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ManpowerGroup Reports 4th Quarter and Full Year 2014 Results

January 30, 2015 at 7:30 AM EST

MILWAUKEE, Jan. 30, 2015 /PRNewswire/ -- ManpowerGroup (NYSE: MAN) today reported net earnings of $1.47 per diluted share for the three months ended December 31, 2014 compared to $1.25 per diluted share in the prior year period. The net earnings in the quarter were $117.2 million compared to $101.2 million a year earlier. Revenues for the fourth quarter totaled $5.1 billion, a decrease of 2 percent in U.S. dollars from the year earlier period and an increase of 5 percent in constant currency.

ManpowerGroup

Included in the prior year fourth quarter results is a restructuring charge related to our simplification and cost recalibration plan of $26.5 million ($19.4 million after tax or 24 cents per diluted share). There were no restructuring charges in the current year quarter. Fourth quarter results were unfavorably impacted by 13 cents per diluted share as foreign currencies were relatively weaker compared to the prior year.

Jonas Prising, ManpowerGroup CEO, said: "We are pleased with our results in the 4th quarter, capping off a year of very good financial performance and margin expansion, continued progress on our strategic initiatives and leadership in workforce solutions. We enter into 2015 with a determination to drive profitable growth, while delivering on our long term ambitions and strategic objectives. We have the market opportunity, we have a strong plan and with our team of talented people across our great company, we will pursue our objectives with discipline, focus and passion for the business.

"We are anticipating diluted earnings per share in the first quarter of 2015 to be in the range of 73 to 81 cents which includes an estimated unfavorable currency impact of 15 cents," Prising stated.

Net earnings per diluted share for the year ended December 31, 2014 was $5.30 compared to $3.62 per diluted share in 2013. Net earnings were $427.6 million compared to $288.0 million in the prior year. Revenues for the year were $20.8 billion, an increase of 3 percent in U.S. dollars from the prior year and 4 percent in constant currency.

Included in the 2013 full year results are restructuring costs of 82 cents per diluted share. There were no restructuring charges in 2014.  2014 results were unfavorably impacted by 10 cents per diluted share due to changes in foreign currencies compared to the prior year.

In conjunction with its fourth quarter and full year earnings release, ManpowerGroup will broadcast its conference call live over the Internet on January 30, 2015 at 7:30 a.m. CST (8:30 a.m. EST). Interested parties are invited to listen to the webcast and view the presentation by logging on to http://www.manpowergroup.com/investors.

Supplemental financial information referenced in the conference call can be found at http://www.manpowergroup.com/investors.

About ManpowerGroup
ManpowerGroup™ (NYSE: MAN) has been the world's workforce expert, creating innovative workforce solutions, for more than 65 years. As workforce experts, we connect more than 600,000 men and women to meaningful work across a wide range of skills and industries every day. Through our ManpowerGroup family of brands — Manpower®, Experis™, Right Management ® and ManpowerGroup™ Solutions— we help more than 400,000 clients in 80 countries and territories address their critical talent needs, providing comprehensive solutions to resource, manage and develop talent. In 2014, ManpowerGroup was named one of the World's Most Ethical Companies for the fourth consecutive year and one of Fortune's Most Admired Companies, confirming our position as the most trusted and admired brand in the industry. See how ManpowerGroup makes powering the world of work humanly possible: www.manpowergroup.com.

Forward-Looking Statements

This news release contains statements, including earnings projections, that are forward-looking in nature.  These statements are based on management's current expectations or beliefs, and are subject to known and unknown 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. Factors that may cause the Company's actual results to differ materially from those contained in the forward-looking statements can be 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, 2013, which information is incorporated herein by reference.  Any forward-looking statement in this release speaks only as of the date on which it is made.  The company assumes no obligation to update or revise any forward-looking statements.  

 

ManpowerGroup

Results of Operations

(In millions, except per share data)




Three Months Ended December 31

% Variance

Amount

Constant

2014

2013

Reported

Currency

(Unaudited)

Revenues from services (a)

$       5,121.1

$      5,252.1

-2.5%

4.8%



Cost of services 

4,252.3

4,365.5

-2.6%

4.7%



  Gross profit

868.8

886.6

-2.0%

5.2%



Selling and administrative expenses

675.5

719.6

-6.1%

0.2%



  Operating profit

193.3

167.0

15.7%

26.7%



Interest and other expenses

11.3

9.2

22.7%





  Earnings before income taxes

182.0

157.8

15.3%

25.7%



Provision for income taxes

64.8

56.6

14.3%





  Net earnings

$          117.2

$        101.2

15.9%

26.3%



Net earnings per share - basic

$            1.49

$          1.28

16.4%





Net earnings per share - diluted

$            1.47

$          1.25

17.6%

28.0%



Weighted average shares - basic

78.8

79.3

-0.6%





Weighted average shares - diluted 

79.8

80.8

-1.2%


(a) 

Revenues from services include fees received from our franchise offices of $6.6 million and $6.4 million for the three months ended December 31, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $279.5 million and $276.7 million for the three months ended December 31, 2014 and 2013, respectively.

