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00:02 Welcome to ManpowerGroup First Quarter Earnings Results Conference Call. At this time, all participants are in a listen-only mode until the Q&A session of today's conference. This call will be recorded. If you have any objections, please disconnect at this time.

00:16 And now, I will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. You may begin..

00:25 Welcome to the first quarter conference call for 2022. Our Chief Financial Officer, Jack McGinnis, is on the call with me today. For your convenience, we have included our prepared remarks within the Investor Relations section of our website at manpowergroup.com.

I will start by going through some of the highlights of the quarter, then Jack will go through the first quarter results and guidance for the second quarter of 2022. I will then share some concluding thoughts before we start our Q&A session. Jack will now cover the Safe Harbor language..

00:59 Good morning, everyone. This conference call includes forward-looking statements, including statements regarding the impact of the COVID-19 pandemic and the Russia-Ukraine War, 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. 01:19 We assume no obligation to update or revise any forward-looking statements.

Slide 2 of our earnings release presentation further identifies forward-looking statements made in this call and factors that may cause our actual results to differ materially and information regarding reconciliation of non-GAAP measures..

01:35 Thanks Jack. On our previous earnings call, the world was truly a different place. We could not have imagined the tragic events that would unfold in Ukraine. Let me be clear on ManpowerGroup’s position.

We stand with Ukraine, we support the people of Ukraine, and we are committed to support refugees from Ukraine as we have previously done with refugees elsewhere, and I’ll talk more about this later in the call. 02:04 Turning to our financial results.

In the first quarter, revenue was $5.1 billion, up 10% year-over-year in constant currency or 6% in organic constant currency. Our EBITA for the quarter was $148 million. Adjusting for the U.S.

acquisition integration costs and a loss on our previously announced disposition of our Russia business, EBITA was $162 million, reflecting growth of 64% in constant currency year-over-year. 02:40 Reported EBITA margin was 2.9%, and adjusted EBITA margin was 3.1%, which was above the adjusted EBITA margin from the first quarter of 2019. Our U.S.

business demonstrated exceptional performance during the quarter and was a major driver of our significant year-over-year improvement. Earnings per diluted share was $1.68 on a reported basis and $1.88 on an adjusted basis. Adjusted earnings per share increased 78% year-over-year in constant currency.

03:20 Although geopolitical uncertainty has increased, we continue to see strong hiring intentions in most of our major markets in Europe as well as globally.

In this environment, our clients need us more than ever to provide them with the strategic and operational flexibility to transform and be successful and to find workers of various skill levels in very tight labor markets.

The pandemic effects are still noticeable in many markets, where supply side issues have led to pent up demand, and with that continued need for workers. 03:53 And as a result, we see requests for skilled workers at record highs, especially in IT, finance, and manufacturing operations.

In select industries, there has been some additional disruption due to the Ukraine crisis, particularly in the automotive supply chain, but overall talent shortages remain a significant challenge for our clients, which benefits our brands and portfolio services and solutions. 04:21 We continue to execute our DDI strategy.

Our initiatives to Diversify, Digitize, and Innovate. On Diversification, our Experis IT resourcing, Talent Solutions, and Manpower permanent recruitment businesses had a very strong quarter, improving our business mix, and expanding the contribution of higher growth and higher value services strengthening our gross profit.

04:46 On Digitization, we continue to execute our technology agenda, adding more value to our client and candidate experience.

And as part of our Innovation plans and our B2C strategy, we continue to scale our skilled talent pool of the future through Manpower MyPath, upskilling and transforming associates’ lives to date across 12 countries including France, U.S., and Italy.

05:12 We now have more than 11,000 clients actively engaged in this career pathways program, creating skills for our associates at scale. Our results continue to reinforce our confidence in our strategic choices and investments.

This is how we believe we will continue to drive profitable growth now and sustainable value creation for the long-term for all of our stakeholders. 05:37 And I will now turn it over to Jack to take you through the Q1 results..

05:42 Thanks, Jonas. Revenues in the first quarter came in at the top end of our constant currency guidance range. Gross profit margin came in above our guidance range. As adjusted, EBITA was $162 million, representing a 64% increase in constant currency from the prior year period, or a 46% increase on an organic constant currency basis.

As adjusted, EBITA margin was 3.1% and came in above our guidance, representing 100 basis points of improvement or 80 basis points organically. 06:15 Breaking our revenue trend down into a bit more detail, after adjusting for the negative impact of currency of about 5.5%, our constant currency revenue increased 10%.

Due to the impact of net acquisitions increasing revenue about 3.5% and slightly more billing days, the organic days-adjusted revenue increase was 6% compared to our guidance of 5%.

06:39 Turning to the EPS bridge, reported earnings per share was $1.68, which included $0.20 related to the previously announced loss on the sale of our Russia business in January and the Experis U.S. acquisition integration costs during the quarter. Excluding these items, adjusted EPS was $1.88, which was well above the top end of our guidance range.

