8-K
ManpowerGroup Inc. (MAN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 20, 2021
MANPOWERGROUP INC.
(Exact name of registrant as specified in its charter)
| Wisconsin | 1-10686 | 39-1672779 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
| 100 Manpower Place | ||
| --- | --- | |
| Milwaukee, Wisconsin | 53212 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (414)
961-1000
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $.01 par value | MAN | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition
The information in this Item 2.02, including exhibit 99.1 attached hereto, is furnished solely pursuant to Item 2.02 of Form 8-K. Consequently, such information is not deemed "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liabilities of that section. Further, the information in this Item 2.02, including exhibit 99.1, shall not be deemed to be incorporated by reference into the filings of the registrant under the Securities Act of 1933.
On July 20, 2021, we issued a press release announcing our results of operations for the three and six months ended June 30, 2021. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
Item 9.01. Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Press Release dated July 20, 2021 |
| 99.2 | Presentation materials for July 20, 2021 Conference Call |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| MANPOWERGROUP INC. | |||
|---|---|---|---|
| Dated: | July 20, 2021 | By: | /s/ John T. McGinnis |
| Name: | John T. McGinnis | ||
| Title: | Executive Vice President and<br><br>Chief Financial Officer |
EX-99.1
Exhibit 99.1
| FOR IMMEDIATE RELEASE | Contact: |
|---|---|
| Jack McGinnis | |
| +1.414.906.7977 | |
| jack.mcginnis@manpowergroup.com |
ManpowerGroup Reports 2nd Quarter 2021 Results
41% revenue increase in the quarter (31% increase on a constant currency basis)
All brands recorded significant quarterly year-over-year revenue growth, as Manpower and Experis experienced increased demand for staffing and permanent recruitment and Talent Solutions experienced strong growth, led by RPO and MSP
Operating profit of $170 million in the quarter
$50 million of common stock repurchased during the quarter
MILWAUKEE, July 20, 2021 -- ManpowerGroup (NYSE: MAN) today reported net earnings of $2.02 per diluted share for the three months ended June 30, 2021 compared to net losses of $1.11 per diluted share in the prior year period. Net earnings in the quarter were $111.6 million compared to net losses of $64.4 million a year earlier. Revenues for the second quarter were $5.3 billion, a 41% increase from the prior year period.
Financial results in the quarter were impacted by the weaker U.S. dollar relative to foreign currencies compared to the prior year period, resulting in a 13 cents positive impact to earnings per share in the quarter compared to the prior year. On a constant currency basis, revenues increased 31% compared to the prior year period. Excluding the prior year impact of special items, on a constant currency basis, net earnings per diluted share increased 938% during the quarter.
Days Sales Outstanding improved by 1.9 days year over year reflecting our continued focus on collections and working capital efficiency.
Jonas Prising, ManpowerGroup Chairman & CEO, said, “Our second quarter results reflect an improving global economic environment and increased demand for our services across our key markets and brands. As restrictions continued to ease worldwide, we saw the benefit of our diversified portfolio of services and workforce solutions. Our Manpower business rebounded strongly, our Experis business improved significantly during the quarter and our Talent Solutions offerings continued to deliver against the strong demand for global workforce solutions. We also made significant progress in the ongoing execution of our strategic initiatives, particularly in the implementation of new technology across the globe.
We are encouraged by the current momentum that we are experiencing across our offerings and confident in our team’s ability to continue to deliver value to all our stakeholders.
We anticipate diluted earnings per share in the third quarter will be between $1.86 and $1.94, which includes an estimated favorable currency impact of 4 cents.”
Net earnings for the six months ended June 30, 2021 were $173.6 million, or net earnings of $3.13 per diluted share compared to net losses of $62.7 million, or net losses of $1.07 per diluted share in the prior year. The prior year to date period included special items and restructuring costs which reduced earnings per share by $2.07. Revenues for the six-month period were $10.2 billion, an increase of 22% from the prior year or an increase of 14% in constant currency. Earnings per share for the six-month period were positively impacted by 20 cents due to changes in foreign currencies compared to the prior year.
In conjunction with its second quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on July 20, 2021 at 7:30 a.m. CDT (8:30 a.m. EDT). Prepared remarks for the conference call are included within the Investor Relations section of our website at manpowergroup.com. Interested parties are invited to listen to the webcast and view the presentation by logging on to http://investor.manpowergroup.com/ in the section titled “Investor Relations.”
