ManpowerGroup 2013 Annual Report Download - page 37

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35
Management’s Discussion & Analysis ManpowerGroup 2013 Annual Report
of 0.2% in constant currency for 2012 due to declining demand for our staffing services within our Manpower business line,
offset by a 16.6% increase in the combined Experis and ManpowerGroup Solutions business lines, compared to 2011. In
Australia, revenues were down 6.0% in constant currency for 2012 compared to 2011 due to the decreased demand
resulting from their economic slowdown.
Gross profit margin decreased in 2013 compared to 2012 due to a decrease in our staffing/interim gross profit margin from
modest pricing pressures and change in business mix, as well as the 5.3% decline in constant currency in our permanent
recruitment business. In 2012, gross profit margin decreased due to the margin declines in our higher-margin
ManpowerGroup Solutions business as well as a slight margin decline in our staffing/interim business.
Selling and administrative expenses decreased 10.4% (–1.6% in constant currency) in 2013 compared to 2012 related to
reduced compensation-related expenses such as salaries and variable incentive-based costs due to lower headcount,
partially offset by an increase in restructuring costs to $6.2 million recorded in 2013 compared to $0.7 million in 2012. In
2012, selling and administrative expenses decreased 3.6% (–3.5% in constant currency) compared to 2011 due to
productivity improvements along with tighter expense controls.
OUP margin for APME was 2.9%, 3.3%, and 3.0% in 2013, 2012 and 2011, respectively. The OUP margin decrease in 2013
was due to the decrease in our gross profit margin, increase in restructuring costs and the impact of fewer billing days,
partially offset by the decrease in salary-related costs due to lower headcount. The improvement in 2012 was due to
productivity improvements and tighter expense controls as we were able to decrease our selling and administrative
expenses while revenues increased.
Right Management — Right Management is a leading global provider of talent
and career management (also known as outplacement services) workforce
solutions, operating in over 130 offices in more than 50 countries and territories.
In 2013, revenues from services decreased 3.6% (–2.1% in constant currency)
due to the 7.1% (–6.6% in constant currency) decline in demand for our talent
management business. Our counter-cyclical outplacement services remained flat
in constant currency in 2013 compared to 2012.
In 2012, revenues from services increased 1.5% (3.4% in constant currency). The
increase was due to the growth in our outplacement services, which were up
10.1% (12.2% in constant currency) in 2012 compared to 2011, partially offset
by a 12.8% (11.2% in constant currency) decline in demand for our talent
management business, as we saw a longer sales cycle as clients deferred their
discretionary spending.
Gross profit margin decreased in 2013 compared to 2012 due to the margin deterioration in both the outplacement business
and talent management business, partially offset by the change in business mix as the higher-margin outplacement
business represented a greater percentage of the revenue mix. In 2012, gross profit margin increased due to the margin
improvement in each business line and the business mix changes in our revenues, as we saw an increase in the higher-
margin outplacement services and a decrease in the lower-margin talent management business.
In 2013, selling and administrative expenses decreased 8.5% (–7.5% in constant currency) compared to 2012 due to the
cost savings from the simplification and cost recalibration plan put in place in 2012, partially offset by an increase in
restructuring costs to $14.0 million in 2013 compared to $10.9 million in 2012. In 2012, selling and administrative expenses
decreased 1.7% (0.4% increase in constant currency) compared to 2011 as the cost savings from the restructuring plan to
streamline the office infrastructure and management organization favorably impacted expense levels.
OUP margin for Right Management was 6.4%, 4.1% and –0.4% for 2013, 2012 and 2011, respectively. The OUP margin for
2013 improved due to the decrease in selling and administrative expenses from the cost savings from the simplification and
cost recalibration plan noted above, partially offset by the decrease in the gross profit margin and the increase in
restructuring costs in 2013. OUP margin in 2012 was higher compared to 2011 due to the greater mix of outplacement
business as well as the decrease in selling and administrative expenses due to cost savings from the restructuring plan
noted above, offset, in part, by the $10.9 million of restructuring costs incurred in 2012 compared to $5.5 million in 2011.
Right Management
Operating Unit Profit
In Millions ($)
’11
’12
’13
13.4
(1.4)
’11
’12
’13
328.5
323.7
Right Management Revenues
In Millions ($)
316.8
20.4