ManpowerGroup Inc

Previous wording

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Current wording

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Previous wording

During 2023, revenues decreased -4.6% compared to 2022. Our 2023 results reflected the negative impact of economic uncertainty, particularly in Europe and North America, as we saw decreased demand for our staffing and permanent recruitment services, partially offset by increased demand for our Talent Solutions outplacement services. As Europe represents a significant portion of our operations, we continue to monitor economic conditions in our Southern Europe and Northern Europe segments. The Americas market also experienced a challenging operating environment during 2023, driven primarily by elevated inflation and the United States' sensitivity to higher interest rates. As a result of these factors, we expect the business environment will continue to be challenging for us in future periods, especially in North America and Europe, with many companies delaying hiring decisions or reducing their demand for contingent labor. The current economic risks are driven by increasing geopolitical tensions and slowing economic growth in many parts of the world. Compounding the challenging business environment, the attack in Israel on October 7, 2023 and the subsequent hostilities in Gaza could negatively impact our operations in Israel, which represents 4.1% of our revenues in the Southern Europe region and 1.8% of our ManpowerGroup revenues. These evolving events could put further pressure on our results and may increase geopolitical risk and business caution more globally.

Current wording

During 2024, revenues decreased -5.6% compared to 2023. Our 2024 results reflected the negative impact of economic uncertainty, particularly in Europe and North America, as we saw decreased demand for our staffing and permanent recruitment services, partially offset by increased demand for our Right Management outplacement services as well as increased demand in Asia Pacific and Latin America. As Europe represents a significant portion of our operations, we continue to monitor economic conditions in our Southern Europe and Northern Europe segments. Inflation has eased in Europe and the United States resulting in both markets reducing interest rates during the year. However, employers are continuing their cautious approach with many employers retaining their current workforce, delaying hiring decisions or reducing their demand for contingent labor as they remain focused on managing the macro-economic and geopolitical challenges impacting their businesses. Many employers are still hesitant to increase their spend and expand their workforce until they perceive a significant improvement in economic outlook. As a result of these factors, we expect the business environment will continue to be challenging, which could further negatively impact our operations in future periods.

Previous wording

During 2023, the United States dollar was generally stable, on average, relative to the currencies in most of our markets, and overall had a slight unfavorable impact on our reported results. The changes in the foreign currency exchange rates had a -0.6% unfavorable impact on revenues from services and an approximately $0.14 per share unfavorable impact on net earnings per share – diluted in 2023. Substantially all of our subsidiaries derive revenues from services and incur expenses within the same local currency and generally do not have cross-currency transactions, and therefore, changes in foreign currency exchange rates primarily impact reported earnings and not our actual cash flow unless earnings are repatriated. To understand the performance of our underlying business, we utilize constant currency or organic constant currency variances for our consolidated and segment results.

Current wording

During 2024, the United States dollar strengthened, on average, relative to the currencies in most of our markets, and overall had an unfavorable impact on our reported results. The changes in the foreign currency exchange rates had a -2.2% unfavorable impact on revenues from services and an approximately $0.15 per share unfavorable impact on net earnings per share – diluted in 2024. Substantially all of our subsidiaries derive revenues from services and incur expenses within the same local currency and generally do not have cross-currency transactions, and therefore, changes in foreign currency exchange rates primarily impact reported earnings and not our actual cash flow unless earnings are repatriated. To understand the performance of our underlying business, we utilize constant currency or organic constant currency variances for our consolidated and segment results.

Previous wording

During 2023, we experienced the following quarterly changes to our consolidated revenues compared to 2022: a -7.6% decrease in revenue in the first quarter due to softening demand for staffing services due to increased economic uncertainty, partially offset by an increase in demand for our Talent Solutions outplacement services; a revenue decrease of -4.3% in the second quarter due to the continued softening demand for staffing services, partially offset by an increase in demand for our Talent Solutions outplacement services; a revenue decrease of -2.6% in the third quarter due to the continued softening demand for staffing services, partially offset by an increase in demand for our Talent Solutions outplacement services; and ending the year with a -3.7% revenue decrease in the fourth quarter of 2023 due to the continuing decrease in demand for our staffing services, partially offset by an increase in demand for our Talent Solutions outplacement services.

Current wording

During 2024, we experienced the following quarterly changes to our consolidated revenues compared to 2023: a -7.3% decrease in revenue in the first quarter due to softening demand for staffing services due to increased economic uncertainty, partially offset by an increase in demand for our Right Management outplacement services; a revenue decrease of -6.9% in the second quarter due to the continued softening demand for staffing and permanent recruitment services; a revenue decrease of -3.1% in the third quarter due to the continued softening demand for staffing services, partially offset by an increase in demand for our Right Management outplacement services; and ending the year with a -5.0% revenue decrease in the fourth quarter of 2024 due to the continuing decrease in demand for our staffing services.

Previous wording

During 2023 compared to 2022, most of our markets experienced revenue decreases due to softening demand for our staffing and permanent recruitment services and the strengthening of the dollar in certain markets, partially offset by increased demand for our Talent Solutions outplacement services. We experienced a -10.6% revenue decrease in the Americas primarily driven by decreased demand across our staffing and permanent recruitment services, partially offset by increased demand for our outplacement services. We experienced a -0.2% revenue decrease in Southern Europe, primarily due to decreased demand for our Manpower staffing services, partially offset by the favorable impact of currency exchange rates. We experienced a revenue decrease of -7.4% in Northern Europe primarily driven by decreased demand across our staffing/interim and permanent recruitment services, partially offset by increased demand for our Talent Solutions outplacement services. We experienced a -2.7% revenue decrease in APME primarily due to the unfavorable impact of changes in currency exchange rates and decreased activity in our RPO permanent recruitment business driven by the non-recurrence of a government contract mid-year and Experis interim services, partially offset by increased demand for our Manpower staffing services.