07:01 Walking from our guidance mid-point, our results included improved operational performance of $0.26, slightly lower weighted average shares due to share repurchases in the quarter, which had a positive impact of $0.01, a slightly higher effective tax rate, which had a negative $0.01 impact, and favorable other expenses which added $0.02.

07:23 Next, let’s review our revenue by business line. Year-over-year, on an organic constant currency basis, the Manpower brand reported revenue growth of 5%, the Experis brand reported revenue growth of 15%, and the Talent Solutions brand reported revenue growth of 13%.

07:40 Within Talent Solutions, we continued to see exceptional revenue growth in RPO and very strong revenue growth in MSP. As we continue to experience a record low outplacement environment, Right Management saw double-digit percentage revenue decreases year-over-year.

07:57 Looking at our gross profit margin in detail, our gross margin came in at 17.4%. Underlying staffing margin contributed a 40-basis-point increase. The Experis U.S. acquisition added 30 basis points. Permanent recruitment contributed a 90-basis-point GP margin improvement as hiring activity continued to be strong across our largest markets.

08:19 Experis Solutions contributed a 20-basis-point improvement, which was driven by the U.S. business. This was offset by a lower mix of Right Management career transition business, which resulted in 20 basis points of GP margin reduction.

Direct cost adjustments in Northern Europe represented 10 basis points of improvement and other items also represented 10 basis points improvement. 08:43 Moving on to our gross profit by business line. During the quarter, the Manpower brand comprised 57% of gross profit.

Our Experis professional business comprised 28%, and Talent Solutions comprised 15%. 08:57 During the quarter, our Manpower brand reported an organic constant currency gross profit year-over-year growth of 11%. Gross profit in our Experis brand increased 29% on an organic constant currency basis year-over-year during the quarter.

Organic gross profit in Talent Solutions increased 22% in constant currency year-over-year. This was driven by the performance in RPO and MSP discussed earlier, which was partially offset by the decreases in Right Management due to outplacement trends. 09:29 Our SG&A expense in the quarter was $758 million.

Excluding the loss on the Russia business disposition and the Experis U.S. acquisition integration costs, SG&A was 16% higher on a constant currency basis, and 12% higher on an organic constant currency basis.

This reflects continued investment in the business, reflecting the addition of recruiters and sales personnel largely in Experis, RPO, and in various growth opportunity markets in Manpower.

10:00 The underlying increases consisted of operational costs of $77 million, incremental costs related to net acquired businesses of $31 million, offset by currency changes of $33 million. Adjusted SG&A expenses as a percentage of revenue represented 14.5% in the first quarter. 10:19 The Americas segment comprised 24% of consolidated revenue.

Revenue in the quarter was $1.3 billion, an increase of 26% in constant currency or 7% on an organic constant currency basis, or 8% after adjusting for days. OUP was $73 million. As adjusted, OUP was $77 million and OUP margin was 6.1%. 10:44 The U.S. is the largest country in the Americas segment, comprising 71% of segment revenues. Revenue in the U.S.

was $889 million, representing a 44% days-adjusted increase, or 13% organically, compared to the prior year. 11:01 As adjusted to exclude acquisition integration costs, OUP for our U.S. business was $62 million in the quarter representing an organic increase of 46%. As adjusted, OUP margin was 7%, or 6.1% on an organic basis.

Within the U.S., the Manpower brand comprised 25% of gross profit during the quarter. 11:25 Revenue for the Manpower brand in the U.S. increased 6% during the quarter, an improvement from the 2% growth recorded in the fourth quarter. The Experis brand in the U.S. comprised 46% of gross profit in the quarter.

Within Experis in the U.S., IT skills comprised approximately 90% of revenues. 11:44 Experis U.S. had an exceptional quarter with revenues growing 35% organically and we anticipate continued strong double-digit organic growth in the second quarter. The acquired U.S.

Experis business had solid revenue growth during the quarter and the integration is proceeding on-schedule. 12:04 Talent Solutions in the U.S. contributed 29% of gross profit and experienced revenue growth of 15% in the quarter.

This was driven by RPO, which continues to win new business and experienced record revenue levels during the quarter as hiring programs continued to strengthen. 12:21 The U.S. MSP business continued to perform well with strong revenue growth in the quarter. Within Right Management, career transition activity continued to run-off.

In the second quarter, we expect ongoing underlying improvement and revenue growth for the U.S. in the range of 46% to 50% year-over-year, or 15% to 19% organically. 12:44 Our Mexico operation experienced a revenue decline of 61% in constant currency in the quarter, representing a stable trend from the fourth quarter.

The decline was driven by the new labor legislation that commenced in the third quarter of 2021. We anticipate a similar revenue decrease in the second quarter. 13:04 Southern Europe revenue comprised 43% of consolidated revenue in the quarter. Revenue in Southern Europe came in at $2.2 billion, growing 8% in constant currency.

OUP equaled $95 million and OUP margin was 4.3%. 13:20 France revenue comprised 54% of the Southern Europe segment in the quarter and increased 8% in constant currency. OUP was $50 million in the quarter and OUP margin was 4.2%.

