Welcome to ManpowerGroup Fourth Quarter Earnings Results Conference Call. At this time, all participants are in a listen-only mode until the Q&A session of today's conference. 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.

Thanks for joining us today for the fourth 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'll start by going through some of the highlights of the quarter. Then Jack will go through the operating results and the segments, our balance sheet and cash flow, and guidance for the first quarter. I will then share some concluding thoughts before we start our Q&A session. But 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. During our earnings call in October, we talked about signs of recovery in the third quarter. I'm pleased to say we saw this trend of slow and steady recovery continuing into the fourth quarter. Despite experiencing a series of new COVID-19 related restrictions around the world, our results reflect a stronger market environment than we had anticipated, with revenue growth and new opportunities in select markets. We are now seeing clear signs of a K-shaped 2-speed recovery. The bifurcation is evident between industries able to adjust to the uncertain environment and others, like travel, hospitality, and entertainment industries being significantly impacted by the lockdowns. This is also reflected in a labor market divide, where demand for workers has improved in some industries and in others remains stalled, with high unemployment rates. Organizations investing in digitization and automation are already emerging stronger, and that is driving an acceleration in the polarization of the workforce between the skilled and the unskilled, creating a risk of continued post-pandemic skills-based polarization of labor markets in many countries. This is also captured in our recent Skills Revolution thought leadership series - Renew, Reskill, and Redeploy - conducted across 26,000 employers in 40-plus countries. Those companies that plan to speed up their digitization plans as a result of the pandemic are maintaining or increasing their headcount, in contrast to others who have put their plans on hold. Many of the trends we've been predicting have accelerated significantly. Adversity can often be a force for societies to change at an accelerated pace. Companies have digitized at speeds and scales they could never have imagined, and we expect these actions will continue into 2021. With that context, I would now like to turn to our financial results. In the fourth quarter, revenue was $5.1 billion, down 6% year-over-year in constant currency, a significant improvement from the 14% decline in the third quarter on the same basis. On a reported basis, we recorded an operating profit for the quarter of $138 million. Excluding restructuring charges, operating profit was $151 million, down 24% in constant currency. Reported operating profit margin was 2.7%, down 100 basis points from the prior year, and, after excluding restructuring, operating profit margin was 3%, down 70 basis points from the prior year. Reported earnings per diluted share of $1.33 reflects the impact of restructuring charges. Excluding the restructuring charges, our earnings per diluted share was $1.48 for the quarter, representing a decrease of 39% in constant currency. Turning to the full year results for a moment, reported earnings per share for the year was $0.41. Excluding restructuring charges and special items, earnings per share was $3.67 and represented a constant currency decrease of 53% year-over-year. Revenues for the year decreased 14% in constant currency to $18 billion, and reported operating profit was $188 million. Excluding restructuring and special items, operating profit was $377 million, which represented a 48% constant currency decline year-over-year. Although 2020 was one of the most challenging years in recent history, we were able to reduce the operational SG&A to significantly offset gross profit declines while remaining committed to our strategic investments for digitization, diversification, and innovation. In our Manpower business, logistics demand was strong in the fourth quarter, driven by the shift in how consumers are buying and an extended holiday delivery peak. While we are seeing increasing cases of COVID-19 in several places, we're also seeing strong safety protocols, increased testing advanced by technology, allowing companies to avoid full shutdowns, manage plant productivity by segregating production lines, all reducing the infection risks and ensuring a safe work environment. In Experis, our IT and Resourcing and Solutions business, we are seeing positive trends in many industries, and there continues to be good demand for a range of IT skills in a number of markets. Many organizations that put investments on hold or made cuts in 2020 are beginning to rebuild and reinvest. Others are seeking the offerings of our Talent Solutions business as they look to optimize their supplier management and delivery solutions and shift more to full-service HR providers with the tools and technology across markets to build just-in-case resilience and flexibility. I'd now like to turn it over to Jack to take you through the financials and country performance details.