Current wording

During 2024 compared to 2023, most of our markets experienced revenue decreases due to softening demand for our staffing and permanent recruitment services and the strengthening of the dollar in certain markets, partially offset by increased demand for our Right Management outplacement services. We experienced a -4.3% revenue decrease in the Americas primarily driven by the unfavorable impact of currency exchange rates and a decrease in demand for our Experis interim services, partially offset by an increase in demand for our Manpower staffing services, an increase in demand for our Talent Based Outsourcing (TBO) business and an increase in demand for our Right Management outplacement services. We experienced a -3.5% revenue decrease in Southern Europe, primarily driven by a decrease in demand for our Manpower and Experis staffing/interim services and a decrease in demand for our permanent recruitment services, partially offset by an increase in demand for our Right Management outplacement services. We experienced a revenue decrease of -11.8% in Northern Europe, primarily due to decreased demand in our Manpower and Experis staffing/interim services, decreased demand in our permanent recruitment business and decreased demand for our Experis solutions services, partially offset by increased demand in our TAPFIN - Managed Service Provider (MSP) business and increased demand for our Right Management outplacement services. We experienced a -6.9% revenue decrease in APME, primarily driven by the unfavorable impact of currency exchange rates, decreased demand in our permanent recruitment business and a decrease in demand in our TBO business, partially offset by an increase in demand for our Manpower and Experis staffing/interim services.

Previous wording

From a brand perspective, we experienced a revenue decrease in Manpower, Experis and Talent Solutions during 2023 compared to 2022. The revenue decrease in our Manpower brand was due to decreased demand for our staffing services and the unfavorable impact of currency exchange rates, partially offset by increased demand for our outcome-based solutions services. In our Experis brand, the revenue decrease was primarily due to decreased demand for our interim services. The revenue decrease in our Talent Solutions brand, which includes Recruitment Process Outsourcing (RPO), TAPFIN - Managed Service Provider (MSP) and our Right Management offerings, was driven primarily by decreased activity in our RPO permanent recruitment business, partially offset by increased demand for our Right Management outplacement services.

Current wording

From a brand perspective, we experienced a revenue decrease in Manpower, Experis and Talent Solutions during 2024 compared to 2023. The revenue decrease in our Manpower brand was due to decreased demand for our staffing services and the unfavorable impact of currency exchange rates. In our Experis brand, the revenue decrease was primarily due to decreased demand for our interim services and decreased demand for our Experis solutions services. The revenue decrease in our Talent Solutions brand, which includes Recruitment Process Outsourcing (RPO), TAPFIN - MSP, and our Right Management offerings, was driven primarily by decreased activity in our RPO permanent recruitment business, partially offset by increased demand for our Right Management outplacement services and increased demand in our MSP business.

Previous wording

In 2023 our gross profit margin decreased 20 basis points compared to 2022 primarily due to decreases in our higher-margin permanent recruitment business as permanent hiring demand continued to soften and experienced reduced levels from the significant activity in the prior year period and decreased activity in our higher margin Experis solutions business. The decrease was partially offset by a change in business mix as our higher-margin Right Management outplacement business represented a higher percentage of the revenue mix and improvements in staffing/interim margins.

Current wording

In 2024 our gross profit margin decreased 50 basis points compared to 2023 primarily due to decreases in our permanent recruitment business, including Talent Solutions RPO, as permanent hiring demand continued to soften and experienced reduced levels from the prior year period and a decrease in staffing/interim margins due to mix shifts and lower volumes while pricing remained stable. The decrease was partially offset by increased career transition activity in Right Management as outplacement activity increased.

Previous wording

The year-over-year decrease in revenues from services of -4.6% (-4.0% in constant currency) was attributed to:

Current wording

The year-over-year decrease in revenues from services of -5.6% (-3.4% in constant currency and -3.0% in organic constant currency) was attributed to:

Previous wording

a revenue decrease in the Americas of -10.6% (-6.8% in constant currency) primarily due to the decreased demand of $246.4 million for our Manpower and Experis staffing/interim services, decreased activity of $59.1 million in our RPO permanent recruitment business and a decrease of $17.5 million in our MSP business as we exited lower margin arrangements, partially offset by the increase in demand of $29.9 million for our Talent Solutions outplacement services. The United States, our largest market in the Americas, experienced a revenue decrease of -15.4% primarily driven by decreased demand of $443.8 million for our Manpower and Experis staffing/interim services, decreased activity of $57.1 million in our RPO permanent recruitment business and a decrease of $18.1 million in our MSP business as we exited lower margin arrangements, partially offset by an increase in demand of $27.7 million for our Talent Solutions outplacement services;

Current wording

a revenue decrease in the Americas of -4.3% (increase of 3.1% in constant currency) primarily driven by the $325.8 unfavorable impact of currency exchange rates and a $144.8 decrease in demand for our Experis interim services, partially offset by a $248.8 increase in demand for our Manpower staffing services, a $24.4 increase in demand for TBO and a $9.3 increase in demand for our Right Management outplacement services. The United States, our largest market in the Americas, experienced a revenue decrease of -3.5% primarily driven by a $105.4 decrease in demand for our Manpower and Experis staffing/interim services and a $6.7 decrease in demand for our permanent recruitment services, partially offset by a $7.9 increase in demand for our Right Management outplacement services;

