Attached files
| file | filename |
|---|---|
| EX-99.1 - EXHIBIT 99.1 - ManpowerGroup Inc. | ex123117991pressrelease.htm |
| 8-K - 8-K - ManpowerGroup Inc. | man-123117x8k.htm |
ManpowerGroup Fourth Quarter Results | February 2, 2018
Exhibit 99.2
ManpowerGroup February 2018 2
FORWARD-LOOKING STATEMENT
This presentation contains statements, including financial projections, that are forward-
looking in nature. These statements are based on managements’ current expectations or
beliefs, and are subject to known and unknown risks and uncertainties regarding
expected future results. Actual results might differ materially from those projected in the
forward-looking statements. Additional information concerning factors that could cause
actual results to materially differ from those in the forward-looking statements is contained
in the ManpowerGroup Inc. Annual Report on Form 10-K dated December 31, 2016,
which information is incorporated herein by reference, and such other factors as may be
described from time to time in the Company’s SEC filings. Any forward-looking
statements in this presentation speak only as of the date hereof. The Company assumes
no obligation to update or revise any forward-looking statements.
ManpowerGroup February 2018 3
ManpowerGroup 2017 Fourth Quarter Results
Throughout this presentation, the difference between reported variances and Constant Currency (CC) variances represents the
impact of changes in currency on our financial results. Constant Currency is further explained in the Annual Report on our Web site.
Consolidated Financial Highlights
As
Reported Q4 Financial Highlights
14%
Revenue $5.6B
7% CC
40 bps
Gross Margin 16.6%
13%
Operating Profit $239M
6% CC
10 bps OP Margin 4.2%
72%
EPS $3.22
67% CC
ManpowerGroup February 2018 4
ManpowerGroup 2017 Fourth Quarter Results
As
Reported
Excluding
Restructuring
Costs(1)
2017 Financial Highlights
7% 7%
Revenue $21.0B
6% CC 6% CC
40 bps 40 bps Gross Margin 16.6%
5% 10%
Operating Profit $788M
3% CC 8% CC
10 bps
10 bps
OP Margin 3.7%
28% 35%
EPS $8.04
27% CC 33% CC
Consolidated Financial Highlights
(1) Excludes the impact of restructuring costs of $34.5M ($27.8M net of tax) in H1 2017.
ManpowerGroup February 2018 5
ManpowerGroup 2017 Fourth Quarter Results
Throughout this presentation, the difference between reported variances and Constant Currency (CC) variances represents the
impact of changes in currency on our financial results. Constant Currency is further explained in the Annual Report on our Web site.
Consolidated Financial Highlights (CFO Commentary)
As
Reported Q4 Financial Highlights
14%
Revenue $5.6B
7% CC
40 bps
Gross Margin 16.6%
13%
Operating Profit $239M
6% CC
10 bps OP Margin 4.2%
72%
EPS $3.22
67% CC
ManpowerGroup February 2018 6
ManpowerGroup 2017 Fourth Quarter Results
EPS Bridge – Q4 vs. Guidance Midpoint
$2.12
$2.05
$2.12
$3.22
+0.07 +0.02 -0.02
Q4 2017
Guidance
Midpoint
Operational
Performance
Tax rate excluding
tax reform
(36.4% vs 37.0%)
Other/Currency Q4 2017
excluding tax
reform
Discrete impacts
of tax reform
Q4 2017
+1.10
ManpowerGroup February 2018 7
ManpowerGroup 2017 Fourth Quarter Results
Note: Provision for income taxes for 2017 included $72M of the French business tax (CVAE), which is classified as income taxes in
accordance with U.S. GAAP. This represented 6.5% of the effective tax rate in 2017.
