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View All NewsWorld – ManpowerGroup fourth-quarter revenue falls; suggests Europe is slowing down but not in recession
Fourth-quarter revenue fell 0.7% on a constant currency basis at ManpowerGroup Inc. (NYSE: MAN). Chairman and CEO Jonas Prising cited a more challenging environment, particularly in Europe. ManpowerGroup also reported that its results were affected by the sale of its language translation business in the Netherlands.
| (USD millions) | Q4 2018 | Q4 2017 | % change | % constant currency |
| Revenue | 5,393.2 | 5,637.5 | -4.3% | -0.7% |
| Gross profit | 880.3 | 934.5 | -5.8% | -2.4% |
| Gross margin | 16.3% | 16.6% | N/A | N/A |
| Net earnings | 158.3 | 216.3 | -26.8% | -23.6% |
Revenue fell 1.1% in Southern Europe and 6.6% in Northern Europe on a constant currency basis. The company’s home market also struggled with US revenue falling 5.1% in the fourth quarter. However, revenue rose in Asia Pacific and the Middle East.
Revenue by Geography was as follows.
| (USD millions) | Q4 2018 | Q4 2017 | % change | % constant currency |
| Americas | ||||
| United States | 632.3 | 666.3 | -5.1% | -5.1% |
| Other Americas | 411.9 | 405.5 | 1.6% | 14.0% |
| Total Americas | 1,044.2 | 1,071.8 | -2.6% | 2.1% |
| Southern Europe | ||||
| France | 1,430.6 | 1,501.7 | -4.7% | -1.7% |
| Italy | 403.8 | 428.9 | -5.9% | -2.8% |
| Other Southern Europe | 459.6 | 468.4 | -1.9% | 2.5% |
| Total Southern Europe | 2,294.0 | 2,399.0 | -4.4% | -1.1% |
| Northern Europe | 1,272.6 | 1,418.1 | -10.3% | -6.6% |
| Asia Pacific Middle East | 732.3 | 695.2 | 5.3% | 8.9% |
| Right Management | 50.1 | 53.4 | -6.3% | -4.0% |
On a constant currency basis, average daily revenue declined in Q4 by 3% in France, 5% in Italy, 5% in Spain, 4% in the UK, 15% in the Netherlands and a substantial decline of 21% in Germany. Growth was seenm in the Nordics (+2%) and Belgium (+1%).
Gross profit in the company’s ManpowerGroup Solutions business line rose 2% in constant currency. The business line includes MSP and RPO and represents 14% of gross profit.
At specialist staffing brand, Experis, gross profit fell by 1% in constant currency. The division represents 20% of gross profit. Meanwhile, fourth-quarter gross profit in the Manpower staffing division fell 4% in constant currency. The division represented 63% of gross profit.
“The fourth quarter results reflect a more challenging environment, particularly in Europe,” Chairman & CEO, Jonas Prising said. “Our performance demonstrates our capability to respond rapidly as market dynamics in some parts of the world change.”
ManpowerGroup also reported full year results as follows.
| (USD millions) | FY 2018 | FY 2017 | % change | % constant currency |
| Revenue | 21,991.2 | 21,034.3 | 4.5% | 2.5% |
| Gross profit | 3,579.0 | 3,484.6 | 2.7% | 0.9% |
| Gross margin | 16.3% | 16.6% | ||
| Net earnings | 556.7 | 545.4 | 2.1% | 1.1% |
Looking ahead, ManpowerGroup reported that first-quarter revenue is expected to fall 3% to 5% on a constant currency basis. On a call with financial analysts yesterday, Prising said that client feeback suggested” a slowdown and not a downturn” but admitted that “we don't know how long the current slowdown in some European markets will continue”.
Gross profit margin for the first quarter is expected to be in the range of 15.9% to 16.1%.
The first-quarter revenue forecast for geographies is as follows:
- Americas flat to up 2% in constant currency
- Southern Europe down 3% to 5% in constant currency
- Northern Europe down 8% to 10% in constant currency
- Asia Pacific Middle East flat to down 2% in constant currency
- Right Management down 1% to 3% in constant currency
Despite the negative outlook, in trading yesterday, ManpowerGroup Inc shares closed at $79.03, up 3.96% on the day and 28.36% above the 52 week low of $61.57 set on 26 December 2018. Based on its current share price the company has a market value of $4.70 billion.