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World – Manpower results in line with expectations

02 February 2012

The US-based staffing firm ManpowerGroup (MAN:NYSE) announced that revenue went up +5.3% to US$5.48 billion for the fourth quarter 2011 from US$5.21 billion in the previous year. On a constant currency basis, revenue rose +5.8%. The firm had a gross profit margin of 17.1%, down from 17.4% in the previous year. 

"We had a strong fourth quarter performance," Jeffrey A. Joerres, ManpowerGroup Chairman and CEO, commented. "The team executed well both operationally and strategically – we were able to achieve a 29% increase in underlying operating profit for the fourth quarter and 61% for the year, while substantially moving forward our strategic drivers.

"Our Solutions business continued to gain momentum as our clients are valuing our portfolio of offerings. Asia continued to lead the pack in revenue and profitability growth.

"We are cautiously optimistic about the first quarter, given the economic back drop, but any sizable disruption in Europe would affect our performance," added Joerres. 

Southern Europe: In France revenues were up by +5.4% to US$1.5 billion in Q4 2011 from US$1.4 billion in Q4 2010. In constant currency, French revenues were up by +6.3%. Operating profit in France was up by +71% from US$12 million in Q4 2010 to US$20 million in Q4 2011. In constant currency, French operating profit was up by +72%. Although management last year cautioned that margins in France could come under pressure in 2011, the market fared well.

In Italy, revenues were up by +3.8% from US$294.1 million in Q4 2010 to US$305.3 million in Q4 2011. In constant currency, Italian revenues were up by +4.6%. Operating profit in Italy was up by +24.3% from US$15.8 million in Q4 2010 to US$19.7 million in Q4 2011. In constant currency, Italian operating profit was up by +25.4%.

Northern Europe: In Northern Europe, revenues were up by +3.2% from US$1.49 billion in Q4 2010 to US$1.54 billion in Q4 2011. In constant currency, revenues were up by +3.8%. In constant currency, operating profit was down -17.7% from US$63 million in Q4 2010 to US$51.8 million in Q4 2011. 

In the Americas revenues were up by +2.7% to US$1.15 billion in Q4 2011 from $1.2 billion in Q4 2010. In constant currency, revenues were up by +4.7%. Operating profit was up by +58% from US$24 million in Q4 2010 to US$38 million in Q4 2011. In constant currency, operating profit was up by +61%. 

For Asia Pacific and the Middle East revenues amounted to US$695 million, up +18% from US$588 million in the previous year (constant currency change +14.5%). Operating profit went up +121% from US$9.6 million in the fourth quarter of 2010 to US$21.7 million in 2011.

Fourth-quarter revenue fell -8.2% at Right Management, the company’s outplacement division, to US$79.8 million.

The firm reported a net income of US$63.6 million compared to a net loss of US$350.4 million in the previous quarter. The fourth quarter of 2011 includes a reorganization charge of $20.5 million primarily related to office consolidations and severance costs. The fourth quarter of 2010 includes US$428.8 million in goodwill and intangible asset impairment charges.

Full-year results

On a full year basis for the year ended 31 December 2011, the firm achieved record revenues of US$22 billion and sales of US$23 billion. The firm’s operating earnings ended at US$545 million before reorganization. Gross profit went up by +14% from US$3.2 billion in 2010 to US$3.7 billion in 2011 (in constant currency +9.4%). Operating profit amounted to US$524.4 million in 2011 at a loss of US$122 million. Earnings before income taxes ere US$479.9 million.

Regarding the firm’s temporary staffing division, Mike Van Handel, Executive Vice President and Chief Financial Officer said, “Our Manpower business, which includes temporary staffing and permanent recruitment services, is about two-thirds of our total gross profit. Gross profit growth in this business moderated to 2% in the quarter with growth in the industrial skills and some contraction in the office skills.”

He added, “Now the growth of Manpower is currently impacted by economic factors. We remain bullish on our long-term prospects, given the secular trends towards flexibility across the globe and the new opportunities presenting themselves in emerging markets, which are very low temporary staffing penetration levels.”

Jeff Joerres, ManpowerGroup Chairman, President & CEO also commented:  “Having come back from Davos, I came back with a just slightly different mindset, and that is that there is a real commitment that this difficult problem whether it’d be some forms of fiscal union or austerity or the balance between austerity and growth are actually being achieved…Yes, there is a slowdown in Europe, but my sense right now is there’s a lot less panic. Optimism would be too strong of a word but more of a satisfaction of, ‘We will make it through this without a major drop’… and I think it’s logical to consider it a wildcard. But given the backdrop, it’s actually less likely than it might have been 30 or 45 days ago.”

ManpowerGroup has almost 3,900 offices in 82 countries. The firm’s operating segments include Americas, France, EMEA, Asia Pacific and Risk Management, providing recruitment and assessment, training and development, career management, outsourcing and workforce consulting. Its portfolio of recruitment services includes permanent, temporary and contract recruitment of professionals, as well as administrative and industrial positions. The firm has a market capitalisation of $US3.74 billion.
Following the results announcement yesterday, the share price jumped over +14% to US$45.86 although this is still down -29% from a year ago. 


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