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ManpowerGroup Reports 4th Quarter and Full Year 2013 Results

MILWAUKEE, Jan. 30, 2014 /PRNewswire/ -- ManpowerGroup (NYSE: MAN) today reported net earnings of $1.25 per diluted share for the three months ended December 31, 2013 compared to 68 cents per diluted share in the prior period. The net earnings in the quarter were $101.2 million compared to $53.3 million a year earlier. Revenues for the fourth quarter totaled $5.3 billion, an increase of 1 percent from the year earlier period in U.S. dollars and constant currency.

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Included in the current year fourth quarter results is a restructuring charge related to our simplification and cost recalibration plan of $26.5 million ($19.4 million after tax or 24 cents per diluted share). Included in the prior year fourth quarter is a restructuring charge of $26.6 million ($18.3 million after tax or 23 cents per diluted share). Excluding these charges, net earnings per diluted share for the three months ended December 31, 2013 increased 64 percent to $1.49 per share compared to 91 cents per share in the year earlier period. Fourth quarter results were favorably impacted by 1 cent per diluted share as foreign currencies were relatively stronger compared to the prior year.

ManpowerGroup Chairman and CEO, Jeff Joerres, said: "The fourth quarter was a good quarter with solid performances from many of our major geographies and business units. Our team continues to execute very well which is contributing nicely to our cost recalibration efforts. We were able to achieve the upper end of our revenue targets as we are experiencing a slightly more positive environment, particularly in Europe. This said, while we are gaining increased confidence we remain guarded on revenue growth in the first quarter.

"We are anticipating diluted earnings per share in the first quarter of 2014 to be in the range of 62 to 70 cents," Joerres stated.

Net earnings per diluted share for the year ended December 31, 2013 was $3.62 compared to $2.47 per diluted share in 2012. Net earnings were $288.0 million compared to $197.6 million in the prior year. Revenues for the year were $20.3 billion, a decrease of 2 percent from the prior year in U.S. dollars and constant currency.

Earnings for the full year 2013 include restructuring costs of 82 cents per diluted share. Earnings in the prior year include restructuring costs and legal settlement costs of 48 cents per diluted share. Excluding these charges, net earnings per diluted share for 2013 increased 51 percent to $4.44 per share compared to $2.95 the prior year. Additionally, 2013 results were unfavorably impacted by 1 cent per diluted share due to changes in foreign currencies compared to the prior year.

In conjunction with its fourth quarter and full year earnings release, ManpowerGroup will broadcast its conference call live over the Internet on January 30, 2014 at 7:30 a.m. CST (8:30 a.m. EST). Interested parties are invited to listen to the webcast and view the presentation by logging on to http://www.manpowergroup.com/investors.

Supplemental financial information referenced in the conference call can be found at http://www.manpowergroup.com/investors.

About ManpowerGroup

ManpowerGroup™ (NYSE: MAN) is the world leader in innovative workforce solutions that ensure the talent sustainability of the world's workforce for the good of companies, communities, countries, and individuals themselves. Specializing in solutions that help organizations achieve business agility and workforce flexibility, ManpowerGroup leverages its 65 years of world of work expertise to create the work models, design the people practices and access the talent sources its clients need for the future. From staffing, recruitment, workforce consulting, outsourcing and career management to assessment, training and development, ManpowerGroup delivers the talent to drive the innovation and productivity of organizations in a world where talentism is the dominant economic system. Every day, ManpowerGroup connects more than 600,000 people to work and builds their experience and employability through its relationships with 400,000 clients across 79 countries and territories. ManpowerGroup's suite of solutions is offered through ManpowerGroup™ Solutions, Manpower®, Experis™ and Right Management®. ManpowerGroup was named one of the World's Most Ethical Companies for the third consecutive year in 2013, confirming our position as the most trusted brand in the industry. See how ManpowerGroup makes powering the world of work humanly possible at www.manpowergroup.com. Follow ManpowerGroup Chairman and CEO Jeff Joerres on Twitter: Twitter.com/manpowergroupjj

Forward-Looking Statements

This news release contains statements, including earnings projections, 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 SEC, including the information under the heading 'Risk Factors' in its Annual Report on Form 10-K for the year ended December 31, 2012, which information is incorporated herein by reference. Any forward-looking statement in this release speaks only as of the date on which it is made.  The company assumes no obligation to update or revise any forward-looking statements. 

