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ManpowerGroup : Reports 1st Quarter 2012 Results

04/20/2012 | 07:35am US/Eastern
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MILWAUKEE, April 20, 2012 /PRNewswire/ -- ManpowerGroup (NYSE: MAN) today reported that net earnings for the three months ended March 31, 2012 were $40.2 million, or 50 cents per diluted share, compared to net earnings of $35.7 million, or 43 cents per diluted share, a year earlier. Revenues for the first quarter were $5.1 billion, similar to the prior year, up 3% in constant currency.

(Logo: http://photos.prnewswire.com/prnh/20110330/CG73938LOGO-a)

Net earnings in the first quarter were negatively impacted by 2 cents per diluted share, as foreign currencies were relatively weaker compared to the prior year period.

Jeffrey A. Joerres, ManpowerGroup Chairman and CEO, said, "We were able to achieve very solid profitability despite the continued headwinds of slow economic growth. Our geographic foot print, wide range of offerings and very good expense management contributed to the strong quarter. Our workforce solutions business continued to grow by solid double digits while our permanent recruitment business continues to outpace last year.

"We anticipate second quarter earnings per share will range between 68 cents to 76 cents. This includes an unfavorable impact of 4 cents per share related to currency changes in the quarter."

In conjunction with its first quarter earnings release, ManpowerGroup will broadcast its conference call live over the Internet on April 20, 2012 at 7:30 a.m. CDT (8:30 a.m. EDT). Interested parties are invited to listen to the webcast and view the presentation by logging on to http://www.manpowergroup.com/investors.

Supplemental financial information referenced in the conference call can be found at http://www.manpowergroup.com/investors.

About ManpowerGroup(TM)
ManpowerGroup(TM) (NYSE: MAN), the world leader in innovative workforce solutions, creates and delivers high-impact solutions that enable our clients to achieve their business goals and enhance their competitiveness. With over 60 years of experience, our $22 billion company creates unique time to value through a comprehensive suite of innovative solutions that help clients win in the Human Age. These solutions cover an entire range of talent-driven needs from recruitment and assessment, training and development, and career management, to outsourcing and workforce consulting. ManpowerGroup maintains the world's largest and industry-leading network of nearly 3,800 offices in 80 countries and territories, generating a dynamic mix of an unmatched global footprint with valuable insight and local expertise to meet the needs of its 400,000 clients per year, across all industry sectors, small and medium-sized enterprises, local, multinational and global companies. By connecting our deep understanding of human potential to the ambitions of clients, ManpowerGroup helps the organizations and individuals we serve achieve more than they imagined -- because their success leads to our success. And by creating these powerful connections, we create power that drives organizations forward, accelerates personal success and builds more sustainable communities. We help power the world of work. The ManpowerGroup suite of solutions is offered through ManpowerGroup(TM) Solutions, Manpower®, Experis(TM) and Right Management®. Learn more about how the ManpowerGroup can help you win in the Human Age at www.manpowergroup.com.

ManpowerGroup is the most trusted brand in the industry, and was once again the only company in our industry to be named to the Ethisphere Institute's 2012 World's Most Ethical Companies list for our proven commitment to ethical business practices, including an outstanding commitment to ethical leadership, compliance practices and corporate social responsibility.

In January 2011, at the World Economic Forum Annual Meeting in Davos, Switzerland, ManpowerGroup announced the world has entered the Human Age, where talent has replaced capital as the key competitive differentiator. This concept of talentism as the new capitalism continues to resonate and was echoed as a core theme of the 2012 Annual Meeting of the World Economic Forum in Davos. Learn more about this new age at www.manpowergroup.com/humanage.

Gain access to ManpowerGroup's extensive thought leadership papers, annual Talent Shortage surveys and the Manpower Employment Outlook Survey, one of the most trusted indices of employment activity in the world, via the ManpowerGroup World of Work Insight iPad application. This thought leadership app explores the challenges faced by employers navigating the changing world of work and provides in-depth commentary, analysis, insight and advice on strategies for success.

Follow ManpowerGroup Chairman and CEO Jeff Joerres on Twitter: twitter.com/manpowergroupjj. Joerres is one of only six Fortune 500 CEOs who leverages a Twitter account to get his message out.

Forward-Looking Statements
This news release contains statements, including earnings projections, that are forward-looking in nature and, accordingly, are subject to risks and uncertainties regarding the Company's expected future results. The Company's actual results may differ materially from those described or contemplated in the forward-looking statements. Factors that may cause the Company's actual results to differ materially from those contained in the forward-looking statements can be found in the Company's reports filed with the SEC, including the information under the heading 'Risk Factors' in its Annual Report on Form 10-K for the year ended December 31, 2011, which information is incorporated herein by reference.

