EU CONSUMER STAPLES: Manpower; 4Q (to Dec) Results

(MAN; Baa1/BBB Neg) (MAN +2% in US pre-market)
Adecco -2%, Randstad -2.3%

Results remain lacklustre, particularly on guidance, but MAN only has short-end debt and is low levered. Adecco is where we have the most concern (considering leverage and levels). It reports on 26th of Feb.

• 4Q revenues -3% including fx -5%
• Excluding FX;
  • Americas +7% (US +1%, Canada -1%, LATAM +23%)
  • Southern Europe -3% (namely France -6%, Italy +2%)
  • Northern Europe -16% (namely UK -21%, Germany -22%, Nordics -22%, Netherlands -1%)
  • APME -4% (Japan +9%, Other -17%)
  • Reminder all 3 majors run significant (60-70%) exposure to Europe.
• Gross profit -5% (ex. FX), reported EBIT reversed from last years loss to +$68m
• Left FY reported EBIT at $306m (+25% yoy) on a 1.7% margin (+35bps)
• FY FCF at $258m vs. $270m last year
• Debt load down slightly at g/n $1.2b/$0.7b - lower than net 2x levered.

1Q25 guidance;

• Revenue; -5-9% on constant currency
  • Americas (25% of group); -3% to +1%
  • Southern Europe (45%); -4%-8%
  • Northern Europe (20%); -12-16%
  • APME (10%); -12-16%
• EBIT margin guidance at 1.1-1.3%