Thanks, Jonas. Going back to the quarterly results on Slide 3, revenues in the fourth quarter came in above our constant currency guidance range. Our gross profit margin came in at the low-end of our guidance range. On a reported basis, our operating profit was $138 million. Excluding restructuring charges, our operating profit was $151 million, representing a decline of 21%, or a decline of 24% on a constant currency basis. This resulted in an operating profit margin of 3% before restructuring charges, which was above the high-end of our guidance. Breaking our revenue trend down into a bit more detail, after adjusting for the positive impact of currency of about 4%, our constant currency revenue declined about 6.5%, which rounds to 6% on a single-digit percentage basis. As acquisitions and billing days had no net effect, the organic days adjusted revenue decline was also about 6.5%. This represented an improvement from the third quarter revenue decline of 15% on a similar basis and 2 consecutive quarters of significant improvement from the second quarter of 2020. Turning to the EPS bridge on Slide 5, on a reported basis, earnings per share was $1.33, which included the restructuring charges of $12 million which, including related tax impacts, represented a negative $0.15. Excluding the restructuring charges, earnings per share was $1.48, which exceeded our guidance range. Included within this result was improved operational performance of $0.38, better-than-expected foreign currency exchange rates which added $0.03, a lower weighted average share count from share repurchases that added $0.02, offset by higher other expenses that had a negative impact of $0.05. Looking at our gross profit margin in detail, our gross margin came in at 15.8%. Underlying staffing margin contributed to a 40 basis point reduction. The anniversary of the incremental Fillon subsidies in France in October and the mix of higher seasonal year-end enterprise activity within the Manpower brand drove the overall additional year-over-year staffing margin decline from the third quarter result of down 20 basis points year-over-year. A lower contribution from permanent recruitment also contributed 30 basis points of GP margin reduction. 10 basis points of increased gross profit margin from career transition growth within Right Management was offset by a 10 basis point decline driven by a higher mix of seasonal other non-staffing activity. Next, let's review our gross profit by business line. During the quarter, the Manpower brand comprised 65% of gross profit, our Experis professional business comprised 20%, and Talent Solutions brand comprised 15%. During the quarter, our Manpower brand reported an organic constant currency gross profit decrease of 11%. This was an improvement from the 17% decline in the third quarter. Gross profit in our Experis brand declined 14% year-over-year during the quarter on an organic constant currency basis, which represented an improvement from the 19% decline in the third quarter. The lower contribution from permanent gross profit drove a more significant gross profit decline compared to the revenue decline in Experis. Talent Solutions includes our global market-leading RPO, MSP, and Right Management offerings. Organic gross profit crossed back over to growth in the quarter at 1% in constant currency year-over-year, which is an improvement from the 2% decline in the third quarter. This was primarily driven by our MSP business, which had a very strong fourth quarter with double-digit GP growth and increased year-over-year career transition activity within our Right Management business. Our RPO business experienced a significant improvement in the rate of decline during the fourth quarter from the third quarter reaching single-digit percentage declines in the fourth quarter. Our reported SG&A expense in the quarter was $661 million including the restructuring charges of $12 million. Excluding the restructuring charges, SG&A of $649 million represented a decrease of $19 million from the prior year. This underlying decrease was driven by $40 million of operational cost reductions, a decrease of $2 million from net dispositions, partially offset by an increase of $22 million from currency changes. On an organic constant currency basis, excluding restructuring, SG&A expenses decreased 6% year-over-year, which represented a very strong recovery against a 10% gross profit decline. SG&A expenses as a percentage of revenue continued to improve sequentially and represented 12.8% in the fourth quarter, excluding restructuring. The Americas segment comprised 20% of consolidated revenue. Revenue in the quarter was $1 billion, a decrease of 3% in constant currency. OUP was $48 million and OUP margin was 4.7%. The U.S. is the largest country in the Americas segment, comprising 61% of segment revenues. Revenue in the U.S. was $622 million, representing a decrease of 4% compared to the prior year. Adjusting for franchise acquisitions, this represented a 5% decrease, which is a significant improvement from the 16% decline in the third quarter. During the quarter, OUP for our U.S. business decreased 11% to $30 million. OUP margin was 4.8%. The U.S. continued to benefit from higher margin career transition activity within Right Management year-over-year, but at a reduced level from the third quarter. Within the U.S., the Manpower brand comprised 36% of gross profit during the quarter. Revenue for the Manpower brand in the U.S. was down 2% when adjusted for days and franchise acquisitions, which reflects a material improvement from the 21% decline in the third quarter. We expect the Manpower business to cross over to growth on a quarterly basis in Q1. The Experis brand in the U.S. comprised 27% of gross profit in the quarter. Within Experis in the U.S., IT skills comprise approximately 80% of revenues. Revenues within our IT vertical within Experis U.S. declined 13% during the quarter and total Experis U.S. revenues declined 14% as the Finance and Engineering verticals experienced greater decreases. This trend reflects a slight improvement from the third quarter year-over-year rate of revenue decline. Talent Solutions in the U.S. contributed 37% of gross profit and experienced revenue growth of 6% in the quarter. Within Right Management in the U.S., revenues increased 8% year-over-year driven by career transition activity during the quarter. The U.S. MSP business continues to perform very well in the current environment and again experienced year-over-year increased revenues during the fourth quarter. The U.S. RPO business crossed back over to revenue growth during the fourth quarter moving to a low-double-digit revenue increase driven by RPO client wins as well as additional projects during the fourth quarter. Provided there are no significant business restrictions impacting our clients across the U.S., in the first quarter we expect ongoing improvement and an overall rate of decline in the very low-single-digits for the quarter overall. Our Mexico operation experienced a revenue decline of 6% in constant currency in the quarter representing an improvement from the 9% decline in the third quarter. During the fourth quarter, the President of Mexico introduced a labor proposal that would prohibit certain types of temporary staffing outside of specialized services. If enacted, we expect this could significantly restrict our activity in Mexico. The bill is still under development in the Mexican legislature and could be finalized in March or April. We will provide an update during our first quarter earnings call, at which time we expect to have greater clarity on the likelihood of adoption and the specific restrictions as they would apply to us. Mexico represented between 2.5% and 3% of our global revenues in 2020. Revenue in Canada declined 10% in constant currency during the quarter. This represented a slight improvement from the third quarter billing days adjusted revenue decline of 11%. Revenue in the other countries within Americas crossed back over to growth with a 4% increase in constant currency reflecting a significant improvement from the 6% decline in the third quarter. This was driven by significant revenue growth in Argentina, Brazil, and Chile. Southern Europe revenue comprised 46% of consolidated revenue in the quarter. Revenue in Southern Europe came in at $2.3 billion, a decrease of 7% in constant currency. This is a significant improvement from the third quarter trend driven by France, Italy, and Spain. OUP including restructuring costs equaled $100 million. Excluding restructuring costs, OUP decreased 25% from the prior year in constant currency and OUP margin was down 100 basis points. The $4 million of restructuring costs represented France real estate optimization. France revenue comprised 56% of the