ManpowerGroup Reports 4th Quarter and Full Year 2019 Results
Financial results in the quarter were impacted by the stronger U.S. dollar relative to foreign currencies compared to the prior year period. On a constant currency basis, revenues were down 2%. On a constant currency basis, net earnings per diluted share decreased 6%. Earnings per share in the quarter were negatively impacted
"We executed well in a slow growth global economy," said
"With that, we are excited to announce today's launch of our new brand Talent Solutions, combining three of our current global offerings to leverage our deep expertise in RPO, Tapfin MSP and Right Management. This is how we will continue to deliver new solutions and create added value that addresses our clients' complex global workforce needs."
"We anticipate diluted earnings per share in the first quarter will be between
Free Cash Flow in the fourth quarter of
Net earnings for the year ended
In conjunction with its fourth quarter and full year earnings release,
Supplemental financial information referenced in the conference call can be found at http://investor.manpowergroup.com/.
About
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 80 countries and territories and has done so for over 70 years. In 2019,
Forward-Looking Statements
This news release contains statements, including earnings projections, predictions about revenue trends and the effect of currency fluctuations, 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. 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
ManpowerGroup |
||||
Results of Operations |
||||
(In millions, except per share data) |
||||
Three Months Ended December 31 |
||||
% Variance |
||||
Amount |
Constant |
|||
2019 |
2018 |
Reported |
Currency |
|
(Unaudited) |
||||
Revenues from services (a) |
$5,196.6 |
$5,393.2 |
-3.6% |
-1.8% |
Cost of services |
4,337.0 |
4,512.9 |
-3.9% |
-2.1% |
Gross profit |
859.6 |
880.3 |
-2.4% |
-0.5% |
Selling and administrative expenses |
668.0 |
662.4 |
0.8% |
2.6% |
Operating profit |
191.6 |
217.9 |
-12.1% |
-10.0% |
Interest and other expenses |
5.5 |
3.6 |
47.7% |
|
Earnings before income taxes |
186.1 |
214.3 |
-13.1% |
-11.1% |
Provision for income taxes |
47.3 |
56.0 |
-15.3% |
|
Net earnings |
$ 138.8 |
$ 158.3 |
-12.4% |
-10.4% |
Net earnings per share - basic |
$ 2.35 |
$ 2.56 |
-8.2% |
|
Net earnings per share - diluted |
$ 2.33 |
$ 2.54 |
-8.3% |
-6.3% |
Weighted average shares - basic |
59.0 |
61.9 |
-4.7% |
|
Weighted average shares - diluted |
59.5 |
62.3 |
-4.4% |
|
(a) Revenues from services include fees received from our franchise offices of $4.4 million and $6.5 million for the three months ended December 31, 2019 and 2018, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $141.9 million and $267.2 million for the three months ended December 31, 2019 and 2018, respectively. |
ManpowerGroup |
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Operating Unit Results |
||||
(In millions) |
||||
Three Months Ended December 31 |
||||
% Variance |
||||
Amount |
Constant |
|||
2019 |
2018 |
Reported |
Currency |
|
(Unaudited) |
||||
Revenues from Services: |
||||
Americas: |
||||
United States (a) |
$ 626.8 |
$ 632.3 |
-0.9% |
-0.9% |
Other Americas |
434.1 |
411.9 |
5.4% |
9.5% |
1,060.9 |
1,044.2 |
1.6% |
3.2% |
|
Southern Europe: |
||||
France |
1,356.0 |
1,430.6 |