ManpowerGroup

Results of Operations

(In millions, except per share data)







Three Months Ended December 31




% Variance




Amount

Constant


2013

2012

Reported

Currency


(Unaudited)

Revenues from services (a)

$5,252.1

$5,202.6

1.0%

0.7%






Cost of services 

4,365.5

4,325.9

0.9%

0.7%






  Gross profit

886.6

876.7

1.1%

0.9%






Selling and administrative expenses

719.6

771.8

-6.8%

-6.8%






  Operating profit

167.0

104.9

59.1%

57.4%






Interest and other expenses

9.2

10.1

-9.7%







  Earnings before income taxes

157.8

94.8

66.5%

64.5%






Provision for income taxes

56.6

41.5

36.4%







  Net earnings

$   101.2

$     53.3

90.0%

88.5%






Net earnings per share - basic

$     1.28

$     0.68

88.2%







Net earnings per share - diluted

$     1.25

$     0.68

83.8%

82.4%






Weighted average shares - basic

79.3

78.1

1.5%







Weighted average shares - diluted 

80.8

78.6

2.8%







(a)

Revenues from services include fees received from our franchise offices of $6.4 million and $6.0 million for the three months ended December 31, 2013 and 2012, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $276.7 million and $257.4 million for the three months ended December 31, 2013 and 2012, respectively.

 

ManpowerGroup

Operating Unit Results

(In millions)







Three Months Ended December 31




% Variance




Amount

Constant


2013

2012

Reported

Currency


(Unaudited)

Revenues from Services:





  Americas:





      United States  (b)

$   750.6

$   750.7

0.0%

0.0%

      Other Americas

387.1

405.4

-4.5%

2.5%


1,137.7

1,156.1

-1.6%

0.9%

  Southern Europe:





      France

1,398.4

1,314.2

6.4%

1.4%

      Italy

281.6

268.5

4.9%

0.0%

      Other Southern Europe

240.2

194.0

23.9%

17.3%


1,920.2

1,776.7

8.1%

2.9%






  Northern Europe

1,521.6

1,487.2

2.3%

0.8%

  APME

590.5

697.7

-15.4%

-4.9%

  Right Management 

82.1

84.9

-3.3%

-2.3%


$5,252.1

$5,202.6

1.0%

0.7%






Operating Unit Profit: (a)





  Americas:





      United States

$     27.5

$     21.7

26.8%

26.8%

      Other Americas

11.9

13.9

-13.8%

-8.8%


39.4

35.6

10.9%

12.9%

  Southern Europe:





      France

69.9

35.7

95.5%

86.4%

      Italy

16.7

8.9

88.3%

79.3%

      Other Southern Europe

4.4

1.4

210.3%

193.3%


91.0

46.0

97.7%

88.4%






  Northern Europe

45.6

34.2

33.2%

32.0%

  APME

16.6

28.5

-42.1%

-34.6%

  Right Management 

6.5

8.2

-20.7%

-20.5%


199.1

152.5



Corporate expenses

(23.3)

(38.3)



Intangible asset amortization expense

(8.8)

(9.3)



    Operating profit

167.0

104.9

59.1%

57.4%

Interest and other expenses (c)

(9.2)

(10.1)



    Earnings before income taxes

$   157.8

$     94.8








(a)

On a consolidated basis, the French business tax is reported in provision for income taxes, in accordance with the current accounting guidance on income taxes.  Prior to the second quarter of 2013, we internally reviewed the financial results of our French operations including the French business tax within OUP given the operational nature of these taxes.  While we continue to view this tax as operational, during the second quarter of 2013 we changed our internal reporting to exclude the French business tax from the OUP of our France reportable segment.  Therefore our France reportable segment OUP now excludes the business tax and we no longer need to show the business tax amount separately to reconcile to the consolidated results. All previously reported segment results have been restated to conform to the current year presentation.  This change in segment reporting has no impact on our reporting of consolidated results.



(b)

In the United States, revenues from services include fees received from our franchise offices of $4.0 million and $3.7 million for the three months ended December 31, 2013 and 2012, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $183.6 million and $170.9 million for the three months ended December 31, 2013 and 2012, respectively.