 

ManpowerGroup

Operating Unit Results

(In millions)




Three Months Ended December 31

% Variance

Amount

Constant

2014

2013

Reported

Currency

(Unaudited)

Revenues from Services:



  Americas:



      United States  (a)

$              789.5

$              750.6

5.2%

5.2%

      Other Americas

383.0

387.1

-1.1%

11.2%

1,172.5

1,137.7

3.1%

7.2%

  Southern Europe:



      France

1,267.9

1,398.4

-9.3%

-1.2%

      Italy

296.1

281.6

5.2%

14.6%

      Other Southern Europe

246.4

240.2

2.5%

11.8%

1,810.4

1,920.2

-5.7%

2.8%



  Northern Europe

1,501.8

1,521.6

-1.3%

7.1%

  APME

566.9

590.5

-4.0%

3.2%

  Right Management 

69.5

82.1

-15.3%

-11.9%

$           5,121.1

$           5,252.1

-2.5%

4.8%



Operating Unit Profit:



  Americas:



      United States

$                40.4

$                27.5

47.6%

47.6%

      Other Americas

15.0

11.9

24.4%

39.1%

55.4

39.4

40.5%

45.0%

  Southern Europe:



      France

68.2

69.9

-2.3%

6.4%

      Italy

18.6

16.7

11.0%

20.8%

      Other Southern Europe

5.6

4.4

26.2%

38.1%

92.4

91.0

1.5%

10.6%



  Northern Europe

53.9

45.6

18.2%

33.5%

  APME

21.4

16.6

29.5%

38.1%

  Right Management 

6.2

6.5

-4.2%

-3.9%

229.3

199.1

Corporate expenses

(27.6)

(23.3)

Intangible asset amortization expense

(8.4)

(8.8)

    Operating profit

193.3

167.0

15.7%

26.7%

Interest and other expenses (b)

(11.3)

(9.2)

    Earnings before income taxes

$              182.0

$              157.8



(a) 

In the United States, revenues from services include fees received from our franchise offices of $4.4 million and $4.0 million for the three months ended December 31, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $189.1 million and $183.6 million for the three months ended December 31, 2014 and 2013, respectively.

(b)

The components of interest and other expenses were:

2014

2013

        Interest expense

$                  8.4

$                  8.2

        Interest income

(1.0)

(1.0)

        Foreign exchange (gain) loss

(0.8)

0.8

        Miscellaneous expenses, net

4.7

1.2

$                11.3

$                  9.2

 

ManpowerGroup

Results of Operations

(In millions, except per share data)




Year Ended December 31

% Variance

Amount

Constant

2014

2013

Reported

Currency

(Unaudited)

Revenues from services (a)

$    20,762.8

$   20,250.5

2.5%

4.0%



Cost of services

17,274.6

16,883.8

2.3%

3.8%



  Gross profit

3,488.2

3,366.7

3.6%

5.2%



Selling and administrative expenses

2,768.3

2,854.8

-3.0%

-1.6%



  Operating profit

719.9

511.9

40.6%

43.5%



Interest and other expenses

38.3

36.4

5.0%





  Earnings before income taxes

681.6

475.5

43.4%

45.9%



Provision for income taxes

254.0

187.5

35.5%





  Net earnings

$         427.6

$        288.0

48.5%

51.4%



Net earnings per share - basic

$          5.38

$         3.69

45.8%





Net earnings per share - diluted

$          5.30

$         3.62

46.4%

49.2%



Weighted average shares - basic

79.5

78.0

1.9%





Weighted average shares - diluted

80.7

79.6

1.5%


(a) 

Revenues from services include fees received from our franchise offices of $25.4 million and $24.4 million for the years ended December 31, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $1,124.7 million and $1,069.1 million for the years ended December 31, 2014 and 2013, respectively.

 

ManpowerGroup

Operating Unit Results

(In millions)




Year Ended December 31

% Variance

Amount

Constant

2014

2013

Reported

Currency

(Unaudited)

Revenues from Services:



  Americas:



      United States  (a)

$           3,086.4

$           2,967.0

4.0%

4.0%

      Other Americas

1,497.3

1,543.2

-3.0%

8.0%

4,583.7

4,510.2

1.6%

5.4%

  Southern Europe:



      France

5,351.6

5,284.9

1.3%

1.2%

      Italy

1,178.8

1,087.6

8.4%

8.5%

      Other Southern Europe

979.3

864.5

13.3%

13.7%

7,509.7

7,237.0

3.8%

3.8%



  Northern Europe

6,048.1

5,738.8

5.4%

5.7%

  APME

2,327.1

2,447.7

-4.9%

-0.1%

  Right Management 

294.2

316.8

-7.1%

-6.7%

$          20,762.8

$          20,250.5

2.5%

4.0%



Operating Unit Profit:



  Americas:



      United States

$              125.4

$                99.8

25.7%

25.7%

      Other Americas

56.2

43.9

27.9%

40.4%

181.6

143.7

26.4%

30.2%

  Southern Europe:



