ManpowerGroup 2008 Annual Report Download - page 21

19Manpower Annual Report 2008 Management’s Discussion & Analysis
When we use the term “organic constant currency,” it means that we have further removed the impact of acquisitions in the
current period and dispositions from the prior period from our constant currency calculation. We believe that this calculation
is useful because it allows us to show the actual growth of our pre-existing business.
Constant currency and organic constant currency percent variances, along with a reconciliation of these amounts to certain
of our reported results, are included on pages 26 and 27.
Results Of Operations – Years Ended December 31, 2008, 2007 and 2006
CONSOLIDATED RESULTS – 2008 COMPARED TO 2007
The following table presents selected consolidated financial data for 2008 as compared to 2007.
Variance in Organic
Reported Constant Constant
(in millions, except per share data) 2008 2007 Variance Currency Currency
Revenues from services $ 21,552.8 $ 20,500.3 5.1% 0.5% (1.2)%
Cost of services 17,450.2 16,651.7 4.8
Gross profit 4,102.6 3,848.6 6.6 2.3 (0.1)
Gross profit margin 19.0% 18.8%
Selling and administrative expenses,
excluding impairment charge 3,430.3 3,023.2
Goodwill and intangible asset impairment charge 163.1 —
Selling and administrative expenses 3,593.4 3,023.2 18.9 14.7 11.8
Selling and administrative expenses as a % of revenues 16.7% 14.7%
Operating profit 509.2 825.4 (38.3) (42.9) (43.6)
Operating profit margin 2.4% 4.0%
Net interest expense 41.8 29.0 44.1
Other expenses 9.1 5.2 75.0
Earnings before income taxes 458.3 791.2 (42.1) (48.0)
Provision for income taxes 239.4 306.5 (21.9)
Effective income tax rate 52.2% 38.7%
Net earnings $ 218.9 $ 484.7 (54.8)% (59.4)%
Net earnings per share - diluted $ 2.75 $ 5.73 (52.0)% (56.7)%
Weighted average shares - diluted 79.7 84.6 (5.8)
The year-over-year increase in Revenues from Services is primarily attributable to:
a 4.6% increase due to the impact of currency exchange rates;
a 1.7% increase due to acquisitions;
increased demand for services in most of our markets, including Other EMEA, Italy, Right Management and Other
Operations, where revenues increased 8.1%, 0.5%, 9.3% and 6.9%, respectively, on a constant currency basis, offset by
decreased demand in the U.S., France and Jefferson Wells where revenues declined 0.9%, 8.7%, and 12.4%, respectively,
on a constant currency basis; and
growth in our permanent recruitment business which increased 14.3% on a consolidated basis in constant currency.
The year-over-year increase in Gross Profit is primarily attributed to:
a 4.3% increase due to the impact of currency exchange rates;
an increase of $48.2 million due to a business tax refund in France related to 2004;
a 39 basis point (+0.39%) improvement in the gross profit margin in our temporary recruitment business; and
offset by a decrease in the impact from a modification to the calculation of payroll taxes in France, which reduced the
amount of payroll taxes in each year. (See Note 1 to the consolidated financial statements for further information.) The
impact of this modification was an increase in Gross Profit of $68.2 million in 2008 related to the modification of payroll taxes
for 2005, and $157.1 million in 2007, related to the modification of payroll taxes for 2006 and the first nine months of 2007.