-5.2% |
-2.3% |
Italy |
380.0 |
403.8 |
-5.9% |
-3.0% |
Other Southern Europe |
589.4 |
459.6 |
28.2% |
29.3% |
2,325.4 |
2,294.0 |
1.4% |
3.9% |
|
Northern Europe |
1,161.8 |
1,272.6 |
-8.7% |
-6.4% |
APME |
596.5 |
732.3 |
-18.5% |
-19.4% |
Right Management |
52.0 |
50.1 |
3.8% |
4.6% |
$ 5,196.6 |
$ 5,393.2 |
-3.6% |
-1.8% |
|
Operating Unit Profit: |
||||
Americas: |
||||
United States |
$ 28.8 |
$ 32.7 |
-12.1% |
-12.1% |
Other Americas |
22.1 |
20.3 |
8.9% |
13.9% |
50.9 |
53.0 |
-4.0% |
-2.1% |
|
Southern Europe: |
||||
France |
82.7 |
80.9 |
2.2% |
5.4% |
Italy |
29.1 |
28.3 |
2.5% |
5.6% |
Other Southern Europe |
15.9 |
17.4 |
-7.9% |
-8.1% |
127.7 |
126.6 |
0.9% |
3.6% |
|
Northern Europe |
20.8 |
40.9 |
-49.1% |
-47.5% |
APME |
21.1 |
27.3 |
-23.1% |
-25.4% |
Right Management |
11.4 |
9.4 |
22.1% |
23.1% |
231.9 |
257.2 |
|||
Corporate expenses |
(32.9) |
(31.0) |
||
Intangible asset amortization expense |
(7.4) |
(8.3) |
||
Operating profit |
191.6 |
217.9 |
-12.1% |
-10.0% |
Interest and other expenses (b) |
(5.5) |
(3.6) |
||
Earnings before income taxes |
$ 186.1 |
$ 214.3 |
||
(a) In the United States, revenues from services include fees received from our franchise offices of $3.3 million and $4.2 million for the three months ended December 31, 2019 and 2018, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $131.5 million and $165.6 million for the three months ended December 31, 2019 and 2018, respectively. |
||||
(b) The components of interest and other expenses were: |
||||
2019 |
2018 |
|||
Interest expense |
$ 11.1 |
$ 9.9 |
||
Interest income |
(2.8) |
(1.9) |
||
Foreign exchange loss (gain) |
0.2 |
(1.4) |
||
Miscellaneous income |
(3.0) |
(3.0) |
||
$ 5.5 |
$ 3.6 |
ManpowerGroup |
||||
Results of Operations |
||||
(In millions, except per share data) |
||||
Year Ended December 31 |
||||
% Variance |
||||
Amount |
Constant |
|||
2019 |
2018 |
Reported |
Currency |
|
(Unaudited) |
||||
Revenues from services (a) |
$20,863.5 |
$21,991.2 |
-5.1% |
-0.9% |
Cost of services |
17,488.4 |
18,412.2 |
-5.0% |
-0.8% |
Gross profit |
3,375.1 |
3,579.0 |
-5.7% |
-1.8% |
Selling and administrative expenses, |
2,666.2 |
2,782.3 |
-4.2% |
-0.2% |
Goodwill impairment charge (b) |
64.0 |
- |
- |
- |
Selling and administrative expenses |
2,730.2 |
2,782.3 |
-1.9% |
2.2% |
Operating profit |
644.9 |
796.7 |
-19.1% |
-15.6% |
Interest and other (income) expenses, net |
(40.6) |
42.0 |
- |
|
Earnings before income taxes |
685.5 |
754.7 |
-9.2% |
-5.7% |
Provision for income taxes |
219.8 |
198.0 |
11.1% |
|
Net earnings |
$ 465.7 |
$ 556.7 |
-16.4% |
-13.3% |
Net earnings per share - basic |
$ 7.78 |
$ 8.62 |
-9.7% |
|
Net earnings per share - diluted |
$ 7.72 |
$ 8.56 |
-9.8% |
-6.5% |
Weighted average shares - basic |
59.9 |
64.6 |
-7.3% |
|
Weighted average shares - diluted |
60.3 |
65.1 |
-7.3% |
|
(a) Revenues from services include fees received from our franchise offices of $18.4 million and $24.1 million for the years ended December 31, 2019 and 2018, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $822.1 million and $1,056.6 million for the years ended December 31, 2019 and 2018, respectively. |
||||
(b) The goodwill impairment charge for the year ended December 31, 2019 relates to our investments in Germany and New Zealand. |
ManpowerGroup |
||||
Operating Unit Results |
||||
(In millions) |