Southern Europe segment in the quarter and was down 11% from the prior year in constant currency. This reflects a steady rate of improvement over the course of the quarter. OUP including restructuring costs was $62 million in the quarter. Excluding restructuring costs, OUP was $66 million and OUP margin was 5%. Although improvement was steady in France during the fourth quarter, January has experienced a softening in the revenue trend as COVID-19 concerns have increased and the government has imposed more restrictions. We are cautiously estimating ongoing sequential improvement in the revenue trend and are estimating a constant currency decline in revenues in the mid-single-digit percentage range in the first quarter overall. Revenue in Italy equaled $423 million in the quarter as Italy crossed back over to growth. Revenues increased 3% in constant currency during the quarter, which was a significant improvement from the 12% days-adjusted decline in the third quarter. This reflects a progressive improvement over the course of the quarter and a particularly strong December driven by large year-end seasonal logistics activity from enterprise clients. OUP declined 25% year-over-year in constant currency to $24 million and OUP margin decreased 200 basis points to 5.6%. We estimate that Italy will have low-single-digit year-over-year revenue growth in the first quarter. Revenue in Spain also crossed over to significant revenue growth in the fourth quarter, also driven by enterprise seasonal activity. Revenue increased 18% on a days-adjusted constant currency basis from the prior year in the quarter. This represented a significant improvement from the 6% decrease in the third quarter. Considering the drop-off of the year-end seasonal activity, we estimate that Spain will have revenue growth in the mid-single-digit constant currency range in the first quarter. Revenue in Switzerland decreased 14% on a days-adjusted constant currency basis from the prior year in the quarter. This represents a slight decline from the 13% decrease in the third quarter as our Switzerland business did not experience the year-end seasonal increases that the other large markets in Southern Europe experienced. Our Northern Europe segment comprised 22% of consolidated revenue in the quarter. Revenue declined 11% in constant currency to $1.1 billion, representing a significant improvement from the 22% decline in the third quarter driven by the UK and the Netherlands. OUP including restructuring costs represented $9 million. Excluding restructuring costs, OUP was $18 million and OUP margin was 1.6%. The $9 million of restructuring costs relates to Germany where we restructured a majority-owned venture with a third-party partner. Our largest market in the Northern Europe segment is the UK, which represented 36% of segment revenue in the quarter. During the quarter, UK revenues decreased 7% in constant currency, which represented a significant improvement from the 22% decline in the third quarter. The improvement was driven by significant year-end public sector activity, particularly in December. We are cautious in our outlook for the UK business and estimate a rate of constant currency revenue decline in the high-single-digits range during the first quarter representing the non-recurrence of certain year-end activity. In Germany, revenues declined 31% in constant currency adjusted for billing days in the fourth quarter, which did not represent a significant change from the 32% decline in the third quarter. We remain very cautious on our Germany business in the near term and expect improvement in the revenue trend in the first quarter. In the Nordics, revenues declined 6% on a days-adjusted constant currency basis. The 2 primary businesses in the Nordics are Norway and Sweden. On a days-adjusted constant currency basis, Norway experienced a decline of 6% and Sweden declined 4%. Both countries experienced a significant improvement in the rate of decline from the third quarter trend. Revenues in the Netherlands decreased 12% on a days-adjusted constant currency basis, which represents a significant improvement from the third quarter decline of 23%. Belgium experienced a days-adjusted revenue decline of 25% in constant currency during the quarter, which also reflects improvement from the third quarter trend. Other markets in Northern Europe crossed over to growth in the quarter. Revenue increased 9% in constant currency, which represents a significant improvement from the third quarter decrease of 5% in constant currency. This was driven by strong revenue growth in Poland, Russia, and Ireland. The Asia Pacific Middle East segment comprises 12% of total company revenue. In the quarter, revenue decreased 1% in constant currency to $617 million. OUP represented $18 million and OUP margin decreased 70 basis points year-over-year. Revenue growth in Japan was up 5% on a constant currency basis, which represents a slight decrease from the 6% growth rate in the third quarter. Our Japan business continues to perform very well and we expect a constant currency revenue trend of low-single-digit growth in the first quarter. Revenues in Australia declined 2% in constant currency on a days-adjusted basis. This represents an improvement from the 7% decline in the third quarter. Revenue in other markets in Asia Pacific Middle East declined 7% in constant currency, also representing an improving trend from the third quarter. I'll now turn to cash flow and balance sheet. Free cash flow equaled $886 million for the year. During the fourth quarter, free cash flow equaled $201 million compared to $302 million in the prior year quarter. At quarter end, days sales outstanding decreased by about 3.5 days to 54 days. Our businesses have displayed outstanding collection and cash management practices throughout this crisis. Capital expenditures represented $51 million during 2020. During the fourth quarter we purchased 2.5 million shares of stock for $201 million. Our purchases for the full year totaled 3.4 million shares for $265 million. As of December 31, we have 3.4 million shares remaining for repurchase under the 6 million share program approved in August of 2019. As previously announced, we also increased the semi-annual dividend paid in December 2020 by 7.3%. Our balance sheet was strong at quarter-end with cash of $1.57 billion and total debt of $1.12 billion, resulting in a net cash position of $443 million. Our debt ratios remain comfortable at quarter-end with total gross debt to trailing 12 months adjusted EBITDA of 2.48 and total debt to total capitalization at 31%. 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. Next, I'll review our outlook for the first quarter of 2021. Our guidance continues to assume no material additional lockdowns or business restrictions impacting our clients in any of our largest markets beyond those that exist today. On that basis, we are cautiously forecasting earnings per share for the first quarter to be in the range of $0.64 to $0.72, which includes a favorable impact from foreign currency of $0.07 per share. Our constant currency revenue guidance range is between a decline of 4% to a decline of 6%. The midpoint of our constant currency guidance is a decline of 5%. On a days-adjusted basis, we note there is about 1 less billing day in Q1, which would improve the days-adjusted rate of revenue decline. This is offset slightly by the impact of net dispositions. At the midpoint, this would yield an organic days-adjusted rate of revenue decline of 3% for the first quarter, representing an ongoing improvement from the 6.5% decline in Q4. We expect our operating profit margin during the first quarter to be down 50 basis points compared to the prior year reflecting a third consecutive quarter of sequential improvement in the year-over-year rate of adjusted operating margin decline. This reflects continued strong underlying cost actions within the businesses and higher corporate expenses year-over-year based on increased technology investments. Regarding the effective tax rate, the government of France finalized their budget with the expected 50% reduction in the French business tax and a continuation of the corporate income tax reductions. Combined, this serves to reduce our underlying effective tax rate by about 4%. However, we will continue to have an elevated tax rate until we are closer to pre-crisis levels of pre-tax earnings and are estimating a full year 2021 effective tax rate of approximately 35%. The effective tax rate in the first quarter will be slightly lower at 34% based on the inclusion of certain discrete items. As usual, our guidance does not incorporate restructuring charges or additional share repurchases and we estimate our weighted average shares to be $56.2 million. I will now turn it back to Jonas.