      France

275.5

198.9

38.5%

38.7%

      Italy

64.2

53.8

19.3%

19.8%

      Other Southern Europe

22.0

11.9

83.9%

84.8%

361.7

264.6

36.7%

37.0%



  Northern Europe

198.1

139.7

41.8%

44.9%

  APME

84.2

70.8

19.0%

25.2%

  Right Management 

33.5

20.4

64.1%

63.7%

859.1

639.2

Corporate expenses

(105.8)

(93.2)

Intangible asset amortization expense

(33.4)

(34.1)

    Operating profit

719.9

511.9

40.6%

43.5%

Interest and other expenses (b)

(38.3)

(36.4)

    Earnings before income taxes

$              681.6

$              475.5



(a) 

In the United States, revenues from services include fees received from our franchise offices of $16.1 million and $15.2 million for the years ended December 31, 2014 and 2013, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $744.8 million and $695.6 million for the years ended December 31, 2014 and 2013, respectively.

(b)

The components of interest and other expenses were:

2014

2013

        Interest expense

$                35.9

$                37.1

        Interest income

(4.4)

(3.7)

        Foreign exchange (gain) loss 

(2.2)

2.3

        Miscellaneous expenses, net

9.0

0.7

$                38.3

$                36.4

 

ManpowerGroup

Consolidated Balance Sheets

(In millions)



Dec. 31

Dec. 31

2014

2013

(Unaudited)

ASSETS


Current assets:


  Cash and cash equivalents

$     699.2

$     737.6

  Accounts receivable, net

4,134.5

4,277.9

  Prepaid expenses and other assets

147.8

161.3

  Future income tax benefits

52.2

66.2

      Total current assets

5,033.7

5,243.0


Other assets:


  Goodwill

1,075.2

1,090.9

  Intangible assets, net

286.8

309.1

  Other assets

637.7

479.3

      Total other assets

1,999.7

1,879.3


Property and equipment:


  Land, buildings, leasehold improvements and equipment

633.5

706.2

  Less:  accumulated depreciation and amortization

484.4

540.2

    Net property and equipment

149.1

166.0

        Total assets

$   7,182.5

$  7,288.3


LIABILITIES AND SHAREHOLDERS' EQUITY


Current liabilities:


  Accounts payable

$   1,542.7

$  1,523.9

  Employee compensation payable

204.5

230.4

  Accrued liabilities

493.3

536.1

  Accrued payroll taxes and insurance

622.4

680.7

  Value added taxes payable

466.3

502.5

  Short-term borrowings and current maturities of long-term debt

45.2

36.0

      Total current liabilities

3,374.4

3,509.6


Other liabilities:


  Long-term debt

423.9

481.9

  Other long-term liabilities

441.2

382.6

      Total other liabilities

865.1

864.5


Shareholders' equity:


  Common stock

1.1

1.1

  Capital in excess of par value

3,084.2

3,014.0

  Retained earnings 

1,667.8

1,317.5

  Accumulated other comprehensive (loss) income

(155.2)

82.2

  Treasury stock, at cost

(1,654.9)

(1,500.6)

      Total shareholders' equity

2,943.0

2,914.2

        Total liabilities and shareholders' equity

$   7,182.5

$  7,288.3

 

ManpowerGroup

Consolidated Statements of Cash Flows

(In millions)



Year Ended

December 31

2014

2013

(Unaudited)

Cash Flows from Operating Activities:


  Net earnings

$     427.6

$     288.0

  Adjustments to reconcile net earnings to net


    cash provided by operating activities:


      Depreciation and amortization

83.8

94.3

      Deferred income taxes

54.0

17.0

      Provision for doubtful accounts

18.9

24.1

      Share-based compensation

40.6

31.5

      Excess tax benefit on exercise of share-based awards

(4.5)

(7.3)

  Changes in operating assets and liabilities, excluding


    the impact of acquisitions:


      Accounts receivable

(270.5)

(82.6)

      Other assets

(198.7)

(35.9)

      Other liabilities

155.0

67.6

            Cash provided by operating activities

306.2

396.7


Cash Flows from Investing Activities:


  Capital expenditures

(51.5)

(44.7)

  Acquisitions of businesses, net of cash acquired

(32.0)

(46.3)

  Proceeds from sales of property and equipment

2.1

3.4

            Cash used in investing activities

(81.4)

(87.6)


Cash Flows from Financing Activities:


  Net change in short-term borrowings

16.0

(5.7)

  Proceeds from long-term debt

-

3.9

  Repayments of long-term debt

(2.6)

(269.5)

  Proceeds from share-based awards

25.5

101.0

  Other share-based award transactions, net

(6.3)

16.1

  Repurchases of common stock

(143.5)

-

  Dividends paid

(77.3)

(72.0)

            Cash used in financing activities

(188.2)

(226.2)


Effect of exchange rate changes on cash

(75.0)

6.6

Change in cash and cash equivalents

(38.4)

89.5


Cash and cash equivalents, beginning of period

737.6

648.1

Cash and cash equivalents, end of period

$     699.2

$     737.6

 

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SOURCE ManpowerGroup

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