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2004 Annual Report MANPOWER INC.44
France – Revenues in France increased 12.7% to $5.2 billion. In
Euros, French Revenues increased 2.8% to 4.2 billion. The
majority of this revenue increase reflects hourly rate increases as
volumes increased only slightly during the year. Revenue growth
in Euro was modest in the first half of the year, growing by 2.7%,
followed by softening in the third quarter to 1.0% and then accel-
erating to 4.9% in the fourth quarter of the year.
Gross Profit Margins declined compared to the prior year, even
after excluding adjustments to our estimated liability related to
social program remittances in each year. (In 2004, there was an
unfavorable adjustment of $12.8 million, and in 2003, there was a
$16.1 million favorable adjustment.) This decline reflects increasing
price competition from large and small competitors, partially due
to their expansion of office network capacity during a period of
nominal growth in the total staffing market.
Selling and Administrative Expenses were well controlled during the year, decreasing slightly from 2003 despite continued
investment in new offices. A total of 49 new offices were opened during the year, bringing the total office count to 1,127.
Operating Unit Profit was $178.8 million, a decrease of 2.8% from the prior year. Operating Unit Profit Margin was
3.4%, a decrease from 3.9% in 2003. Operating Unit Profit was unfavorably impacted by the adjustment for social
program remittances in 2004, and favorably impacted by the adjustments in 2003, as discussed above.
During 2004, a new law in France ended the French Job Center’s (ANPE’s) control of the placement of the unemployed.
As a result of this law change, temporary staffing companies are allowed to offer placement and recruitment services
beginning January 1, 2005. We expect these services will have a long-term benefit on our French business, but will not
have a significant impact on 2005 results due to investments required to grow this service line.
EMEA – The EMEA region includes our operations in Europe, the
Middle East and Africa (excluding France), which covers a total of
18 countries delivering services through 1,400 offices. In addition
to employment services delivered under the Manpower brand, this
region also includes Elan, which is a leading IT recruitment, staffing
and managed services firm operating across 16 countries in the
region, and Brook Street, which provides general staffing and
recruitment services primarily in the United Kingdom.
Geographically, the largest operations in this segment are the U.K.,
which comprises 27% of EMEA revenues, Germany, Italy, the
Netherlands, Norway, Spain and Sweden, which combined comprise
52% of EMEA revenues. Elan comprises 11% of EMEA revenues.
MANAGEMENT’S DISCUSSION AND ANALYSIS
of financial condition and results of operations
2002
2003
2004
3.848.2 (+2.2%)
4,638.8 (+20.5%)
5,226.7 (+12.7%)
FRANCE REVENUES
in millions
($)
2002
2003
2004
143.6 (+5.8%)
184.0 (+28.2%)
178.8 (-2.8%)
FRANCE OPERATING
UNIT PROFIT
in millions
($)
2002
2003
2004
3,434.9 (+.2%)
3,920.2 (+14.1%)
5,084.3 (+29.7%)
EMEA REVENUES
in millions
($)
2002
2003
2004
83.0 (-21.6%)
51.7 (-37.7%)
115.1 (+122.4%)
EMEA OPERATING UNIT PROFIT
in millions
($)