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Edited Transcript of MAN earnings conference call or presentation 31-Jan-20 1:30pm GMT

Q4 2019 ManpowerGroup Inc Earnings Call

MILWAUKEE Jan 31, 2020 (Thomson StreetEvents) -- Edited Transcript of ManpowerGroup Inc earnings conference call or presentation Friday, January 31, 2020 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* John T. McGinnis

ManpowerGroup Inc. - Executive VP, CFO & Head of IR

* Jonas Prising

ManpowerGroup Inc. - Chairman & CEO

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Conference Call Participants

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* Andrew Charles Steinerman

JP Morgan Chase & Co, Research Division - MD

* Emily McLaughlin

* Gary Elftman Bisbee

BofA Merrill Lynch, Research Division - MD & Research Analyst

* Hamzah Mazari

Jefferies LLC, Research Division - Equity Analyst

* Jeffrey Marc Silber

BMO Capital Markets Equity Research - MD & Senior Equity Analyst

* Keen Fai Tong

Piper Sandler & Co., Research Division - Former Principal and Senior Research Analyst

* Mark Steven Marcon

Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst

* Ryan C. Leonard

Barclays Bank PLC, Research Division - Research Analyst

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Presentation

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Operator [1]

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Welcome to ManpowerGroup Fourth Quarter Earnings Results Conference call. (Operator Instructions) This call will be recorded. If you have any objections, please disconnect at this time.

And now I will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. Sir, you may begin.

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [2]

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Good morning. Welcome to the year-end conference call for 2019. With me today is our Chief Financial Officer, Jack McGinnis. I'll start our call today by going through some of the highlights of the fourth quarter and the full year, then Jack will go through the operating results in the segments, our balance sheet and cash flow. I will then give an update on some strategic items, and Jack will comment on our outlook for the first quarter of 2020. I will then make some concluding thoughts before we start our Q&A session.

Before we proceed, Jack will now cover the safe harbor language.

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [3]

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Good morning, everyone. This conference call includes forward-looking statements, which are subject to known and unknown risks and uncertainties. These statements are based on management's current expectations or beliefs. Actual results might differ materially from those projected in the forward-looking statements. We assume no obligation to update or revise any forward-looking statements.

Slide 2 of our earnings release presentation includes important information regarding previous SEC filings and reconciliation of non-GAAP measures.

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [4]

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Thanks, Jack. We continue to execute well in a slow growth global economy. Our fourth quarter performance reflects a challenging revenue environment in Europe, partially offset by revenue growth in the Americas and most markets within APME. Revenue in the fourth quarter came in at $5.2 billion, down 2% year-over-year in constant currency. On a same-day basis, our underlying organic constant currency revenue decreased by 1.5%, representing a step down from our third quarter flat revenue trend on the same basis. This decrease from the third quarter trend was mainly driven by the U.S. where the manufacturing environment has become more difficult in recent months. The Nordics, which has been experienced similar issues in manufacturing, and Australia, where we've exited certain low-margin clients. These decreases were partially offset by improvements in the revenue trend in the U.K., Italy, Germany and the Netherlands. Operating profit for the fourth quarter was $192 million, down 10% in constant currency. Operating profit margin came in at 3.7%, down 30 basis points in constant currency from the prior year. Our performance in the quarter reflects a strong gross profit margin improvement, driven by improved mix and successful margin initiatives. We managed SG&A very closely in the quarter and are continually monitoring costs, considering the economic environment within our key markets, while at the same time, continuing our investments in technology. Earnings per share for the quarter was $2.33 and included a benefit from discrete tax items of $0.23. Earnings per share in the fourth quarter decreased 6% in constant currency year-over-year.

Turning to the full year results for a few moments. Reported earnings per share for the year was $7.72. Excluding special items noted in previous quarters, earnings per share was $7.68 and represented a constant currency decrease of 11% year-over-year. Revenues for the year decreased 1% in constant currency to $20.9 billion. And reported operating profit was $645 million. Excluding special items noted in the previous quarters, operating profit was $720 million, which represented a 10% constant currency decline year-over-year. Although 2019 was challenging year in many respects, we made very good progress advancing the key initiatives that will position us well for future growth.

Last week, I was in Switzerland, participating in the World Economic Forum's annual meeting at Davos. This gathering of global business and government leaders provides us with an opportunity to meet many of our clients and capture the broad sentiment of their business outlook, organizational challenges relative to the solutions we can provide, and a wider perspective concerning the economy. Our assessment that the overall economic outlook reflects a slow growth environment, where labor markets are strong and unemployment low overall but they're not evenly distributed across regions and industries. Despite recent progress on trade agreements, the manufacturing sector globally is feeling the negative effect of trade wars and industry-specific challenges, such as in the automotive sector. This is impacting both economic growth and employment and will take some time to moderate. Workforce needs are evolving and skills demands are changing faster due to the adoption of technology and business model transformation in many organizations. As a result, businesses around the world need more help than ever to find, engage and sustain talent. And we can also see evidence of this in our latest talent shortage white paper, closing the skills gap, what workers want. A survey of 25,000 employers and 14,000 workers globally, which is showing record high talent shortages across over 40 countries. Globally, 54% of employers are struggling to find the talent they need, almost double what it was a decade ago. And in the U.S., that figure is 69%. We are very well positioned to help our clients address these challenges with our strong brands, market-leading global footprint and extensive portfolio of solutions and services.

I would now like to turn it over to Jack to provide additional financial information and review of our segment results.

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [5]

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Thanks, Jonas. Revenues in the fourth quarter came in at the lower end of our constant currency guidance range. Our gross profit margin was very strong in the quarter and was up 20 basis points year-over-year, exceeding our guidance range. This reflects continued improvement in our bill-pay yield initiatives. We continue to experience the impact of operational deleveraging in the slower revenue environment, while we continue to invest in technology. Our fourth quarter performance resulted in an operating profit decline of 12% or 10% on a constant currency basis on lower revenues year-over-year. This resulted in an operating profit margin at the midpoint of our guidance of 3.7%. Breaking our revenue trend down into a bit more detail. After adjusting for the negative impact of currency of about 2% in the quarter, our constant currency revenue decline was 2%. The impact of net dispositions was about 0.5% of the decline. And the days impact was slight, which resulted in a days adjusted organic constant currency revenue decline of 1.5%. This represented a decline from the flat revenue trends in the third quarter on a similar basis. The decline from the third quarter trend was primarily driven by the U.S., the Nordics and Australia.

