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View All NewsWorld – ManpowerGroup's Q3 revenue struggles amid headwinds in Europe
ManpowerGroup Inc.’s (NYSE: MAN) third-quarter revenue rose marginally by 0.3% in constant currency. The US-headquartered staffing giant reported strength in the Americas but tougher conditions in Europe. At the same time, gross margin narrowed and net earnings fell.
Many of the same trends that affected in the second quarter — slowing economic growth globally and tight labour markets — continued in the third, according to the company.
“The global economic environment continues to be uncertain, leading to uneven market conditions as economic growth slows but labour markets remain tight and skills shortages high,” Chairman and CEO Jonas Prising said.
| (US$ millions) | Q3 2019 | Q3 2018 | % change | % constant currency |
| Revenue | $5,248.9 | $5,418.7 | -3.1% | 0.3% |
| Gross profit | $840.3 | $890.6 | -5.7% | -2.5% |
| Gross margin | 16.0% | 16.4% | - | - |
| Net earnings | $146.1 | $158.0 | -7.5% | -4.7% |
Revenue in ManpowerGroup’s single largest geography, France, fell 1.0% in constant currency. US revenue rose 2.0%, and other Americas revenue rose 11.0% in constant currency. Canadian revenue rose 21% in constant currency.
Revenue by geography
| (US$ millions) | Q3 2019 | Q3 2018 | % change | % constant currency |
| Americas | ||||
| United States | $645.7 | $633.2 | 2.0% | 2.0% |
| Other Americas | $425.0 | $406.8 | 4.5% | 11.0% |
| Total Americas | $1,070.7 | $1,040.0 | 2.9% | 5.5% |
| Southern Europe | ||||
| France | $1,382.1 | $1,460.6 | -5.4% | -1.0% |
| Italy | $376.6 | $410.2 | -8.2% | -3.9% |
| Other Southern Europe | $592.9 | $460.8 | 28.7% | 31.9% |
| Total Southern Europe | $2,351.6 | $2,331.6 | 0.9% | 5.0% |
| Northern Europe | $1,156.6 | $1,287.1 | -10.1% | -5.3% |
| Asia Pacific Middle East | $621.9 | $713.0 | -12.8% | -12.6% |
| Right Management | $48.1 | $47.0 | 2.5% | 4.7% |
Revenue in Southern Europe received a boost from the company’s acquisition of its remaining interest in the Switzerland Manpower franchise in April; the franchise has approximately $500 million in annual revenue.
Despite Brexit concerns, UK revenue rose 4% in constant currency. The UK represents 33% of revenue in the company’s Northern European segment.
In Asia Pacific, revenue in Japan rose 8% on a constant currency basis but Australian revenue fell 26% in constant currency. Revenue in other areas of the region was down 20% in constant currency.
ManpowerGroup completed the initial public offering of its greater China joint venture, ManpowerGroup Greater China Ltd., for a non-cash gain of $30 million.
Guidance
For the fourth quarter, ManpowerGroup expects:
- Total revenue, down 3% to 5% (flat/down 2% in constant currency)
- Americas, up 1% to 3% (up 3% to 5% in constant currency)
- Southern Europe, up 1% to 3% (up 4% to 6% in constant currency)
- Northern Europe, down 9% to 11% (down 5% to 7% in constant currency)
- Asia Pacific Middle East, down 16% to 18% (down 16% to 18% in constant currency)
- Right Management, flat to down 2% (flat to up 2% in constant currency)
- Gross profit margin, 16.1% to 16.3%
Share price and market cap
On Friday, ManpowerGroup shares closed at $86.65, up 0.96% on the day and 11.55% 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 $5.19 billion.