                                                         ManpowerGroup
                                                     Results of Operations
                                             (In millions, except per share data)

                       Three Months Ended March 31
                       ---------------------------
                                                                                  % Variance
                                                                                  ----------
                                                                                    Amount         Constant
                                              2012                         2011    Reported        Currency
                                              ----                         ----    --------        --------
                               (Unaudited)
    Revenues from
     services (a)                         $5,096.4                     $5,072.4               0.5%           3.0%

    Cost of services                       4,249.0                      4,214.8               0.8%           3.4%
                                           -------                      -------

      Gross profit                           847.4                        857.6              -1.2%           1.1%

    Selling and
     administrative
     expenses                                753.6                        772.0              -2.4%          -0.3%
                                             -----                        -----

      Operating profit                        93.8                         85.6               9.5%          13.9%

    Interest and other
     expenses                                 11.8                         11.1               5.3%
                                              ----                         ----

      Earnings before
       income taxes                           82.0                         74.5              10.1%          14.7%

    Provision for
     income taxes                             41.8                         38.8               7.6%

      Net earnings                           $40.2                        $35.7              12.8%          17.5%
                                             =====                        =====

    Net earnings per
     share -basic                            $0.50                        $0.44              13.6%
                                             =====                        =====

    Net earnings per
     share -diluted                          $0.50                        $0.43              16.3%          20.9%
                                             =====                        =====

    Weighted average
     shares -basic                            80.2                         81.9              -2.0%
                                              ====                         ====

    Weighted average
     shares -diluted                          80.9                         83.6              -3.3%
                                              ====                         ====

    (a)             Revenues from services include
                    fees received from our
                    franchise offices of $5.4
                    million and $5.9 million for
                    the three months ended March
                    31, 2012 and 2011,
                    respectively. These fees are
                    primarily based on revenues
                    generated by the franchise
                    offices, which were $253.9
                    million and $274.5 million for
                    the three months ended March
                    31, 2012 and 2011,
                    respectively.

                                                               ManpowerGroup
                                                          Operating Unit Results
                                                               (In millions)

                                Three Months Ended March 31
                                ---------------------------
                                                                                         % Variance
                                                                                         ----------
                                                                                           Amount          Constant
                                                       2012                        2011   Reported         Currency
                                                       ----                        ----   --------         --------
                                        (Unaudited)
    Revenues from Services:
      Americas:
          United States (a)                          $735.8                      $750.9              -2.0%           -2.0%
          Other Americas                              402.5                       361.8              11.3%           16.1%
                                                    1,138.3                     1,112.7               2.3%            3.9%
                                                    -------                     -------
      Southern Europe:
          France                                    1,291.8                     1,353.8              -4.6%           -0.4%
          Italy                                       267.5                       284.6              -6.0%           -1.9%
          Other Southern Europe                       195.2                       180.0               8.5%           13.7%
                                                    1,754.5                     1,818.4              -3.5%            0.7%
                                                    -------                     -------

      Northern Europe                               1,444.0                     1,456.6              -0.9%            2.6%
      APME                                            680.0                       602.9              12.8%            9.8%
      Right Management                                 79.6                        81.8              -2.6%           -2.0%
                                                   $5,096.4                    $5,072.4               0.5%            3.0%
                                                   ========                    ========

    Operating Unit Profit:
      Americas:
          United States                                $6.9                        $8.7             -20.8%          -20.8%
          Other Americas                               15.3                        12.8              19.7%           26.2%
                                                       22.2                        21.5               3.4%            7.2%
                                                       ----                        ----
      Southern Europe:
          France                                        5.5                        12.0             -54.3%          -51.4%
          Italy                                        14.5                        12.9              12.7%           18.0%
          Other Southern Europe                         3.5                         2.2              56.0%           64.9%
                                                       23.5                        27.1             -13.4%           -8.8%
                                                       ----                        ----

      Northern Europe                                  43.9                        41.9               4.8%            8.3%
      APME                                             19.6                        16.5              18.5%           16.1%
      Right Management                                  2.5                         3.3             -24.6%          -24.5%
                                                      111.7                       110.3
    Corporate expenses                                (26.3)                      (32.0)
    Intangible asset
     amortization expense                              (9.0)                       (9.6)
    Reclassification of
     French business tax                               17.4                        16.9
        Operating profit                               93.8                        85.6               9.5%           13.9%
    Interest and other
     expenses (b)                                     (11.8)                      (11.1)
        Earnings before income
         taxes                                        $82.0                       $74.5
                                                      =====                       =====

    (a)             In the United States, revenues
                    from services include fees
                    received from our franchise
                    offices of $3.2 million and
                    $2.7 million for the three
                    months ended March 31, 2012 and
                    2011, respectively. These fees
                    are primarily based on revenues
                    generated by the franchise
                    offices, which were $164.4
                    million and $148.5 million for
                    the three months ended March
                    31, 2012 and 2011,
                    respectively.

