ManpowerGroup 2001 Annual Report Download - page 14

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Dear Shareholders —
As you know, 2001 was a tough year for businesses world-
wide and, consequently, for the staffing companies that
serve them. While it was difficult for us to show growth in
that environment, we know from past history that recoveries
usually offer an early opportunity to grow revenues and
profits. With this potential opportunity in mind, we used
the year to solidify both our operating and financial
strengths, focusing on the key strategic areas that we have
been building on over the past three years.
For example, our gross profit margin improved by 70 basis
points during the year, reflecting the value our customers
place on the services we provide. In the major geographies
in which we operate, we were able to reduce operating and
overhead expenses, and we did so thoughtfully and
strategically – by improving our service-delivery process,
rather than by eliminating elements that will drive our
future growth. We generated more than $193 million in
free cash flow – a 49% increase over 2000. This is due, in
part, to the fact that our cash flow runs counter to the
business cycle; so, as the revenues decreased, the receivables
from a higher revenue stream were collected. Even so, we
made improvements that went beyond economic cycles,
Letter to our Shareholders
reflecting the underlying strength of our business. One
such area was a two-day reduction in the collection period
for our outstanding receivables.
We ended the year with systemwide sales of $11.8 billion
and revenues of $10.5 billion. Operating profit was
$237.6 million.
The worldwide economy may be slow and timing of a
recovery uncertain, but we believe Manpower’s future
growth opportunities are certain. Customers of all sizes –
from the largest global accounts to the smallest local
customers – are all asking for more from Manpower. This is
a real opportunity for us because of Manpower’s track
record for delivering the best service in the industry.
Exceptional service is, in fact, the core of the Manpower
brand – a reputation built over the last 54 years by delivering
people with the right skills, quickly and efficiently to our
customers.
During the year, we continued to build on our service
leadership position in many markets and expanded our
presence worldwide, growing our network to more than
3,900 offices, with 235 net office additions in the year. We
added locations in high-potential geographies, including
Asia Pacific and targeted countries in Europe – notably
Italy and France. Today, our assets and service capabilities
are aligned with both long-range market opportunities
and near-term demand.
We also continued to expand both the range and reach of
the services we provide, focusing on the specialty and
professional side of our business, where there are great
growth opportunities. We significantly expanded the
geographic footprints of both Elan Group Ltd., our
European IT staffing subsidiary, and The Empower Group,
an independent operating unit that provides human
resource consulting services to major customers. And, in
July, we acquired Jefferson Wells International, Inc., a
respected and fast-growing professional provider of internal
audit, accounting, technology, and tax services.
At a time when companies worldwide are experiencing a
significant increase in their need for financial professionals
– and equally significant pressure to control fixed-expense
growth – Jefferson Wells allows us to offer a wide range of
specialized services that are strategically important to our
customers. Just as important, this acquisition – like those of