Daily News
View All NewsWorld – ManpowerGroup Q2 revenue nearly flat in constant currency
ManpowerGroup Inc. (NYSE: MAN) reported second-quarter results on Friday announcing that revenue edged down 0.1% on a constant currency basis. In France, its largest single market, revenue fell 0.4% on a constant currency basis. Gross profit and earnings also tumbled.
| (USD millions) | Q2 2019 | Q2 2018 | % change | % constant currency |
| Revenue | 5,373.1 | 5,656.9 | -5.0% | -0.1% |
| Gross profit | 870.4 | 922.7 | -5.7% | -1.1% |
| Gross margin | 16.2% | 16.3% | ||
| Net earnings | 127.3 | 143.4 | -11.3% | -8.0% |
Revenue by geography
| (USD millions) | Q2 2019 | Q2 2018 | % change | % constant currency |
| Americas | ||||
| United States | 630.9 | 640.5 | -1.5% | -1.5% |
| Other Americas | 412.5 | 412.0 | 0.1% | 8.8% |
| Total Americas | 1,043.4 | 1,052.5 | -0.9% | 2.5% |
| Southern Europe | ||||
| France | 1,420.2 | 1,512.5 | -6.1% | -0.4% |
| Italy | 394.0 | 443.0 | -11.1% | -5.7% |
| Other Southern Europe | 573.0 | 478.5 | 19.7% | 25.2% |
| Total Southern Europe | 2,387.2 | 2,434.0 | -1.9% | 3.7% |
| Northern Europe | 1,183.2 | 1,393.2 | -15.1% | -9.6% |
| Asia Pacific Middle East | 708.9 | 724.8 | -2.2% | 1.3% |
| Right Management | 50.4 | 52.4 | -3.9% | -0.9% |
In Southern Europe, which comprises 45% of total revenue for ManpowerGroup, revenue was up 3.7% in constant currency. However, in France, revenue decreased by 0.4% in constant currency and in Italy, revenue was down 5.7%. Northern Europe was weaker reporting a decrease of 9.6% in constant currency.
In Northern Europe, the company experienced strong revenue declines in Germany (-26%) and the Netherlands (-21%) on a constant currency basis. Belgium was down 8% while the UK was down 1%. The only market in Northern Europe which saw growth was the Nordic region.
In the APME region, Japanese revenue grew by 5% on a constant currency basis while Australia & New Zealand declined by 16%.
Gross margin narrowed to 16.2% in the second quarter from 16.3% in the year-ago quarter. Gross profit was down 1.1% in constant currency. Gross profit fell across most business lines in the second quarter, with Right Management down 5% on a constant currency basis. However, gross profit was up 1% in the company’s ManpowerGroup Solutions business, which includes the recruitment process outsourcing and managed service provider business lines.
ManpowerGroup also announced:
- The completion of the initial public offering on 10 July of its greater China joint venture, ManpowerGroup Greater China Ltd., which will result in a deconsolidation of the business.
- The purchase of its remaining interest in the Switzerland Manpower franchise back in April that brought a noncash accounting gain of $80 million.
- A noncash goodwill impairment charge of $64 million during the second quarter. The impairment charge was related to its businesses in Germany and New Zealand.
Quote
“As skills shortages continue to be felt by many employers, demand for our extensive portfolio of workforce solutions and services across our global footprint continues to provide us with opportunities for profitable growth in many markets,” Chairman and CEO Jonas Prising said in a statement.
Guidance
ManpowerGroup provided the market with guidance for the third-quarter with further declines expected, though suggesting that Europe was stabilizing:
- Total revenue: Flat to down 2%, (flat to up 2% in constant currency)
- Americas revenue: Up 2% to 4%, (up 4% to 6% in constant currency)
- Southern Europe revenue: Up 3% to 5%, (up 6% to 8% in constant currency)
- Northern Europe revenue: Down 6% to 8%, (down 2% to 4% in constant currency)
- Asia Pacific, Middle East revenue: Down 14% to 16%, (down 14% to 16% in constant currency)
- Right Management revenue: Down 1% to 3%, (up 1% to down 1% in constant currency)
On Friday, ManpowerGroup Inc shares closed at $90.21, up 0.03% on the day and 7.91% below its 52-week high of $97.96, set on 1 July 2019. Based on its current share price the company has a market value of $5.40 billion.