Turning to the EPS bridge. Earnings per share came in at $2.33, well above our guidance range. Included within this result was a positive variance of $0.01 from improved operational performance, $0.02 on better-than-expected foreign currency exchange rates, $0.02 on improved interest and other expense, $0.23 on a lower effective tax rate as a result of discrete items realized in the quarter, and $0.01 on a lower weighted average share count due to the impact of repurchases during the quarter.

Looking at our gross profit margin in detail, our gross margin came in at 16.5%. And the staffing interim margin reflects an improving trend and represents a year-over-year increase of 40 basis points. Many of our largest markets continue to see tight labor market conditions, and this has contributed to stronger underlying staffing margins based on our ongoing initiatives. In addition, France also benefited from higher subsidies effective October 1. A lower contribution from permanent recruitment contributed to 10 basis point reduction and a lower contribution from our Solutions businesses contributed to about 10 basis points of reduction.

Next, let's review our gross profit by business line. During the quarter, the Manpower brand comprised 63% of gross profit, our Experis Professional business comprised 19%, ManpowerGroup Solutions comprised 14% and Right Management, 4%. During the quarter, our Manpower brand reported flat organic constant currency gross profit year-over-year. This was an improvement from the 3% decline in the third quarter. This improvement was driven by Southern and Northern Europe. Gross profit in our Experis brand decreased 1% on an organic constant currency basis during the quarter, a decline from the 4% growth experienced in the third quarter. This was driven primarily by the U.S. and the U.K. ManpowerGroup Solutions organic gross profit growth in the quarter was 7% in constant currency year-over-year, which is a significant improvement from the flat growth in the third quarter. This improvement was driven by our RPO business, which experienced double-digit gross profit growth and by our Proservia business. Right Management experienced gross profit growth of 7% on an organic constant currency basis during the quarter, which was a significant improvement from the 2% growth rate in the third quarter, driven by higher career management activity. I will also comment on Right Management in my segment review.

SG&A expense was $668 million, representing a reported increase of $6 million from the prior year. The prior year period included a gain on the sale of the business and after adjusting for this gain, SG&A decreased $3 million year-over-year. This decrease was driven by $12 million from currency changes, $3 million from net dispositions, which were offset by $12 million of increased operational costs. On an organic constant currency basis, excluding the special item in the prior year, SG&A expenses increased 1.8% year-over-year. SG&A expenses as a percentage of revenue in the quarter represented 12.9%, which reflected deleveraging on lower revenues, while investing in technology and maintaining strong cost management year-over-year.

The Americas segment comprised 20% of consolidated revenue. Revenue in the quarter was $1.1 billion, an increase of 3% in constant currency. OUP equaled $51 million and represented a decrease of 2% in constant currency from the prior year, and an OUP margin decrease of 30 basis points year-over-year. The U.S. is the largest country in the Americas segment, comprising 59% of segment revenues. Revenue in the U.S. was $627 million, representing a decline of 1% compared to the prior year. The U.S. completed the acquisition of 3 small Manpower franchises in the third quarter and 1 additional franchise during the fourth quarter, which increased the revenue growth rate. Excluding the additional revenues from the franchises acquired in 2019 and adjusting for billing days, the U.S. had an underlying revenue decline of 3% in the fourth quarter, which was a decline from the 1% growth on a similar basis in the third quarter.

In the U.S., gross profit margin increased year-over-year as the pricing environment reflects the scarcity of talent in the U.S., and we experienced strong RPO business growth. Our RPO growth has driven front-loaded increases in SG&A as we implement our service platforms for these new clients. This results in a slight drag to our OUP margin until the revenue activity is fully ramped up. During the quarter, OUP for our U.S. business decreased 12% to $29 million. OUP margin was 4.6%, a decrease of 60 basis points from the prior year.

Within the U.S., the Manpower brand comprised 41% of gross profit during the quarter. Revenue for the Manpower brand in the U.S. was down 1% in the quarter or down 6% when adjusted for billing days and franchise acquisitions, reflecting a decrease from the 1% decline in the third quarter on the same basis. The decrease in the U.S. Manpower business was driven by reduced manufacturing activity. The revenue trend of our U.S. Manpower business has been aligned to the decline in manufacturing PMI in the U.S. over the last 4 months. We believe our Manpower business in the U.S. has experienced revenue trends in line with the current market for commercial staffing.

The Experis brand in the U.S. comprised 33% of gross profit in the quarter. Although Experis had good growth in higher-margin convenience clients in the fourth quarter, total U.S. Experis revenues declined 2% from the prior year. This represents a decline from the 3% growth experienced in the third quarter as we experienced reduced volumes from a few large enterprise accounts, and we saw a larger drop than expected in December during the holiday period. Although our U.S. Experis revenue trend has been choppy over the last 2 quarters and the path to market growth has not been a straight line, we remain focused on closing the gap to market performance and believe we are taking the right actions.

ManpowerGroup Solutions in the U.S. contributed 26% of gross profit and experienced 3% revenue growth in the quarter, slightly lower than the 4% growth rate in the third quarter. We continue to see strong demand by our clients for our higher-value RPO and MSP solutions and recent large global RPO wins are ramping up. Our RPO business in the U.S. experienced double-digit revenue growth in the quarter. We expect our overall U.S. business year-over-year revenue trend in the first quarter to increase slightly on a constant currency basis and to have a similar organic days adjusted revenue trend to the fourth quarter.

Our Mexico operation had flat revenue growth in the quarter in constant currency, which represented a slight decrease from the third quarter, 1% constant currency growth. Revenue in Canada was up 21% in constant currency. We are very pleased with the performance of our Canada business as they continue to generate market-leading growth. We expect Canada to have a very strong performance again in the first quarter. Revenue growth in the other countries within Americas was up 12% in constant currency. This growth was driven primarily by strong revenue growth in Peru and Central America.