As we begin the second quarter, we are estimating a year-over-year constant currency increase in revenues for France in the range of 5% to 9%. 13:41 Our recent revenue growth in the month of March was 7%, which also represents the midpoint of our second quarter guidance range for France.

The slight deceleration in revenue growth in March and early April in France is driven by the automotive sector. 13:57 Revenue in Italy equaled $445 million in the quarter reflecting an increase of 18% in days-adjusted constant currency. OUP equaled $29 million and OUP margin was 6.5%.

We estimate that Italy will continue to have strong growth in the second quarter with year-over-year constant currency revenue growth in the range of 8% to 12%. 14:20 Our Northern Europe segment comprised 21% of consolidated revenue in the quarter. Revenue increased 4% in organic constant currency to $1.1 billion.

After adjusting for the loss on the sale of our Russia business, OUP represented $9 million, and OUP margin was 0.8%. 14:41 Our largest market in the Northern Europe segment is the U.K., which represented 38% of segment revenues in the quarter. During the quarter, U.K. revenues were flat year-over-year in constant currency.

This reflects the exit of certain low margin arrangements, replaced with higher fee-based margin business. These and other actions including permanent recruitment growth are driving significant improvement in the margin profile of our UK business.

15:07 Our UK business is performing well and we expect a slight decrease in revenues and increase in margins during the second quarter based on the aforementioned business mix updates. In Germany, revenues decreased 6% in days-adjusted constant currency in the first quarter.

Although many of our European businesses have seen COVID-related improvements in sickness rates and related associate utilization in the second half of the quarter, Germany has lagged in this regard. 15:36 We are anticipating an improvement in sickness rates during the course of the second quarter.

The trends in Germany also reflect a sluggish automotive sector for which supply chain issues have worsened in March. Overall, we are expecting a similar year-over-year revenue trend in the second quarter. 15:54 The Asia Pacific Middle East segment comprises 12% of total company revenue.

In the quarter, revenue grew 6% in constant currency to $618 million. OUP was $19 million and OUP margin was 3.1%. 16:11 Our largest market in the APME segment is Japan, which represented 47% of segment revenues in the quarter. Revenue in Japan grew 14% in days-adjusted constant currency.

We are very pleased with the performance of our Japan business, which continues to lead the market in revenue growth, and we expect continued strong revenue growth in the second quarter. 16:33 As I wrap up my comments on APME, I would like to give a brief update on our investment in ManpowerGroup Greater China.

Although this business is no longer consolidated since the July 2019 IPO on the Hong Kong Stock Exchange, we remain the largest shareholder with a stake of approximately 37%.

16:53 The China business has performed very well and recently released their 2021 results recording revenue growth of 23% for the year, including 41% growth in staffing in Mainland China. Profit attributed to owners increased 10% year-over-year.

ManpowerGroup Greater China represents a significant strategic investment, and we are very pleased with their performance. 17:18 I’ll now turn to cash flow and balance sheet. In the first quarter, free cash flow equaled $52 million compared to $128 million in the prior year.

At quarter-end, days sales outstanding was up about 1 day year-over-year at 57 days. Capital expenditures represented $19 million during the first quarter. 17:38 During the first quarter, we repurchased 578,000 shares of stock for $60 million.

As of March 31, we have 3.9 million shares remaining for repurchase under the share program approved in August of 2021. 17:56 Our balance sheet ended the quarter with cash of $777 million and total debt of $1.06 billion, resulting in a net debt position of $287 million.

Our debt ratios at quarter-end reflect total gross debt to trailing 12 months adjusted EBITDA of 1.44 and total debt to total capitalization at 31%. 18:20 Our debt and credit facilities did not change in the quarter. During the quarter, we reduced our utilization of the $600 million revolving credit facility from $75 million to $50 million.

The revolver was utilized in funding the U.S. Experis acquisition and we expect to pay down the remainder over the next six months. 18:38 Next, I'll review our outlook for the second quarter of 2022. Our guidance continues to assume no material additional COVID-19 or Russia-Ukraine war related impacts beyond those that exist today.

On that basis, we are forecasting underlying earnings per share for the second quarter to be in the range of $2.31 to $2.39, which includes an unfavorable foreign currency impact of $0.19 per share.

This does not include the impact of acquisition integration costs of $4 million to $6 million, which will continue to be broken out separately from ongoing operations. 19:18 Regarding revenues, the stabilized impact of the regulation in Mexico continues to represent a year-over-year revenue loss of about 2% again in the second quarter of 2022.

Considering this, our constant currency revenue guidance growth range is between 6% and 10% and at the midpoint represents 8%. 19:39 After adjusting for the acquisition of the U.S.

Experis business, the disposition of Russia, and a slightly lower number of billing days in the second quarter, our organic days-adjusted revenue growth rate represents 5% at the mid-point.

This represents solid revenue growth across our industry verticals with the exception of automotive manufacturing, which we expect to continue to be sluggish predominately in France and Germany. 20:06 We expect our EBITA margin during the second quarter to be up 40 basis points at the midpoint compared to the prior year with the acquired U.S.