Previous wording

a revenue decrease in Southern Europe of -0.2% (-2.4% in constant currency and -2.6% in organic constant currency) which was primarily due to decreased demand of $230.8 million for our Manpower staffing services, partially offset by the $185.9 million favorable impact of changes in currency exchange rates and a $31.4 million increase in demand for our Talent Solutions outplacement services. France, the largest market in Southern Europe, experienced a revenue increase of 1.7% (-1.0% in constant currency and decrease of -1.5% in organic constant currency), which was primarily due to $129.7 million favorable impact of foreign currency exchange rates and an increase in demand of $31.0 million for our Talent Solutions outplacement services, partially offset by decreased demand of $83.8 million for our Manpower staffing services. Italy, our second-largest market in Southern Europe, experienced a revenue increase of 0.1% (-2.5% in constant currency), which was primarily due to the $43.8 million favorable impact of foreign currency exchange rates, increased demand of $5.5 million for our consulting services, primarily driven by Experis, and increased demand of $2.6 million for our Manpower permanent recruitment services. The increase in Italy was partially offset by the decrease in demand of $51.8 million for our Manpower and Experis staffing/interim services;

Current wording

a revenue decrease in Southern Europe of -3.5% (-3.3% in constant currency and -3.1% in organic constant currency) primarily driven by a $273.0 decrease in demand for our Manpower and Experis staffing/interim services and a $23.9 decrease in demand for our permanent recruitment services, partially offset by a $14.6 increase in demand for our Right Management outplacement services. France, the largest market in Southern Europe, experienced a revenue decrease of -5.1% (-5.1% in constant currency) primarily driven by a $248.2 decrease in demand for our Manpower staffing services, partially offset by a $12.6 increase in demand for our Right Management outplacement services. Italy, our second-largest market in Southern Europe, experienced a revenue decrease of -1.9% (-1.8% in constant currency) primarily driven by a $24.7 decrease in demand for our Manpower staffing services and a $7.0 decrease in demand for our permanent recruitment services;

Previous wording

The year-over-year 20 basis point decrease in gross profit margin was primarily attributed to:

Current wording

The year-over-year 50 basis point decrease in gross profit margin was primarily attributed to:

Previous wording

a 50 basis point unfavorable impact due to decreases in permanent recruitment, including Talent Solutions RPO, as permanent hiring demand continued to soften and experienced reduced levels from the significant activity in the prior year period; and

Current wording

a 40 basis point unfavorable impact due to decreases in permanent recruitment, including Talent Solutions RPO, as permanent hiring demand continued to soften and experienced reduced levels from the prior year period; and

Previous wording

The 3.7% increase in selling and administrative expenses in the year ended December 31, 2023 (3.8% in constant currency; 3.7% in organic constant currency) was primarily attributed to:

Current wording

The -10.4% decrease in selling and administrative expenses in the year ended December 31, 2024 (-8.8% in constant currency; -8.5% in organic constant currency) was primarily attributed to:

Previous wording

Selling and administrative expenses as a percent of revenues increased 130 basis points in the year ended December 31, 2023 compared to the year ended December 31, 2022 due primarily to:

Current wording

Selling and administrative expenses as a percent of revenues decreased 80 basis points in the year ended December 31, 2024 compared to the year ended December 31, 2023 due primarily to:

Previous wording

Interest and other expenses, net is comprised of interest, foreign exchange gains and losses and other miscellaneous non-operating income and expenses, including those associated with noncontrolling interests. Interest expense, net was $45.5 million in 2023 compared to $29.0 million in 2022 primarily due to the higher interest cost on pension obligations and a higher interest rate Euro note following the refinancing mid 2022. Miscellaneous income, net was $17.4 million in 2023 compared to $16.3 million in 2022. Foreign exchange loss, net was $21.8 million in 2023 compared to $11.9 million in 2022 primarily due to non-cash currency translation loss related to our Argentina business. Argentina is required to be treated as a hyperinflationary economy for accounting purposes and the non-cash currency translation losses reflected the devaluation of the Argentine peso in 2023. This is a non-cash accounting charge as our Argentina business operates in their local currency.

Current wording

Interest and other expenses, net is comprised of interest, foreign exchange gains and losses and other miscellaneous non-operating income and expenses, including those associated with noncontrolling interests. Interest expense, net was $56.7 in 2024 compared to $45.5 in 2023 primarily due to increased revolver and other short-term borrowings at a higher interest rate during the period. Foreign exchange loss, net was $6.2 in 2024 compared to $21.8 in 2023 primarily due to a reduction in foreign currency exchange losses in Argentina. Miscellaneous income, net was $13.7 in 2024 compared to $17.4 in 2023.

Previous wording

We recorded income tax expense at an effective rate of 56.9% for 2023, as compared to an effective rate of 32.9% for 2022. The 2023 rate was higher than the 2022 rate primarily due to a lower level of pre-tax earnings with a less beneficial mix driven by restructuring costs in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances. The 56.9% effective tax rate for 2023 was higher than the United States Federal statutory rate of 21% primarily due to restructuring costs in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances, the Netherlands non-deductible goodwill impairment charge, the French business tax and the overall mix of earnings.

Current wording

We recorded income tax expense at an effective rate of 43.5% for 2024, as compared to an effective rate of 56.9% for 2023. The 2024 rate was lower than the 2023 rate primarily due to a higher level of pre-tax earnings with a more beneficial mix driven by fewer restructuring costs in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances and the Netherlands non-deductible goodwill impairment charge recorded in 2023. The 43.5% effective tax rate for 2024 was higher than the United States Federal statutory rate of 21% primarily due to restructuring costs in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances, the French business tax and the overall mix of earnings.