Thank you, Jack. We're well positioned to be able to provide the strategic and operational workforce expertise and flexibility our clients and candidates are looking for: sourcing and developing in-demand talent across the globe, and delivering new work models across the HR solutions spectrum. We strengthened our brand portfolio during 2020 and launched Talent Solutions as a separate brand to include our RPO, MSP, and Right Management offerings. This accelerates our diversification strategy by focusing on higher margin, higher growth market segments in all brands. We also remain laser-focused on delivering our digitization plans with our PowerSuite technology and continued this investment even during the pandemic. We have already implemented PowerSuite in our front office in businesses across 17 countries, are in the process of implementation in another wave of businesses across 17 more countries. Based on this progress, we expect to have the majority of our businesses on our new PowerSuite front office by the end of this year. Our PowerSuite front office is improving efficiency and productivity enabled by technology via cloud, mobile, and analytics. We also continue to roll out our new web platform for candidates. Our B2C digital investments build off the success of Mon Manpower, our French associate app, which has had more than 1.3 million downloads, the most downloaded and the most highly rated in the French market. In France, one-third of our applicants are sourced via the app with an average of 150,000 active users a month enjoying a full portfolio of B2C services, including on-demand access to current, targeted assignment opportunities, time management and payroll technology and other services, including online carpooling. The success of this market-leading tool is helping us to scale and expand our B2C technology elsewhere as well. We continue to invest in and advance our Analytics capability, laying strong foundations for the creation of our data lake. It will be our data science and data-based decision-making that will continue to create new value, helping clients better predict performance and supporting candidates so they know more about their skills and potential. These, together with our investments in NextGen infrastructure programs, will continue to be critical enablers for the next steps of our process transformation and growth. And what we knew all along has been confirmed as well. It is the combination of tech and our PeopleFirst approach, the talent, the skills, and dedication of our teams with last-mile delivery capability, that allows us to confidently manage uncertainty, volatility, and collaborate remotely, to deliver the solutions and talent organizations need, while being more agile than we ever believed possible. As we execute our strategic priorities, we remain committed to our values and broader purpose, that meaningful sustainable employment has the power to change the world. As a member of the International Business Council, we have committed to the IBC's new Stakeholder Capitalism Metrics, developed by the Big Four global accounting firms, focused on people, planet, prosperity, and governance. This important framework will enable our organization and others to be more explicit about our commitments and progress we are making to create long-term value to shareholders and operate a sustainable business model that addresses the long-term imperatives of society. Our Social Impact Report that we released in December is a demonstration of the critical role we already play in being part of the solution. Case in point, in 2020 we were recognized as a Catalyst for Change among 70-plus companies outpacing our global peers in advancing women, particularly women of color, along with being placed on the Dow Jones Sustainability Index for the 12th year. Helping people and companies respond and reset, redeploy and reskill in this Skills Revolution remains the defining challenge of our time. And it is what our clients, candidates, and employees expect us to help them with today and even more so in the future. Finally, I am very proud and grateful for the relentless resilience and commitment of our people to support and deliver to each of our stakeholders during these challenging times: our employees, associates, clients, shareholders, and the communities in which we operate. As digitization continues at pace, we are confident that our strategy is even more relevant as structural changes take hold in a post-pandemic world, and as we continue to execute our strategy to diversify, digitize, and innovate, it is positioning ManpowerGroup for greater success, improved returns, and profitable growth in the future. I now like to open the call for Q&A.