Supplemental financial information referenced in the conference call can be found at http://investor.manpowergroup.com/.
About ManpowerGroup
ManpowerGroup® (NYSE: MAN), the leading global workforce solutions company, helps organizations transform in a fast-changing world of work by sourcing, assessing, developing and managing the talent that enables them to win. We develop innovative solutions for hundreds of thousands of organizations every year, providing them with skilled talent while finding meaningful, sustainable employment for millions of people across a wide range of industries and skills. Our expert family of brands – Manpower, Experis and Talent Solutions – creates substantially more value for candidates and clients across more than 75 countries and territories and has done so for over 70 years. We are recognized consistently for our diversity - as a best place to work for Women, Inclusion, Equality and Disability and in 2021 ManpowerGroup was named one of the World's Most Ethical Companies for the 12thyear - all confirming our position as the brand of choice for in-demand talent.
Forward-Looking Statements
This news release contains statements, including statements regarding economic uncertainty, the global recovery, financial outlook, the Company’s strategic initiatives and technology investments and its positioning for future growth, as well as the potential impacts of the COVID-19 pandemic and the Company’s efforts to respond to such impacts, that are forward-looking in nature and, accordingly, are subject to risks and uncertainties regarding the Company’s expected future results. The Company’s actual results may differ materially from those described or contemplated in the forward-looking statements due to numerous factors. These factors include those found in the Company’s reports filed with the SEC, including the information under the heading “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2020, which information is incorporated herein by reference.
ManpowerGroup
Results of Operations
(In millions, except per share data)
| Three Months Ended June 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| % Variance | |||||||||||
| Amount | Constant | ||||||||||
| 2021 | 2020 | Reported | Currency | ||||||||
| (Unaudited) | |||||||||||
| Revenues from services (a) | $ | 5,277.1 | $ | 3,742.2 | 41.0 | % | 31.3 | % | |||
| Cost of services | 4,417.0 | 3,165.5 | 39.5 | % | 29.8 | % | |||||
| Gross profit | 860.1 | 576.7 | 49.1 | % | 39.8 | % | |||||
| Selling and administrative expenses, <br> excluding goodwill impairment charge | 690.2 | 559.9 | 23.2 | % | 15.8 | % | |||||
| Goodwill impairment charge (b) | — | 66.8 | N/A | N/A | |||||||
| Selling and administrative expenses | 690.2 | 626.7 | 10.1 | % | 3.4 | % | |||||
| Operating profit (loss) | 169.9 | (50.0 | ) | N/A | N/A | ||||||
| Interest and other expenses, net | 2.8 | 5.8 | -50.9 | % | |||||||
| Earnings (loss) before income taxes | 167.1 | (55.8 | ) | N/A | N/A | ||||||
| Provision for income taxes | 55.5 | 8.6 | 549.2 | % | |||||||
| Net earnings (loss) | $ | 111.6 | $ | (64.4 | ) | N/A | N/A | ||||
| Net earnings (loss) per share - basic | $ | 2.05 | $ | (1.11 | ) | N/A | |||||
| Net earnings (loss) per share - diluted | $ | 2.02 | $ | (1.11 | ) | N/A | N/A | ||||
| Weighted average shares - basic | 54.5 | 58.2 | -6.3 | % | |||||||
| Weighted average shares - diluted | 55.4 | 58.2 | -4.9 | % |
(a) Revenues from services include fees received from our franchise offices of $3.5 million and $2.8 million for the three months ended June 30, 2021 and 2020, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $253.5 million and $128.1 million for the three months ended June 30, 2021 and 2020, respectively.
(b) The goodwill impairment charge for the six months ended June 30, 2020 relates to our investment in Germany.