Previous wording

Net earnings per share - diluted was $1.76 in 2023 compared to $7.08 in 2022. Restructuring costs recorded in 2023 and 2022 negatively impacted net earnings per share - diluted by approximately $2.74 and $0.05 per share, net of tax, in 2023 and 2022, respectively. Foreign currency exchange rates in 2023 unfavorably impacted net earnings per share - diluted by approximately $0.14 per share, net of tax, in 2023. Goodwill and other impairment charges recorded in 2023 and 2022 negatively impacted net earnings per share - diluted by approximately $1.13 and $0.93 per share, net of tax, in 2023 and 2022, respectively. The pension settlement expense recorded in 2023 and 2022 negatively impacted net earnings per share - diluted by approximately $0.12 and $0.05, net of tax, in 2023 and 2022, respectively. Non-cash currency translation losses related to our Argentina business in 2023 unfavorably impacted net earnings per share - diluted by approximately $0.26, net of tax, in 2023. The loss from the disposition of subsidiaries recorded in 2023 and 2022 negatively impacted net earnings per share - diluted by approximately $0.03 and $0.19 per share, net of tax, in 2023 and 2022, respectively. The acquisition transaction and integration costs recorded in 2022 negatively impacted net earnings per share - diluted by approximately $0.22, net of tax, in 2022.

Current wording

Net earnings per share - diluted was $3.01 in 2024 compared to $1.76 in 2023. Restructuring costs recorded in 2024 and 2023 negatively impacted net earnings per share - diluted by approximately $1.10 and $2.74 per share, net of tax, in 2024 and 2023, respectively. Losses related to our Proservia Germany wind down in 2024 unfavorably impacted net earnings per share - diluted by approximately $0.19, net of tax, in 2024. Foreign currency exchange rates in 2024 unfavorably impacted net earnings per share - diluted by approximately $0.15 per share, net of tax, in 2024. The pension settlement expense recorded in 2024 and 2023 negatively impacted net earnings per share - diluted by approximately $0.08 and $0.12, net of tax, in 2024 and 2023, respectively. Goodwill and other impairment charges recorded in 2023 negatively impacted net earnings per share - diluted by approximately $1.13 per share, net of tax, in 2023, respectively.

Previous wording

Weighted average shares - diluted decreased to 50.4 million in 2023 from 52.8 million in 2022. This decrease was due to the impact of share repurchases completed in 2023, partially offset by grants of share-based awards.

Current wording

Weighted average shares - diluted decreased to 48.3 million in 2024 from 50.4 million in 2023. This decrease was due to the impact of share repurchases completed in 2024, partially offset by grants of share-based awards.

Previous wording

In the Americas, revenues from services decreased -10.6% (-6.8% in constant currency) in 2023 compared to 2022. In the United States, revenues from services decreased -15.4% in 2023 compared to 2022, primarily driven by decreased demand of $443.8 million for our Manpower and Experis staffing/interim services, decreased activity of $57.1 million in our RPO permanent recruitment business and a decrease of $18.1 million in our MSP business as we exited lower margin arrangements, partially offset by an increase in demand of $27.7 million for our Talent Solutions outplacement services. In Other Americas, revenues from services increased 1.2% (14.2% in constant currency) in 2023 compared to 2022 primarily due to increased demand of $211.3 million for our Manpower staffing services, partially offset by the $187.3 million unfavorable impact of foreign currency exchange rates and decreased demand of $13.9 million for our Experis interim services. The increase in revenues from services in Other Americas was driven by revenue increases in Mexico and Argentina of $35.3 million, or 17.2%, and $19.4 million, or 11.6%, respectively (3.2% and 139.8%, respectively, in constant currency), partially offset by a revenue decrease in Canada of $61.2 million, or -14.7% (-11.3% in constant currency). The constant currency increase in Other Americas was primarily due to inflation in Argentina.

Current wording

In the Americas, revenues from services decreased -4.3% (increase of 3.1% in constant currency) in 2024 compared to 2023. In the United States, revenues from services decreased -3.5% in 2024 compared to 2023, primarily driven by a $105.4 decrease in demand for our Manpower and Experis staffing/interim services and a $6.7 decrease in demand for our permanent recruitment services, partially offset by a $7.9 increase in demand for our Right Management outplacement services. In Other Americas, revenues from services decreased -5.8% (increase of 15.2% in constant currency) in 2024 compared to 2023 primarily driven by the $325.8 unfavorable impact of foreign currency exchange rates, partially offset by a $202.1 increase in demand for our Manpower and Experis staffing/interim services and a $24.6 increase in demand for our TBO business. The constant currency increase in Other Americas was primarily due to inflation in Argentina. Within our Other Americas segment, we experienced decreases in Argentina and Canada of $60.6, or -32.4%, and $43.1, or -12.1%, respectively (125.3% and -10.8%, respectively, in constant currency), partially offset by a revenue increase in Mexico of $3.9, or 1.6% (4.5% in constant currency).

Previous wording

Gross profit margin decreased 80 basis points in 2023 compared to 2022 primarily due to decreased activity in our permanent recruitment business, particularly Talent Solutions RPO, which contributed 130 basis points to the decrease and decreased margins in our staffing and interim services, particularly within Experis, which contributed 50 basis points to the decrease. These contributions were partially offset by increased demand in our higher-margin Right Management outplacement business, which had a 60 basis point offsetting impact and the favorable impact of currency exchange rates, which had a 40 basis point offsetting impact.

Current wording

Gross profit margin decreased 50 basis points in 2024 compared to 2023. This decrease was primarily due to decreased margins in our Experis interim services, which contributed 120 basis points to the decrease. These decreases were partially offset by favorable impacts of currency exchange rates, which had a 50 basis point impact and increased margins in our Right Management outplacement business, which had a 20 basis point impact.

