are you expecting, I know it’s hard to gauge, but would we expect some of that SG&A not to come back once we get out of this crisis?

Yes. We have been spending a lot of time on that as you would imagine, Jeff. When we look back at the second quarter, one good example of this is obviously travel cost is an area that everyone is talking about. We reduced travel costs by at least $10 million in the second quarter and we are looking very, very hard at that. There is definitely a piece of that that’s not going to come back. We know there will be some level of travel that will resume after we get through this crisis, but we have been harnessing all the great technology that we have put in place prior to the crisis. We really didn’t get to see the full potential of all that technology until we were forced to use it through working remotely. It’s really changed a lot of the way that we are working. We are looking very closely at that. We do think there will be more permanent savings as a result of that, which is great because it will help offset some of the technology spend that we continue to do as we look through the continued investment in our technology roadmap. There are clearly portions of it that will be permanent. Another opportunity for us is we have a great track record in optimizing our branch network. We are going to continue to look at that. I think particularly on the experience side, I think we have a workforce that is very akin to working remote there. Just like we have done in the past on the right management side and moving to more virtual work offices, we have an opportunity to do more of that on the experience side. We will continue to look at branch optimization on the manpower side, and we are also looking at our headquarters space in our key markets and globally as well, and we know we can probably get some savings out of reducing some of that footprint as well.

Okay, great. And then looking at the rate of recovery so far, and it’s moving in the right direction, but some of the private companies that we have been speaking to in the U.S. have been telling us that it’s a little bit weaker than they would have thought or what you typically see in an upturn because some of their clients are rehiring the furloughed employees first before they hire temps. On the other hand, they are also seeing a little bit more in terms of absences, in terms of just filling in a few days here, few days there. I am wondering if you are seeing the same thing, not only in the U.S., but even globally. Thanks.

Yes, Jeff. We are seeing similar trends in our own business. A few comments: it’s clear that the level of unemployment programs that exist in the U.S. are making some of the workforce harder to get to come back to work. We are also seeing flare-ups that we have in various states having some impact. Now, that’s countered by the general easing of the lockdown effect that is looking at improved activity and improved demand for our services. By and large, the level of furlough schedules, as well as unemployment in Europe and the unemployment subsidies that we had here in the U.S., may temporarily dampen some of the traditional rapid return because the unemployment levels are really still in Europe, very low due to the furlough programs. Overall, we don’t think that the dynamics of the industry will be structurally impacted. We think that as the healthcare crisis morphs into an economic crisis, the demand for our services will continue to be experiencing the same kind of return you would expect during a cyclical downturn that is coming out of a recession. So, we don’t think that the furlough programs or any unemployment programs may have a temporary effect. They are short-term in nature and they expire. When that happens, companies decide whether they want to restructure their workforce or have brought everyone back, and then we expect to see the increase in demand that we typically would see when you come out of a recession.

Okay, great. Really helpful. Thanks so much.

Our next question is coming from the line of Hamzah Mazari of Jefferies. Your line is now open.

Good morning. Thank you. Just following up on the last question, you touched on furloughs and the impact on the recovery of this cycle, but maybe you can touch on what your expectations are in terms of temp and perm increasing at the same time. Or do you see one leading the other? Any kind of changes in the mix between temp and perm as the recovery continues to mature?

Morning, Hamzah. Yes, we think that the trends are going to be similar to what we have seen in other cycles. Frankly, as you can tell, we had a pretty steep drop off of perm, that is really not projected to materially improve in the third quarter. Yes, we are seeing our resourcing business improve in our outlook into the third quarter. We would expect perm to be lagging our resourcing business, our temporary resourcing business or consultancy business within Experis? And then perm would come back after that, as we would normally and typically see during the recovery from the recession.

Got it. Just my follow-up question, I will turn it over. Could you maybe update us on any kind of diversification or initiative to increase penetration from sort of non-larger enterprises or sort of small and medium-sized businesses, maybe just where you are in that process in terms of penetrating that customer base? Thank you.

Right now, Hamzah, the strength of the enterprise business in the national enterprise size clients that we have is strength for us because it provides a level of stability. These are global and national enterprises, large enterprises that continue to want to have strategic and operational flexibility. We have clearly seen a softening in demand from our convenience clients in all of our brands, and that is going to be something that we think will continue to be the case until we see some strength in the recovery from the recession. We are actually leveraging the fact that we have very good strength in the enterprise segment, and that provides us with great stability and upward momentum or upward movement at least in the short term. Subsequently, we still think that the convenience segment of the market is a very good place to be, and we have made some good progress in a number of countries. When this period passes, we continue to expect to make progress also in that customer segment.