Southern Europe revenue comprised 45% of consolidated revenue in the quarter. Revenue in Southern Europe came in at $2.3 billion, an increase of 4% in constant currency. Adjusting for the Manpower Switzerland acquisition and billing days, this represented a revenue decrease of 1% year-over-year, equal to the trend experienced in the third quarter on the same basis. OUP equaled $128 million, an increase of 4% in constant currency. OUP margin of 5.5% was flat to the prior year. France revenue comprised 58% of Southern Europe segment in the quarter and was down 2% from the prior year in constant currency. Although this represented a continuation of the same 2% days adjusted decrease in the third quarter, we exited the quarter at a lower rate, which was impacted by lower holiday activity partly due to timing of holidays as well as the impact of the strikes in France. OUP was $83 million, an increase of 5% in constant currency. And OUP margin was up 40 basis points in constant currency at 6.1%. France had the benefit of the additional fee-owned subsidies, which commenced on October 1, which added 35 basis points to gross profit margin from the third quarter run rate, and the business also continued to execute well on GP margin initiatives.

In January, activity levels in France continued to be lower than December, partly due to the impact of the strikes in the first 3 weeks of the month. Considering current activity levels in January, we are forecasting first quarter revenues for France to represent a decline of 3% in constant currency year-over-year.

Revenue in Italy equaled $380 million, representing a decrease of 3% in constant currency. This represented a 4% decline on a billing days adjusted basis. This represents a slight improvement from the 5% decrease on the same basis in the third quarter. Although revenue declines have been improving at a slow rate in Italy, the businesses continued to execute very well and improved gross profit margin in the fourth quarter. Despite the lower revenue environment, OUP increased by 6% in constant currency and OUP margin increased 70 basis points to 7.7%. Our Italy business is performing very well in a difficult environment, and we expect an improved revenue trend in the first quarter, which should result in a flat revenue trend year-over-year.

Revenue in Spain increased 11% in constant currency from the prior year and represented a 9% increase on the days adjusted basis. This reflects a slight decrease from the 10% days adjusted constant currency growth in the third quarter. We expect Spain to have another strong revenue result in the first quarter.

As previously mentioned, we acquired the remaining interest in our Manpower Switzerland franchise in early April. This business represented 5% of Southern Europe's revenues and performed very well in the quarter.

Our Northern Europe segment comprised 22% of consolidated revenue in the quarter. Revenue declined 6% in constant currency to $1.2 billion. On an organic days adjusted basis, this represented a 5% decline, which was an improvement from the 6% decline in the third quarter on the same basis. OUP equaled $21 million, OUP declined 48% in constant currency, and OUP margin was down 140 basis points. The decline was driven by the Netherlands and Sweden. Our largest market in Northern Europe segment is the U.K., which represented 35% of segment revenue in the quarter. U.K. revenues were up 3% in constant currency or up 4% after adjusting for billing days. This represents the third consecutive quarter of improvement for the U.K. and the step up from the 3% days adjusted revenue growth in the third quarter. The U.K. business has been performing well in a difficult market.

In Germany, revenues declined 16% on a constant currency basis in the fourth quarter or a decline of 17% on a days adjusted basis, which represented an improvement from the days adjusted decline of 19% in the third quarter. Our Germany business had seen steady improvement over the last 6 months, although at a slow pace. Germany remains a very challenging market driven by lower manufacturing activity. Although the market has continued to be very weak. We anticipate further improvement in the revenue trend during the first quarter.

In the Nordics, revenues decreased 9% on a days adjusted constant currency basis. This represented a further decrease from the 4% days adjusted decline in the third quarter driven by Sweden, and to a lesser degree, lower growth in Norway due to the anniversary of high-growth rates. Our Norway business continues to grow revenues and is performing well. Our Sweden business has experienced a double-digit revenue decline on decreased manufacturing activity. We expect the Nordics to experience a slight improvement in the rate of revenue decline in the first quarter.

Revenue in the Netherlands decreased 19% on a days adjusted constant currency basis during the fourth quarter. Adjusting for the disposition of our language translation business last year, this represented a 15% days adjusted constant currency revenue decline, which is a slight improvement from the 18% decline on the same basis in the third quarter. This continues to reflect the impact of a weaker manufacturing market and the exit of select clients, largely due to pricing decisions. We expect a stable to slightly improved rate of decline in the first quarter. As we mentioned last quarter, new legislation for temporary workers is being introduced in the Netherlands in the first quarter, and we have been working through these changes with our clients as they adjust to the new rules.

Belgium experienced revenue decline of 7% in constant currency or a decline of 9% on a days adjusted basis during the fourth quarter. This represented a decline from the 5% days adjusted constant currency decrease in the third quarter. We expect a similar revenue trend in the first quarter. Other markets in Northern Europe had a revenue increase of 10% in constant currency driven by growth in Poland, Russia and Ireland. The Asia Pacific Middle East segment comprises 12% of total company revenue. In the quarter, revenue was down 19% in constant currency to $597 million, reflecting the deconsolidation of the Greater China JV following its public offering discussed last quarter. Organically, APME revenues declined by 1% year-over-year in constant currency. OUP equaled $21 million in the quarter, down 25% in constant currency. And on an organic basis, represented an increase of 10% year-over-year, driven by strong performance in Japan. OUP margin decreased 20 basis points, driven by the deconsolidation of China. Revenue growth in Japan was up 6% on a constant currency basis and adjusting for billing days, this represented an 8% growth rate, which was a slight decrease from the 9% growth in the third quarter on the same basis. Our Japan business continues to perform very well, and we expect mid- single-digit revenue trends into the first quarter.

Revenues in Australia declined 31% in constant currency. This represented a further decrease from the 26% decline in the third quarter driven by the exiting of low-margin Manpower business in Australia to improve our profitability. We continue to expect revenue declines in the double digits percentage range into the first quarter. Revenue in other markets in Asia Pacific Middle East were down 31% in constant currency as a result of the deconsolidation of China, and organic revenue growth was 8%. This was a result of strong growth in a number of markets, including Korea, Vietnam and the Middle East.

