ManpowerGroup Inc. (NYSE:MAN) Q2 2023 Earnings Call Transcript

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Mark Marcon: Yes. And that’s consistent with what we were expecting as well. Can — just shifting over to Northern Europe. Obviously, you telegraphed the move with regards to Proservia last quarter. When you think about Northern Europe from a longer-term perspective, maybe 3 to 5 years out, what sort of margin expectations should investors have with regards to Northern Europe, Jonas?

Jonas Prising: I think as you look at the Northern Europe business, Mark, you have a couple of things. This is where we have most of our bench countries. So when you see a decline in revenue, this is the region that takes the biggest hit on the decline in margins because we keep our bench there. You have one of our biggest countries, the U.K. which has been also sensitive to the enterprise exposure we talked about, both on the Manpower and the Experis side and that saw some weakness as well. And then, we have a business in Germany that we’ve been working on turning around. And I have to say we’re pleased with the progress that we’re making on our staffing side and we’re seeing a good evolution here on revenues with more work to do but we do have a business that we need to address.

And that is exactly what we’re signaling in today’s earnings call. But you’ve heard us talk about this over the last couple of quarters already that we’re working on the turnaround. But I would say there is no reason not to expect Northern Europe to come back to our target profitability levels as a region on the whole. Right now, it’s a little bit of a perfect storm but we are confident that with the actions that we’re taking today and into the future, that we will get Northern Europe back on track by some decisive actions and you have heard us talk about one of those decisive actions as it relates to our Proservia business in Germany on this call.

Operator: Our next question comes from George Tong with Goldman Sachs.

George Tong: You touched on some of the factors driving the declines in Experis. Can you elaborate on some of the trends in Talent Solutions, specifically, how trends are performing with RPO and the MSP business?

Jonas Prising: Sure. The RPO business is clearly feeling the effects of the slowing hiring environment from a permanent recruitment perspective. And of course, RPO is an enterprise business. It has very limited convenience activities. So it really is exactly in the crosshairs of both enterprise and perm slowdown right now, had fantastic performance and really benefited from the hiring boom. We have a very strong position in RPO, we’re the global leaders. We feel very good about that business. But right now, we’re going through the economic cycle and we can see the reduction both in enterprise spend as evidenced in reductions in permanent recruitment. So RPO is having a tougher time in this quarter. MSP is really starting to stabilize, we believe and is really seeing some of the actions that we’re taking on rebalancing our client mix there.

And finally, of course, as part of Talent Solutions, we’re seeing very strong activity and growth in Right Management in this quarter. So on the whole, it’s a mixed picture with RPO feeling the effects of permanent recruitment. MSP, you really reflecting the levels that we’re seeing in our staffing businesses overall, so aligned and then a strong Right Management performance.

George Tong: Okay, that’s helpful. You talked about taking decisive actions in the business to better align the strategy, the core to simplify the operations and Proservia was a great example of that. Are there additional areas of the business that you see opportunity or potential for further streamlining?

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