Experis business contributing 20 basis points of the improvement. We estimate that the effective tax rate for both the second quarter and the full-year of 2022 to be 30%. 20:27 As usual, our guidance does not incorporate restructuring charges or additional share repurchases and we estimate our weighted average shares to be 54 million.

20:36 I will now turn it back to Jonas..

one, providing humanitarian emergency support and immediate relief on the ground and in neighboring countries; two, integrating people into the workforce, including expanding our MyPath upskilling program to refugees with additional resettlement and language support, and three, partnering with companies and NGOs to scale long-term impact.

22:53 We are working very closely with clients in Poland and surrounding countries. We are partnering with them to redesign roles to employ more women refugees, and in the past few weeks alone, we have connected hundreds of people to roles in auto manufacturing and consumer goods production in Poland, the Czech Republic, and Slovakia.

23:13 In the Czech Republic, we worked with the labor ministry as they swiftly changed legislation to allow non-EU citizens to work in the country. And we are helping aid agencies staff up while also committing $500,000 and counting to UNHCR and local humanitarian organizations, including the Polish Red Cross.

23:35 Our management teams are managing very well in the current environment which, outside of some industry verticals I discussed, continues to be an environment in which there are very good growth opportunities.

Should this change, we will manage risks to economic growth as we always do, proactively and in a manner that continues to position ManpowerGroup for ongoing success, but for now, we are investing additional resources in markets where we continue to see opportunities for profitable growth.

24:05 And as always, it is our people that drive our success and all we accomplish. We were recently recognized by the Wall Street Journal and The Drucker Institute as one of the top 250 Managed companies, scoring especially highly for sustainability.

We were also recognized as one of the World's Most Ethical Companies for the 13th year by Ethisphere, a global leader in defining and advancing the standards of ethical business practices.

24:33 We are proud to be the only company in our industry to be recognized for more than a decade and we thank all of our talented teams for playing a critical role in driving our business results and also, driving positive change in societies and communities around the world. 24:51 I’d now like to open the call for Q&A.

Operator?.

24:57 Thank you. [Operator Instructions] We have our first question from Andrew Steinerman of J.P. Morgan. Your line is open..

25:18 Hi, good morning Jonas and Jack. I'm going to ask you an economic cycle question, if I could? You know, kind of looking back at the 2020 recession, it was just so unusual, kind of steep and brief, and surely the economic recovery last year was also atypical* and now we're facing the Russia conflict and inflation.

So, my question is, assuming we get through this period of geo uncertainty and inflation, does it feel like the macro drivers are in place that we can have kind of a long tenure of economic expansion ahead?.

25:55 Thanks, Andrew. That's a great question. And from what we can observe, you are looking at labor markets that are extremely tight. And we think of course, this is in part an effect of pent-up demand due to the pandemic.

And when I traveled in Europe across many countries just a few weeks ago, there wasn't a conversation that did not involve talent shortages and the difficulty in finding talent.

And as you can tell from our results, demand for talent, look – if you look at perm, if you look across all of our brands, all of which improved during Q1 between Experis, very strong growth Talent Solutions and Manpower improving broadly across many markets.

We see very strong demand for workers across all of the aspects of our geographies, all of the skillsets that we're looking for. 26:55 And we are still in the recovery phase after the pandemic. So, at least as you can tell from our outlook when we look into Q2, we forecast that this is going to continue.

And if you think about the structural drivers of demand, so you have growth, you have a higher degree of uncertainty, you have demographic impact on a lot of labor markets where people at less labor markets, we feel very good about the growth opportunities as we look ahead Andrew..

27:25 Excellent. Thank you..

27:28 Thanks, Andrew..

27:32 Thank you. Our next question is from Manav Patnaik of Barclays. Your line is open..

27:37 Thank you.

I just wanted to clarify in terms of the guidance, you said, you've assumed some impact, I guess from the Russia-Ukraine conflict, and I just wanted to appreciate what impact have you seen and where the moving pieces there could be?.

27:57 Well thanks, Manav. Well so far, most of the impact that we are looking at as it relates to the labor markets frankly are driven by the pandemic effects. So, what we saw in the first quarter as we had anticipated was that the COVID situation would improve in many markets.

We expect they will continue to prove into Q2 with vaccination rates improving in a number of markets all over the world.

28:25 And in terms of the impact on the supply chain, which was of course impacted heavily and continues to be dealing with pent-up demand following the pandemic, really the main segment that we saw sector with any additional impact was the automotive sector in a couple of countries where we have a little bit higher exposure to automotive and we – in our prepared remarks, we talked about Germany as well as France, but other than that as you can tell from our guidance, we feel good about the growth opportunities broadly speaking, both globally as well as in most sectors..

29:06 Got it. And then maybe just one quick one.

France always has had many moving pieces, and I think we had another election cycle, like any thoughts on whether if that goes one way or the other impacts your business?.

29:22 Well, overall, I would say that our queue line, trends were in-line with the expectations and when I visited France just a few weeks ago, frankly, every conversation that we had * was about what we can do to help our clients find more people. So, underlying demand is still strong.

