Manpower 1Q17 Earnings Call Notes

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Jonas Prising – Chairman and Chief Executive Officer

Economic and labor market outlook has improved slightly

“Economic and labor market outlook in many parts of the world has improved slightly, also finally in Europe, where we have the majority of our operations. Employer hiring intent is also showing small slight improvement globally, as measured by our second quarter ManpowerGroup employment outlook survey. All of this was still in the context of a slow growth environment in many parts of the world, with some political uncertainty added to the mix as well. But it indicates an overall slight market improvement from what we saw in the fourth quarter.”

Starting to see teh UK market getting a little bit soft

“But I think it’s fair to say that, as we continue to understand what the impact of Brexit is, we are starting to see some companies make decisions in anticipation of a different business environment for them in that market. And part of this that we’re seeing could be related to Brexit, but it’s really difficult to call at this point. But we’d note that, the UK market is getting a little bit soft during the numbers of areas. And I think, we’re starting to see our clients react to that and especially the bigger clients that we have.”

UK decline offsetting some strength elsewhere

“Mark, to our earlier comments, I think it’s really a combination of the UK continuing to perform in the second quarter at the level that we saw in the first quarter, generally speaking, so stable on that level of decline into the second quarter. And that’s really going to offset some of the growth we’re seeing elsewhere. So if you look at to cover some of the countries there. If you look at Germany, we are expecting Germany to be slightly up in the second quarter. So, low double-digit on an average daily revenue basis in the second quarter, which is good in terms of that improvements. We talked about Belgium in our prepared remarks, we see Belgium being relatively stable into the second quarter versus the rate we saw in the first quarter. And from the Netherlands, I’d say, as we’ve talked about, Netherlands had very, very strong growth in 2016, very high.”

Tight labor market in the US but no runaway inflation

“So now for the U.S. specifically, I would say that, it’s a tight labor market. So we are seeing some wage inflation. And we think that we are able to generate a little bit more pricing leverage, but it’s all within the context of smaller changes. So wage inflation, there’s no runaway wage inflation right now. So we can see maybe a little bit more ability to improve our pricing in the U.S., but it isn’t any major shift from what we’ve seen in past quarters.”