||||
Year Ended December 31 |
||||
% Variance |
||||
Amount |
Constant |
|||
2019 |
2018 |
Reported |
Currency |
|
(Unaudited) |
||||
Revenues from Services: |
||||
Americas: |
||||
United States (a) |
$ 2,507.0 |
$ 2,522.3 |
-0.6% |
-0.6% |
Other Americas |
1,675.3 |
1,637.0 |
2.3% |
10.0% |
4,182.3 |
4,159.3 |
0.6% |
3.6% |
|
Southern Europe: |
||||
France |
5,459.7 |
5,827.7 |
-6.3% |
-1.2% |
Italy |
1,506.5 |
1,670.6 |
-9.8% |
-4.9% |
Other Southern Europe |
2,200.2 |
1,873.3 |
17.5% |
21.9% |
9,166.4 |
9,371.6 |
-2.2% |
2.8% |
|
Northern Europe |
4,691.3 |
5,370.5 |
-12.6% |
-7.6% |
APME |
2,627.2 |
2,890.3 |
-9.1% |
-7.2% |
Right Management |
196.3 |
199.5 |
-1.6% |
0.9% |
$20,863.5 |
$21,991.2 |
-5.1% |
-0.9% |
|
Operating Unit Profit: |
||||
Americas: |
||||
United States |
$ 113.2 |
$ 130.8 |
-13.4% |
-13.4% |
Other Americas |
73.1 |
73.1 |
-0.1% |
4.9% |
186.3 |
203.9 |
-8.6% |
-6.8% |
|
Southern Europe: |
||||
France |
284.3 |
290.4 |
-2.1% |
3.0% |
Italy |
102.6 |
111.1 |
-7.7% |
-2.7% |
Other Southern Europe |
67.7 |
66.1 |
2.4% |
5.3% |
454.6 |
467.6 |
-2.8% |
2.0% |
|
Northern Europe |
67.1 |
122.7 |
-45.3% |
-42.4% |
APME |
122.6 |
114.8 |
6.8% |
7.4% |
Right Management |
30.0 |
32.8 |
-8.6% |
-6.9% |
860.6 |
941.8 |
|||
Corporate expenses |
(121.9) |
(110.0) |
||
Goodwill impairment charge |
(64.0) |
- |
||
Intangible asset amortization expense |
(29.8) |
(35.1) |
||
Operating profit |
644.9 |
796.7 |
-19.1% |
-15.6% |
Interest and other income (expenses), net (b) |
40.6 |
(42.0) |
||
Earnings before income taxes |
$ 685.5 |
$ 754.7 |
||
(a) In the United States, revenues from services include fees received from our franchise offices of $14.1 million and $15.0 million for the years ended December 31, 2019 and 2018, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $594.3 million and $651.2 million for the years ended December 31, 2019 and 2018, respectively. |
||||
(b) The components of interest and other (income) expenses, net were: |
||||
2019 |
2018 |
|||
Interest expense |
$ 44.4 |
$ 47.0 |
||
Interest income |
(6.0) |
(6.0) |
||
Foreign exchange loss |
6.7 |
1.4 |
||
Miscellaneous income (c) |
(85.7) |
(0.4) |
||
$ (40.6) |
$ 42.0 |
|||
(c) Includes an $80.0 million gain related to our acquisition of the remaining controlling interest in our Swiss franchise. |
ManpowerGroup |
|||
Consolidated Balance Sheets |
|||
(In millions) |
|||
Dec. 31 |
Dec. 31 |
||
2019 |
2018 |
||
(Unaudited) |
|||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 1,025.8 |
$ 591.9 |
|
Accounts receivable, net |
5,273.1 |
5,276.1 |
|
Prepaid expenses and other assets |
185.6 |
129.1 |
|
Total current assets |
6,484.5 |
5,997.1 |
|
Other assets: |
|||
Goodwill |
1,260.1 |
1,297.1 |
|
Intangible assets, net |
268.6 |
246.3 |
|
Operating lease right-of-use asset |
448.5 |
- |
|
Other assets |
618.8 |
826.7 |
|
Total other assets |
2,596.0 |
2,370.1 |
|
Property and equipment: |
|||
Land, buildings, leasehold improvements and equipment |
605.5 |
613.6 |
|
Less: accumulated depreciation and amortization |
462.2 |
461.0 |
|
Net property and equipment |
143.3 |
152.6 |
|
Total assets |
$ 9,223.8 |
$ 8,519.8 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 2,474.9 |
$ 2,266.7 |
|
Employee compensation payable |
206.4 |
209.7 |
|
Accrued liabilities |
545.4 |
411.0 |
|
Accrued payroll taxes and insurance |