(c)

The components of interest and other expenses were:





2013

2012



        Interest expense

$      8.2

$     10.7



        Interest income

(1.0)

(1.9)



        Foreign exchange losses

0.8

0.3



        Miscellaneous expenses, net

1.2

1.0




$      9.2

$     10.1



 

ManpowerGroup

Results of Operations

(In millions, except per share data)







Year Ended December 31




% Variance




Amount

Constant


2013

2012

Reported

Currency


(Unaudited)

Revenues from services (a)

$20,250.5

$20,678.0

-2.1%

-2.1%






Cost of services

16,883.8

17,236.0

-2.0%

-2.0%






  Gross profit

3,366.7

3,442.0

-2.2%

-2.1%






Selling and administrative expenses

2,854.8

3,030.3

-5.8%

-5.7%






  Operating profit

511.9

411.7

24.3%

24.3%






Interest and other expenses

36.4

43.3

-15.9%







  Earnings before income taxes

475.5

368.4

29.1%

28.9%






Provision for income taxes

187.5

170.8

9.8%







  Net earnings

$     288.0

$     197.6

45.8%

46.4%






Net earnings per share - basic

$      3.69

$      2.49

48.2%







Net earnings per share - diluted

$      3.62

$      2.47

46.6%

47.0%






Weighted average shares - basic

78.0

79.5

-1.8%







Weighted average shares - diluted

79.6

80.1

-0.7%







(a)

Revenues from services include fees received from our franchise offices of $24.4 million and $23.9 million for the years ended December 31, 2013 and 2012, respectively. These fees are primarily based on revenues generated by the franchise offices, which were $1,069.1 million and $1,051.8 million for the years ended December 31, 2013 and 2012, respectively.

 

ManpowerGroup

Operating Unit Results

(In millions)







Year Ended December 31




% Variance




Amount

Constant


2013

2012

Reported

Currency


(Unaudited)

Revenues from Services:





  Americas:





      United States  (b)

$  2,967.0

$  3,010.5

-1.4%

-1.4%

      Other Americas

1,543.2

1,585.4

-2.7%

1.2%


4,510.2

4,595.9

-1.9%

-0.5%

  Southern Europe:





      France

5,284.9

5,425.6

-2.6%

-5.8%

      Italy

1,087.6

1,056.8

2.9%

-0.3%

      Other Southern Europe

864.5

768.5

12.5%

7.9%


7,237.0

7,250.9

-0.2%

-3.6%






  Northern Europe

5,738.8

5,773.9

-0.6%

-1.7%

  APME

2,447.7

2,728.8

-10.3%

-1.4%

  Right Management 

316.8

328.5

-3.6%

-2.1%


$20,250.5

$20,678.0

-2.1%

-2.1%






Operating Unit Profit: (a)





  Americas:





      United States

$      99.8

$      60.8

64.2%

64.2%

      Other Americas

43.9

50.6

-13.1%

-11.5%


143.7

111.4

29.0%

29.8%

  Southern Europe:





      France

198.9

129.6

53.4%

48.0%

      Italy

53.8

45.4

18.5%

14.8%

      Other Southern Europe

11.9

10.1

18.1%

11.6%


264.6

185.1

42.9%

37.9%






  Northern Europe

139.7

159.8

-12.6%

-13.1%

  APME

70.8

90.7

-22.0%

-13.3%

  Right Management 

20.4

13.4

52.3%

59.6%


639.2

560.4



Corporate expenses

(93.2)

(112.0)



Intangible asset amortization expense

(34.1)

(36.7)



    Operating profit

511.9

411.7

24.3%

24.3%

Interest and other expenses (c)

(36.4)

(43.3)



    Earnings before income taxes

$     475.5

$     368.4








(a)

On a consolidated basis, the French business tax is reported in provision for income taxes, in accordance with the current accounting guidance on income taxes.  Prior to the second quarter of 2013, we internally reviewed the financial results of our French operations including the French business tax within OUP given the operational nature of these taxes.  While we continue to view this tax as operational, during the second quarter of 2013 we changed our internal reporting to exclude the French business tax from the OUP of our France reportable segment.  Therefore our France reportable segment OUP now excludes the business tax and we no longer need to show the business tax amount separately to reconcile to the consolidated results. All previously reported segment results have been restated to conform to the current year presentation.  This change in segment reporting has no impact on our reporting of consolidated results.