29:40 We did experience an overall improvement in our trend between the fourth quarter and the first quarter, but we did exit the quarter with a slight downtick in growth rate, and that's driven primarily by automotive. So, we view the current disruptions as temporary, and we're optimistic on France’s recovery overall.

And the recent government budget shows ongoing commitment to recovery actions and a continuation of the French business tax reductions that were introduced last year, which is also positive for our business. 30:14 So overall, France has recovered well, but we expect to see slightly slow growth in the coming quarter isolated to the automotive sector.

And frankly on the election, we would expect President Macron to win the election, which we believe would be favorable for the French government because it provides stability and to continue* making France more competitive for global business, but should the unexpected happen and Macron does not win, we've had a long history of working with all administrations, all labor market policies, and related initiatives, and we'd expect to continue to do that in that case as well..

30:52 Got it. Thank you very much, Jonas..

30:54 Thanks Manav..

30:57 Thank you. Our next question is from Kevin McVeigh of Credit Suisse. Your line is open..

31:03 Great. Thanks so much and congratulations. You mentioned auto a couple of times.

Jack or Jonas, could you just remind us how much Auto is in France, in Germany, and then just overall? And just to tie that in, what would get to the low end versus the high end of the range with the French guidance? The 5 to 9, it seems like you are 7% and more, if I heard you're right, so maybe just some puts and takes around France?.

31:34 Sure Kevin. This is Jack. So, I'd be happy to refresh on the auto exposure. I think if you look at that appendix to our release, you can see auto overall has been holding about 5% of our revenues, that's been pretty consistent the last couple of quarters, but as we said, we are seeing some bigger impacts specifically in Germany.

So, I think at the moment, Germany is about 30% auto, some of that is related to our end user IT business, so those are auto industry clients, but not all of those are specifically auto manufacturing workers, but Germany is certainly the biggest impact from a country perspective.

32:21 France is about 8% to 10% and that's been fairly consistent as well. So, I'd say, those are the two markets where we're seeing probably the most impact from the supply chain items that Jonas was referring to.

And we do have auto exposure in some other countries, but I'd say, it really has not been impacted the way it has in France and Germany specifically. 32:51 In terms of the French guidance for the revenue, so at the midpoint, that would be equal to what we just experienced in March at 7% growth.

To get to the high end Kevin of 9%, we would like to cease just perhaps maybe a little bit of a step up in the second quarter above the rate we're experiencing, now driven by some of the other industries.

33:17 So, we've been doing a really nice job in France growing convenience, so the non-enterprise part of the business, there's opportunity if that is stronger into the second quarter that could lift us towards the higher-end of that range. On the flip side, I think automotive is the one we're watching closely in the enterprise clients.

33:38 So, but I'd say that's kind of how we're thinking of it at the moment. We did say that we are investing in recruiters and France is a market that we are investing in. There is still some very good growth opportunities in France outside of the automotive sector and we're very focused on that.

So, there is a little bit of a lag from the time we bring the recruiters on until you see that in the sales results, but that is an opportunity for us as we move beyond the second quarter as well..

34:13 Thank you so much..

34:17 Thank you. Our next question is from Mark Marcon of Baird. Your line is open..

34:22 Hey, good morning Jonas and Jack. I'd like to just continue on the trend with regards to the European questions first before getting to some structural questions.

On Europe, Jonas you travel a lot, what are your clients basically saying with regards to the probability or possibility of a recession occurring on the continent just due to higher energy prices and maybe some of the supply chain constraints that are currently occurring both as it relates to Europe and then China lockdowns? How are they discussing that and how that could potentially unfold? And then how do they think about those impacts relative to Europe had more severe lockdowns for COVID? There's a lot of pent-up demand.

Most people don't appreciate the talent shortages that exist in Europe, but they do exist and if we do have a recession, could it end up being relatively shallow as it relates to Europe, you know given that COVID is lifting and there are all sorts of demographic factors that should boost your business?.

35:45 Thanks, Mark. Those are great questions and of course, that's exactly what I discussed with our clients across the various countries that I travel to.

And the overall position of almost every client is that they're dealing with significant talent shortages as an effect, all of the pandemic, the healthcare issues, the pandemic lockdowns, and they're just trying to recover from this pent-up demand where they have a lot of demand for their products and services.

36:26 So the main issue they are grappling with is really where to find skilled workers, how can we help them do that faster and in all of the different brands, be it higher skilled IT people through Experis, manufacturing workers in Manpower, permanent recruitment as you've seen very, very strong.

36:49 They are equally experiencing wage inflation, but as you sure have seen, the wage inflation in Europe is quite a bit lower than it is in the U. S. for instance.

So, wage inflation is a concern, but so far, they are willing to take the wage inflation when as you will know, wage inflation in terms of our business model is positive and we are able to move with the markets and increase our bill rates to reflect the ability to attract the talent. So, that is where most of the focus is in our conversation.