649.7 |
729.8 |
|
Value added taxes payable |
504.0 |
508.6 |
|
Short-term borrowings and current maturities of long-term debt |
61.0 |
50.1 |
|
Total current liabilities |
4,441.4 |
4,175.9 |
|
Other liabilities: |
|||
Long-term debt |
1,012.4 |
1,025.3 |
|
Long-term operating lease liability |
336.7 |
- |
|
Other long-term liabilities |
671.8 |
620.1 |
|
Total other liabilities |
2,020.9 |
1,645.4 |
|
Shareholders' equity: |
|||
ManpowerGroup shareholders' equity |
|||
Common stock |
1.2 |
1.2 |
|
Capital in excess of par value |
3,370.6 |
3,337.5 |
|
Retained earnings |
3,494.1 |
3,157.7 |
|
Accumulated other comprehensive loss |
(441.0) |
(399.8) |
|
Treasury stock, at cost |
(3,681.9) |
(3,471.7) |
|
Total ManpowerGroup shareholders' equity |
2,743.0 |
2,624.9 |
|
Noncontrolling interests |
18.5 |
73.6 |
|
Total shareholders' equity |
2,761.5 |
2,698.5 |
|
Total liabilities and shareholders' equity |
$ 9,223.8 |
$ 8,519.8 |
ManpowerGroup |
|||
Consolidated Statements of Cash Flows |
|||
(In millions) |
|||
Year Ended |
|||
December 31 |
|||
2019 |
2018 |
||
(Unaudited) |
|||
Cash Flows from Operating Activities: |
|||
Net earnings |
$ 465.7 |
$556.7 |
|
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|||
Depreciation and amortization |
77.2 |
85.8 |
|
Non-cash gain on disposition of previously held equity interest |
(80.4) |
- |
|
Non-cash gain on disposition of previously held controlling interest |
(30.4) |
- |
|
Non-cash lease expense |
136.4 |
- |
|
Non-cash goodwill impairment charge |
64.0 |
- |
|
Deferred income taxes |
(43.0) |
(11.9) |
|
Provision for doubtful accounts |
21.8 |
23.0 |
|
Share-based compensation |
26.3 |
27.8 |
|
Changes in operating assets and liabilities, excluding the impact of acquisitions: |
|||
Accounts receivable |
(80.2) |
(146.4) |
|
Other assets |
122.3 |
58.7 |
|
Other liabilities |
134.7 |
(110.6) |
|
Cash provided by operating activities |
814.4 |
483.1 |
|
Cash Flows from Investing Activities: |
|||
Capital expenditures |
(52.9) |
(64.7) |
|
Acquisitions of businesses, net of cash acquired |
77.8 |
(9.1) |
|
Impact to cash resulting from deconsolidation of subsidiaries |
(57.9) |
- |
|
Proceeds from the sale of subsidiaries, investments, property and equipment |
16.8 |
18.9 |
|
Cash used in investing activities |
(16.2) |
(54.9) |
|
Cash Flows from Financing Activities: |
|||
Net change in short-term borrowings |
11.2 |
3.5 |
|
Proceeds from long-term debt |
9.6 |
583.3 |
|
Repayments of long-term debt |
(1.3) |
(408.6) |
|
Payments for debt issuance costs |
- |
(2.5) |
|
Payments of contingent consideration for acquisitions |
(22.8) |
(18.6) |
|
Proceeds from share-based awards |
7.0 |
5.2 |
|
Payments to noncontrolling interests |
(2.1) |
(1.9) |
|
Other share-based award transactions |
(7.2) |
(17.3) |
|
Repurchases of common stock |
(203.0) |
(500.7) |
|
Dividends paid |
(129.3) |
(127.3) |
|
Miscellaneous, net |
0.5 |
- |
|
Cash used in financing activities |
(337.4) |
(484.9) |
|
Effect of exchange rate changes on cash |
(26.9) |
(40.4) |
|
Change in cash and cash equivalents |
433.9 |
(97.1) |
|
Cash and cash equivalents, beginning of period |
591.9 |
689.0 |
|
Cash and cash equivalents, end of period |
$1,025.8 |
$591.9 |
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SOURCE
Jack McGinnis, +1.414.906.7977, jack.mcginnis@manpowergroup.com