Our Right Management business grew revenues to $52 million in the fourth quarter, representing 5% constant currency growth year-over-year, consistent with the rate of growth in the third quarter. OUP equaled $11 million, an increase of 23% on a constant currency basis. OUP margin increased 330 basis points to 21.9%. Later in my outlook, I will discuss upcoming changes to our reporting segments in 2020 impacting Right Management.

I'll now turn to cash flow and balance sheet. Free cash flow, defined as cash from operations less capital expenditures, was very strong at $762 million for the year compared to $418 million in the prior year. The fourth quarter experienced positive cash flow of $303 million which compared to $156 million in the year-ago period. At quarter end, days sales outstanding decreased by 1 day. Capital expenditures represented $17 million during the quarter. During the quarter, we purchased 579,000 shares of stock for $51 million, bringing total purchases for the year to 2.4 million shares for $203 million. As of December 31, we have 750,000 shares remaining for repurchase under the 6 million share program approved in August of 2018. Our Board approved an incremental 6 million share program in August of 2019, which remains unused.

Our balance sheet was strong at quarter end with cash of $1.03 billion and total debt of $1.07 billion, bringing our net debt to $47 million. Our debt ratios are very comfortable at quarter end with total debt to trailing 12 months EBITDA of 1.35 and total debt to total capitalization at 28%. Our debt credit facilities did not change in the quarter.

Before I cover our outlook, I will turn it back to Jonas.

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [6]

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Thanks, Jack. As we have mentioned in previous calls, we're taking strong actions to digitize, diversify and innovate at an accelerated pace to deliver higher value. The Solutions market is a rapidly growing, high-margin global business with a double-digit market growth trajectory, providing end-to-end life cycle talent solutions, especially in our areas of expertise. Given these dynamics, I'm excited to announce that we're launching a new brand within ManpowerGroup effective today. This new brand, called Talent Solutions, combines 3 of our current global offerings to leverage our deep expertise at RPO, Tapfin MSP and Right Management to deliver new solutions and create added value addressing our clients' complex global workforce needs. Talent Solutions will leverage our core capabilities to help organizations more effectively source, manage and develop talent at scale, providing our clients with what they want. Expert offerings, integrated and data-driven workforce solutions, seamless delivery across multiple countries and strong implementation. Together with scalable workforce insights via consistent processes, data and technology platforms, we expect to add new global offerings as part of Talent Solutions over time as well.

Our strategic technology initiatives continue to be a key focus in 2020. We're digitizing our business at an accelerated pace to drive efficiencies and interact differently with our candidates and clients. We're creating data assets and insights that deliver new and differentiated value for our stakeholders, leveraging the cloud, SaaS and mobile as the main drivers of our technology roadmap. Our PowerSuite integrated HR technology stack has been designed to provide scalable AI-enabled tools and cloud-based platforms that can optimize HR processes, offer virtual coaching, assessment and upskilling and address an organization's most pressing workforce challenges using data analytics. We have strategically chosen not to acquire technology products or companies but to develop scalable global partnerships with best-in-class technology partners. We believe that real competitive advantage comes from the analytics and insights of our proprietary data assets, creating new opportunities for value creation.

Another key differentiator for us is our MyPath initiative. Our global program designed to provide individuals with significant career progression within a short time frame, allowing them to develop the skills required for jobs in high-growth sectors and increasing their earnings potential. We've been a leader in providing our associates traditional workforce readiness training over many decades, and MyPath leverages this expertise and takes it to a new level. With our data-driven insight into people's motivation, skills adjacencies and performance potential, it enables us to provide learning programs, on the job training and market-based certifications for rapid reskilling and upskilling at scale. We're expanding the number of countries that offer enrollment in our MyPath program, allowing our associates to learn new skills and become a greater pool of skilled talent to our clients at a time of skill shortages or at decade-high levels. MyPath is already driving faster and higher placements, increased reassignment rates, more motivated and loyal associates that become ManpowerGroup's advocates and refer others to our brands. It is also driving greater overall productivity and efficiency of our associates and of our talent agents managing their employment opportunities. Already deployed in some of our major markets, including France and the U.S., we intend to continue to scale MyPath at speed to build upon its success, driving innovation that differentiates us from the competition and scaling this program to hundreds of thousands of individuals benefiting from in-depth skills assessment and career progression every year.

And having covered these strategic updates, I will now turn it back to Jack to review the outlook for the first quarter.

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [7]

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As Jonas covered, we have updated our brands effective for the first quarter of 2020. In addition to Right Management now being included within Talent Solutions brand, we have also moved our European IT infrastructure and end-user support business, Proservia from Solutions into Experis. The IT nature of the Proservia business is more aligned to our Experis business, which has successfully continued to grow its IT specialization. Lastly, our Talent Based Outsourcing offerings previously in Solutions have been moved to our Manpower business as this business continues to be more and more aligned to manufacturing and industrial services. In the appendix to our release slides, we have presented a restated business line gross profit view for the fourth quarter and full year of 2019 to illustrate the impact of these changes.

We are also updating our reporting segments effective for the first quarter of 2020. Our Right Management business has represented our smallest reporting segment. We have historically reported this business as a separate segment, and over time, this business has become more connected to our other workforce solutions offerings from a client perspective as a result of our strong and connected brand strategy. Right Management continues to be one of our core leading global offerings, and as Jonas covered, it will be an important part of our new Talent Solutions brand. Beginning in the first quarter, we will report our Right Management offerings, similar to how we report our other Talent Solution offerings within our geographical regional reporting segments. Our reporting segments will be simplified to only include the geographic regions going forward, and Right Management will be included within the results of each regional segment.

We have included a restatement of our 2019 reporting segments on a quarterly and year-to-date basis for comparability purposes in an appendix to our press release available on our website.