ManpowerGroup
Operating Unit Results
(In millions)
| Three Months Ended June 30 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % Variance | ||||||||||||
| Amount | Constant | |||||||||||
| 2021 | 2020 | Reported | Currency | |||||||||
| (Unaudited) | ||||||||||||
| Revenues from Services: | ||||||||||||
| Americas: | ||||||||||||
| United States (a) | $ | 628.8 | $ | 515.9 | 21.9 | % | 21.9 | % | ||||
| Other Americas | 415.5 | 320.7 | 29.6 | % | 24.3 | % | ||||||
| 1,044.3 | 836.6 | 24.8 | % | 22.8 | % | |||||||
| Southern Europe: | ||||||||||||
| France | 1,346.8 | 736.0 | 83.0 | % | 67.3 | % | ||||||
| Italy | 469.1 | 268.5 | 74.7 | % | 59.6 | % | ||||||
| Other Southern Europe | 606.5 | 466.3 | 30.1 | % | 20.4 | % | ||||||
| 2,422.4 | 1,470.8 | 64.7 | % | 51.0 | % | |||||||
| Northern Europe | 1,190.5 | 865.7 | 37.5 | % | 23.1 | % | ||||||
| APME | 619.9 | 569.1 | 8.9 | % | 5.5 | % | ||||||
| $ | 5,277.1 | $ | 3,742.2 | 41.0 | % | 31.3 | % | |||||
| Operating Unit Profit: | ||||||||||||
| Americas: | ||||||||||||
| United States | $ | 38.0 | $ | 9.2 | 311.7 | % | 311.7 | % | ||||
| Other Americas | 18.0 | 10.5 | 71.9 | % | 68.1 | % | ||||||
| 56.0 | 19.7 | 184.2 | % | 182.2 | % | |||||||
| Southern Europe: | ||||||||||||
| France | 65.7 | (2.5 | ) | N/A | N/A | |||||||
| Italy | 31.7 | 11.0 | 187.5 | % | 162.8 | % | ||||||
| Other Southern Europe | 17.9 | 3.6 | 414.9 | % | 380.3 | % | ||||||
| 115.3 | 12.1 | 855.9 | % | 776.5 | % | |||||||
| Northern Europe | 17.9 | 0.3 | 5387.9 | % | 4768.1 | % | ||||||
| APME | 22.3 | 18.0 | 24.6 | % | 23.1 | % | ||||||
| 211.5 | 50.1 | |||||||||||
| Corporate expenses | (37.3 | ) | (26.6 | ) | ||||||||
| Goodwill impairment charges | — | (66.8 | ) | |||||||||
| Intangible asset amortization expense | (4.3 | ) | (6.7 | ) | ||||||||
| Operating profit | 169.9 | (50.0 | ) | N/A | N/A | |||||||
| Interest and other expenses, net (b) | (2.8 | ) | (5.8 | ) | ||||||||
| Earnings before income taxes | $ | 167.1 | $ | (55.8 | ) |
(a) In the United States, revenues from services include fees received from our franchise offices of $3.0 million and $2.4 million for the three months ended June 30, 2021 and 2020, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $114.6 million and $122.3 million for the three months ended June 30, 2021 and 2020, respectively.
(b) The components of interest and other expenses, net were:
| 2021 | 2020 | |||||
|---|---|---|---|---|---|---|
| Interest expense | $ | 9.7 | $ | 10.4 | ||
| Interest income | (3.1 | ) | (3.1 | ) | ||
| Foreign exchange loss | 0.6 | 0.5 | ||||
| Miscellaneous income | (4.4 | ) | (2.0 | ) | ||
| $ | 2.8 | $ | 5.8 |
ManpowerGroup
Results of Operations
(In millions, except per share data)
| Six Months Ended June 30 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| % Variance | |||||||||||
| Amount | Constant | ||||||||||
| 2021 | 2020 | Reported | Currency | ||||||||
| (Unaudited) | |||||||||||
| Revenues from services (a) | $ | 10,201.5 | $ | 8,361.3 | 22.0 | % | 14.4 | % | |||
| Cost of services | 8,573.3 | 7,060.6 | 21.4 | % | 13.7 | % | |||||
| Gross profit | 1,628.2 | 1,300.7 | 25.2 | % | 17.9 | % | |||||
| Selling and administrative expenses, <br> excluding goodwill impairment charge | 1,359.9 | 1,246.2 | 9.1 | % | 3.0 | % | |||||
| Goodwill impairment charge (b) | — | 66.8 | N/A | N/A | |||||||
| Selling and administrative expenses | 1,359.9 | 1,313.0 | 3.6 | % | -2.3 | % | |||||
| Operating profit (loss) | 268.3 | (12.3 | ) | N/A | N/A | ||||||
| Interest and other expenses, net | 8.2 | 26.3 | -68.6 | % | |||||||
| Earnings (loss) before income taxes | 260.1 | (38.6 | ) | N/A | N/A | ||||||
| Provision for income taxes | 86.5 | 24.1 | 258.9 | % | |||||||
| Net earnings (loss) | $ | 173.6 | $ | (62.7 | ) | N/A | N/A | ||||
| Net earnings (loss) per share - basic | $ | 3.17 | $ | (1.07 | ) | N/A | |||||
| Net earnings (loss) per share - diluted | $ | 3.13 | $ | (1.07 | ) | N/A | N/A | ||||
| Weighted average shares - basic | 54.8 | 58.5 | -6.2 | % | |||||||
| Weighted average shares - diluted | 55.5 | 58.5 | -5.1 | % |
(a) Revenues from services include fees received from our franchise offices of $7.1 million and $6.1 million for the six months ended June 30, 2021 and 2020, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $502.6 million and $210.4 million for the six months ended June 30, 2021 and 2020, respectively.
