The third largest staffing company in the world, ManpowerGroup (MAN: NYSE) reported revenue for the second quarter ending 30 June 2014 of USD 5.3 billion, an increase of +3.7% in constant currency, compared with USD 5 billion last year.

The company achieved gross profit in Q2 2014 of USD 897.3 million, a year-on-year organic increase of +5.6% from USD 836.4 million in Q2 2013. Operating profit for the three months rose by +43.2% in constant currency to USD 187.4 million, up from USD 128.1 million a year ago.

Jonas Prising, recently appointed CEO of ManpowerGroup commented: “In the second quarter, we saw our revenue growth improve in a number of major operations including the US, UK, and Italy. This combined with our continued focus on efficiency and productivity, has resulted in good operational leverage and healthy earnings growth."

ManpowerGroup attributed their strong results to a steady decline in the unemployment rate in the European Union. The company earns more than 65% of its revenue from Europe, which saw sales increase by +9%, year-on-year, during Q3 2014.

During the first six months of the year, ManpowerGroup reported organic revenue growth of +3.3% to USD 10.2 billion, up from USD 9.8 billion during H1 2013. Gross profit increased organically by +4.6% to USD 1.7 billion, compared with USD 1.6 billion a year ago. Operating profit rose by a staggering +70.5% to USD 314.3 million, up from USD 182.5 million last year.

Across the Americas, the company achieved organic revenue growth of +5% during Q2 2014 to USD 1.2 billion, compared with USD 1.1 billion last year. Revenue from the United States increased organically by +3.7% to USD 775.9 million, while revenue from ‘Other Americas’ increase by +7.7% in constant currency to USD 375.2 million.

During the first six months of the year, revenue across the Americas increased organically by +3.8% to USD 2.2 billion. Revenue from the United States increased on an organic basis by +2.9% to USD 1.5 billion in H1 2014, while revenue from ‘Other Americas’ increased by +5.7% in constant currency to USD 725.8 million.

Across Southern Europe revenue increased by +4.2% in constant currency during Q2 2014 to USD 1.9 billion, up from USD 1.8 billion a year ago. Revenue from France increased organically by +1.9% to USD 1.4 billion, up from USD 1.3 billion last year. In Italy, revenue increased by +7.5% on an organic basis to USD 313.9 million, up from USD 278.4 million in Q2 2013. Across ‘Other Southern Europe’, revenue increased by +14.9% in constant currency to USD 243 million, up from USD 203 million last year.

During the first six months of the year, revenue across Southern Europe rose by +4% in constant currency to USD 3.7 billion, up from USD 3.4 billion in H1 2013. Revenue from the French market increased organically by +2.1% to USD 2.6 billion. In Italy, revenue increased by +5.1% on an organic basis to USD 588.6 million, while ‘Other Southern Europe’ reported organic revenue growth of +14.8% to USD 473 million.

Across Northern Europe revenue during the second quarter increased by +4.6% in constant currency to USD 1.5 billion, up from USD 1.4 billion last year. During the first six months of the year, revenue rose organically by +4.6% to USD 3 billion, up from USD 2.8 billion in H1 2013.

Across ManpowerGroup’s Asia Pacific and Middle East (APME) region revenue fell during Q2 2014 by -1.8% in constant currency to USD 594 million, down from USD 623.3 million in Q2 2013. During the first six months of the year, revenue fell organically by -1.5% to USD 1.2 billion, down from USD 1.3 billion a year ago.

The company’s Right Management division reported revenue of USD 79.8 million, a fall of -2.7% in constant currency from USD 80.9 million. During the first six months of the year the division reported a fall in revenue of -3.4% in constant currency to USD 153.1 million, down from USD 157.5 million during H1 2013. Right Management is a counter-cyclical outplacement business and contributes 1% of total ManpowerGroup revenue.

Looking forward, ManpowerGroup expects organic revenue growth of between +4% and +6% for the third quarter. The company also expects Q3 earnings of between USD 1.46 and USD 1.54 per share, versus analysts’ estimates of USD 1.45 per share. 

Mike Van Handel, CFO and Executive Vice President of ManpowerGroup, advised: “We expect the Americas, Northern Europe, and Asia-Pacific & Middle East to have slightly stronger growth in the third quarter than the second quarter on both a reported and on an average daily basis. In Southern Europe we expect growth of +3% to +5% in constant currency… which is slightly less than the average daily growth we saw in the second quarter. This slightly slower growth is a result of slower growth in Spain as the anniversary of prior year acquisition in the third quarter. We expect a stable rate of growth in the French market despite increasingly tougher prior year comparable growth rates.”

The results were in line with analysts’ expectations, despite revenue in France falling -2% below expectations. Analysts’ expectations for Q3 remain positive following the release of ManpowerGroup’s Q2 results.

Despite the strong results, in trading yesterday, the company’s share price closed down by -3.2% at USD 80.46, an increase of +23.5% compared with a year ago. Based on its current share price, the company has a market value of USD 6.4 billion.