Thank you. We will now begin the question-and-answer session. Our first question came from Andrew Steinerman of J.P. Morgan. Your line is now open.

Good morning, Jonas and Jack. I wanted to focus on the Manpower U.S. brand that, obviously, you already said that revenues were down only 2% in the fourth quarter and headed to growth in the first quarter. This is kind of a huge improvement from a minus 21% in the third quarter. So I thought you just might take some time to help us understand how much of this is kind of market improvement versus Manpower's specific success, and if you could also make a comment on how January, this January 2021, started for the Manpower U.S. brand?

Good morning, Andrew, and thank you. Yeah. No, we're very pleased with the progress we've seen in the U.S. Manpower business. And it's difficult to say at this point how much is us and how much is market. But I would say that we've seen a continued at or above market performance from the Manpower business all the way through a number of quarters now. And what we could observe is that clients are really looking for the flexibility that the Manpower offering provides them across a number of sectors. And we expect to continue to see good evolution here on the Manpower side going into the first quarter as well.

And I would add to that, Andrew, to your point about January trend. So what we saw for Manpower was good, steady improvement the entire quarter in the fourth quarter. So starting mid-single-digits days adjusted. And then December, we did have higher volumes of logistics activity, which really took December to a growth overall for the month. What we see for January is as some of that logistics activity is seasonal and falls off, still good underlying improvement into the month of January. Demand continues to be very strong and increasing, so we see that continuing, and as we said for the first quarter overall, we see that trend continuing for the next 3 months.

Thank you. And the next question came from the line of Mark Marcon of Baird. Your line is now open.

Good morning. Thanks for taking my question. I'm wondering if you could give an overall comment with regards to perm placement in terms of what you ended up seeing globally this quarter as a percentage of revenue. And what your prognostication is for improvement going forward? And then, I've got a follow-up.

Mark, sure, this is Jack. So perm, I guess the way I would look at perm is the progression over the last 3 quarters continues to improve. So if I look at perm gross profit dollars year-over-year, in the second quarter, at the depth of the pandemic, we were down 43%. That improved in Q3 to down 27% year-over-year. And here in Q4, we were down 18% year-over-year. So I'd say good steady improvement. In terms of, we measure it as a percentage of total gross profit dollars. And I'd say, you probably remember, we were running close to 16% pre-crisis, about 15.9% for full year 2019. As we end the fourth quarter here, we're at about 13.2% of our GP contribution is from perm. So the outlook for that is we continue to expect the same trends going forward, so that steady improvement in perm will continue into the first quarter. We're expecting that to continue to see a reduced rate of decline year-over-year. I would say as we look back to the fourth quarter, we saw some very strong perm trends emerging in Italy, which was great in the fourth quarter overall. So we are seeing some very - some nice trends of perm picking up. And I think in our prepared remarks, we also called out RPO in the U.S. was growth year-over-year, and so that's certainly contributing as well. So there's certainly some very good signs that perm is starting to return and we're seeing good steady improvement into the first quarter.

Right. And this as a follow-up, to what extent is that, the perm part of the business driving the operating profit margin guidance? And, when would you expect that to potentially inflect?

Yeah. So I would say if you look at what's happening on GP margin, perm, that decline year-over-year has been a pretty steady drag in the margin. So we said in the fourth quarter, about 30 basis points in the walk, that's in line with what we've been experiencing. I would expect, Mark, we will continue to have a drag until perm returns to growth again. And so, we'll continue to have a bit of a drag in the first quarter. I think if you look at the first quarter guide on GP margin, staffing is holding up very well. So staffing is basically we're projecting staffing margin to be flat year-over-year. I think overall, it's down about 10 basis points in the guide. And that's largely because perm still will not be back to growth, but it will continue to be improving. So it will still be a drag. It'll be less so of a drag in the first quarter.

And every recovery is going to be a little bit different. But assuming that we do have a recovery, kind of a post-pandemic environment in the second half, how quickly do you think perm could end up bouncing back?

Yeah, so I think once we get beyond the first quarter, we expect to see strong growth in perm beyond that, as we start to anniversary the huge declines in 2020. I'd say we would - as we talk about that percentage of total GP, I would expect that, Mark, to steadily increase over the course of 2021.

Thank you. And the next question is from Jeff Silber of BMO Capital Market. Please go ahead with your question.