    (b)  The components of interest and other expenses were:
                                             2012     2011
                                             ----     ----
            Interest expense                $10.6    $10.2
            Interest income                  (1.8)    (1.4)
            Foreign exchange (gain) loss     (0.2)     0.5
            Miscellaneous expenses, net       3.2      1.8
                                            $11.8    $11.1
                                            =====    =====

                                  ManpowerGroup
                           Consolidated Balance Sheets
                                  (In millions)

                                       Mar. 31           Dec. 31
                                                   2012              2011
                                                   ----              ----
                                     (Unaudited)
    ASSETS
    Current assets:
      Cash and cash
       equivalents                               $553.5            $580.5
      Accounts
       receivable,
       net                                      4,232.7           4,181.3
      Prepaid
       expenses and
       other assets                               189.7             176.3
      Future income
       tax benefits                                56.5              52.4
          Total current
           assets                               5,032.4           4,990.5

    Other assets:
      Goodwill and
       other
       intangible
       assets, net                              1,342.9           1,339.6
      Other assets                                417.1             395.1
          Total other
           assets                               1,760.0           1,734.7

    Property and
     equipment:
      Land,
       buildings,
       leasehold
       improvements
       and equipment                              710.9             685.6
      Less:
       accumulated
       depreciation
       and
       amortization                               530.0             511.1
        Net property
         and equipment                            180.9             174.5
            Total assets                       $6,973.3          $6,899.7
                                               ========          ========

    LIABILITIES AND
     SHAREHOLDERS'
     EQUITY
    Current
     liabilities:
      Accounts
       payable                                 $1,432.2          $1,370.6
      Employee
       compensation
       payable                                    189.7             221.9
      Accrued
       liabilities                                513.0             520.8
      Accrued payroll
       taxes and
       insurance                                  649.8             712.4
      Value added
       taxes payable                              488.0             502.3
      Short-term
       borrowings and
       current
       maturities of
       long-term
       debt                                       454.2             434.2
          Total current
           liabilities                          3,726.9           3,762.2

    Other
     liabilities:
      Long-term debt                              267.6             266.0
      Other long-
       term
       liabilities                                410.3             388.1
          Total other
           liabilities                            677.9             654.1

    Shareholders'
     equity:
      Common stock                                  1.1               1.1
      Capital in
       excess of par
       value                                    2,849.8           2,839.9
      Retained
       earnings                                 1,011.9             971.7
      Accumulated
       other
       comprehensive
       income                                      74.8              35.3
      Treasury stock,
       at cost                                 (1,369.1)         (1,364.6)
          Total
           shareholders'
           equity                               2,568.5           2,483.4
            Total
             liabilities
             and
             shareholders'
             equity                            $6,973.3          $6,899.7
                                               ========          ========

                                            ManpowerGroup
                                Consolidated Statements of Cash Flows
                                            (In millions)

                                              Three Months Ended
                                                   March 31
                                                   --------
                                                             2012       2011
                                                             ----       ----
                                                 (Unaudited)
    Cash Flows from Operating
     Activities:
      Net earnings                                          $40.2      $35.7
      Adjustments to reconcile
       net earnings to net
        cash used in operating
         activities:
          Depreciation and
           amortization                                      24.3       25.9
          Deferred income taxes                              (0.8)      (2.9)
          Provision for doubtful
           accounts                                           5.0        5.9
          Share-based compensation                            6.9        8.2
          Excess tax benefit on
           exercise of share-based
           awards                                               -       (0.5)
      Changes in operating
       assets and liabilities,
       excluding
        the impact of
         acquisitions:
          Accounts receivable                                34.4     (212.9)
          Other assets                                      (16.7)      (6.3)
          Other liabilities                                (114.0)     (12.8)
                Cash used in operating
                 activities                                 (20.7)    (159.7)
                                                            -----     ------

    Cash Flows from Investing
     Activities:
      Capital expenditures                                  (19.7)     (11.2)
      Acquisitions of
       businesses, net of cash
       acquired                                              (1.5)         -
      Proceeds from sales of
       property and equipment                                 0.1        1.1
                Cash used in investing
                 activities                                 (21.1)     (10.1)
                                                            -----      -----

    Cash Flows from Financing
     Activities:
      Net change in short-term
       borrowings                                             9.5        9.6
      Proceeds from long-term
       debt                                                   0.1        0.1
      Repayments of long-term
       debt                                                  (8.4)      (0.1)
      Proceeds from share-based
       awards                                                 3.5        5.2
      Other share-based award
       transactions, net                                     (4.5)       0.5
                Cash provided by financing
                 activities                                   0.2       15.3
                                                              ---       ----

    Effect of exchange rate
     changes on cash                                         14.6       31.4
    Change in cash and cash
     equivalents                                            (27.0)    (123.1)

    Cash and cash equivalents,
     beginning of period                                    580.5      772.6
    Cash and cash equivalents,
     end of period                                         $553.5     $649.5
                                                           ======     ======

SOURCE ManpowerGroup

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