Provision for Income Taxes
(in millions of USD)
Tax ETR Tax ETR
Provision for income taxes, excluding tax reform (82) 36.4% (266) 36.0%
Discrete impacts of tax reform:
US tax reform
Change in deferred taxes due to Territorial Tax Regime 248 248
Transition tax on one-time deemed repatriation (170) (170)
France tax reform
Change in deferred taxes due to tax rate reductions (4) (4)
Total discrete tax items 74 74
Provision for income taxes, as reported (8) 3.4% (192) 26.0%
Q4 YTD
ManpowerGroup February 2018 8
ManpowerGroup 2017 Fourth Quarter Results
17.0%
16.6%
Q4 2016 Staffing/Interim Permanent
Recruitment
Solutions Right
Management
Currency Q4 2017
-0.5%
-0.1% +0.1%
-0.1% +0.2%
Consolidated Gross Margin Change
ManpowerGroup February 2018 9
ManpowerGroup 2017 Fourth Quarter Results
Growth
█ Manpower █ Experis █ ManpowerGroup Solutions █ Right Management █ ManpowerGroup – Total
Business Line Gross Profit – Q4 2017
$592M
63%
$185M
20%
$122M
13%
$36M
4%
$935M
11%
5% CC
9%
5% CC
22%
17% CC
-7%
-10% CC
11%
5% CC
ManpowerGroup February 2018 10
ManpowerGroup 2017 Fourth Quarter Results
629.0
695.8
Q4 2016 Currency Acquisitions Operational
Impact
Q4 2017
+33.6
+30.1
12.7%
% of Revenue % of Revenue
12.3%
+3.1
SG&A Expense Bridge – Q4 YoY
(in millions of USD)
ManpowerGroup February 2018 11
ManpowerGroup 2017 Fourth Quarter Results
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 Q4 Financial Highlights
1%
Revenue $1.1B
0% CC
8%
OUP $58M
8% CC
40 bps OUP Margin 5.4%
ManpowerGroup February 2018 12
ManpowerGroup 2017 Fourth Quarter Results
Revenue Growth - CC Revenue Growth
% of Segment
Revenue
Americas – Q4 Revenue Growth YoY
Average Daily
Revenue Growth - CC
-3%
15%
-2%
5%
-3%
10%
12%
3%
US
Mexico
Argentina
Other
63%
13%
5%
19%
-3%
12%
12%
ManpowerGroup February 2018 13
ManpowerGroup 2017 Fourth Quarter Results
As
Reported Q4 Financial Highlights
25%
Revenue $2.4B
15% CC
31%
OUP $133M
20% CC
20 bps OUP Margin 5.5%
Southern Europe Segment
(41% of Revenue)
ManpowerGroup February 2018 14
ManpowerGroup 2017 Fourth Quarter Results
(1)
Southern Europe – Q4 Revenue Growth YoY
Revenue Growth - CC Revenue Growth
% of Segment
Revenue
(1) On an organic basis, revenue for Spain increased 23% (+12% in CC; and 12% on an average daily revenue basis).
