- Revenue: $4.5 billion, down 3% year-over-year in constant currency.
- EBITA: $109 million reported; $112 million adjusted, representing a 9% decrease in constant currency year-over-year.
- EBITA Margin: 2.4% reported; 2.5% adjusted.
- Earnings per Diluted Share: $1.24 reported; $1.30 adjusted, a 12% decrease year-over-year in constant currency.
- Gross Profit Margin: 17.4% for the quarter.
- SG&A Expense: $685 million reported; 5% lower year-over-year on a constant currency basis excluding Proservia run-off.
- Free Cash Flow: Outflow of $150 million during the quarter.
- Debt: Total debt of $1.1 billion; net debt of $630 million.
- Share Repurchases: 371,000 shares for $27 million.
- Revenue by Segment:
- Americas: $1.1 billion, 5% increase in constant currency.
- Southern Europe: $2.1 billion, 4% decrease in constant currency.
- Northern Europe: $837 million, 12% decline in constant currency.
- Asia Pacific Middle East: $541 million, 1% decrease in organic constant currency.
Release Date: July 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue for the second quarter was $4.5 billion, slightly above the midpoint of the constant currency guidance range.
- The US business showed signs of stabilization, with revenue in the US Manpower brand decreasing only 2% compared to a 13% decline in the first quarter.
- The company is making significant progress in its digitization strategy, which is expected to drive medium and long-term productivity and efficiency enhancements.
- ManpowerGroup Inc (MAN, Financial) has been recognized for its sustainability efforts, being named by Time Magazine as a World's Most Sustainable company.
- The company has a diversified business mix and geographic footprint, which is serving it well in a challenging environment.
Negative Points
- Revenue decreased by 3% year-over-year in constant currency.
- Adjusted EBITA decreased by 9% year-over-year in constant currency.
- Permanent recruitment activity decreased, particularly in Europe, contributing to a 50 basis points reduction in gross profit margin.
- The Northern Europe segment experienced a 12% decline in revenue in constant currency, with significant pressure in the UK and Germany.
- The company anticipates ongoing low levels of permanent recruitment activity and a challenging environment in North America and Europe for the third quarter.
Q & A Highlights
Highlights from ManpowerGroup Inc (MAN) Q2 2024 Earnings Call
Q: Can we get more color on the underlying growth in the US, particularly in terms of customer feedback and trends?
A: Jonas Prising, CEO: The US market showed stability in Q2, with positive movements in Manpower, Experis, and Talent Solutions. However, demand remains soft, and we do not see an inflection point yet. The market has broadly stabilized, which is positive, but we are cautious about future demand.Q: Can you provide more details on the perm weakness in Europe and any similar trends in North America?
A: Jonas Prising, CEO: Perm hiring has softened more in Europe, particularly in France and Italy. In North America, perm hiring is stabilizing. Employers are prioritizing temporary staffing over permanent hires due to fragile confidence.Q: What is the current pricing environment, and are there any pressures on permanent recruitment pricing?
A: Jonas Prising, CEO: Pricing remains rational and stable due to solid underlying labor markets. Wage inflation has moderated, but demand for talent keeps pricing disciplined. On the perm side, fees remain stable, but demand has decreased, especially in Europe.Q: How are the recent political changes and upcoming Olympics in France expected to impact your business?
A: Jonas Prising, CEO: Political uncertainty in France has caused some hesitation in perm hiring. The Olympics may provide a slight boost, but it will be limited to the Paris region and short-lived. Overall, the impact is manageable, and we are prepared to adapt to any new policies.Q: Can you elaborate on the improvement in the US Experis business and the impact of the healthcare IT Go Live project?
A: Jonas Prising, CEO: The US Experis business showed stability, with a significant boost from the healthcare IT Go Live project. Excluding this project, underlying trends are stable. We expect this stability to continue into Q3, with opportunities for growth as enterprise demand stabilizes.Q: What is the outlook for Northern Europe, especially after winding down the Proservia business in Germany?
A: Jack McGinnis, CFO: Northern Europe remains challenging, but the completion of the Proservia wind-down removes a significant drag. We expect improved profitability as we move out of the current slump and see more traditional trends emerge in manufacturing and other sectors.Q: What is driving the greater than expected softening in perm recruitment, and are there specific verticals impacted more than others?
A: Jack McGinnis, CFO: The softening in perm recruitment is more pronounced in Europe, particularly in France and Italy. It is driven by employer confidence and broader economic uncertainty rather than specific sectors.Q: Can you discuss the trends in Europe and whether there is any incremental softening expected in the second half?
A: Jonas Prising, CEO: Europe shows stability at a lower level, with some weakness in Northern Europe, especially the Nordics. The ECB's decision to hold rates steady and the cooling economy are playing out as expected. We do not see an inflection point yet but are prepared for when it occurs.Q: How are clients prioritizing hiring for core skills, and is there a structural change in hiring mindset due to AI and technology?
A: Jonas Prising, CEO: Employers are prioritizing retaining and developing their current workforce due to past hiring challenges and wage inflation. We do not see a structural shift in hiring but rather traditional staffing dynamics playing out. The focus is on stability and readiness for future demand improvements.Q: What level of macro improvements would be required for employers to become more aggressive in hiring?
A: Jonas Prising, CEO: It is hard to predict the exact level of improvement needed. Factors like geopolitical uncertainties, interest rate changes, and inventory adjustments in manufacturing will play a role. Employers are cautious but will likely increase hiring as confidence in a stable environment grows.For the complete transcript of the earnings call, please refer to the full earnings call transcript.
ManpowerGroup Inc (MAN) Q2 2024 Earnings Call Transcript Highlights: Revenue Decline Amidst Stabilization Efforts
ManpowerGroup Inc (MAN) reports a 3% year-over-year revenue decrease, with signs of stabilization in the US market and ongoing challenges in Europe.