Great, thank you. I wonder, Jack and Jonas, you talked about accelerating skill shifts. Maybe help us frame out where you are positioned to capture that and what revenue kind of percentages on legacy versus where you see some emerging, whether it’s IT versus some of the legacy skill sets and how are you trying to position business to capture some of that shift.

Thanks, Kevin. The way we think about this is that the underlying structural changes that were in place before the pandemic are going to be accelerating. Essentially, it means that the movement towards a more skilled workforce is going to be accelerating and we have been preparing for that acceleration on those trends for many years. We invested in technology ourselves, of course, we are diversifying our business, strengthening our experience business and ensuring that it represents a bigger part of our portfolio. Our Talent Solutions business is really aligned with that, focusing on areas that are within our core expertise and where companies are deeming this is not part of their core expertise. That’s why we have seen very good growth in that area and would expect to see very good growth also in those areas going forward, probably accelerated by the effects of the pandemic. Lastly, I would say that the manpower business, if companies ever needed the reminder of how unpredictable the environment can be and how quickly things can change, therefore the need for strategic and operational flexibility to provide the agility for those organizations, the unfortunate reminder that we have gotten from the pandemic, we think will also benefit the manpower business as that goes through this and then comes out on the other side.

Hey, guys. Thanks for the time. If you kind of look out to the third quarter, I am curious you talked a little bit about assuming no real flare-ups or incremental shutdowns. What level of macro activity is underpinning your expectations? If we get into September, October and the next earnings call, if rates are at the lower end of what you expect today, is that going to be more a function of macro activity now picking up, do you think, or is it more just kind of the virus impact?

The impact that we have seen in the markets is really unprecedented, Ryan. If you look at the amount of stimulus that the governments have been pouring into this all over the world, if you look at the labor market subsidies or furlough schemes or other actions that they have taken, it’s actually quite difficult to predict what the long-term impact is going to be and how quickly we are going to get out of this. I think that is really the key issue here. It’s clear that you would expect to see recovery from the very deep levels of drop that you saw in the second quarter. The question is how quickly are we going to come out of this? Most companies that we spoke to at the beginning of the pandemic were clearly thinking about this as a V-shaped recovery based on the stimulus and all of the extraordinary actions that governments were taking all over the world. Most of our client conversations today are clearly more around a gradual recovery that is slower, a U-shaped recovery. Within that, there is a whole range of opinions on how big of the U and how long the bottom on the U will be.

Got it. If I can just follow-up on Germany specifically, has there been any impact from the Wirecard fiasco? I mean, it’s generally kind of dampened sentiment in the country. Is all of the commentary on Germany that really just purely macro-specific or is there any Wirecard impact that is kind of hanging over things today?

Yes. Ryan, I can tell you there is no impact specific to our business from Wirecard, specifically. I think when you look back at our comments, it really was reflecting more than the manufacturing sector, which continues to be very challenging and that’s really was the driving force in terms of our comments on Germany.

Hi, thanks. Good morning. You indicated that in 2Q you are effective in receivables collections and benefited from government payment deferral measures and expect these benefits to mature resulting in lower free cash flow in the third and fourth quarter. Can you talk about how much government payment deferral measures helped you in the quarter and elaborate on your free cash flow expectations for the second half of the year?

Sure, George. Specifically what we are seeing in some of our key markets, not all of them but some of our key markets is that the government put programs in place to defer the payment of payroll taxes. For example, in the U.S., it’s about $20 million of temporary benefit, and that will reverse. That same level of benefit is not currently in place in France from a payroll tax perspective, so really differs by market. What I was trying to get across was there is some impact on our free cash flow that is mainly driven by our collections activities, and our teams around the world have really done a spectacular job in the second quarter, staying on top of collections. We see that evidenced by the DSO decrease of about a day as well. Looking to the second half of the year, we do expect that free cash flow will be down as we continue to look at that phenomenon of collecting out our AR. As that matures, we are expecting that free cash flow levels would be down in the second half of the year. That is really what we are trying to guide to. We feel very good about the ability to collect the cash in part of the second quarter, and we have a very strong position in the balance sheet.

Got it. That’s helpful. You indicated that you expect your income tax rate in the third quarter to be approximately 41%, which reflects the outsized impact of the French business tax effect. Until when do you expect the French tax effect to persist?

Yes, I would say it’s probably going to be a couple more quarters, George. The whole dynamic there is the way that French business tax referred to a CVA is calculated primarily on revenues in France. As a result of that, even though pretax earnings are down due to the crisis, revenue levels still end up being a significant part of the overall end result in terms of the tax, and under U.S. GAAP, we are required to record that CVAE in our income tax line. It will be a couple more quarters until we see a stronger recovery rate in France. I would say, looking forward, we gave our guide for the third quarter, but if you look at that trend continuing, and we will know more based on the pace of that trend in the third quarter, I would expect at least for the next two quarters.