37:31 Clearly, they are aware of the issues around rising energy costs and the food prices that are coming up and are concerned about the eventual outcome of the Ukraine crisis, but their markets where they are seeing the demand they still have strong demand.

37:52 And [indiscernible] point, when I go to Poland, and I travel there, of course, because of the Ukraine crisis and Poland absorbing the equivalent to the United States absorbing 35 million people, so more than the size of the population of Texas in four weeks, I'm going to Poland expecting to see great difficulties, of course, on a humanitarian level, but also on a business level.

But Poland’s unemployment rate is 2.8%, the second lowest in Europe and only beaten by the Czech Republic at 2.5% unemployment. 38:30 So, whilst all of this is going on with the humanitarian crisis, and the tragedy in Ukraine, demand for our product and services in Poland is very, very strong.

We expect to have record revenues in Poland strong, double-digit growth with very good profitability during this year. So, we can absorb the uncertainty, which frankly drives demand also for our services, while at the same time working with our clients to fulfill their demand.

39:08 So, at least based on what our clients are seeing today and what we're seeing across the labor markets, demand remains strong, our clients are noting the increased turbulence, of course, they are concerned, but they're not taking any actions discernible to us that really change their behavior as you can tell from our second quarter outlook as well..

39:34 That's great. And then can you talk, Experis showing really nice improvement, which is awesome to see.

Can you talk a little bit about to what extent would you attribute that to just market growth and the secular demand for IT relative to actual share gains and improved positioning, improved systems that you have in place through all the investments that you’ve made?.

40:04 Well, we’ve really doubled down on being the leader in IT resourcing and solutions Mark for a number of years, clarified our market to position and invested heavily in recruiters and of course, the acquisition in the U.S. as well, which you heard from our prepared remarks, integration is going in very well there also.

And we are very pleased with how Experis is progressing globally with that positioning across a number of practice areas that our clients are looking for today, but frankly, we think due to the structural demand, we feel really good about the IT – demand for IT resources and solutions going forward as well.

40:48 And to your question on market share gain, I think when we're growing the strongly organically at 33% in the U.S., we feel really good about how the U.S. operation is performing and we're gaining share there. Between the UK and the U.S.

we have 50% of our Experis business globally and both of those operations are very strong, but especially our Experis U.S. Operation is really progressing well. 41:20 And I think the team has done a great job really positioning us for success. And as you heard from our outlook, we expect that to continue into the second quarter.

And overall, we're very pleased with our progress competitively and with the outlook of demand, structural demand going forward as every company is investing in digital transformation, and we intend to be a huge part of that as it relates to resourcing in IT Solutions globally..

41:53 Fantastic. Thank you..

41:56 Thank you. Our next question is from Jeff Silber of BMO Capital Markets. Your line is open..

42:03 Thanks so much.

In your prepared remarks, you did mention some intra quarter trends in France, at least how you finished up in March, I'm just wondering if we can get any color on some of the other major regions? I’m specifically interested in, if there was any impact from the Russian-Ukraine crisis or anything else that specifically impacted intra-quarter trends? Thanks..

42:26 Jeff. Yes, on that point, so France definitely was the one that we called out. So, they moved from about an 8% growth rates in January and February to that 7% that we referenced in the month of March. If I look across the other countries in Europe, I’d say, the other one I would call out would be Germany, for the same reasons.

42:52 Germany really stepped down. As we approach March, they were starting to see a bigger impact from the supply chain issues on that large automotive concentration we have there. So, I'd say that one probably step down about mid-single digit percentages from where they were the month before.

And we're using that as part of our – we think on overall basis, Germany will have a trend pretty similar to what we saw in the first quarter because March was a big part of the quarter overall as we look forward. 43:31 I'd say, those are probably the two that jump out the most.

The other item that we highlighted was the UK and although the UK revenues were more flat on a quarterly basis year-over-year, the UK is doing really well, and we've talked about some business mix changes, which are really improving the margin. So, we anticipate the UK.

I'd say from a quarter overall perspective, they were pretty stable and we expect them to have really good margin performance going into the second quarter as well. 44:06 Although probably a similar trend from a revenue perspective into the second quarter maybe down slightly from the trend we saw in the first quarter.

But in terms of the puts and takes, I'd say those are probably the three that I would call out that that had probably a bigger impact from a European perspective..

44:28 Okay. That's great. And Mark alluded to this in his question earlier, but I wanted to drill down a little bit more in terms of the recent lockdowns in China. I think they only started in late March. So, you probably didn't see much of an impact in the first quarter.

I know it's still early, but is there any impact you think there's going to be any impact from the recent China lockdown on supply chain issues, anything else in your business in the second quarter? Thanks..

44:55 That's a good question, Jeff.

And as you point out, it's too early to say whether they will be, but rather whether there was any in March, we didn’t notice anything there, but just as with any of these lockdowns, I think there might be supply chain impact, but as we've spoken about in prior earnings calls and as we've experienced, they are temporary in nature.

So, they cause a temporary disruption. They postpone demand if there are supply chain issues, they don't cancel demand. And so, if there is a disruption, we would expect those to come through and then subside as the governments get the COVID outbreaks under control.