(b) The goodwill impairment charge for the six months ended June 30, 2020 relates to our investment in Germany.
ManpowerGroup
Operating Unit Results
(In millions)
| Six Months Ended June 30 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| % Variance | ||||||||||||
| Amount | Constant | |||||||||||
| 2021 | 2020 | Reported | Currency | |||||||||
| (Unaudited) | ||||||||||||
| Revenues from Services: | ||||||||||||
| Americas: | ||||||||||||
| United States (a) | $ | 1,237.6 | $ | 1,126.8 | 9.8 | % | 9.8 | % | ||||
| Other Americas | 809.6 | 720.8 | 12.3 | % | 12.6 | % | ||||||
| 2,047.2 | 1,847.6 | 10.8 | % | 10.9 | % | |||||||
| Southern Europe: | ||||||||||||
| France | 2,535.7 | 1,829.8 | 38.6 | % | 26.8 | % | ||||||
| Italy | 871.9 | 596.2 | 46.2 | % | 33.7 | % | ||||||
| Other Southern Europe | 1,175.1 | 989.5 | 18.8 | % | 10.0 | % | ||||||
| 4,582.7 | 3,415.5 | 34.2 | % | 23.1 | % | |||||||
| Northern Europe | 2,324.3 | 1,934.2 | 20.2 | % | 9.1 | % | ||||||
| APME | 1,247.3 | 1,164.0 | 7.2 | % | 2.9 | % | ||||||
| $ | 10,201.5 | $ | 8,361.3 | 22.0 | % | 14.4 | % | |||||
| Operating Unit Profit: | ||||||||||||
| Americas: | ||||||||||||
| United States | $ | 67.2 | $ | 11.5 | 482.5 | % | 482.5 | % | ||||
| Other Americas | 32.9 | 24.8 | 32.8 | % | 33.9 | % | ||||||
| 100.1 | 36.3 | 175.8 | % | 176.6 | % | |||||||
| Southern Europe: | ||||||||||||
| France | 108.3 | 35.5 | 204.9 | % | 179.1 | % | ||||||
| Italy | 51.1 | 25.2 | 103.0 | % | 85.7 | % | ||||||
| Other Southern Europe | 29.3 | 4.4 | 571.3 | % | 525.5 | % | ||||||
| 188.7 | 65.1 | 190.1 | % | 166.3 | % | |||||||
| Northern Europe | 22.7 | (13.8 | ) | N/A | N/A | |||||||
| APME | 41.1 | 34.9 | 17.8 | % | 15.6 | % | ||||||
| 352.6 | 122.5 | |||||||||||
| Corporate expenses | (74.5 | ) | (54.4 | ) | ||||||||
| Goodwill impairment charges | — | (66.8 | ) | |||||||||
| Intangible asset amortization expense | (9.8 | ) | (13.6 | ) | ||||||||
| Operating profit | 268.3 | (12.3 | ) | N/A | N/A | |||||||
| Interest and other expenses, net (b) | (8.2 | ) | (26.3 | ) | ||||||||
| Earnings before income taxes | $ | 260.1 | $ | (38.6 | ) |
(a) In the United States, revenues from services include fees received from our franchise offices of $6.1 million and $5.4 million for the six months ended June 30, 2021 and 2020, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $232.1 million and $198.8 million for the six months ended June 30, 2021 and 2020, respectively.