Previous wording

Operating Unit Profit (“OUP”) decreased -41.4% (-37.5% in constant currency). This decrease was primarily due to decreased profitability in the United States business of $118.8 million, which includes the decreased demand for our Manpower and Experis staffing/interim services and decreased activity in our RPO permanent recruitment business, as noted above. The decreased profitability in the United States was partially offset by decreased selling and administrative expenses, particularly bonuses and sales commissions and salaries, as noted above. OUP margin in the Americas decreased to 3.8% in 2023 from 5.7% in 2022, respectively. In the United States, OUP margin decreased to 3.4% in 2023 from 6.3% in 2022 primarily due to a decrease in gross profit margin as we saw decreased demand for our Manpower and Experis staffing/interim services and decreased activity in our RPO permanent recruitment business. The decrease was also due to an increase in our selling and administrative expenses as a percent of revenue as we reduced costs slower than the decline in gross profit and incurred higher levels of restructuring charges as compared to the previous year. Other Americas OUP margin increased to 4.5% in 2023 from 4.4% in 2022 primarily due to an increase in our gross profit margin, specifically in our Manpower staffing services, partially offset by an increase in our selling and administrative expenses as a percent of revenue as we saw restructuring in both Canada and Mexico.

Current wording

OUP decreased -14.5% (-8.9% in constant currency) in 2024, which represents a 3.4% OUP margin, a decrease from 3.8% in 2023. This decrease was primarily due to decreased profitability in our United States business of $16.7, which experienced decreased activity in our higher-margin permanent recruitment business, as noted above, partially offset by decreases to selling and administrative expenses as a percent of revenue. In the United States, OUP margin decreased to 2.8% in 2024 from 3.3% in 2023 primarily due to decreased activity in our higher-margin permanent recruitment and Manpower and Experis staffing/interim businesses, as noted above, partially offset by a decrease in our selling and administrative expenses as a percent of revenue. Other Americas OUP margin decreased to 4.4% in 2024 from 4.6% in 2023 primarily due to an increase in our selling and administrative expenses as a percent of revenue and decreased gross profit margins across our staffing and interim services.

Previous wording

Gross profit margin increased 20 basis points in 2023 compared to 2022. The increases were primarily due to increased demand in our higher-margin Right Management outplacement business, which contributed 20 basis points to the increase and increased demand in our permanent recruitment business, particularly within Manpower, which contributed 5 basis points to the increase. These contributions were partially offset by decreased activity in our higher margin Manpower staffing services, which had a 5 basis point offsetting impact.

Current wording

Gross profit margin decreased 50 basis points in 2024 compared to 2023. This decrease was primarily due to decreased activity in our higher margin Manpower staffing services, which contributed 30 basis points to the decrease, a decrease of activity in our permanent recruitment services, which contributed 20 basis points to the decrease and decreases across our Experis solutions services, which contributed 10 basis points to the decrease. These contributions were partially offset by increased demand in our higher-margin Right Management outplacement business which had a 10 basis point impact.

Previous wording

OUP in Southern Europe decreased -13.4% (-15.2% in constant currency). This decrease was primarily due to decreased profitability in the France reporting unit of $38.4 million and increased selling and administrative expense, as noted above. OUP margin in Southern Europe decreased to 4.2% in 2023 from 4.8% in 2022. In France, the OUP margin was 3.9% in 2023 compared to 4.7% in 2022. The decrease in France was primarily due to an increase in salary related costs and restructuring charges, as noted above, which had a significant impact on the overall increase in selling and administrative expenses as a percent of revenue. In Italy, the OUP margin increased to 7.3% in 2023 from 7.2% in 2022 primarily due to an increase in the gross profit margin, partially offset by restructuring charges, as noted above, which had a significant impact on the overall increase in selling and administrative expenses as a percent of revenue. In Other Southern Europe, the OUP margin decreased to 2.3% in 2023 from 3.1% in 2022 primarily due to an increase in our selling and administrative expenses as a percent of revenue as we incurred restructuring charges related to Spain and the regional head office, as noted above.

Current wording

OUP decreased -15.0% (-14.8% in constant currency and -15.2% in organic constant currency) in 2024, which represents a 3.7% OUP margin, a decrease from 4.2% in 2023. This OUP decrease was primarily due to decreased profitability in the France reporting unit of $36.4. In France, the OUP margin decreased to 3.3% in 2024 compared to 3.9% in 2023 primarily driven by an increase in selling and administrative expenses as a percent of revenue and a decrease in our higher-margin permanent recruitment business. In Italy, the OUP margin decreased to 6.7% in 2024 from 7.3% in 2023 primarily driven by an increase in selling and administrative expenses as a percent of revenue and a decrease in our higher-margin permanent recruitment business. In Other Southern Europe, the OUP margin decreased to 2.0% in 2024 from 2.3% in 2023 primarily due to a decrease in gross profit margin as we saw decreased activity in higher-margin Experis solutions services, as noted above, partially offset by a decrease in selling and administrative expenses as a percent of revenue.

