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30 ManpowerGroup 2013 Annual Report Management’s Discussion & Analysis
MANAGEMENT’S DISCUSSION & ANALYSIS
of financial condition and results of operations
CONSOLIDATED RESULTS — 2012 COMPARED TO 2011
The following table presents selected consolidated financial data for 2012 as compared to 2011.
Reported
Variance in
Constant
Variance in
Organic Constant
(in millions, except per share data) 2012 2011 Variance Currency Currency
Revenues from services $ 20,678.0 $ 22,006.0 (6.0)% (1.4)% (2.0)%
Cost of services 17,236.0 18,299.7 (5.8)
Gross profit 3,442.0 3,706.3 (7.1) (3.0) (3.7)
Gross profit margin 16.6% 16.8%
Selling and administrative expenses 3,030.3 3,182.1 (4.8) (0.8) (1.5)
Selling and administrative expenses as a % of revenues 14.7% 14.5%
Operating profit 411.7 524.2 (21.5) (16.5) (17.2)
Operating profit margin 2.0% 2.4%
Net interest expense 35.2 35.5 (0.8)
Other expenses 8.1 8.8 (8.2)
Earnings before income taxes 368.4 479.9 (23.2) (18.2)
Provision for income taxes 170.8 228.3 (25.2)
Effective income tax rate 46.4% 47.6%
Net earnings $ 197.6 $ 251.6 (21.5) (16.3)
Net earnings per share — diluted $ 2.47 $ 3.04 (18.8) (14.1)
Weighted average shares — diluted 80.1 82.8 (3.3)%
The year-over-year decrease in revenues from services of 6.0% (–1.4% in constant currency and –2.0% in organic constant
currency) was attributed to:
• decreased demand for services in several of our markets within Southern Europe and Northern Europe, where revenues
decreased 11.7% (–4.2% in constant currency and –5.3% in organic constant currency) and 6.3% (–1.3% in constant
currency), respectively. Several of our larger markets such as France and Italy experienced revenue declines of 12.2%
(–4.6% in constant currency and –6.1% in organic constant currency) and 15.8% (–8.9% in constant currency),
respectively, due to the current economic environment in these countries;
• revenue decline in the United States of 4.0% primarily due to a decrease of our key account client revenues because of
softening demand as well as stronger pricing discipline on new business opportunities;
• decreased demand for talent management services at Right Management, where these revenues decreased 12.8%
(–11.2% in constant currency); and
• a 4.6% decrease due to the impact of currency exchange rates; partially offset by
• our acquisitions of three entities in APME during April 2011, two acquisitions in Southern Europe at the end of September
2011 and in April 2012, and one acquisition in the Americas during April 2012, which combined to add 0.6% of revenue
growth to our consolidated results;
• Other Americas and APME experienced revenue growth of 9.6% and 1.6%, respectively, in organic constant currency; and
• increased demand for our outplacement services at Right Management, where these revenues increased 10.1% (12.2%
in constant currency).
The year-over-year 20 basis point (–0.20%) decrease in gross profit margin was primarily attributed to:
• a 40 basis point (–0.40%) decline from our staffing/interim business primarily related to pricing pressures in some of our
European markets and within the Experis business line in the United States; partially offset by
• a 10 basis point (0.10%) favorable impact from strong growth and improved margins in Right Management’s higher-
margin outplacement services; and
• a 10 basis point (0.10%) increase due to the impact of currency exchange rates.