(b) The components of interest and other expenses, net were:
| 2021 | 2020 | |||||
|---|---|---|---|---|---|---|
| Interest expense | $ | 19.9 | $ | 21.5 | ||
| Interest income | (6.2 | ) | (6.8 | ) | ||
| Foreign exchange loss | 3.1 | 3.6 | ||||
| Miscellaneous (income) expense | (8.6 | ) | 8.0 | |||
| $ | 8.2 | $ | 26.3 |
ManpowerGroup
Consolidated Balance Sheets
(In millions)
| Jun. 30, | Dec. 31, | |||||
|---|---|---|---|---|---|---|
| 2021 | 2020 | |||||
| (Unaudited) | ||||||
| ASSETS | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 1,461.4 | $ | 1,567.1 | ||
| Accounts receivable, net | 5,203.3 | 4,912.4 | ||||
| Prepaid expenses and other assets | 165.0 | 186.9 | ||||
| Total current assets | 6,829.7 | 6,666.4 | ||||
| Other assets: | ||||||
| Goodwill | 1,219.1 | 1,225.8 | ||||
| Intangible assets, net | 237.4 | 248.6 | ||||
| Operating lease right-of-use assets | 367.2 | 400.7 | ||||
| Other assets | 686.0 | 651.6 | ||||
| Total other assets | 2,509.7 | 2,526.7 | ||||
| Property and equipment: | ||||||
| Land, buildings, leasehold improvements and equipment | 606.4 | 614.7 | ||||
| Less: accumulated depreciation and amortization | 483.4 | 479.6 | ||||
| Net property and equipment | 123.0 | 135.1 | ||||
| Total assets | $ | 9,462.4 | $ | 9,328.2 | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 2,849.3 | $ | 2,527.4 | ||
| Employee compensation payable | 229.8 | 231.8 | ||||
| Accrued liabilities | 577.6 | 602.1 | ||||
| Accrued payroll taxes and insurance | 744.1 | 752.0 | ||||
| Value added taxes payable | 526.3 | 551.1 | ||||
| Short-term borrowings and current maturities of long-term debt | 23.1 | 20.4 | ||||
| Total current liabilities | 4,950.2 | 4,684.8 | ||||
| Other liabilities: | ||||||
| Long-term debt | 1,070.2 | 1,103.5 | ||||
| Long-term operating lease liability | 272.6 | 305.1 | ||||
| Other long-term liabilities | 772.7 | 781.2 | ||||
| Total other liabilities | 2,115.5 | 2,189.8 | ||||
| Shareholders' equity: | ||||||
| ManpowerGroup shareholders' equity | ||||||
| Common stock | 1.2 | 1.2 | ||||
| Capital in excess of par value | 3,423.1 | 3,402.5 | ||||
| Retained earnings | 3,494.1 | 3,388.8 | ||||
| Accumulated other comprehensive loss | (422.3 | ) | (397.3 | ) | ||
| Treasury stock, at cost | (4,109.0 | ) | (3,954.2 | ) | ||
| Total ManpowerGroup shareholders' equity | 2,387.1 | 2,441.0 | ||||
| Noncontrolling interests | 9.6 | 12.6 | ||||
| Total shareholders' equity | 2,396.7 | 2,453.6 | ||||
| Total liabilities and shareholders' equity | $ | 9,462.4 | $ | 9,328.2 |
ManpowerGroup
Consolidated Statements of Cash Flows
(In millions)
| Six Months Ended | ||||||
|---|---|---|---|---|---|---|
| June 30, | ||||||
| 2021 | 2020 | |||||
| (Unaudited) | ||||||
| Cash Flows from Operating Activities: | ||||||
| Net earnings (loss) | $ | 173.6 | $ | (62.7 | ) | |
| Adjustments to reconcile net earnings (loss) to net cash provided by operating activities: | ||||||
| Depreciation and amortization | 34.4 | 37.0 | ||||
| Non-cash goodwill and other impairment charges | — | 71.3 | ||||
| Non-cash operating lease right-of-use assets impairment | — | 8.2 | ||||
| Deferred income taxes | (13.3 | ) | (7.9 | ) | ||
| Provision for doubtful accounts | 9.2 | 10.9 | ||||
| Share-based compensation | 16.9 | 11.5 | ||||
| Changes in operating assets and liabilities, excluding the impact of acquisitions: | ||||||
| Accounts receivable | (381.7 | ) | 988.3 | |||
| Other assets | (6.3 | ) | (27.2 | ) | ||
| Other liabilities | 362.6 | (433.3 | ) | |||