(b)

In the United States, revenues from services include fees received from our franchise offices of $15.2 million and $14.6 million for the years ended December 31, 2013 and 2012, respectively.  These fees are primarily based on revenues generated by the franchise offices, which were $695.6 million and $691.7 million for the years ended December 31, 2013 and 2012, respectively.



(c)

The components of interest and other expenses were:





2013

2012



        Interest expense

$      37.1

$      41.8



        Interest income

(3.7)

(6.6)



        Foreign exchange losses

2.3

0.9



        Miscellaneous expenses, net

0.7

7.2




$      36.4

$      43.3



 

ManpowerGroup

Consolidated Balance Sheets

(In millions)






Dec. 31


Dec. 31


2013


2012


(Unaudited)

ASSETS




Current assets:




  Cash and cash equivalents

$   737.6


$   648.1

  Accounts receivable, net

4,277.9


4,179.0

  Prepaid expenses and other assets

161.3


172.9

  Future income tax benefits

66.2


60.6

      Total current assets

5,243.0


5,060.6





Other assets:




  Goodwill and other intangible assets, net

1,400.0


1,371.9

  Other assets

479.3


395.3

      Total other assets

1,879.3


1,767.2





Property and equipment:




  Land, buildings, leasehold improvements and equipment

706.2


704.1

  Less:  accumulated depreciation and amortization

540.2


519.3

    Net property and equipment

166.0


184.8

        Total assets

$7,288.3


$7,012.6





LIABILITIES AND SHAREHOLDERS' EQUITY




Current liabilities:




  Accounts payable

$1,523.9


$1,466.5

  Employee compensation payable

230.4


210.7

  Accrued liabilities

536.1


533.8

  Accrued payroll taxes and insurance

680.7


685.7

  Value added taxes payable

502.5


472.5

  Short-term borrowings and current maturities of long-term debt

36.0


308.0

      Total current liabilities

3,509.6


3,677.2





Other liabilities:




  Long-term debt

481.9


462.1

  Other long-term liabilities

382.6


372.5

      Total other liabilities

864.5


834.6





Shareholders' equity:




  Common stock

1.1


1.1

  Capital in excess of par value

3,014.0


2,873.2

  Retained earnings 

1,317.5


1,101.5

  Accumulated other comprehensive income

82.2


34.4

  Treasury stock, at cost

(1,500.6)


(1,509.4)

      Total shareholders' equity

2,914.2


2,500.8

        Total liabilities and shareholders' equity

$7,288.3


$7,012.6

 

ManpowerGroup

Consolidated Statements of Cash Flows

(In millions)






Year Ended


December 31


2013


2012


(Unaudited)

Cash Flows from Operating Activities:




  Net earnings

$288.0


$197.6

  Adjustments to reconcile net earnings to net




    cash provided by operating activities:




      Depreciation and amortization

94.3


100.5

      Deferred income taxes

17.0


(11.6)

      Provision for doubtful accounts

24.1


29.2

      Share-based compensation

31.5


30.0

      Excess tax benefit on exercise of share-based awards

(7.3)


(0.3)

  Changes in operating assets and liabilities, excluding




    the impact of acquisitions:




      Accounts receivable

(82.6)


48.3

      Other assets

(35.9)


(9.2)

      Other liabilities

67.6


(52.9)

            Cash provided by operating activities

396.7


331.6





Cash Flows from Investing Activities:




  Capital expenditures

(44.7)


(72.0)

  Acquisitions of businesses, net of cash acquired

(46.3)


(49.0)

  Proceeds from sales of property and equipment

3.4


3.7

            Cash used in investing activities

(87.6)


(117.3)





Cash Flows from Financing Activities:




  Net change in short-term borrowings

(5.7)


(6.7)

  Proceeds from long-term debt

3.9


751.6

  Repayments of long-term debt

(269.5)


(703.2)

  Proceeds from share-based awards

101.0


6.0

  Other share-based award transactions, net

16.1


(6.3)

  Repurchases of common stock

-


(138.2)

  Dividends paid

(72.0)


(67.8)

            Cash used in financing activities

(226.2)


(164.6)





Effect of exchange rate changes on cash

6.6


17.9

Change in cash and cash equivalents

89.5


67.6





Cash and cash equivalents, beginning of period

648.1


580.5

Cash and cash equivalents, end of period

$737.6


$648.1

SOURCE ManpowerGroup

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