45:40 So, hard to tell where exactly that would be, but if it happens just as we've seen in all of the other countries, it's a temporary effect and then eventually it starts to catch up again, which frankly, just drives more demand for workers as production facilities will work harder to catch up..

46:01 Okay, very helpful. Thanks so much..

46:03 Thanks, Jeff..

46:06 Thank you. Our next question is from Tobey Sommer of Truist Securities. Your line is open..

46:13 Hey, good morning. This is Jasper Bibb on for Tobey. Following up on earlier question, I wanted to ask about wage inflation in the U.S., could you quantify what the U.S.

bill rate growth was for Experis versus the Manpower brand in the quarter?.

46:31 Jasper, this is Jack. We don't really disclose bill rate details like that just due to the number of countries that we have. So that hasn't been the level of detail, but what I can't tell you directionally is, we saw good GP margin expansion in Experis and Manpower in the quarter, which was very strong.

And if I look specifically at perm, perm is a big driver for Experis to your question that was a big contributor to that. So, very, very strong GP margin improvement year-over-year in the U.S. organically and certainly, we have the addition of the acquired business that is helping that further.

47:16 And then on the Manpower side, similar, so GP margin up very strongly in the quarter. I think to your point, we found that pricing continues to be very strong in both Experis and Manpower. Wage inflation, as Jonas mentioned, does benefit the cost of the worker gets passed through to the client, our margin goes on top of that.

SO, those dynamics play into our GP dollar increases. So, I think on an overall basis in terms of trends that we're seeing, it's still holding up quite well. Those wages are being passed through and we're not seeing that impact demand at this stage..

48:02 And Jasper, maybe I would just add to that that we believe that we're at peak or have passed the peak of wage inflation in the U.S. It's still high, but when we look at some of our most recent trends, we can see some easing off in the growth rates, which we believe is positive overall.

It's early days yet and inflation, as I mentioned earlier is much higher in the U.S. than it is elsewhere in, but wage inflation, of course also exists in Europe and in other countries, but as it relates to U.S. specifically, we are starting to see a little bit of an easing and we believe that we've seen the peak of wage increases..

48:53 Thanks that makes sense.

And then I was just hoping you could speak to the temporary employment legislation in Spain that came out [in intra quarter] [ph]? Are you seeing any impacts on your country business there at this stage or will you say it's still too early to tell?.

49:09 Well, I would say this, the proposed [stained label integration] [ph] is overall targeted at Spain’s really broad use of temporary contracts at large, so not related to our industry, but just generally using temporary short-term contracts specifically within the tourism and hospitality and leisure industries.

And that's what this legislation primarily is addressing, but as part of that, our temporary staffing is going to be impacted, but the temp penetration for our parts is less than 1%, but it will be captured by the proposed legislation.

49:56 So, there are various details on the terms for the temporary assignments, but overall, and in summary, this moves them closer to an Italy like model.

And we know we can manage such a model very successfully based on the performance of our Italian business, and we would manage any of these new [legislational aspects] [ph] in what we believe a positive way for the business. 50:26 So, the implementation of these new legislations happened on April 1.

We're monitoring the reaction of our clients very closely.

We're out talking to our clients about what this means for them and the opportunities that we have, helping them, but overall, I would say, we anticipate that the impact is neutral to positive because there are also some really positive impacts of the legislation which gives us opportunities to break into sectors of the markets that we weren't able to be in before like hospitality and tourism industries because the requirements are pretty onerous, which we are used to dealing with and other [indiscernible] are not.

51:13 So, we think this could actually be a good opportunity, but more to come on this as it evolves, but overall, we think it's entirely manageable for our business in Spain..

51:24 Okay. Appreciate the color. Thanks for taking the questions guys..

51:28 Thank you..

51:30 Thank you. Our next question is from Hamzah Mazari of Jefferies. Your line is open..

51:37 Hi. This is Hans Hoffman filling in for Hamzah Mazari.

I really wonder if you could comment a bit on which end market verticals maybe came in better or worse than your guide? I know you guys guide geographically or regionally, but just curious on any additional color there by end-market?.

51:56 Sure. I'd be happy to talk a little bit to that. So, I think based on the Experis results, I think it goes, you know it's pretty clear that on the professional side, we performed very well and that was a huge driver. I think Jonas mentioned the performance of the U.S. That's a big driver as well.

I'd say the financial sector was one that we saw strengthen during the quarter. 52:25 Technology, we certainly saw strengthen during the quarter as well. And as I look across, I'd say pharmaceuticals continues to be very strong for us as well. We do a good deal of public sector work in the UK as well that was strong for us as well.

52:46 So, I'd say a little color on what we saw in some of the industry verticals that were strong for us.

And as we look at the guidance for the second quarter, those are industries that we expect to continue to show strength as we go forward and we're seeing that as we end the quarter and we would expect that to continue during the second quarter as well..

53:12 Got it. Thank you..

53:16 Thank you. Our next question is from [indiscernible] of Bank of America. Your line is open..