Previous wording

In Northern Europe, the largest country operations include the United Kingdom, the Nordics, Germany, the Netherlands and Belgium (comprising 35%, 21%, 15%, 10% and 9%, respectively, of Northern Europe’s revenues). In the Northern Europe region, revenues from services decreased -7.4% (-7.3% in constant currency and -7.2% in organic constant currency) in 2023 compared to 2022. We experienced revenue decreases in the United Kingdom of $190.1 million, the Nordics of $150.4 million, and the Netherlands of $20.2 million, which represented revenue decreases of -12.7%, -15.8% and -5.0%, respectively (-13.0%, -9.8% and -7.4%, respectively, in constant currency). These decreases were partially offset by revenue increases in Germany of $28.2 million and Belgium of $18.8 million, which represented revenue increases of 5.3% and 6.2%, respectively (2.6% and 3.1%, respectively, in constant currency). The revenue decrease in Northern Europe was primarily due to decreased demand of $295.6 million for our Manpower and Experis staffing/interim services and decreased demand of $25.8 million for our permanent recruitment services, partially offset by the increased demand of $6.7 million for our Talent Solutions outplacement services and increased demand of $4.8 million within our MSP business.

Current wording

In Northern Europe, the largest country operations include the United Kingdom, the Nordics, Germany, the Netherlands and Belgium (comprising 35%, 19%, 14%, 11% and 9%, respectively, of Northern Europe’s revenues). In the Northern Europe region, revenues from services decreased -11.8% (-12.9% in constant currency) in 2024 compared to 2023, primarily due to decreased demand of $390.1 for our Manpower and Experis staffing/interim services, decreased demand of $33.7 in our permanent recruitment business and decreased demand of $78.7 for our Experis solutions services, partially offset by the $39.5 favorable impact of currency exchange rates, increased demand of $11.9 within our MSP business and increased demand of $6.2 for our Right Management outplacement services. Within our Northern Europe segment, we experienced revenue decreases in the United Kingdom of $157.3, the Nordics of $175.2, Germany of $84.5, the Netherlands of $6.7 and Belgium of $10.9, which represented revenue decreases of -12.1%, -21.8%, -15.1%, -1.8% and -3.4%, respectively (-14.5%, -21.2%, -15.2%, -1.8% and -3.4%, respectively, in constant currency).

Previous wording

Gross profit margin decreased by 10 basis points in 2023 compared to 2022 primarily due to decreases in our staffing/interim margins, which contributed 30 basis points to the decrease and decreased demand in our permanent recruitment business, particularly in Manpower and Experis, which contributed 30 basis points to the decrease. These contributions were partially offset by a shift in business mix towards our higher-margin Talent Solutions outplacement and MSP services, which had a 20 basis point offsetting impact and improvements in our consulting solutions margins, which had a 30 basis point offsetting impact.

Current wording

Gross profit margin increased by 10 basis points in 2024 compared to 2023 primarily due to increased activity in our MSP business, which contributed 40 basis points to the increase, a shift in business mix towards our higher-margin Right Management outplacement services, which contributed 30 basis points to the increase, and the wind down of our lower margin Germany Proservia business in 2023. These contributions were partially offset by decreased activity in our permanent recruitment business, which had a 40 basis point unfavorable impact and decreased activity in our higher margin Manpower staffing services, which had a 20 basis point unfavorable impact.

Previous wording

Gross profit margin decreased 20 basis points in 2023 compared to 2022 primarily due to decreased activity in our permanent recruitment business, particularly Talent Solutions RPO, which contributed 120 basis points to the decrease. This contribution was partially offset by improvement in our staffing/interim margins, which had a 60 basis point offsetting impact, and increased demand in our higher-margin Right Management outplacement services, which had a 40 basis point offsetting impact.

Current wording

Gross profit margin decreased 70 basis points in 2024 compared to 2023 primarily due to decreased activity in our permanent recruitment business, particularly Talent Solutions RPO, which contributed 140 basis points to the decrease, and a decrease in activity across our higher-margin outplacement services, which contributed 20 basis points to the decrease. These contributions were partially offset by improvement in our staffing/interim margins, which had a 90 basis point impact.

Previous wording

Selling and administrative expenses decreased -6.9% (-2.4% in constant currency and -2.1% in organic constant currency) in 2023 compared 2022. The decrease is primarily due to the $14.2 million favorable impact of currency exchange rates, a $6.0 million decrease in office lease related costs and a $5.8 million decrease in salary related costs from a reduction in headcount, partially offset by $3.3 million in restructuring costs incurred in 2023 compared to $0.1 million in 2022. The restructuring charges in 2023 were related to headcount reductions in Australia.

Current wording

Selling and administrative expenses decreased -11.0% (-6.7% in constant currency and -4.3% in organic constant currency) in 2024 compared 2023. The decrease is primarily driven by the $12.5 favorable impact of currency exchange rates, an $11.6 decrease in salary related costs from a reduction in headcount and a $9.3 decrease in office lease costs and other office related costs and a $4.4 decrease in consulting and outside services costs.

Previous wording

Certain constant currency and organic constant currency percent variances are discussed throughout this report. A reconciliation of these Non-GAAP percent variances to the percent variances calculated based on our annual GAAP financial results is provided below. (See Constant Currency and Organic Constant Currency on page 34 for information.)

Current wording

Certain constant currency and organic constant currency percent variances are discussed throughout this report. A reconciliation of these Non-GAAP percent variances to the percent variances calculated based on our annual GAAP financial results is provided below. (See Financial Measures - Constant Currency and Organic Constant Currency on page 31 for information.)

