ManpowerGroup (MAN) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was $4.5 billion, down 7% as reported and 3% in constant currency, with broad stabilization in staffing trends in North America and Europe, and continued resilience in Asia and Latin America.

• Adjusted EBITDA was $112 million, down 9% year-over-year in constant currency; adjusted EPS was $1.30, down 12% year-over-year, while reported EPS was $1.24, impacted by currency and Proservia Germany wind-down.

• The business environment remains challenging, especially in the US and Europe, with clients delaying hiring and reducing contingent labor demand, but Asia and Latin America showed solid demand.

• Talent Solutions was recognized as a global leader in Recruitment Process Outsourcing for the 14th year.

• Strategic investments in digitization and AI integration are ongoing, with pilots underway in recruiter platforms.

Financial highlights

• Gross profit margin for Q2 2024 was 17.4%, down 40 bps year-over-year, mainly due to declines in higher-margin permanent recruitment.

• Adjusted EBITDA margin was 2.5%; reported operating profit was $101.1 million, margin at 2.2%.

• SG&A expenses were 15% of revenue in constant currency, reflecting an 11% reduction in average organic headcount year-over-year.

• Free cash flow for Q2 was an outflow of $150 million, improved from $177 million outflow in the prior year, mainly due to timing of payables and MSP payments.

• Net earnings for Q2 2024 were $60.1 million, down 7.8% year-over-year.

Outlook and guidance

• Q3 2024 revenue is expected to decline 4% to flat in constant currency, with a midpoint of -2%; as reported, revenue is expected to decline 2-6%.

• Q3 adjusted EPS guidance is $1.25–$1.35, including a $0.05 per share negative FX impact and a 34% tax rate.

• Gross profit margin guidance for Q3 is 17.3-17.5%; EBITA margin projected at 2.4-2.6%.

• Ongoing low levels of permanent recruitment activity are anticipated.