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ManpowerGroup | Annual Report 2014 25
companies may calculate such financial results differently. These Non-GAAP financial measures are not measurements of
financial performance under GAAP, and should not be considered as alternatives to measures presented in accordance
with GAAP.
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 36 and 37.
RESULTS OF OPERATIONS — YEARS ENDED DECEMBER 31, 2014, 2013 AND 2012
Client demand for workforce solutions and services is dependent on the overall strength of the labor market and secular
trends toward greater workforce flexibility within each of the countries and territories in which we operate. Improving
economic growth typically results in increasing demand for labor, resulting in greater demand for our staffing services
and solutions. During periods of increased demand, as we saw in 2014, we are generally able to improve our profitability
and operating leverage as our cost base can support some increase in business without a similar increase in selling and
administrative expenses.
In 2014, we experienced revenue growth in most of our markets as the global economy continued to stabilize. The improving
economic conditions contributed to our consolidated revenue growth of 2.5% (4.0% in constant currency) in 2014 compared
to 2013, as we maintained a steady trend of improvement throughout 2014, from constant currency revenue growth of 3.0%
in the first quarter to a 4.8% increase in the fourth quarter. We saw this similar trend in many of the markets within our
staffing segments as we saw solid growth on the whole across the Americas and Europe, with APME showing a slight
decline. Our staffing/interim business showed solid growth in 2014, along with a 13.3% constant currency increase in our
permanent recruitment business and growth in all of our ManpowerGroup Solutions offerings. At Right Management, we
continued to experience revenue declines as the demand for our counter-cyclical outplacement services decreased 9.8%
in constant currency and revenues from our talent management services increased slightly in constant currency.
Our gross profit margin in 2014 compared to 2013 increased due to expansion of our staffing/interim gross profit margin
and growth in our permanent recruitment business, partially offset by declining demand for our higher-margin Right
Management outplacement services and decreased margins in our other offerings. Our staffing/interim gross profit margin
improvement in 2014 compared to 2013 reflects strong price discipline, focused pricing initiatives, and additional payroll tax
credits related to the Credit d’Impôt pour la Compétitivité et l’Emploi (“CICE”) in France. For additional information on the
CICE payroll tax credit, see the Employment-Related Items section of Management’s Discussion and Analysis.
Our profitability improved in 2014, with operating profit up 40.6%, or 43.5% in constant currency, and operating profit
margin up 100 basis points compared to 2013. Included in 2013 was $89.4 million of restructuring charges as a result of our
simplification and cost recalibration plan that began in the fourth quarter of 2012. Excluding these charges, our operating
profit was up 22.2% in constant currency and 50 basis points compared to 2013. Our simplification and cost recalibration
plan initiatives have resulted in a lower cost base for the company as we streamlined our organization. We continue to
monitor expenses closely to ensure we maintain the full benefit of these actions while investing appropriately to support the
growth in the business. During 2014, we added recruiters and certain other staff to support the increased demand for our
services. We have also seen an increase in our variable incentive costs due to the improved profitability. Even with these
investments, we saw improved operational leverage in 2014 as we were able to support the higher revenue level without a
similar increase in expenses.
Management’s Discussion & Analysis