Previous wording

Cash used to fund our operations is primarily generated through operating activities and provided by our existing credit facilities. We believe our available cash and existing credit facilities are sufficient to cover our cash needs for the foreseeable future. We assess and monitor our liquidity and capital resources globally. We use a global cash pooling arrangement, intercompany lending, and some local credit lines to meet funding needs and allocate our capital resources among our various entities. As of December 31, 2023, we had $503.5 million of cash held by foreign subsidiaries. We have historically made and anticipate future cash repatriations to the United States from certain foreign subsidiaries to fund corporate activities. As of December 31, 2023, deferred taxes related to non-United States withholding and other taxes were provided on $1,519.8 million of accumulated unremitted earnings of non-United States subsidiaries that may be remitted to the United States. As of December 31, 2023 and 2022, we have recorded a deferred tax liability of $23.1 million and $18.4 million, respectively, related to these non-United States earnings that may be remitted. As of December 31, 2023, we had an additional $391.5 million of accumulated unremitted earnings of non-United States subsidiaries for which we have not provided deferred taxes as amounts are deemed indefinitely reinvested. We have not estimated the deferred tax liability on these earnings as such estimation is not practicable to determine or immaterial to the financial statements.

Current wording

Cash used to fund our operations is primarily generated through operating activities and provided by our existing credit facilities. We believe our available cash and existing credit facilities are sufficient to cover our cash needs for the foreseeable future. We assess and monitor our liquidity and capital resources globally. We use a global cash pooling arrangement, intercompany lending, and some local credit lines to meet funding needs and allocate our capital resources among our various entities. As of December 31, 2024, we had $348.8 of cash held by foreign subsidiaries. We have historically made and anticipate future cash repatriations to the United States from certain foreign subsidiaries to fund corporate activities. As of December 31, 2024, deferred taxes related to non-United States withholding and other taxes were provided on $1,353.5 of accumulated unremitted earnings of non-United States subsidiaries that may be remitted to the United States. As of December 31, 2024 and 2023, we have recorded a deferred tax liability of $25.9 and $23.1, respectively, related to these non-United States earnings that may be remitted. As of December 31, 2024, we had an additional $289.4 of accumulated unremitted earnings of non-United States subsidiaries for which we have not provided deferred taxes as amounts are deemed indefinitely reinvested. We have not estimated the deferred tax liability on these earnings as such estimation is not practicable to determine or immaterial to the financial statements.

Previous wording

Cash provided by operating activities was $348.2 million, $423.3 million and $644.8 million for 2023, 2022 and 2021, respectively. Changes in operating assets and liabilities generated $98.7 million, compared to $139.7 million utilized and $135.6 million of cash generated in 2023, 2022 and 2021, respectively. The change in 2023 from 2022 was primarily attributable to a decrease in accounts receivable due to the slowdown in the demand for our services. The change in 2022 from 2021 was primarily attributable to a decrease in accounts payable due to timing.

Current wording

Cash provided by operating activities was $309.2, $348.2 and $423.3 for 2024, 2023 and 2022, respectively. Changes in operating assets and liabilities generated $65.4 of cash, compared to $98.7 generated and $139.7 utilized in 2024, 2023 and 2022, respectively. The decrease in 2024 from 2023 was primarily attributable to decreased accounts receivable collections and an increase in capitalized implementation costs related to our cloud computing arrangements, partially offset by an increase in accounts payable. The change in 2023 from 2022 was primarily attributable to a decrease in accounts receivable due to the slowdown in the demand for our services.

Previous wording

Accounts receivable decreased to $4,830.0 million as of December 31, 2023 from $5,137.4 million as of December 31, 2022. The decrease was partly offset by the impact of changes in currency exchange rates. DSO decreased by two days from December 31, 2022 to 54 days as of December 31, 2023 due to favorable mix changes, with lower growth in countries with a higher average DSO.

Current wording

Accounts receivable decreased to $4,297.2 as of December 31, 2024 from $4,830.0 as of December 31, 2023. The decrease was partly attributable to the impact of changes in currency exchange rates. DSO decreased by two and a half days from December 31, 2023 to 52 days as of December 31, 2024 due to an increased emphasis on cash collections.

Previous wording

Capital expenditures were $78.2 million, $75.6 million and $64.2 million during 2023, 2022 and 2021, respectively. These expenditures were comprised of purchases of computer equipment, office furniture and other costs related to office openings and refurbishments, as well as capitalized software costs of $12.0 million, $34.2 million and $26.9 million in 2023, 2022 and 2021, respectively. The higher expenditures in 2022 and 2021 were primarily due to additional technology investments and the timing of capital expenditures.

Current wording

Cash used in investing activities were $68.2, $74.1 and $85.3 for 2024, 2023 and 2022, respectively. Capital expenditures were $51.1, $78.2 and $75.6 during 2024, 2023 and 2022, respectively. These expenditures were comprised of purchases of computer equipment, office furniture and other costs related to office openings and refurbishments, as well as capitalized software costs of $10.1, $12.0 and $34.2 in 2024, 2023 and 2022, respectively. The higher expenditures in 2022 were primarily due to additional technology investments and the timing of capital expenditures.

Previous wording

Net debt repayments were $16.2 million in 2023 as compared to net debt repayments of $58.7 million in 2022 and net borrowings of $70.3 million in 2021. The decrease in 2023 from 2022 is mainly due to the $75.0 million repayment we made into our revolving credit facility during 2022 to clear the outstanding borrowings as of December 31, 2022 related to the Experis acquisition. The acquisition was funded through cash on hand and a $150.0 million draw on our revolving credit facility on October 1, 2021 which was paid in 2022.

Current wording

Cash used in financing activities were $282.4, $349.5 and $482.1 for 2024, 2023 and 2022, respectively. Net debt borrowings were $16.1 in 2024 as compared to net debt repayments of $16.2 and $58.7 in 2023 and 2022, respectively. The larger repayments in 2022 were mainly due to the $75.0 repayment of our revolving credit facility to clear the outstanding borrowings as of December 31, 2021 related to an Experis acquisition. The acquisition was funded through cash on hand and a $150.0 draw on our revolving credit facility on October 1, 2021 which was repaid in 2022.

