MANPOWER INC. BAIRD 2008 BUSINESS SOLUTIONS CONFERENCE

Transcription

1 MANPOWER INC. BAIRD 2008 BUSINESS SOLUTIONS CONFERENCE FEBRUARY 27,

2 2 Forward Looking Statement This presentation includes forward-looking statements which are subject to risks and uncertainties. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements is contained in the Company s Annual Report on Form 10-K dated December 31, 2007, which information is incorporated herein by reference, and such other factors as may be described from time to time in the Company s SEC filings.

3 3 Manpower: A Global Leader Nearly 4,500 offices in 80 countries & territories with $21 billion in revenue. 400,000 clients worldwide, including most of the Fortune 500 and more than 90% of the Fortune Global 500 companies. Nearly five million people placed into permanent, temporary and contract positions in More than 200,000 permanent placements in 2007, including more than 100,000 direct permanent placements and 100,000 career transition placements through Right Management. Named to Forbes magazine s Platinum List of America s Best Managed Companies for the fifth year in a row. Honored by Institutional Investor magazine as one of the most shareholder-friendly companies the last two years. Received CSR Award from the European Year of People with Disabilities based on our integration of people with disabilities into the workforce. Partnered with FACE in France to help people from economically challenged areas to find jobs through a program called Job Academy.

4 4 Manpower Vision We lead in the creation and delivery of services that enable our clients to win in the changing world of work.

5 5 Helping our Clients Win Nordea Implemented a common process for Procure-to-Pay and centralized the accounts payable function for all four Nordic countries All Nordea employees were transitioned to temporary staffing positions or offered career transition services. Approximately 550,000 invoices per year Lenovo Partnered to develop and deliver a three-day Management Development Course, focused on various leadership skills Delivered to 2,200-2,400 managers, 50% of which are in China Delivered in English and Mandarin and integrated into Lenovo s hiring process

6 6 Manpower Key Strategies Revenue Generating more revenue requires us to develop strategic insights about our clients needs and goals, elevating and broadening our mutually-beneficial relationships and measuring our contribution to our clients businesses. Innovation Organization and Culture Efficiency Thought Leadership Improving our efficiency means achieving speed, quality and effective use of resources throughout all our operations. Demonstrating our commitment to innovation requires us to continuously capture creativity in local markets, and replicate this around the world. Our role is to develop and expand our capabilities, while creating services targeted to what s new and what s next in the world of work. Maintaining our thought leadership means continuously anticipating future dynamics of the market and contributing to the design of social and employment systems on a global basis. Evolving our organization and culture requires attracting and retaining high quality people for the long term. It also requires creating an environment that promotes entrepreneurship, rewards high performance, and motivates us to reach our full potential.

7 7 Where We re Going Specialty HR Consulting F&A MBS Needs Permanent Outplacement Professional Core Staffing Lower Margins Value Higher Margins

8 8 Evolution of Gross Margin - Specialty Services $1,803 M $3,849 M Manpower Professional 22% 26% 5-Year CAGR: 16.4% Elan Jefferson Wells 78% 74% Right Manpower

9 9 Well-Positioned Worldwide Jefferson Wells 2% Right Right Manage Management 2% 2% 2007 Revenue 2007 Operating Unit Profit Italy 7% Other Ops. 12% Other EMEA 33% US 10% France 34% Right Right Management ment 4% 4% Jefferson Other Wells Ops. 9% Italy 13% Other EMEA 33% US 10% France 31% (1) $20.5 Billion $784.1 Million (1) (1) Excludes the favorable impact from the French payroll tax change of $149.6M. As reported, OUP was $933.7M and France was 42% of OUP.

10 10 Exciting Growth Opportunities Staffing Market Penetration 5 Yr Estimated Staffing Market Growth Manpower Market Share Italy 0.7% % 16% Nordics 0.8% % 21% Germany 1.3% % 5% Japan 1.9% % 4% US 2.0% % 4% France 2.4% % 23% UK 4.5% % 6% SOURCE: CIETT Agency Work Statistics for 2006, Manpower estimates