53:22 Hi, thank you for taking my question. I wanted to ask another one just in terms of the Russia Ukraine war impact and sort of the rest of your manufacturing exposure outside of autos.

I'm just curious what you've been hearing from your clients and what you think is driving, kind of the delta in terms of auto is being impacted versus, I guess the rest of the other manufacturing industries, just to, kind of better understand the dynamics there? Thanks..

53:55 Well, it's a great question. And we'd already seen during the pandemic issues around automotive and as the case is, in Eastern Europe, specifically in Ukraine, as well as in Russia there are a number of suppliers that are supplying into the European automotive sector.

So, I think that's the reason they are more exposed European car manufacturers to Russia and Ukraine in their supply chain that makes sense, it's close proximity, easy access, but of course, when there is a crisis like this, all of that gets up ended.

54:38 And we believe that is a reason why they are feeling it more, but frankly, the automotive sector along with many other sectors, of course, is still dealing with the pandemic impact across their various supply chains globally and different geographies, if you look at the used car prices in the U.S.

and you try to order a new car of just about any make right now, you're going to be waiting a long time. And it's one of those industries that was hit the hardest during the pandemic, still working its way out and then incrementally now not made a little bit more difficult by the crisis and the war in Ukraine..

55:24 Thank you. That's really helpful. And a second question on permanent staffing. The business has done well recently, and also it's provided a really nice tail into margins. Can you talk about the demand dynamics there? And kind of where do you see the margins going? Thanks..

55:50 Well, this has been one of the fastest growing areas of our business portfolio and the outlook for perm is that it continues to be very strong into Q2 as well. And in Q1 that was up 55% in constant currency. So, it is really a reflection of the very tight labor markets.

And our clients are increasingly recognizing us as a great channel to find excellent talent on a temporary or more flexible basis and also increasingly a great way of finding talent that they need on a permanent basis.

56:39 So, it's really been a good evolution for Manpower and Experis and ManpowerGroup Talent Solutions as well that we are seen as a provider of perm hiring and a scale that we've frankly never seen before and we’re reaching record numbers of perm every quarter, which is a really good shift in terms of the perception of the kinds of services and the value that we can provide to our clients in the market that is very tight now, but of course, we also know that demographically speaking, you know all of the countries and where we do business are demographic challenged.

57:22 So, even past any pandemic pent-up demand, we feel really good about our opportunity to be a very strong player in the permanent recruitment space globally as well..

57:36 Right. Thank you very much..

57:39 Thank you. Our next question is from George Tong of Goldman Sachs. Your line is open..

57:45 Hi, thanks. Good morning. I wanted to try to understand some of the supply chain dynamics that are occurring outside of the auto sector.

Given some of the broad-based supply in issues globally, can you talk about whether Manpower’s business has been affected, but supply chain issues in other verticals across our geographies?.

58:07 Thanks, George. It's a good question. And frankly, based on the performance that we had in Q1 and also looking ahead from Manpower business in Q2. We're still working our way through the pent-up demand caused by the pandemic across all of our geographies and most other industries as well.

So, we feel really good about the demand for both permanent as we just discussed, as well as temporary staffing in Manpower and I can't really think of any specific sector that would have experienced something similar. So, we think demand remains broad-based strong and really, really positive for us as we look into the second quarter..

59:00 Got it. That's helpful.

The performance in the UK reflected the exit of certain low margin arrangements, can you elaborate on the exits there and your overall mix strategy in the UK?.

59:15 Yeah, George, I'd be happy to. I think this is a reflection of what you've seen us do in some other markets as well. Really it's – looking at the nature of the services we provide and really what we're seeing in the UK are, certain arrangements are being moved to more of a services type arrangement.

So, similar to like an MSP where we manage workers for a client, where the client continues to be responsible for those workers, well the substance of that is we're really providing more of a service as opposed to providing the workers to them.

59:51 And so in those type of arrangements, we would look at the nature of those contracts and that's what we're seeing is, you know the ship to more of a services type approach as we work through that with our clients. So, traditionally, I think there's some [payrolling] [ph] in our industry where that tends to cost some lower margin activity.

And there [just traditionally] [ph] isn't a lot of value in those type of services. 60:26 So, it's really a move away from those lower margin payrolling type arrangements and into higher services, higher margin type arrangements with our clients. And that's really what you're seeing in the UK. So, driving really strong margins.

The underlying business is doing quite well. And I'd say, you'll see that continue a little bit into the second quarter trend and then we would expect to see that sort of work its way through since we've entered into some of those arrangements in the second half of last year.

So, you would see that start to have a more muted impact in the second half of the year..

61:09 Got it. Very helpful. Thank you..

61:14 Thank you. At this time, we don't have any questions on queue. Speakers, you may proceed..

61:20 Excellent. Well, thank you very much everyone for your questions and interest in our earnings call today, and we look forward to speaking with you on our next earnings call for our second quarter during the summer. Thanks, everyone. Have a good rest of the week..

61:38 Thank you. That concludes today's conference. Thank you all for joining. You may now disconnect..