Previous wording

The Board of Directors authorized the repurchase of 5.0 million, 4.0 million and 6.0 million shares of our common stock in August 2023, August 2021 and August 2019. Share repurchases may be made from time to time through a variety of methods, including open market purchases, block transactions, privately negotiated transactions or similar facilities. In 2023, we repurchased a total of 2.4 million shares comprised of 2.0 million shares under the 2021 authorization and 0.4 million shares under the 2023 authorization, at a total cost of $179.8 million excluding excise tax on share repurchases of $1.7 million. In 2022, we repurchased a total of 3.2 million shares comprised of 1.2 million shares under the 2019 authorization and 2.0 million shares under the 2021 authorization, at a total cost of $270.0 million. In 2021, we repurchased 2.1 million shares under the 2019 authorization at a total cost of $210.0 million. As of December 31, 2023, there were 4.6 million shares remaining authorized for repurchase under the 2023 authorization and no shares remaining authorized for repurchase under the 2021 or 2019 authorization.

Current wording

The Board of Directors authorized the repurchase of 5.0 million and 4.0 million shares of our common stock in August 2023 and August 2021, respectively. Share repurchases may be made from time to time through a variety of methods, including open market purchases, block transactions, privately negotiated transactions or similar facilities. In 2024, we repurchased a total of 2.0 million shares under the 2023 authorization, at a total cost of $140.9 including excise tax on share repurchases of $0.9. In 2023, we repurchased a total of 2.4 million shares comprised of 2.0 million shares under the 2021 authorization and 0.4 million shares under the 2023 authorization, at a total cost of $181.5 including excise tax on share repurchases of $1.7. In 2022, we repurchased a total of 3.2 million shares comprised of 1.2 million shares under the 2019 authorization and 2.0 million shares under the 2021 authorization, at a total cost of $270.0. As of December 31, 2024, there were 2.6 million shares remaining authorized for repurchase under the 2023 authorization and no shares remaining authorized for repurchase under the 2021 authorization.

Previous wording

During 2023, 2022 and 2021, the Board of Directors declared total cash dividends of $2.94, $2.72 and $2.52 per share, respectively, resulting in total dividend payments of $144.3 million, $139.9 million and $136.6 million, respectively.

Current wording

During 2024, 2023 and 2022, the Board of Directors declared total cash dividends of $3.08, $2.94 and $2.72 per share, respectively, resulting in total dividend payments of $145.8, $144.3 and $139.9, respectively.

Previous wording

We have aggregate commitments of $2,303.4 million related to debt, operating leases, purchase obligations for global technology and financial shared services, restructuring costs, transition tax resulting from the Tax Act and certain other commitments, as follows:

Current wording

We have aggregate commitments of $2,268.2 related to debt, operating leases, purchase obligations for global technology and financial shared services, restructuring costs, transition tax resulting from the Tax Act and certain other commitments, as follows:

Previous wording

Our liability for unrecognized tax benefits, including related interest and penalties, of $17.1 million is excluded from the commitments above as we cannot determine the years in which these positions might ultimately be settled.

Current wording

Our liability for unrecognized tax benefits, including related interest and penalties, of $11.4 is excluded from the commitments above as we cannot determine the years in which these positions might ultimately be settled.

Previous wording

We recorded net restructuring costs of $149.2 million, $3.6 million and $15.2 million during 2023, 2022 and 2021, respectively, in selling and administrative expenses, primarily related to severances and office closures and consolidations in multiple countries and territories. The costs paid out of our restructuring reserve were $72.4 million during 2023.

Current wording

We recorded net restructuring costs of $53.6, $149.2 and $3.6 in 2024, 2023 and 2022, respectively, in selling and administrative expenses, primarily related to severance, office closures and consolidations, and professional and other fees related to restructuring in multiple countries and territories. The costs paid out of our restructuring reserve were $93.7 in 2024.

Previous wording

We have entered into guarantee contracts and stand-by letters of credit that total $745.7 million as of December 31, 2023 ($696.9 million for guarantees and $48.8 million for stand-by letters of credit). The guarantees primarily relate to staffing license requirements, operating leases and indebtedness. The stand-by letters of credit mainly relate to workers’ compensation in the United States. If certain conditions were met under these arrangements, we would be required to satisfy our obligation in cash. Due to the nature of these arrangements and our historical experience, we do not expect to make any significant payments under these arrangements. Therefore, they have been excluded from our aggregate commitments identified above. The cost of these guarantees and letters of credit was $1.6 million for 2023.

Current wording

We have entered into guarantee contracts and stand-by letters of credit that total $571.0 as of December 31, 2024 ($524.2 for guarantees and $46.8 for stand-by letters of credit). The guarantees primarily relate to staffing license requirements, operating leases and indebtedness. The stand-by letters of credit mainly relate to workers’ compensation in the United States. If certain conditions were met under these arrangements, we would be required to satisfy our obligation in cash. Due to the nature of these arrangements and our historical experience, we do not expect to make any significant payments under these arrangements. Therefore, they have been excluded from our aggregate commitments identified above. The cost of these guarantees and letters of credit was $1.4 for 2024.

Previous wording

Total capitalization as of December 31, 2023 was $3,236.7 million, comprised of $1,002.6 million in debt and $2,234.1 million in equity. Debt as a percentage of total capitalization was 31%, 29% and 31% as of December 31, 2023, 2022 and 2021, respectively.

Current wording

Total capitalization as of December 31, 2024 was $3,079.7, comprised of $952.8 in debt and $2,126.9 in equity. Debt as a percentage of total capitalization was 31%, 31% and 29% as of December 31, 2024, 2023 and 2022, respectively.