11 11 Emerging Market Opportunities China 63% of placed candidates are middle to senior managers Markets include: accounting & finance, engineering & manufacturing, HR, IT, office, sales & marketing and supply chain Our 62 offices service 3,500 existing clients, including 80% of the world s top companies Manpower, Manpower Professional and Right Management brands India GDP growth over 9%, with double digit growth in Manufacturing and Service Outsourcing is the preferred option for cost and efficiency Markets include: IT, ITes, manufacturing, retail financial services, telecom, infrastructure Market growing at 30% per year, with 80% of the market permanent recruitment 32 offices operating under the Manpower, Manpower Professional and Right Management brands Middle East Acquired Clarendon Parker, regional leader in permanent recruitment and contract staffing, with 9 offices in 5 countries in the region Markets include: oil & gas, IT, telecommunications, accounting & finance, financial services, administration Manpower, Manpower Professional, Clarendon Parker and Right Management brands

12 12 FINANCIAL HIGHLIGHTS

13 13 15-Year Revenue Growth Strong global secular trends toward workforce flexibility Superior brand recognition Global leveraging of innovation Clear and effective strategy Year CAGR: 13% 12% Before Acquisitions

14 14 Financial Summary Fourth Quarter ($ in millions, except EPS) % Variance Constant (2) USD Currency Revenue 5, , % 9.4% Gross profit 1, % 10.0% 18.4% 18.4% SG&A expense % 8.6% % of Revenue 14.5% 14.8% % of Gross profit 78.9% 80.4% Operating Profit % 15.6% 3.9% 3.6% (3) Earnings per share % 29.6% (1) (1) Constant currency is further explained in our quarterly filings with the SEC. (2) Excludes the net impact from the French payroll tax change, legal reserve, and JW reorganization costs. As reported, GP was $1.1B with 18.6% margin, SG&A expense was $827M, OP was $223M with 4.0% margin, and EPS was $1.63. (3) Prior year variance represents growth over 2006 EPS from continuing operations.

15 15 Financial Summary Full Year ($ in millions, except EPS) % Variance Constant (2) USD Currency Revenue 20, , % 9.0% Gross profit 3, , % 10.0% 18.0% 17.9% SG&A expense 3, , % 8.6% % of Revenue 14.7% 14.9% % of Gross profit 81.7% 83.1% Operating Profit % 17.0% 3.3% 3.0% (3) Earnings per share % 24.1% (1) (1) Constant currency is further explained in our quarterly filings with the SEC. (2) Excludes the net impact from the French payroll tax change. As reported, GP was $3.8B with 18.8% margin, SG&A expense was $3.0B, OP was $825M with 4.0% margin, and EPS was $5.73. (3) Prior year variance represents growth over 2006 EPS from continuing operations.

16 16 Trend Analysis Dollars in Billions % = Variance in constant currency +2.2% 12.1 Revenue +13.1% % % % 20.5 Y-O-Y Growth in CC % 22.0% 17.0% 12.0% 7.0% Dollars in Millions Operating Profit % = Variance in constant currency -6.6% +43.1% % % % +17.0% +17.0% OP Margin 4.5% 4.0% 3.5% 3.0% 5 2.0% % % (1) 2.0% (1) Excludes the net favorable impact from the French payroll tax change of $149.6M. Includes this impact. OP is $825.4M and OP margin is 4.0%.

17 17 Operating Cash Flows ($ in millions) Capital Expenditures Free Cash Flow * * Free Cash Flow is equal to cash provided by operating activities less capital expenditures, and is further explained on our website.

18 18 Balance Sheet December 31, 2007 ($ in millions) Cash Accounts Receivable Other Assets Assets $7, ,479 2,208 Other Liabilities Total Debt Equity Liabilities & Equity $7,224 3, ,669

19 19 Return on Invested Capital * (ROIC) % 18.0% (1) % % % % (1) Excludes the favorable impact from the French payroll tax change. Including the French payroll tax change, ROIC is 18.0%. * Return on Invested Capital is defined as operating profit after tax divided by the average monthly total of net debt (total debt less cash and cash equivalents) and equity for the year, and is further explained on our website.

20 20 Financial Targets Revenue Growth > Market SG&A Expense < 80% of Gross Profit Operating Profit Margin > 4% ROIC > 15% EPS Growth > 15% Constant Currency

21 21 Why Manpower? Recognized industry leader with most recognized single brand. Complete range of services across the employment lifecycle. Broad geographical diversification. Well positioned for growth in emerging markets (China, India, Middle East, Eastern Europe). Seasoned management team with extensive industry experience. Strong financial performance Five-year CAGR for Revenue of 14.2% and for Operating Profit of 23.7% (1) ). (1) Excludes the favorable impact from the French payroll tax change in As reported, the CAGR for OP is 28.8%.

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