Average Daily
Revenue Growth - CC
22%
40%
33%
19%
12%
28%
22%
9%
France
Italy
Spain
Other
63%
17%
7%
13%
12%
31%
22%
ManpowerGroup February 2018 15
ManpowerGroup 2017 Fourth Quarter Results
Northern Europe Segment
(25% of Revenue)
As
Reported Q4 Financial Highlights
10%
Revenue $1.4B
2% CC
4%
OUP $47M
10% CC
50 bps OUP Margin 3.3%
ManpowerGroup February 2018 16
ManpowerGroup 2017 Fourth Quarter Results
3%
15%
7%
13%
11%
22%
-3%
5%
1%
4%
1%
11%
UK
Germany
Nordics
Netherlands
Belgium
Other
30%
21%
20%
14%
8%
7%
-3%
8%
2%
6%
1%
Northern Europe – Q4 Revenue Growth YoY
Revenue Growth - CC Revenue Growth
% of Segment
Revenue
Average Daily
Revenue Growth - CC
ManpowerGroup February 2018 17
ManpowerGroup 2017 Fourth Quarter Results
As
Reported Q4 Financial Highlights
10%
Revenue $695M
9% CC
31%
OUP $28M
30% CC
60 bps OUP Margin 4.0%
APME Segment
(13% of Revenue)
ManpowerGroup February 2018 18
ManpowerGroup 2017 Fourth Quarter Results
APME – Q4 Revenue Growth YoY
Revenue Growth - CC Revenue Growth
% of Segment
Revenue
Average Daily
Revenue Growth - CC
3%
3%
20%
7%
1%
15%
Japan
Australia/NZ
Other
33%
23%
44%
3%
1%
ManpowerGroup February 2018 19
ManpowerGroup 2017 Fourth Quarter Results
As
Reported Q4 Financial Highlights
9%
Revenue $53M
12% CC
11%
OUP $11M
13% CC
40 bps OUP Margin 19.9%
Right Management Segment
(1% of Revenue)
ManpowerGroup February 2018 20
ManpowerGroup 2017 Fourth Quarter Results
Cash Flow Summary – Full Year
(in millions of USD) 2017 2016
Net Earnings 545 444
Non-cash Provisions and Other (65) 206
Change in Operating Assets/Liabilities (79) (50)
Capital Expenditures (55) (57)
Free Cash Flow 346 543
Change in Debt 5 (7)
Acquisitions of Businesses, including Contingent
Considerations, net of cash acquired (46) (61)
Other Equity Transactions 16 13
Repurchases of Common Stock (204) (482)
Dividends Paid (124) (118)
Effect of Exchange Rate Changes 83 (24)
Other 15 4
Change in Cash 91 (132)
ManpowerGroup February 2018 21
ManpowerGroup 2017 Fourth Quarter Results
Balance Sheet Highlights
Total Debt
(in millions of USD)
Total Debt to
Total Capitalization
Total Debt
Net Debt (Cash)
(221) (231) 125
227
109
318 256 259
923 948
516 468
855 825 834 891
-250
50
350
650
950
2013 2014 2015 2016 Q1 Q2 Q3 Q4
2017
15% 14%
24% 25% 25%
26% 25% 25%
0%
10%
20%
30%
2013 2014 2015 2016 Q1 Q2 Q3 Q4
2017
ManpowerGroup February 2018 22
ManpowerGroup 2017 Fourth Quarter Results
(1) 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
0.73 and a fixed charge coverage ratio of 5.22 as of December 31, 2017. As of December 31, 2017, there were $0.8M of standby letters of credit
issued under the agreement.
(2) Represents subsidiary uncommitted lines of credit & overdraft facilities, which total $324.1M. 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 - €350M 4.505% Jun 2018 420 -
Euro Notes - €400M 1.913% Sep 2022 478 -
Revolving Credit Agreement 2.56% Sep 2020 - 599
Uncommitted lines and Other Various Various 50 274
Total Debt 948 873
Debt and Credit Facilities – December 31, 2017
(in millions of USD)
(2)
(1)
ManpowerGroup February 2018 23
ManpowerGroup 2017 Fourth Quarter Results
First Quarter Outlook
Total Up 13-15% (Up 4-6% CC)
Americas Flat/Down 2% (Flat/Down 2% CC)
Southern Europe Up 26-28% (Up 10-12% CC)
Northern Europe Up 12-14% (Flat/Up 2% CC)
APME Up 3-5% (Up 1-3% CC)
Right Management Down 6-8% (Down 11-13% CC)
Gross Profit Margin 16.2 – 16.4%
Operating Profit
Margin 3.0 – 3.2%
Tax Rate 29%
EPS $1.60 – $1.68 (favorable $0.15
currency)
Revenue
33-34%
Anticipated elimination of French
tax benefit as CICE transitions to
a taxable subsidy.
Annual Tax Rate Expectations(1)
27-28%
No U.S. tax on repatriations
CICE tax exempt
2018:
2019:
(1) These estimates may be refined in future periods as further
information becomes available.