Hi, guys. Good morning. First question, just another question on the margins and the Q3 commentary. I heard you say that there is some SG&A that comes back to support parts of the businesses that are rebounding sequentially. I guess when I think about the detrimental margin, is the third quarter applies worst than the second quarter even though revenue trend is getting a lot better? If I looked at that change in GP relative to change in SG&A, these two quarters in aggregate seem to be a lot less SG&A coming out than what happened in 2009. In relation to the GP, is there anything that’s changed with the cost structure since then, or is it more just this happened so suddenly, you couldn’t move as quickly? Any thoughts on how we should think about margins playing out for revenue continuing to get moderately better?

Gary, I would say I think we are pretty closely aligned actually to the level of SG&A. If you look back to 2009 at the height of where our business was impacted, I think that SG&A decrease of 16% that we saw as adjusted this quarter was very close to what we experienced last time. One important thing to keep in mind is that during the Great Recession, there was more of an outplacement market happening at the time. Companies were dealing with a prolonged downturn, and they were making decisions around outplacement, which increased our GP quite significantly for right management at the time. As we said in our prepared comments, we are not seeing that surge in outplacement at this time and as a result, we are not getting that same contribution to gross profit that we were at the height of the last Great Recession. We will monitor that going forward, and that could change the dynamic. But I think if you adjust for that, we did a very good job of taking significant cost actions.

Okay, that’s helpful color. Thank you. And then just the last one: cash flow obviously strong. I hear you that some of that working capital timing in particular will reverse, but with the liquidity strong, your confidence around the numbers, enough to give guidance again, curious how you are thinking about putting some of that cash to work? You didn’t do any share repurchases this quarter; the stock’s obviously down a lot from its highs pre-COVID. Do you anticipate using some of that cash to repurchase shares here or are you more of the view that until you have more visibility, you are likely to continue to focus on liquidity as the number one factor?

Yes. Thanks, Gary. I guess I would say in terms of our overall strategy, very consistent with what we have done in the past. We have a great track record of returning cash to shareholders, and we were very pleased to declare and pay a dividend in the second quarter. So that's our first priority. In terms of excess cash, we will continue – if there isn’t an acquisition, we will continue to look at share buybacks. We don't forecast our share repurchase activity, we don't guide on that. But we do consider the current environment, and that is what we talked about. As we left the first quarter, we talked about ensuring we have a strong balance sheet for whatever laid ahead for us going forward. That’s where we are focused in the second quarter. We will continue to monitor the environment and will give an update in the future on share repurchases.

Thanks. I want to step back from the near-term and just think a little longer-term in the context of your prior margin targets. Do you think that those are you are going to endeavor on additional cost cuts during this downturn and perhaps more structural realignment afterwards, such that those margin targets could be hit at lower revenue levels than 2019?

Yes, Tobey, I think when we look back at our targets, first, I should say they remain unchanged. We are committed to those financial targets. We purposely didn't put a revenue target associated with that for that reason. We believe that with the various actions we have planned, costs are continued to be one of our major initiatives to continue to optimize the cost base of the organization. That will be a key driver with gross profit margin being another key driver for us. Jonas talked earlier on the call about the progress we were making in convenience prior to the downturn that helps, and that will continue to help. That mix will come back to the business as we continue to recover; it has shifted a bit more to enterprise, which is natural based on the environment and we see that coming through in our staffing margin. We feel very good about our opportunities to get to those margins without hitting a specific revenue target. We will obviously need some level of the environment to return to a more conducive environment, but we won’t, we are not anchoring to a specific revenue level that we have to hit. It’s possible we will make progress even as we come out of the downturn in accelerating our operating profit margin increase over time.

Thanks. As a follow-up in the RPO segment, could you comment about whether your customer conversations are leading you to believe that customers are going to look to shift more of their fixed recruiting costs to variable and it could get a step-function kind of higher demand for RPO as a result? Are the hiring freezes that you described in 2Q still in place? Are some of those loosening up in 3Q?

Some of those hiring freezes are still in place, but just as we said in our Q2 earnings call, we have not lost any clients. We believe that just as you outlined, as companies come out and through this recession and this pandemic, the idea that they would be needing support in hiring and one to have flexibility in hiring should drive some continued very good growth for our RPO business. Overall, we were also pleased to see, given within the context of declining perm numbers, that RPO held up better than our general perm business.

Hey guys. Good morning. I wanted to ask a couple questions on the Experis business. I thought I heard Jack say that revenue was down kind of high singles, low double-digits. Can you just talk to the appetite for clients to continue to place and continue to enter into contracts and projects going forward? Just trying to understand if we are going to hit an air pocket here as contracts roll off, or can you talk to whether you are seeing an exquisite amount of contracts kind of coming back on that will support growth going forward? And then my other question is just to better understand what happened on the gross margins side? Thanks.

