ManpowerGroup 2014 Annual Report Download - page 35

ManpowerGroup | Annual Report 2014 33
2014, 2013 and 2012, respectively. Italy’s margin increase in 2014 was due to our ability to effectively manage selling and
administrative expenses while revenues increased, partially offset by the decrease in our gross profit margin and the impact
of three fewer billing days. Other Southern Europe’s OUP margin was 2.3%, 1.4% and 1.3% in 2014, 2013 and 2012,
respectively. Other Southern Europe’s margin increased in 2014 as we were able to support an increase in revenues
without a similar increase in expenses. The margin increase in Southern Europe in 2013 was due to the improvement in
France’s gross profit margin and the decrease in salary-related costs due to lower headcount, partially offset by the
increase in restructuring costs in 2013 compared to 2012.
6,048.1
5,738.8
5,773.9
2014
2013
2012
Northern Europe Revenues
($ in millions)
198.1
139.7
159.8
2014
2013
2012
Northern Europe Operating Unit Profit
($ in millions)
Northern Europe — In Northern Europe, which includes operations in the
United Kingdom, the Nordics, Germany and the Netherlands (comprising
35.0%, 20.6%, 11.9%, and 9.9%, respectively, of Northern Europe’s revenues),
revenues from services increased 5.4% (5.7% in constant currency and 4.4%
in organic constant currency) in 2014 as compared to 2013. We experienced
organic constant currency revenue growth in the United Kingdom and the
Netherlands of 12.7% and 5.1%, respectively. The increase in revenues from
services was primarily attributable to the increase in our staffing/interim
business, as a result of the improving economic conditions in a majority of
our larger Northern European markets, and a 22.2% constant currency
increase (7.5% in organic constant currency) in our permanent recruitment
business mostly due to 92.6% constant currency growth (33.7% in organic
constant currency) in the United Kingdom.
In 2013, revenues from services in Northern Europe decreased 0.6% (–1.7% in constant currency and –2.3% in organic
constant currency) primarily attributable to the 8.2% decline in constant currency in our Experis business line, which saw
softening demand for IT services among our larger clients, in both our interim and permanent recruitment businesses.
Gross profit margin decreased in 2014 compared to 2013 due to the decline in our staffing/interim margins as a result of
business mix changes in our staffing/interim revenue as higher growth came from our lower-margin markets, general
pricing pressures in several markets and client contract termination costs, partially offset by the increase in our permanent
recruitment business. In 2013, gross profit margin decreased due to the decline in our staffing/interim margins as we
experienced lower bench utilization in our Manpower business line in Sweden and new collective labor agreements and
higher holiday pay costs in Germany, encountered general pricing pressures in several markets, and saw a 9.8% decrease
in constant currency in our permanent recruitment business.
Selling and administrative expenses decreased 2.8% (–2.2% in constant currency and –4.8% in organic constant currency)
in 2014 compared to 2013. The decrease in selling and administrative expenses was due primarily to the $39.0 million of
restructuring costs incurred in 2013 that did not recur in 2014 and a decrease in lease costs as a result of the simplification
and cost recalibration actions taken, partially offset by the additional recurring selling and administrative costs resulting
from acquisitions and an increase in organic salary-related costs, because of an increase in our variable incentive-based
costs due to improved operating results and higher headcount to support increased revenues. In 2013, selling and
administrative expenses decreased 3.8% (–5.3% decrease in constant currency and –5.9% in organic constant currency)
compared to 2012 due primarily to lower headcount, which reduced compensation-related expenses such as salaries and
variable incentive-based costs, lower lease costs, and the additional cost savings from the simplification and cost
recalibration actions, partially offset by an increase in restructuring costs to $39.0 million in 2013 compared to $13.2 million
in 2012 and the additional recurring selling and administrative costs resulting from an acquisition in April 2013.
Management’s Discussion & Analysis