Thanks so much. You gave a little bit of color on intra-quarter trends and January trends for the U.S. Can we get some similar color on some of your other major markets? Thanks.

Sure, Jeff. I guess, what I'd say maybe to back up and talk about the fourth quarter overall, and that trend that - that steady improvement trend. So we gave you the overall quarter in terms of the organic constant currency days adjusted decline of 6.5%. If you look at the monthly trend, October was down about 9%. That improved in November to down about 7%. And then, December, with that higher logistics activity that we called out, improved to down about 3.5%, so good improvement. I'd say we see probably a more marked improvement in the month of December. But that was due to that yearend seasonal logistics work. So I think as we look forward to January and some of the trends we're seeing in some of our key markets, I'd say a continuation of some of the underlying progress we saw in the fourth quarter, I'd say probably with one exception. I think as we called out in our prepared remarks, France is experiencing some heightened restrictions. So businesses continuing, so that's good. But what we're seeing is not too different than what we saw in November, when France had some heightened restrictions. That did slow down their progress in terms of the continued rate of progress on the recovery. We're seeing that in the month of January. So instead of ongoing improvement in January, a trend more consistent with what we saw in the month of December. And as we see those, as we look forward and those restrictions are loosened, we'd expect to see a trend similar to what happened in the fourth quarter, when December had a bit of an improvement after the restrictions were lifted. So I'd say that's the trends in the key markets. We said that Italy is continuing to see very strong trends, so growth year-over-year in January. We talked about the U.S. seeing good improvement, particularly on the Manpower side. And I'd say the other market is the UK. So it was great to see the UK really come out of more of the sluggish returns we saw in the third quarter from a revenue perspective, so very good surge of revenue in the UK in the fourth quarter, which was great. We do expect - a lot of that was yearend logistics and some Brexit-related work in the public sector. We do expect some of that to continue into the first quarter. So I'd say the UK is continuing to perform at a good level as well.

All right, that's really helpful. And as my follow-up, Jonas, I guess this one's for you. In your prepared remarks, you talked about your thought leadership piece that companies were planning on speeding up their digitization plans. And those companies are either maintaining or increasing their headcount. I'm really curious, can you give us some color in terms of where those headcounts either maintenance or increases are coming as it is in technology jobs? Is it overall, any color would be great?

Sure, Jeff. The increase in employment, it actually cuts across many different skills categories, because it essentially indicates that their confidence in the future is high, and that they're looking to maintain or increase their levels. So it's actually broad-based across a number of them; of course, there are going to be increases in the skill sets within IT, but also within logistics and just the general operations and sales. And that's an indication of their increased confidence in their business model, their ability to adapt to this - these accelerating changes and their belief that they will be able to take advantage of them.

Thank you. And the next question is from the line of Hamzah Mazari of Jefferies. Your line is now open.

Hey, good morning. My first question is just stepping back just sort of a cycle question. Maybe if you could touch on how this recovery is different than past cycles coming out of a downturn, I guess you have a potential vaccine benefit we haven't seen yet. There's a lot of stimulus. Is sort of 2019 not the right prior peak to look at? I guess, if we look at your prior peak, $22 billion of revenue, all-time peak, 2019 was maybe $20.8 billion, I guess you were in the middle of last cycle when COVID hit. So just any thoughts as you think about recovery, should we be looking at all-time prior peak revenue to judge sort of when you get back to a recovery revenue base, any sort of thoughts there would be great?

Well, Hamzah, the year 2020 contained all kinds of things; it contained the deepest decline we've ever seen in the history of the company in almost 75 years, and also the fastest recovery, all of this happening in 1 year. And it sort of brought an economic expansion cycle to an end pretty abruptly in March, as we are all familiar with. But as we're looking at the recovery now, I think what our thesis has always been is that in times of uncertainty and volatility, human capital is going to make the difference for companies when they execute their business strategies. The services, the brands that we have respond extremely well to that demand. And that's what we've been positioning the company for all the way through the prior cycle, and that's what we continue to position the company for. And as we mentioned in our prepared remarks, despite the pandemic, we continued to invest in digitization; we continue to prepare for the diversification and the markets where we saw good opportunities. And we also continue to drive innovation through our MyPath program, analytics, and insights across a number of our brands. So, I think we're very well positioned as we come into this new economic cycle; how it's going to look exactly is, of course, not something that we would know. But I would say that we're very confident that we're very well positioned, and we used the time of the pandemic to come out of this recessionary environment stronger than we were coming in. And by and large, I feel very good about the work that we've done during 2020 to achieve exactly that.

And Hamzah, I would just add to that to your question about what's different this time. So I think the one item that's very different is just how margin is held up; staffing margin has held up fairly well. We have not seen a big change in pricing. Actually, in some markets, we've seen improvement in pricing. So I'd say that's a big difference. And you bring up a very good point about pre-crisis 2019. Remember for us, 2019 was the year where we were still in a manufacturing slump in most of Europe. We were in revenue decline for the full year of 1% in constant currency. So, I would actually go back prior to that, really in the beginning in the middle of 2018 is when a lot of manufacturing really started to decline in Europe. So I'd say more of the midpoint of 2018 is what I would consider more kind of the peak cycle, and even 2017 we had good upper mid-single-digit revenue growth in constant currency. So I think it's a very good point, reflecting on the fact that 2019, even though it was technically pre-crisis was still a year of decline for us on an overall basis based on what was happening in manufacturing. And that is our opportunity going forward as manufacturing comes back in the recovery.

