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ManpowerGroup’s Q4 revenue falls, but net earnings rise 16%

January 30, 2015

Fourth-quarter revenue at ManpowerGroup Inc. (NYSE: MAN) fell 2.5% to $5.12 billion. The world’s third-largest staffing firm reported revenue fell in its largest single geography, France, by 9.3%, or 1.2% in constant currency. However, revenue rose 5.2% in both the US and Italy.

Net earnings rose 15.9%. The third quarter of 2013 had included a restructuring charge of $26.5 million; the fourth quarter of 2014 did not have restructuring charges. ManpowerGroup also reported fourth-quarter results were unfavorably impacted by 13 cents per diluted share as foreign currencies were relatively weaker compared to the prior year.

Gross margin improved with the primary driver of growth being permanent recruitment, according to a conference call with analysts.

(US$ millions) Q4 2014 Q4 2013 % growth % constant currency
Revenue $5,121.1 $5,252.1 -2.5% 4.8%
Gross profit $868.8 $886.6 -2.0% 5.2%
Gross margin 17.0% 16.9%    
Net earnings $117.2 $101.2 15.9% 26.3%

Quote

“As I step back and I think about 2014 from a macro perspective, it turned out to be a year that was not as strong as many had anticipated a year ago, but in reality was better than how most people perceive it now,” ManpowerGroup CEO Jonas Prising said in a conference call with analysts. “Let me give you some examples. Although unemployment in Europe is still very high in many countries, it actually came down somewhat in both the European Union and in the Eurozone during 2014 and it is projected to decrease somewhat also in 2015. Unemployment fell significantly in the US, and although economic growth rates in some emerging markets were lower, they’re still at a healthy level, meaning labor markets were reasonably stable.”

Revenue by geography

(US$ millions) Q4 2014 Q4 2013 % growth % constant currency
Americas        
United States $789.5 $750.6 5.2% 5.2%
Other Americas $383.0 $387.1 -1.1% 11.2%
Total Americas $1,172.5 $1,137.7 3.1% 7.2%
         
Southern Europe        
France $1,267.9 $1,398.4 -9.3% -1.2%
Italy $296.1 $281.6 5.2% 14.6%
Other Southern Europe $246.4 $240.2 2.5% 11.8%
Total Southern Europe $1,810.4 $1,920.2 -5.7% 2.8%
         
Northern Eruope $1,501.8 $1,521.6 -1.3% 7.1%
         
Asia Pacific Middle East $566.9 $590.5 -4.0% 3.2%
         
Right Management $69.5 $82.1 -15.3% -11.9%

Full-year results

(US$ millions) 2014 2013 % growth % constant currency
Revenue $20,762.8 $20,250.5 2.5% 4.0%
Gross profit $3,488.2 $3,366.7 3.6% 5.2%
Gross margin 16.8% 16.6%    
Net earnings $427.6 $288.0 48.5% 51.4%

Share price and market cap

Shares in ManpowerGroup rose 13.20% in early afternoon trading to $73.47. The company had a market cap of $5.81 billion, according to Yahoo!