Manpowergroup · NYSE:MAN
Manpowergroup — Q3 2017 Earnings Presentation
21 slides from Manpowergroup's earnings presentation, Oct 20, 2017
Slide 1: Third Quarter Results
ManpowerGroup Third Quarter Results | October 20, 2017 Exhibit 99.2
Slide 2: Forward-Looking Statement
ManpowerGroup October 2017 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
Slide 3: Consolidated Financial Highlights
ManpowerGroup October 2017 3 ManpowerGroup 2017 Third 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 Annu
Slide 4: EPS Bridge – Q3 vs. Guidance Midpoint
ManpowerGroup October 2017 4 ManpowerGroup 2017 Third Quarter Results EPS Bridge – Q3 vs. Guidance Midpoint
Slide 5: Consolidated Gross Margin Change
ManpowerGroup October 2017 5 ManpowerGroup 2017 Third Quarter Results Consolidated Gross Margin Change 16.9% 16.5% Q3 2016 Staffing/Interim Solutions Right Management Q3 2017 -0.4% -0.1% +0.1%
Slide 6: Total Business Line Gross Profit – Q3 2017
ManpowerGroup October 2017 6 ManpowerGroup 2017 Third Quarter Results Growth █ Manpower █ Experis █ ManpowerGroup Solutions █ Right Management █ ManpowerGroup – Total Business Line Gross Profit – Q3 2017 $575M 64% $174M 19% $120M 13% $32M 4% $901M 8% 4% CC -2% -4% CC 11% 9% CC -18% -19% CC 5% 2% CC
Slide 7: SG&A Expense Bridge – Q3 YoY
ManpowerGroup October 2017 7 ManpowerGroup 2017 Third Quarter Results SG&A Expense Bridge – Q3 YoY (in millions of USD) 647.2 672.7 Q3 2016 Currency Acquisitions Operational Impact Q3 2017 +16.9 +5.5 12.7% % of Revenue % of Revenue 12.3% +3.1
Slide 8: Americas Segment
ManpowerGroup October 2017 8 ManpowerGroup 2017 Third 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
Slide 9: Americas – Q3 Revenue Growth
ManpowerGroup October 2017 9 ManpowerGroup 2017 Third Quarter Results Revenue Growth - CC Revenue Growth % of Segment Revenue Americas – Q3 Revenue Growth YoY Average Daily Revenue Growth - CC -9% 21% 4% -4% -9% 15% 20% -6% US Mexico Argentina Other 62% 14% 4% 20% -7% 15% 20%
Slide 10: Southern Europe Segment
ManpowerGroup October 2017 10 ManpowerGroup 2017 Third Quarter Results As Reported Q3 Financial Highlights 18% Revenue $2.3B 12% CC 16% OUP $117M 11% CC 0 bps OUP Margin 5.1% Southern Europe Segment (42% of Revenue)
Slide 11: Southern Europe – Q3 Revenue Growth
ManpowerGroup October 2017 11 ManpowerGroup 2017 Third Quarter Results (1) Southern Europe – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue (1) On an organic basis, revenue for Spain increased 9% (+4% in CC). Average Daily Revenue Growth - CC 16% 29% 17% 15% 10% 23% 12
Slide 12: Northern Europe Segment
ManpowerGroup October 2017 12 ManpowerGroup 2017 Third Quarter Results Northern Europe Segment (25% of Revenue) As Reported Q3 Financial Highlights 5% Revenue $1.4B 1% CC 8% OUP $49M 12% CC 50 bps OUP Margin 3.6%
Slide 13: Northern Europe – Q3 Revenue Growth
ManpowerGroup October 2017 13 ManpowerGroup 2017 Third Quarter Results Northern Europe – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue (1) On an organic basis, revenue for the Nordics increased 11% (+6% in CC). (1) Average Daily Revenue Growth - CC -8% 15% 13% 6% 7% 2
Slide 14: APME Segment
ManpowerGroup October 2017 14 ManpowerGroup 2017 Third Quarter Results As Reported Q3 Financial Highlights 2% Revenue $665M 4% CC 8% OUP $27M 9% CC 20 bps OUP Margin 4.1% APME Segment (12% of Revenue)
Slide 15: APME – Q3 Revenue Growth
ManpowerGroup October 2017 15 ManpowerGroup 2017 Third Quarter Results APME – Q3 Revenue Growth YoY Revenue Growth - CC Revenue Growth % of Segment Revenue Average Daily Revenue Growth - CC -5% 0% 9% 3% -3% 8% Japan Australia/NZ Other 32% 24% 44% 3% -3%
Slide 16: Right Management Segment
ManpowerGroup October 2017 16 ManpowerGroup 2017 Third Quarter Results As Reported Q3 Financial Highlights 19% Revenue $52M 20% CC 8% OUP $8M 8% CC 180 bps OUP Margin 15.7% Right Management Segment (1% of Revenue)
Slide 17: Cash Flow Summary – YTD
ManpowerGroup October 2017 17 ManpowerGroup 2017 Third Quarter Results Cash Flow Summary – 9 Months YTD (in millions of USD) 2017 2016 Net Earnings 329 316 Non-cash Provisions and Other 138 136 Change in Operating Assets/Liabilities (180) (49) Capital Expenditures (40) (43) Free Cash Flow 247 360 Ch
Slide 18: Balance Sheet Highlights
ManpowerGroup October 2017 18 ManpowerGroup 2017 Third Quarter Results Balance Sheet Highlights Total Debt (in millions of USD) Total Debt to Total Capitalization Total Debt Net Debt (Cash) -221 -231 125 227 109 318 256 923 516 468 855 825 834 891 -300 0 300 600 900 2013 2014 2015 2016 Q1 Q2 Q3 2017
Slide 19: Debt Facilities and Covenants
ManpowerGroup October 2017 19 ManpowerGroup 2017 Third 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 coven
Slide 20: Fourth Quarter Outlook
ManpowerGroup October 2017 20 ManpowerGroup 2017 Third Quarter Results Fourth Quarter Outlook Revenue Total Up 11-13% (Up 5-7% CC) Americas Flat/Up 2% (Flat/Down 2% CC) Southern Europe Up 22-24% (Up 12-14% CC) Northern Europe Up 7-9% (Down/Up 1% CC) APME Up 8-10% (Up 6-8% CC) Right Management Down 3
Slide 21: Key Take Aways
ManpowerGroup October 2017 21 ManpowerGroup 2017 Third Quarter Results Solid third quarter performance. We continue to balance profitable growth and overall efficiency with continued investments in digital applications and process enhancements to meet the needs of our clients, candidates and employe