| Cash provided by operating activities | 195.4 | 596.1 | ||||
| Cash Flows from Investing Activities: | ||||||
| Capital expenditures | (24.6 | ) | (18.9 | ) | ||
| Acquisitions of businesses, net of cash acquired | (7.1 | ) | — | |||
| Proceeds from the sale of property and equipment | 0.9 | 0.8 | ||||
| Cash used in investing activities | (30.8 | ) | (18.1 | ) | ||
| Cash Flows from Financing Activities: | ||||||
| Net change in short-term borrowings | 3.1 | (17.8 | ) | |||
| Proceeds from long-term debt | 0.3 | 1.1 | ||||
| Repayments of long-term debt | (2.2 | ) | (0.1 | ) | ||
| Payments of contingent consideration for acquisitions | (6.2 | ) | (1.7 | ) | ||
| Proceeds from share-based awards | 4.2 | 6.8 | ||||
| Payments to noncontrolling interests | — | (0.8 | ) | |||
| Other share-based award transactions | (4.6 | ) | (6.6 | ) | ||
| Repurchases of common stock | (150.1 | ) | (63.8 | ) | ||
| Dividends paid | (68.3 | ) | (63.2 | ) | ||
| Cash used in financing activities | (223.8 | ) | (146.1 | ) | ||
| Effect of exchange rate changes on cash | (46.5 | ) | (19.1 | ) | ||
| Change in cash and cash equivalents | (105.7 | ) | 412.8 | |||
| Cash and cash equivalents, beginning of period | $ | 1,567.1 | $ | 1,025.8 | ||
| Cash and cash equivalents, end of period | $ | 1,461.4 | $ | 1,438.6 |
July 20, 2021 ManpowerGroup Second Quarter Results Exhibit 99.2
FORWARD-LOOKING STATEMENT This presentation contains statements, including statements regarding economic uncertainty, the global recovery, financial outlook, the Company’s strategic initiatives and technology investments and its positioning for future growth, as well the potential impacts of the COVID-19 pandemic and the Company’s efforts to respond to such impacts, that are forward-looking in nature and, accordingly, are subject to risks and uncertainties regarding the Company’s expected future results. The Company’s actual results may differ materially from those described or contemplated in the forward-looking statements due to numerous factors. These factors include those found in the Company’s reports filed with the SEC, including the information under the heading “Risk Factors” in its Annual Report on Form 10-K for the year ended December 31, 2020, which information is incorporated herein by reference. The Company assumes no obligation to update or revise any forward-looking statements. We reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include a reconciliation of these measures, where appropriate, to GAAP on the Investor Relations section of our website at manpowergroup.com.
As Reported As Adjusted(1) Q2 Financial Highlights 41% 41% Revenue $5.3B 31% CC 31% CC 90 bps 90 bps Gross Margin 16.3% 440% 645% Operating Profit $170M 416% CC 593% CC 450 bps 260 bps OP Margin 3.2% NM(2) NM(2) EPS $2.02 Consolidated Financial Highlights Excludes the impact of prior year items of $72.8M ($75M net of tax) consisting of goodwill impairment, software impairment and discrete taxes. Variances are not meaningful.
EPS Bridge – Q2 vs. Guidance Midpoint
Consolidated Gross Margin Change
Trend Business Line Gross Profit – Q2 2021(1) (1) Business line classifications can vary by entity and are subject to change as service requirements change. █ Manpower █ Experis █ Talent Solutions █ ManpowerGroup – Total
SG&A Expense Bridge – Q2 YoY (in millions of USD) This was favorably impacted 10 bps due to the effect of currency exchange rates on our business mix. In constant currency, SG&A was 13.2% of Revenue.