That's very helpful color. And just my follow-up question is just on the diversification strategy, higher solutions mix, higher professional services. I guess, you baked that into your long-term margin target of, I guess, close to 5%. Do you have to do a lot of acquisitions to get there? Or is this largely sort of organic growth, where you see that shift and mix over time?

Our growth strategy hasn't changed. So we can do all of what we want to do organically. But as we've mentioned in the past, if we were to look at acquisitions, it would be within the Experis IT side of the business or in parts of the Talent Solutions business as well. So those would be the 2 areas where we could contemplate acquisitions, but we don't need to make an acquisition. We have strong organic growth plans. We prefer organic growth, because it provides a better return to our shareholders as we execute that. But it's possible that there could be opportunities that have to fill all of our filters of cultural fit, business fit, and geographic mix, so that we could accelerate even faster. But we don't have to do that to get to the objectives of diversifying the business.

Thank you. Our next question is from Kevin McVeigh of Credit Suisse. Please go ahead with your question.

Great. Thanks so much. Hey, Jack, you spent a fair amount of time talking about digitization, and truly translated even more leverage on the SG&A line. Is there any way to think about - is there more leverage on SG&A? And does that manifests itself in higher margin? Or does the mix kind of get offset on the GP line? Just how should we think about that, because it seems like clearly, you're getting more leverage out of the dollars you're spending?

Yeah, Kevin, thank you. I guess, what I would say, you're breaking up a little there, but I think I caught most of your question. Basically, digitization is helping us with our efficiency on an overall basis and that clearly is a continuing trend. So we continue to leverage automation and digitization. Jonas has talked a lot about our technology roadmap. That will continue, I would say, the way we're looking at that is we are experiencing some increased spend on technology, I call that out in terms of our corporate expenses for the first quarter. But our goal is to offset that as much as possible with ongoing productivity. And we're seeing that we talked about the businesses throughout 17 countries, we've already implemented our new front office system. We are getting increased productivity, where we have implemented the technology, and we continue to have a very good rollout here in 2021 across 17 countries as well. So that progress will continue to increase our productivity going forward. And that helps us fund some of this increasing investment. I would say, though, we will probably still have a little bit more of investment as we continue through the recovery and that should ease as we move forward. But on an overall basis, absolutely, the investment in technology is improving our efficiency on an overall basis and that's helping fund the increased costs.

And Kevin, the only thing I would add to that is, the productivity and the efficiency gains are going to be very welcome. And you've seen how we've leveraged the technology in terms of reducing our physical footprint very significantly over a number of years. But the great news with these technology investments is that they also provide with opportunities for growth. It's easier for us to move towards candidates and have interactions with candidates on an ongoing basis, increasing reassignment rates and increasing referrals, which help us grow, fill orders faster. It also provides us with new offerings around analytics, where, for instance, in our Talent Solutions businesses, we can provide a lot more insight and advice to our clients. So they run their businesses more efficiently, which gives us more growth opportunities. So it's really on both sides, it runs our business better and more efficiently, which is what we're always aiming to do. But at the same time, it helps increase both existing growth opportunities within our brands as well as open up new opportunities for future growth in new offerings as well.

Yeah, it makes a lot of sense. And then just real quick on the Mexican legislation, would you expect to the extent that goes through that you'd see an increase in perm placement? Or are there any just puts and takes as you think about the impact of that over the course of 2021?

Well, if I step back a bit, Kevin, and give you just an idea of what the proposal is all about. So the President of Mexico has been concerned about certain employment practices in Mexico, and in terms of outsourcing, and he's introduced a very broad proposal to address those, frankly, legal practices that are not related to our industry, specifically. But the issue is that the proposal is so broad. So as drafted, it could have a significant impact on restricting various outsourcing arrangements, including the staffing industry. And we believe that the legislation should be more targeted to address this issue. We, along with our industry association and the broader business community have been providing feedback to this extent. This should play out over the next couple of months and we're monitoring this closely. I think by the next earnings call, we should be able to provide you some more detail on what specifically has been impacted. So right now, the impact could be pretty broad, although difficult to quantify. When we talk next, I believe we should know more details and understand what would be impacted and how we would mitigate it, and how we would adjust our business in Mexico.

Thank you. The next question is from Tobey Sommer of Truist. Your line is now open.

Thank you. Could you elaborate on what's driving the growth in your solutions business, particularly RPO, and then maybe comment on the drivers at the customer level and what you're hearing from them in the prospects for that in this expansion? Thank you.