Next, I'll review the outlook for the first quarter of 2020. We are forecasting earnings per share for the first quarter to be in the range of $1.33 to $1.41, which includes a negative impact from foreign currency of $0.03 per share. Our constant currency revenue guidance range is between a decrease of 2% to flat. Walking from the midpoint of a constant currency decrease of 1%, the favorable impact of the net acquisitions in excess of dispositions is about 0.5%. And additional days in Q1 2020 accounts for about 1% of revenues. After adjusting for that, our organic constant currency days adjusted revenue guidance would represent a decline of 2.5% at the midpoint. Sequentially, this represents a further decline from the 1.5% organic days adjusted revenue decline in the fourth quarter. We expect constant currency revenue growth in the Americas to be in the low to mid-single digits, with Southern Europe growing in the low single digits, with about 5% of this increase driven from the Switzerland acquisition, resulting in an organic constant currency revenue trend for Southern Europe of minus 3% at the midpoint.

Northern Europe decreasing in the low to mid-single digits and Asia Pacific Middle East decreasing in the double-digit teens range, with about 15% of the decrease due to deconsolidation of Greater China, resulting in a flat organic constant currency growth rate for APME at the midpoint. Our operating profit margin during the first quarter is expected to be down 10 basis points compared to the prior year quarter. We expect our income tax rate in the first quarter to approximate 35.5%. The 2020 impact of the French tax rate decrease, applicable for 2020, is about 0.5% globally for the full year. And as a result, we expect our full year 2020 tax rate to be approximately 34%. As usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares to be $59.4 million. We also expect to incur a modest charge related to the planned settlement of a pension plan in the U.S., and this charge has not been incorporated into our guidance and will be broken out separately as part of our first quarter results.

With that, I'd like to turn it back to Jonas.

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [8]

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Thanks, Jack. In closing, I would like to thank our talented ManpowerGroup team, whose hard work and expertise is key to delivering on our mission to find meaningful, sustainable work for millions of people and to deliver the workforce solutions our clients need to succeed.

I would now like to open the call for Q&A. Operator?

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Questions and Answers

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Operator [1]

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(Operator Instructions)

Our first question is from the line of Andrew Steinerman of JPMorgan.

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Andrew Charles Steinerman, JP Morgan Chase & Co, Research Division - MD [2]

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Could you go back to Slide #6. I want to know if you feel like this is a time of inflection in temp gross margins. I see you're up 40 basis points. You first mentioned better bill-pay. And then secondly, you mentioned the additional French subsidy. So if you could just give us a sense of how much of that's getting driven by better bill-pay. And specifically, in France, are you getting better bill-pay spreads without consideration to the subsidy?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [3]

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Andrew, thanks for the question. I would say we definitely have seen an improving trend, as I mentioned. And I do think this is a bit of an inflection in terms of the trend we've been seeing for quite some time where we've had pressure on a GP margin basis, year-over-year on a quarterly basis. And we started to see that improvement earlier in the year. And I'd say we've seen a steady underlying improvement. And as I mentioned, in some of our very large markets, I would say, our top 7 markets overall, we had GP margin improvement. So it was very broad-based. Certainly, we had help in France from the higher subsidies that I mentioned, that added 35 basis points from a trending perspective from where we ended the third quarter on the higher Fillon subsidies. But beyond that, we're also seeing improved bill yield initiatives in France. So we're getting additional improvement beyond the subsidies themselves. And that's true in the U.S. as well in terms of the pricing actions. We've talked about earlier in the year, the additional bill-pay-yield initiatives there. And the other item that was significant for us in the quarter was Italy. Italy had very -- and you can see that in Italy's strong OUP margin for the quarter overall. So I'd say across the board, we saw very strong GP margin trends in our largest businesses, and I would say that, that is the result of the efforts we've been putting in on all the bill-pay-yield and the pricing actions from earlier in the year. And we expect -- based on our guidance, we expect that to continue into the first quarter.

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Operator [4]

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Our next question is from Jeff Silber of BMO Capital Markets.

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Jeffrey Marc Silber, BMO Capital Markets Equity Research - MD & Senior Equity Analyst [5]

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Actually I wanted to focus on Right Management for a second. I understand the reason for, I guess, moving those businesses from a segment reporting perspective. That makes a lot of sense. But at a high level, can you just give us a little bit more color which regions Right are you in mostly? And what the trends are for right businesses in those major regions? It's typically more of a countercyclical kind of business. I'm just wondering what you're seeing there?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [6]

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Yes. Jeff, I'd be happy to take that. So as you saw, strong performance from Right Management in the fourth quarter. And I should say, we will be reporting it in the regions. But certainly, we'll continue to give color on Right Management's performance as we go forward in terms of the impact it'll have on the regional results. If you look at Right in terms of the composition, basically, about 50% of Right Management's revenues fall within the Americas, with the U.S. being the biggest part of that, roughly about 42%. 12% of the business is in Southern Europe, with about 8% of that in France. And then 1/4 of the business is in Northern Europe and about 14% to 15% in APME. So that gives you a bit of the breakout for modeling purposes. As I mentioned, we do have the restated views in the appendix, and you'll be able to see the impact that has. But if you look at the first quarter guidance overall, I'd say we expect Right Management to be close to flat overall on a revenue basis. And with those breakouts, that should help you do the modeling. But as I said, good GP margin -- or very strong GP margin improvement from Right Management in addition to what we saw from our other businesses, and we expect that to continue into Q1.

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Jeffrey Marc Silber, BMO Capital Markets Equity Research - MD & Senior Equity Analyst [7]

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And are there any differing trends between those 4 major geographic regions for Right specifically?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [8]

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No. I'd say, what we've seen is the career management business has been very strong, and that's been -- that's about 3/4 of the business overall, with the balance of the business being talent management. And that's been driving the improvement. I wouldn't say that we're seeing a step change in more outplacement activity that we expect to ramp up. We've seen pockets of it in select segments, but I wouldn't say that we're starting to see a new trend that would cause us to increase the revenue rate for that business going forward.

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [9]

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So to provide a bit more color on context on that. It's the kind of transformations that are occurring within companies as they are leveraging technology and adapting their business models is what's -- what we're benefiting from as opposed to major actions that are more broad-based across any of the geographies. So the team has done a good job identifying those opportunities.

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Operator [10]

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And the next question is from Seth Weber of RBC Capital Markets.

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Emily McLaughlin, [11]

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This is Emily McLaughlin on for Seth this morning. Wondering if you could discuss what you're seeing in the U.S. Experis business. Have you seen demand come back at all into January? And how to think about the U.S. margin progression looking ahead?