Operating Unit Profit (OUP) is the measure that we use to evaluate segment performance. OUP is equal to segment revenues less direct costs and branch and national headquarters operating costs. Americas Segment (20% of Revenue) As Reported As Adjusted(1) Q2 Financial Highlights 25% 25% Revenue $1.0B 23% CC 23% CC 184% 117% OUP $56M 182% CC 116% CC 300 bps 230 bps OUP Margin 5.4% Excludes the prior year impact of software impairment of $6.0M ($4.5M net of tax) in Q2 2020
Revenue Trend - CC Revenue Trend % of Segment Revenue Americas – Q2 Revenue Trend YoY Average Daily Revenue Trend - CC On an organic basis, revenue for the US increased 21% and ADR increased 21%. (1)
Southern Europe Segment (46% of Revenue) Variances are not meaningful. As Reported Q2 Financial Highlights 65% Revenue $2.4B 51% CC NM(1) OUP $115M 400 bps OUP Margin 4.8%
Southern Europe – Q2 Revenue Trend YoY Revenue Trend - CC Revenue Trend % of Segment Revenue Average Daily Revenue Trend - CC On an organic basis revenue for Southern Europe Other increased 37% or 26% in constant currency. (1)
Northern Europe Segment (22% of Revenue) Variances are not meaningful. As Reported Q2 Financial Highlights 38% Revenue $1.2B 23% CC NM(1) OUP $18M 150 bps OUP Margin 1.5%
Northern Europe – Q2 Revenue Trend YoY Revenue Trend - CC Revenue Trend % of Segment Revenue Average Daily Revenue Trend - CC
APME Segment (12% of Revenue) As Reported Q2 Financial Highlights 9% Revenue $620M 6% CC 25% OUP $22M 23% CC 50 bps OUP Margin 3.6%
APME – Q2 Revenue Trend YoY Revenue Trend - CC Revenue Trend % of Segment Revenue Average Daily Revenue Trend - CC (1)
Cash Flow Summary – 6 Months YTD
Balance Sheet Highlights Total Debt (in millions of USD) Total Debt to Total Capitalization Total Debt Net Debt Net (Cash)
Debt and Credit Facilities – June 30, 2021 (in millions of USD) (3) (1)(2) The $600M agreement requires that we comply with a Leverage Ratio (net Debt-to-EBITDA) of not greater than 3.5 to 1 and a Fixed Charge Coverage Ratio of not less than 1.5 to 1, in addition to other customary restrictive covenants. As defined in the agreement, we had a net Debt-to-EBITDA ratio of 0.06 to 1 and a fixed charge coverage ratio of 4.19 to 1 as of June 30, 2021. (In the agreement, net debt is defined as total debt less cash in excess of $400M.) As of June 30, 2021, there were $0.5M of standby letters of credit issued under the agreement. Under the $600M agreement, we have an option to increase the total availability under the facility by an additional $200M. Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $350.8M. Total subsidiary borrowings are limited to $300M due to restrictions in our Revolving Credit Facility, with the exception of Q3 when subsidiary borrowings are limited to $600M. Interest Rate Maturity Date Total Outstanding Remaining Available Euro Notes - €500M 1.809% Jun 2026 589 - Euro Notes - €400M 1.913% Sep 2022 474 - Revolving Credit Agreement 1.100% Jun 2023 - 599 Uncommitted lines and Other Various Various 30 320 Total Debt 1,093 919
Third Quarter 2021 Outlook Revenue Total Up 14-18% (12-16% CC) Americas Up 9-13% (8-12% CC) Southern Europe Up 14-18% (12-16% CC) Northern Europe Up 28-32% (23-27% CC) APME Up 2-6% (1-5% CC) Gross Profit Margin 15.9 – 16.1% Operating Profit Margin 3.0 – 3.2% Tax Rate 33.0% EPS $1.86 – $1.94 (favorable $0.04 currency)
Our second quarter results reflect an improving global economic environment with revenue growth of 31% in constant currency Our Talent Solutions RPO and MSP businesses have again been recognized as global leaders in the Everest Group PEAK Matrix Assessment Our PowerSuite technology is advancing at speed and helping us grow our competitive advantage as we shift to cloud platforms to streamline candidate management and improve customer experience As recently displayed at VivaTech, we are using artificial intelligence and data-driven predictive performance tools together with our human expertise to upskill people at speed and match people to jobs with improved accuracy Key Take Aways
Appendix
Industry Vertical Composition – Q2 2021 Manufacturing, 43.0%