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View All NewsManpowerGroup sees uneven global growth, revenue up 6% in constant currency
ManpowerGroup (NYSE: MAN), one of the world’s largest staffing firms, reported uneven growth across geographies in the third quarter. A strong US dollar also significantly impacted results.
French revenue fell 14.6%, but when measured in constant currency, rose 1.9%. France represents ManpowerGroup’s largest single market. In comparison, third-quarter revenue from Italy rose 10.3%, and was up 31.4% in constant currency.
In the US, revenue fell 3.9%. The company cited softer demand for many larger accounts, particularly in the light industrial area.
Total third-quarter revenue at ManpowerGroup fell 8.2% to $4.97 billion, but was up 5.8% in constant currency.
Gross margin improved to 17.1% from 16.7% in the same quarter last year. Permanent recruitment added about 20 basis points to the gross margin, according to the company.
| (US$ millions) | Q3 2015 | Q3 2014 | % growth | % constant currency |
| Revenue | $4,972.5 | $5,416.0 | -8.2% | 5.8% |
| Gross profit | $852.1 | $905.6 | -5.9% | 7.0% |
| Gross margin | 17.1% | 16.7% | ||
| Net earnings | $123.9 | $130.5 | -5.1% | 9.5% |
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“We had anticipated that the market conditions in Europe and elsewhere would be somewhat patchy and that is in effect what we saw in our business during the quarter,” CEO Jonas Prising said in a conference call with analysts. “We saw parts of the US economy soften further, notably in the manufacturing sector. Europe is a region where some countries seem to be well on their way to recovery, where others are still struggling to get traction.
“Emerging markets were generally strong in the quarter, but countries with significant exposure to commodity markets or the Chinese market are starting to feel more sluggish. We believe that parts of the global market are experiencing softening market conditions for a variety of reasons and that the strength of the global recovery will continue to be uneven, particularly in some countries in Asia, Latin America and Europe.”
Revenue by geography
| (US$ millions) | Q3 2015 | Q3 2014 | % growth | % constant currency |
| Americas | ||||
| United States | $769.6 | $800.5 | -3.9% | -3.9% |
| Other Americas | $367.0 | $388.5 | -5.6% | 16.4% |
| Total Americas | $1,136.6 | $1,189.0 | -4.4% | 2.8% |
| Southern Europe | ||||
| France | $1,242.5 | $1,454.3 | -14.6% | 1.9% |
| Italy | $324.4 | $294.1 | 10.3% | 31.4% |
| Other Southern Europe | $258.5 | $259.9 | -0.6% | 16.0% |
| Total Southern Europe | $1,825.4 | $2,008.3 | -9.1% | 8.0% |
| Northern Europe | $1,373.4 | $1,554.6 | -11.7% | 3.1% |
| Asia Pacific Middle East | $570.2 | $592.5 | -3.7% | 11.9% |
| Right Management | $66.9 | $71.6 | -6.6% | 1.3% |
- Americas
- The US was down 4% in constant currency; however, third-quarter revenue from Mexico rose 15% in constant currency while Argentinian revenue rose 50% in constant currency. Other Americas revenue rose 9% in constant currency.
- Southern Europe
- Third-quarter French revenue rose 2% in constant currency. Italy, on the other hand, posted revenue growth of 31% and Spanish revenue rose 29% — both in constant currency. Other Southern European revenue rose 4% in constant currency.
- Northern Europe
- Third-quarter revenue rose 1% in constant currency in both the UK and the Nordics. Dutch revenue fell 2% in constant currency, and Belgian revenue fell 3% in constant currency. German revenue rose 27% in constant currency, but it was up only 8% on an organic basis. This year, ManpowerGroup acquired German firm 7S Group. Other Northern European revenue fell 2%.
- Asia Pacific Middle East
- Japanese third-quarter revenue rose 1% in constant currency. Australia/New Zealand revenue rose 23% in constant currency but fell 2% on an organic basis. ManpowerGroup acquired Greythorn in Australia; the deal closed in the second quarter. Other APME revenue rose 15% on a constant currency basis.
- Right Management
- At Right Management, which provides outplacement services, third-quarter revenue rose 1.3% in constant currency.
Guidance
ManpowerGroup estimates total revenue will fall by 1% to 3% in the fourth quarter (up 6% to 8% in constant currency). Americas revenue is expected to rise 3% to 5% in constant currency, Southern Europe to rise 8% to 10% in constant currency, Northern Europe to rise 5% to 7% in constant currency, APME to rise 11% to 13% in constant currency and Right Management to be flat to up 2% in constant currency.
Share price and market cap
Shares in ManpowerGroup fell 1.91% in early afternoon trading to $85.99. The company had a market cap of $6.60 billion, according to Yahoo!