Manpowergroup · NYSE:MAN
Manpowergroup — Q4 2017 Earnings Presentation
30 slides from Manpowergroup's earnings presentation, Feb 2, 2018
Slide 1: Fourth Quarter Results
ManpowerGroup Fourth Quarter Results | February 2, 2018 Exhibit 99.2
Slide 2: Forward-Looking Statement
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 uncertaintie
Slide 3: 2017 Fourth Quarter Results: Consolidated Financial Highlights
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 An
Slide 4: 2017 Financial Highlights
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
Slide 5: Consolidated Financial Highlights (CFO Commentary)
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 An
Slide 6: EPS Bridge – Q4 vs. Guidance Midpoint
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 Discret
Slide 7: Provision for Income Taxes
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
Slide 8: Consolidated Gross Margin Change
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
Slide 9: Total Business Line Gross Profit – Q4 2017
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% C
Slide 10: SG&A Expense Bridge – Q4 YoY
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)
Slide 11: Americas Segment
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)
Slide 12: Americas – Q4 Revenue Growth
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%
Slide 13: Southern Europe Segment
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)
Slide 14: Southern Europe – Q4 Revenue Growth
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
Slide 15: Northern Europe Segment
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%
Slide 16: Northern Europe – Q4 Revenue Growth
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 Averag
Slide 17: APME Segment
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)
Slide 18: APME – Q4 Revenue Growth
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%
Slide 19: Right Management Segment
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)
Slide 20: Cash Flow Summary – Full Year
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 Cha
Slide 21: Balance Sheet Highlights
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
Slide 22: Debt and Credit Facilities
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 cov
Slide 23: First Quarter Outlook
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%
Slide 24: Our Strategies and Key Priorities provide the platform to achieve our new Financial Targets
February 2018 24 ManpowerGroup Our Strategies and Key Priorities provide the platform to achieve our new Financial Targets
Slide 25: Strong Market Growth Fundamentals
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 emerg
Slide 26: Strong and Connected Brands
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 •
Slide 27: Profitable Growth Through Value Creation
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 •
Slide 28: Powering the Future of Work – Enabled by Technology
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 Wo
Slide 29: Financial Targets
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 driv
Slide 30: Q & A
ManpowerGroup February 2018 30 ManpowerGroup 2017 Fourth Quarter Results Q & A