Yes, Seth. I can add a little color to that. On the Experis side, we have seen pretty stable enterprise client activity. I do refer to the fact that we did see a bit of a decrease in the second half of the quarter in the U.S. business, but that really was focused on the finance and engineering side. Those parts of the business had bigger decreases, while the IT side actually held up quite well, with only an 8% decrease in revenue. I would say, it’s really the IT side holding up well, and we talked a little bit earlier on the call about the benefits of our actions to invest in the IT business. That’s holding up, but there has been a bit more pressure in the second half of the quarter on the finance and engineering side. We are not anticipating that that is going to deteriorate further, but what we are holding in our forecast now is a slight adjustment on the second half of the quarter leading into the third quarter. Regarding margin side, the margin has been holding up quite well on the Experis side. If you look at what we have talked about in terms of the staffing margin, one thing to keep in mind with Experis is they do have a heavier portion of permanent recruitment fees, and that’s impacting the gross profit margin and the gross profit dollars, so that explains why Experis was a little bit bigger of a divide on the gross profit side.

Okay, that’s helpful. Thanks. If I could just follow-up on the Talent Solutions side, are you able to use any of the current dislocation in the markets to help grow the business outside the U.S.? Were you seeing any more interest in Europe, etc. on the Talent Solutions side? Thanks.

We have seen some good evolution on the TAPFIN vendor consolidation, MSP part of the business was positive growth and a very strong pipeline. But I would say that overall that’s true, of course for the outplacement part for Right Management, although not a surge as Jack referred to. We are starting to see some good growth in the pipeline there as well as companies are thinking about their restructuring plans, although they don’t know which is why we don’t think we have seen much of that yet. We are starting to see a good evolution there as well. So, I would say we are seeing some strong traction on the MSP side really globally and in pockets, and Right Management on the outplacement side. RPO, as we mentioned is still holding its own performing better than our overall perm business, and we haven’t lost any clients. We think there are some good growth opportunities there for us as well going forward.

Yes, thank you. So, I had a couple of bigger picture questions. I guess the first one would be about reshoring. In your discussions with clients and customers, I think you highlighted in your prepared remarks their shorter-term perspective, but I am wondering about one potential maybe medium-term effect. Are you seeing global clients open discussions? Are they starting plans of reshoring activities currently conducted in other countries, say, in China or maybe certain emerging countries that are suffering unduly from the pandemic?

I’d say that the trends in our discussions with clients are really accelerating the trends that we saw before the pandemic. As you know, there have been various natural disasters in different places that have tested the fundamentals of the global supply chain. Most companies are looking at near-shoring, but I would say that they are really looking at building greater resilience in their global supply chain. We are not hearing of any major initiatives that many companies have of reshoring into the U.S. market for instance, but what we are hearing is that companies are being very thoughtful around how they can protect their global supply chain. That’s a combination of offshore, near-shore, and onshore. That’s a trend that we saw already before, and as we spoke about earlier on the call, we think that trend will continue and will accelerate following the pandemic as it’s been a reminder of the importance of making sure that you have a resilient supply chain.

Okay, thank you for that. Then I just wanted to ask maybe about how you are thinking about your global footprint. ManpowerGroup, I believe has been operating in roughly 80 countries for many, many years now, and you did cite some changes in the current business environment and the shifting demand amongst employment sectors that you highlighted again in your opening remarks. I am just wondering how that prompts maybe any rethinking of your overall country strategy. I mean, do you still believe you have critical mass in 80 countries here, or how does the changes in the business environment as you interpret them kind of cause you to think about that? Thank you.

Well, I would start by saying that we think our geographical diversification and market-leading footprint in 80 markets is a strength. It helps with the diversification in terms of catching on to emerging trends and being able to participate in labor markets in emerging markets that are starting. We can apply our diversification strategy in terms of our brands very early and take leading positions on those brands in those markets. We feel very good about our geographical diversification. We think it’s a great strength for the company. We have very good strength in emerging markets, which is where all of the population growth is really going to be coming from. Having said that, as any company, of course, we are looking at the portfolio of our operations and looking at whether we can make the same and get the same coverage in other ways if we don’t think the potential in those markets is as big as we had originally anticipated. But that’s part of our normal management discipline to ensure that we have operations that can contribute today and also in the longer term and make a meaningful contribution to ensure that those operations are there for the benefit of our clients so that we can serve their needs. Our strength is the ability to service our clients on a global basis, and that’s where the geographical diversification is a tremendous asset for us. And with that, we come to the end of our second quarter earnings call. We look forward to speaking with you again in the third quarter earnings call later on this year. Thanks again. Have a good rest of the week.

Thank you, speakers. That concludes today’s conference. Thank you all for joining. You may disconnect at this time.