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [12]

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So the U.S. business has 4 components. The Manpower business we've spoken about. And we believe that the Manpower business is at markets from a commercial staffing perspective. We saw -- we've seen some very good evolution in the fourth quarter in terms of our Solutions business. Our ManpowerGroup Solutions business had strong growth, and especially RPO, we're growing at 19% there reflecting the strength of permanent placement and demand for talent in the U.S. market and then Right Management that Jack just referenced is doing well as well. From an Experis perspective, I would say the volatility we see is mostly driven by enterprise clients that can go and turn on and turn off demand, and we are primarily still dependent on enterprise clients, but we've seen some very good growth in our convenience segment. And we mentioned that in the last quarter. We continue to see the convenience segment growing and that is part of our plan to ensure that we are able to offset the potential volatility from certain enterprise clients with the more stable and higher-margin trends within the convenience segment. And we're pleased with progress we've made on the convenience segment. We're pleased with the evolution of the bill-pay rates. I would say that the demand for the higher level professional skills is still solid in the U.S., and we think we have good opportunities to come back to market and continue our progress.

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [13]

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And I would just add a little color to that, Emily, in terms of some of the trends. I mentioned that the December holiday effect was a bit more pronounced than we expected. That certainly came through in the Experis results in the month of December. And as Jonas mentioned, we continue to see some volatility related to demand flows from some of our -- a few large enterprise clients. But the good news is that convenience book has been growing. It's now over half of the book now. And so as that continues to grow, that will reduce the volatility associated with the enterprise business.

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Emily McLaughlin, [14]

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Okay. And separately, just wondering what kind of cost savings you realized in the fourth quarter from earlier restructuring actions? And if the environment kind of stays at these levels, at what point would you and could you pull more levers on the cost side?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [15]

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Yes. So I'd say, based on the restructuring actions we announced earlier in the year, we're basically running at about a $10 million a quarter run rate savings from those actions, and those did come through. You can see that in the results, particularly when you look at Northern Europe in terms of their cost trends and so forth. So we are getting that benefit. They did receive an outsized part of those restructuring actions. And then we've also talked about some of the changes we've made in North America as part of the footprint changes and so forth. So in terms of going forward, Emily, I guess, I'd say we continue to have programs to continue to reduce our costs and improve the efficiency, particularly in our back-office processes. And those -- we have plans in place to continue those in 2020. And you should expect to hear more from that as we proceed throughout the year.

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Operator [16]

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And the next question is from the line of George Tong of Goldman Sachs.

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Keen Fai Tong, Piper Sandler & Co., Research Division - Former Principal and Senior Research Analyst [17]

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You've indicated that the U.K. temp staffing environment is improving. Can you discuss the impact of the Brexit overhang on the U.K. business, and what assumptions around Brexit you're incorporating into guidance?

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [18]

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George, the U.K. team has done a great job, and we're really performing well in the U.K. market. And you might have seen that -- and despite all of the negative rhetoric around Brexit and actual effect on the U.K. employment market has been quite strong. And the team has been very successful upon covering the growth opportunities that still exist in parts of that economy. I would say that in the short term, we are comfortable with the guidance and the outlook because we believe there'll continue to be opportunities for us. Longer term, of course, as you think about the U.K. as a whole, the Brexit may have a negative impact going forward. But nothing really changes today in terms of the transition and what happens. It's really business as usual from a regulatory and tax standpoint. So we expect the opportunities to continue to exist in the U.K., and that's what's reflected in our guidance.

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Keen Fai Tong, Piper Sandler & Co., Research Division - Former Principal and Senior Research Analyst [19]

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Got it. That's helpful. Your organic constant currency days adjusted guidance of down 2.5% at the midpoint for next quarter, represents a bit of a further decline from 1.5% in 4Q. Can you help deconstruct that step down and elaborate on which of the markets you're seeing most incremental pressure from?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [20]

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Yes. George, it's actually a pretty straightforward story for the first quarter in terms of the sequential trend. I mentioned France. So France and -- we do see France going down from that 2% down in Q4 to 3% in Q1. And as we mentioned in our prepared remarks, the strike certainly had an impact in the activity levels we're seeing in the month of January. So we're calling what we're seeing at the moment in terms of the early trends for the first quarter, and that's what we're using to influence our guidance for France for the first quarter. So that's the biggest part of the driver. I'd say the U.K. continues to perform very well. We had a good growth in the fourth quarter. I think we'll see just a slightly reduced level of growth for the U.K. into the first quarter. So closer to low single digits, closer to flattish. But still a good result, based on the environment there. And Japan continues to perform very well. But typically, they see a bit of a step down in the first quarter from the fourth quarter trend, and that's what we're projecting as well. So all in all, I think the offset to all of that is a lot of the countries in Europe that we've talked about, we've seen steady improvement in that rate of decline through the fourth quarter, and we're anticipating continued improvement in that rate of decline into the first quarter. And that's certainly what we're anticipating for Italy, for Germany, for the Netherlands, and a lot of the countries we covered in our prepared remarks.

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [21]

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And George, maybe as a bit of color on the steps down that we've seen in France and what Jack just mentioned on the strikes. Stepping back, the reason that the turbulence is occurring in France, while it provides us with some short-term pain, is all going to make the French market even more attractive for companies to do business in. So they're addressing long-term structural issues and these reforms, both this reform on pensions that they are now addressing as well as prior reforms that they've pushed through really has improved the underlying business environment in France in terms of the attractiveness and the competitiveness in France. So while, of course, we're now seeing a little bit of turbulence in the French market. The underlying strength, we believe, of the French economy and the labor market is still very strong. So we'll see how this all plays out going forward. But in the medium to long term, at least, we think all of these reforms that are being pushed through make France a very attractive place to do business.

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Operator [22]

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And the next question is from Hamzah Mazari of Jefferies.

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Hamzah Mazari, Jefferies LLC, Research Division - Equity Analyst [23]

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I believe you mentioned Manpower brand growing in line with the market in the U.S. Maybe if you could just touch on what has to happen for you to outgrow your market growth rate and whether you think that's realistic?