Sure, Tobey, I'll be happy to. Over a number of years, we've seen that our Talent Solutions offerings have really responded to the company need to focus on what they do best, and then work with strong global partners to help them navigate human capital-related solutions. We're really well placed in all of our global offerings within RPO or within MSP TAPFIN as well as Right Management to respond to those demands. What's been very interesting to see, Tobey, is that during the pandemic, despite the headwinds that a lot of companies had. First of all, our MSP TAPFIN business as a whole grew during 2020 of this pandemic year. So the idea that we would be able to provide a solution that reduces the risk, reduces the cost, that has really come through very, very strongly for our clients. We're very optimistic on our TAPFIN business. RPO was, of course, a business that was hit very hard right at the beginning when the uncertainty was at its highest. But we've seen a very quick return and recovery, and our win rate in the fourth quarter coming into the first and the second quarter is looking very strong. I think that's an indication of companies thinking about how they want to deal with recruitment, and working with partners that can help them find great talent and integrate great talent at scale on a national, regional, or global basis, and then take it forward as part of their overall human capital strategy of how they want to attract and retain the best and the brightest talent to run their business. So I think both of our offerings there really respond to the strategic need for companies to run their business in different ways and focus on what they're doing really well and then work with world-class partners, such as ManpowerGroup Talent Solutions. Let us handle that part; we expect that this trend carries on as we go through this economic cycle because it's really seen a tremendous boost even during the pandemic, despite the very deep downturn in the second quarter.

Thank you. My follow-up, could you refresh us on your balance sheet management strategy and your leverage goal and maybe the most likely path for you to get there?

Yeah, Tobey, I'd say from a balance sheet perspective, you saw the details in the release slides, very, very comfortable. So we continue to have a net cash position. You did see what we did in the fourth quarter from a capital allocation perspective. So with the balance sheet as strong as it was and with the outlook continuing to improve, we definitely allocated more capital to share repurchases in the fourth quarter. So, I guess, what I would say from a leverage perspective, our ratios are very comfortable at the moment. We will continue to see improvement as profitability continues to improve as we look at trailing 12 months EBITDA. So, I'd say the outlook is it continues to be improving on an overall basis. So we feel very well positioned from that perspective. It was also great from capital allocation to increase the dividend again in the fourth quarter. So I'd say the outlook is very stable, improving trends, and we look for that to continue.

Thank you. And the next question is from the line of Gary Bisbee of Bank of America. Your line is now open.

Hey, guys, good morning. So when I look back at past recessions, there's frequently a couple of years of elevated revenue growth as the business bounces back and benefits from stronger economic growth coming out of these types of things. When I think about today, obviously, you've got easy comps and seeing improvement sequentially on a month-to-month basis, pretty strong in the last 6 months; on the other hand, when we look at GDP forecasts, pretty anemic recovery that's being forecast for Europe, at least relative to the U.S. How should we think about sort of the need for economic growth versus just the cadence of the business normalizing in a more normal environment post a recession or post the pandemic? Does this feel like your setup for a good period of recovery, like you've seen in the past? Or could a weak economic recovery have some impact on that? And obviously, I'm asking beyond Q1, just thinking out over the next couple of years.

So we feel really good about the overall outlook and how we're positioned in terms of this recovery. Then when you look at the economic recovery, although there is great uncertainty on when it really starts to kick in, a lot of the world that - Asia, North America, and parts of Latin America should see some really good improved growth. This morning, you might have seen the GDP in the fourth quarter for Europe. Europe is clearly lagging behind in that growth. But having said that, just as when we came out of the last great recession, we could see some very good growth, even though GDP growth was lower. The driver of that growth, we believe, came from the need for companies both to transform their workforce, and the degree of uncertainty that they were facing, so unwilling to take on permanent headcount to some degree and preferring the flexibility of our workforce solutions across all of our skill-sets. We think that that's going to play out just as much, if not more going forward as well. And just as we said in the last economic cycle, that we thought the penetration rate, so the market share of our overall offerings as an industry would surpass the prior peak, that would still be our belief, also coming into this new cycle that we would see greater use of flexible workforce solutions, greater use of permanent workforce solutions, as well as of course the offerings of talent solutions that we have, which should be able to help us have a good run base even if the GDP recovery is a little bit slower in Europe.

Great, thanks. And one follow-up on just the tax rate commentary, Jack. You said that based on the French tax situation, you would expect the tax rate to be down 4%, but not this year, because profits are down. I understand that dynamic. But of those 2 things you called out, I assume those are temporary, right? So should we see that things as a tax rate may fall in 2022? Or could the payroll tax and the corporate tax changes in France sort of go back to the pre-pandemic levels beyond this year? Do you have any insight or color on how that could play out? Thank you.

Yeah, so Gary, there's 2 parts of that. So we have the French business tax, which is the bigger part. So that's about 3.5% of the minus 4%. And that's a fair question, to be determined. We're hoping that's permanent. We know President Macron has been very focused on the French business tax is uncompetitive for France, so although technically there's only a one-year budget going forward. We're hoping that that reduction continues into future years. So to be determined, but as of right now, I think a lot of the press on that is hopeful that that reduction will continue into future years, but we'll keep you posted on that. The second part of it is just overall corporate tax reform in France on their corporate rate. And that is permanent. So that steps down again this year to 27.5% from 31% last year. It steps down again in 2022, down to 25%. So we'll see additional improvement next year as that occurs. So that's the landscape currently and we'll keep you posted on the French business tax going forward as well.

Thank you. And this does conclude today's conference call. Thank you all for participating. You may now disconnect.