February 2018 24 ManpowerGroup
Our Strategies and Key
Priorities provide the
platform to achieve our
new Financial Targets
ManpowerGroup February 2018 25
ManpowerGroup 2017 Fourth Quarter Results
Strong Market Growth Fundamentals
Companies demanding flexibility in cost structure
given more volatile global economic cycles.
Companies looking to the “experts”
for workforce management solutions.
Massive opportunity in emerging markets
in Asia, Eastern Europe and Latin America.
Job seekers looking for current positions as
well as career advice and assistance.
Companies reducing the number of vendors,
partnering with those that best meet their talent needs.
ManpowerGroup February 2018 26
ManpowerGroup 2017 Fourth Quarter Results
Strong and Connected Brands
63% of GP
Leverage our trusted brand,
while driving relentless
efficiency / productivity
• Targeted sales
• Permanent
recruitment growth
• Multi-channel delivery
• Centers of recruiting
excellence
• Core growth in Experis IT
• Innovative talent
resourcing
• Permanent recruitment
growth
• Delivery excellence
• Career Transition /
Talent Management &
Assessment
• Tailored solutions to
improve the effectiveness
of organizations and
individuals
• RPO, MSP, Proservia,
TBO
• Expert workforce
solutions that deliver
performance
37% of GP
Drive higher growth and gross margin while investing more in changing our business mix
Sustainability, Mission and Values
We are a world leader in innovative workforce solutions and services,
helping clients win through our family of brands and offerings.
Digitally-Fueled Transformation
ManpowerGroup February 2018 27
ManpowerGroup 2017 Fourth Quarter Results
Profitable Growth Through Value Creation
For our
Clients
For our
Candidates
Profitable Growth
• Workforce experts
providing world-leading
workforce solutions
• Flexibility to meet their
talent needs
• Frictionless interaction
• Tailored solutions for each
client – one size fits one
• Globally diversified with a
superior global footprint.
• Provide candidates
with skills and the best
opportunities to meet
their career goals
• Frictionless recruiting
• Associate apps to
enhance connection
with candidates and
associates
Our Employees
Enabled by Technology
• Passionate; highly trained
• Strength in our last-mile delivery
• Skill focus
• Strong culture of collaboration and diversity
• Recognized for corporate social responsibility
• High employee engagement and net promoter scores
ManpowerGroup February 2018 28
ManpowerGroup 2017 Fourth Quarter Results
SEARCH
Data Analytics
ASSESS
Volume Screening
& Assessment
MEASURE
Analytics & Reporting tools
PERSONALIZE
Candidate experience
ENGAGE
Candidate Relationship
Management
MANAGE
Candidate Experience data
Powering the Future of Work – Enabled by Technology
Enabling employees to efficiently deliver a personalized
candidate experience and valuable insights for clients.
DATA ANALYTICS
NEXT GEN APPLICATIONS
DATA CENTER CONSOLIDATION
FOCUS ON CYBERSECURITY
Enhanced digital experience through
ManpowerGroup Digital Ecosystem.
Enhanced digital experience through
ManpowerGroup Digital Ecosystem
ManpowerGroup February 2018 29
ManpowerGroup 2017 Fourth Quarter Results
Financial Targets
• Exceed or maintain key market revenue growth
• Disciplined profitable growth
• Focus on improvement in client mix
• Assumes stable economic environment and
consistent revenue growth and pricing
• Growth driven by:
− gross profit improvement
− continued steady efficiency/productivity
enhancements
• Disciplined capital allocation to achieve a return
well above cost of capital
• Rigorous cash management with a focus on DSO
• EBITA margin growth enabled
• Capital efficiency metric in Executive Team and
Global Management incentive plans for nearly 20
years
EBITA
Margin 4.5% - 5.0%
Market Revenue Growth
15% ROIC
ManpowerGroup February 2018 30
ManpowerGroup 2017 Fourth Quarter Results
Q & A