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [24]

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We had actually a very good growth rate in the third quarter and in the second quarter as well compared to where we believe the commercial market was and there was a slight step down. But if you think about this at a global level, the trend in manufacturing has been suppressed due to the trade wars, the uncertainties around those and some issues around specific sectors, particularly automotive. And that's what we're seeing as an underlying trend. As Jack mentioned, though, in a number of countries where we've seen more pressure that appeared, there are some early signs that, that appears to have stabilized. Certainly, if you look at PMI. So if trade wars that have now been agreed. So the trade agreements between the U.S. and China, U.S. MCA as well as other areas that we think can be conducive to this. We would be hopeful that this pressure eases, stabilizes and then starts reversing over time. But just as it took some time for the effects of the trade wars to be visible, it will take some effect of the trade wars to start to ease off as well.

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Hamzah Mazari, Jefferies LLC, Research Division - Equity Analyst [25]

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Great. And just my follow-up question. As you look at your longer-term margin target, do you expect more help from the SG&A line or sort of the gross margin line? I know there's no time frame to get there, but just any sense of building blocks to do that margin number.

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [26]

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Hamzah, I'll take that, and welcome back to the call. I would say, yes, definitely, SG&A is one of our major underpinnings of how we're going to reach our margin targets. And effectively, nothing's really changed from our plan to get there. Certainly, we've had some headwinds with the revenue environment that have changed the pace at which we're going to reach that level. But certainly, we are committed to continuing to make the operation more and more efficient, and we have plans in place to do that. So that clearly will be a major lever that we pull to get there. I would say, GP margin was one of the levers as well, and it is actually great to see the initiatives that we've talked about by doing items like growing our convenience business. We just talked about the actions we're taking in the U.S. Experis business to do just that. That's higher-margin business. And improving our mix. Those are going to continue to be key areas of focus for us going forward. And that will give us a GP margin improvement, if we're successful continuing to execute on those initiatives. And I'd say those 2 items together are going to be major drivers to get us there.

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Operator [27]

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The next question is from the line of Mark Marcon of Baird.

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Mark Steven Marcon, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [28]

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I was just wondering, with regards to the U.S., you've got this drag just because you're implementing these RPO contracts, which is obviously good news. When would you anticipate that those would be fully implemented? And what sort of rebound should we see in the U.S. operating margins?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [29]

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Thanks, Mark. I would say the lead time for these ramp-ups could sometimes take up to 6 months or so. It just depends on the size of the RPO implementation. As we've said in our prepared remarks, these are very large RPOs, which is great, but that does involve some infrastructure set up to build the platform for that new business. So it -- that typically happens over a couple of quarters. And so I would say the pressure that we're seeing in the fourth quarter. That will likely continue for another quarter or so. And then we would start to see the benefit falling through to the bottom line. So and as Jonas said, that's just 1 part of the U.S. business. So it is having an impact in the fourth quarter. I wouldn't necessarily expect that, that same level of impact will happen every quarter. So it was a bit more outsized, based on the scale of those large wins. But I would say that's probably a good way to think about it. So once you get beyond the next quarter or 2, we should -- that should be neutralized.

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Mark Steven Marcon, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [30]

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Great. And then with regards to Northern Europe, a few questions there. One, Germany, you're -- it sounds like you're feeling more optimistic about your internal operations than what we're hearing from some of the European competitors with regards to the environment over there. What do you attribute your -- the success in terms of stabilizing things and partially growing at this point, at least on a sequential seasonally adjusted basis?

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [31]

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Well, the team is starting to get some traction from the actions that we've been working on for some time. And I think we feel incrementally better about the situation in Germany. There are some external indicators as well that seem to indicate that the automotive sector decline is starting to stabilize. No doubt, though, it's still a difficult market. So you've seen us improve, and you've seen us improve over a number of quarters now, although the pace of improvement is slow. So I would say that the actions that we're taking and that management is taking is now showing the good signs of progress. And I think that's probably what we should think about looking forward as well. Gradual progress and continued results from the actions that we're making and taking in Germany.

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Mark Steven Marcon, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [32]

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Great. And then how should we think about the longer-term OUP margin for Northern Europe? I know we've got some issues in Sweden and the Netherlands right now. But if we think about what a normalized rate should ultimately end up being as we go out towards, say, we stabilized by the back half of the year, like the PMI suggests we might. How should we think about that?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [33]

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Yes. I think, Mark, as you say, it's really going to come down to the manufacturing sector and the improvement in the manufacturing activity, overall. When you look at the nature of our Northern Europe businesses. There is a very strong Manpower businesses in a lot of those markets that you mentioned, and they're currently seeing the impact of the manufacturing depressed activity. So I think as we move forward, if we see -- the good news is, is there has been some very recent data. If you look at the eurozone PMI manufacturing, it just recently did step up from December to January. So let's see if that becomes a trend. But if we continue to see manufacturing PMI continued to strengthen, then, I would say, in the second half of the year, I think you would start to see more of a traditional OUP margin improvement trend for Northern Europe. A little too early to call at this point, Mark, but we're going to watch that very carefully, and we'll continue to give updates on that as we move forward.

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Mark Steven Marcon, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [34]

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Great. And then one last one, if I could. The free cash flow is really strong this last year. How should we think about CapEx? And any additional puts and takes as it relates to thinking about free cash flow for this year relative to 2019?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [35]

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Sure. So I'd say, in terms of capital expenditures, annually, we basically run anywhere from $55 million to $65 million a year. I would use that -- probably the top end of that range for 2020, probably closer to $65 million. So within the range that we've been historically in. And in terms of a broader capital allocation strategy, I'd say, the punch line there is really our strategy hasn't changed. You saw us do share repurchases during the quarter. We continue to think share repurchases are a good mechanism to return excess cash back to shareholders. And we've talked in the past about our M&A appetite and the type of areas that we consider for M&A. So with that being said, we're very careful when it comes to M&A. And if there is an M&A, we'll continue to look at ways to return cash to shareholders in the interim.

