ManpowerGroup(MAN) - 2023 Q4 - Annual Report

Operations and Revenue - As of December 31, 2023, ManpowerGroup operated 2,100 offices in approximately 75 countries, connecting millions of people to work each year [12]. - In the Americas segment, 67% of revenue was generated from the United States, with 286 branch and 131 franchise offices as of December 31, 2023 [31]. - In Southern Europe, the largest operations are in France (57% of segment revenue) and Italy (20% of segment revenue), with 1,139 branch offices in total [34]. - Approximately 91% of revenues in the Americas segment were derived from staffing/interim services during 2023 [33]. - In Northern Europe, 84% of revenues were generated from staffing/interim services in 2023 [40]. - The Asia Pacific Middle East (APME) region accounted for approximately 77% of revenues from staffing/interim services during 2023 [41]. - The company operates in approximately 75 countries, with 30% of its workforce in the Americas and 32% in Southern Europe [61]. - Approximately 84% of the company's revenues were generated outside of the United States, primarily in Europe [121]. Financial Performance - Revenues from services decreased by 4.6% in 2023, totaling $18,914.5 million compared to$ 19,827.5 million in 2022 [186]. - The Americas experienced a significant revenue decrease of 10.6%, primarily due to a $246.4 million decline in demand for staffing services [188]. - Operating profit decreased by 56.0% to$ 255.8 million, with an operating profit margin of 1.4%, down from 2.9% in 2022 [183]. - Net earnings fell by 76.3% to $88.8 million, with diluted net earnings per share dropping to$ 1.76 from $7.08 [187]. - The effective income tax rate increased to 56.9% in 2023, compared to 32.9% in 2022 [187]. - Selling and administrative expenses decreased by 4.7% in 2023, mainly due to a reduction in bonuses and sales commissions [198]. - Selling and administrative expenses increased by 15.8% in 2023 compared to 2022, primarily due to$ 120.4 million in restructuring costs, up from $0.8 million in 2022 [206]. Workforce and Talent Management - The company had around 27,900 full-time equivalent employees as of December 31, 2023 [53]. - The Manpower MyPath program has impacted over 240,000 lives through 2023, with MyPath associates now representing 36% of the associate talent pool [57]. - The Experis Academy has graduated more than 1,900 developers by the end of 2023, addressing skills gaps for over 170 tech companies across 17 countries [58]. - The Future Leader Program saw 198 employees complete it in 2023, totaling 832 since its inception in 2019 [68]. - The Accelerated Leadership Program had 58 completions in 2023, with a total of 90 since its launch in 2022 [68]. Economic and Market Conditions - ManpowerGroup's operations are sensitive to economic factors, making it challenging to forecast future demand for services with certainty [26]. - The company is sensitive to global macroeconomic conditions, with a significant risk of recession impacting demand for staffing services [82]. - Economic conditions in Europe, which accounts for 64% of the company's revenue, are particularly susceptible to geopolitical events and inflationary pressures [84]. - The company expects continued challenges in the business environment, particularly in North America and Europe, due to economic uncertainty [177]. Risks and Challenges - The competitive landscape in the employment services industry is intensifying, with pressure on pricing and the risk of clients opting for in-house resources or AI tools [91]. - The company faces challenges in maintaining profitability during periods of low demand, as selling and administrative expenses do not decline as quickly as revenues [83]. - The company is increasingly reliant on technology systems, which are vulnerable to cyberattacks and system failures, potentially leading to operational disruptions [99]. - Compliance with evolving data privacy and cybersecurity regulations, such as GDPR, adds operational burdens and potential financial penalties [97]. - The company faces intense competition for qualified personnel, particularly in the IT field, which may restrict its ability to fulfill customer requirements [103]. Strategic Initiatives - The company aims for 50% gender parity at the global leadership level by 2025 [64]. - The company is focused on championing diversity, equity, inclusion, and belonging (DEIB) across its operations [60]. - The company aims to diversify revenues beyond core staffing services, focusing on higher-margin professional resourcing, such as its Experis brand in IT recruitment [112]. - The company has made significant acquisitions, including ettain group in 2021, which may introduce unexpected costs and operational risks [117]. - The company has disposed of operations in the Philippines, Russia, and Hungary to optimize its strategic footprint, which may involve financial losses and reputational risks [119]. Shareholder Information - The company has authorized the repurchase of 5.0 million shares in August 2023, with 4.6 million shares remaining authorized for repurchase as of December 31, 2023 [167]. - The total number of shares repurchased in Q4 2023 was 697,138, with an average price paid per share of$ 71.95 [168]. - The cumulative total shareholder return on the company's common stock was $123 as of December 31, 2023, compared to$ 150 in 2021 [171]. - The company expects to continue paying semi-annual dividends, subject to review and change at the discretion of the Board of Directors [166]. Cybersecurity and Data Privacy - The company has experienced data security breaches in the past, which have not materially impacted operations, but ongoing vulnerabilities remain a concern [93]. - The Chief Information Security Officer (CISO) leads the global information security organization, providing regular reports on cybersecurity threats and assessments [153]. - The Audit Committee oversees the annual enterprise risk assessment, including cybersecurity threats and mitigation strategies [154].