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Mark Steven Marcon, Robert W. Baird & Co. Incorporated, Research Division - Senior Research Analyst [36]

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Anything we should factor in, in terms of the nonrecurring CICE receivables being sold?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [37]

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No. I'd say we've done very well in that regard. I think we've sold down the majority of our CICE receivables that we've been using a balance of that to pay taxes. Now that we're back to paying taxes after the regulatory changes in France. But no, I'd say the balance is fairly small into 2020. So nothing really to consider there, Mark.

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Operator [38]

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And the next question is from the line of Gary Bisbee of Bank of America.

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Gary Elftman Bisbee, BofA Merrill Lynch, Research Division - MD & Research Analyst [39]

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As I look back over the gross profit trend, gross margin throughout 2019. You called out Solutions is a drag pretty much throughout the year, every quarter. And I guess, I've been of the understanding that those businesses had quite a bit better gross margins than the core temp business. I know this quarter, you called out cost for the new RPO contracts. Is that what's been going on? Or is there -- am I wrong about sort of how to think about margins in Solutions? And I -- I'd also note they've been -- Solutions' been growing faster than anything else, which is why I can't quite figure why that wouldn't be helping margins?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [40]

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Gary, I'd say that what that slide is trying to show is just the contribution to the year-over-year overall margin. And so in some quarters, we certainly will have GP growth -- GP margin growth. And certainly, that was the case in the fourth quarter, where we did have GP margin growth and good GP growth, as you saw on the brand slide. But the contribution of the overall mix as you balance that with all of the other businesses could be a lesser contribution if the other businesses are having an outside. So some of it is just the mix of the business. It is not necessarily a reflection on what's happening in those specific businesses. What I would say, if we look at the RPO business, we had good double-digit growth in GP margin in the fourth quarter. We had good growth, mid single-digit growth in the MSP business. And our Proservia business organically had good mid single-digit growth in GP margin as well. So I think the probably more relevant slide is the GP dollar growth slide on the brand view. And in the next slide, I think -- as I mentioned earlier, now that we're seeing more accelerated RPO business growth, I think you should expect to see a higher contribution from those in future quarters, and that trend should reverse.

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Gary Elftman Bisbee, BofA Merrill Lynch, Research Division - MD & Research Analyst [41]

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Yes. I guess -- I can appreciate that answer, but I guess when I look at it, it looks like almost every quarter this year, Solutions had better GP growth than the other businesses. So is it not quite a bit higher gross margins on a margin percentage?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [42]

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It definitely is a much higher margin. So behind Right Management, it has been -- our RPO and MSP have been our highest margin businesses, and that continues, Gary. So I think it's really a mix issue. And I do expect you'll start to see that change based on the wins we've been seeing. But clearly, they are very high margin. And going back to the changes we've talked about, the new Talent Solutions brand, which includes RPO, MSP and now Right Management. Those are higher-margin businesses. And it's client-based that is driving Talent Solutions. Those offerings are -- we talk about very commonly with our clients, and they look for those as workforce solutions. So they're all high margin. And as we go forward, we'll have all of those higher-margin businesses together in Talent Solutions. And as I mentioned, some of the other pieces of Solutions, like the Proservia business and some of the Talent-Based Outsourcing, are really more better aligned to our staffing businesses. And you've seen some of the -- we've talked about some of the reclasses we're making to Manpower and Experis. So I think going forward, it'll be even clearer, and that will be differentiated even more prominently as we go forward in terms of the margin profile of Talent Solutions.

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Gary Elftman Bisbee, BofA Merrill Lynch, Research Division - MD & Research Analyst [43]

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Got it. And then the follow up, just can you give us an update on perm versus temp trends for a while in 2018 and early 2019? In your prepared remarks, you called out strong perm growth in a number of the segments. I see you've got that as a drag, a slight drag to gross margin, and you didn't call it out much today. Does that mean that perm has been more difficult relative to temp over the last couple of quarters?

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [44]

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Yes. I would say what we've seen in perm -- we did see improvement from the third quarter to the fourth quarter. We saw about -- so perm has been growing in the low single digits for us on a consolidated basis. But we have seen good opportunities for perm. I'd say, to call out some of the markets, U.S. had good double-digit growth in perm in the fourth quarter. Australia had very strong double-digit growth in perm as well. In Italy and Southern Europe has always been an area of strength for us in perm. And that was high single digits. And Japan had a very, very good double-digit growth in perm on an overall basis. But I would say, as we've seen in some markets, perm has been a little bit lower, and some of that's been driven by the nature of some of our clients in the manufacturing sector. So on an overall basis, perm has trended down a little bit lower this year. And on a consolidated basis, more lower single digits. And -- but we still feel very good about the perm market. And we think there's very good opportunities to continue to grow perm into the first quarter.

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Operator [45]

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The next question is from the line of Manav Patnaik of Barclays.

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Ryan C. Leonard, Barclays Bank PLC, Research Division - Research Analyst [46]

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Yes. This is Ryan Leonard on for Manav. I appreciate that it's early on, but is there any way to think of the potential impact of Coronavirus, mostly just from a supply chain kind of view that there could be just a disruption in ordering and some sort of impact in manufacturing outside of trade wars.

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Jonas Prising, ManpowerGroup Inc. - Chairman & CEO [47]

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Well, thanks, Ryan. No. I think it's still way too early to assess any impact. And you can see a number of companies that are involved in travel and hospitality and things like that, are operating in China, of course, are taking the measures that they need to do in China. I think we're monitoring the situation very closely. And as you would expect, we're taking the actions that we need to do, especially in Asia Pacific, to make sure that we're providing regular reporting and communicating to our associates, our employees and our clients. So like many organizations, whose operations are mainly outside of China, we're monitoring it. And we've made and continue to make business continuity and risk assessments, and we have the -- and we have processes in place to monitor and take actions as the situation evolves. But overall, I would say, right now, the situation is too fluid, and it's too early to determine what the impact would be.

And with that, we come to the end of our Q&A. Thank you, everyone, for calling in, and we look forward to speaking with you again when we report out on our first quarter results.

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John T. McGinnis, ManpowerGroup Inc. - Executive VP, CFO & Head of IR [48]

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Thanks, everyone.

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Operator [49]

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Thank you. And this does conclude today's call. All parties may disconnect at this time. Thank you all for participating.