Manpower (MAN)

Headquartered in Milwaukee, Wisconsin, Manpower (MAN) is one of the largest temporary staffing firms in the world with a global network of 4,400 offices in 72 countries. The company assigns more than 2 million temporary workers annually and is an industry leader in employee assessment and training. Manpower provides a range of staffing solutions, as well as engagement and consulting services worldwide, through a family of companies including Manpower (temporary and permanent staffing, employment assessment, and training), Jefferson Wells (professional financial services), Right Management Consultants (career transition and organizational consulting services), and Elan (IT recruitment and managed services). Manpower is organized primarily on a geographic basis with Jefferson Wells and Right Management operating as separate global business units. In 2007, EMEA (Europe, Middle East, and Africa) accounted for 39% of total revenues, France 34%, United States 10%, Right 2%, Jefferson Wells 2%, and Other 13%.

Management continues to execute on its key strategies of elevating and broadening client relationships while improving Manpower's efficiency through speed and quality. The company continues to expand its specialty businesses and increase the depth of its offerings. In addition, the company is focused on aiding its clients to raise the productivity of their operations by providing improved quality, efficiency, and cost-reduction across their total workforce, enabling them to concentrate on their core business activities. Manpower provides assistance and employment strategies to HR managers as they seek skilled employees to fulfill recruitment (permanent, temporary and contract), training, and outplacement needs.

In order to further strengthen the company's portfolio of services, management completed three strategic acquisitions during the first quarter of 2008. In January 2008, Manpower acquired Clarendon Parker Middle East FZ LLC (CPME), the largest professional recruitment provider in the region. CPME has operations in United Arab Emirates, Bahrain, Kuwait, Qatar, and Saudi Arabia. The acquisition is a part of management's strategy to expand the company's presence in the Middle East market. In March 2008, Manpower acquired Vitae, a leading professional placement firm in the Netherlands. On March 31, 2008, the company acquired CRI Inc., a leading recruitment process outsourcing (RPO) service provider, headquartered in Los Angeles. The acquisition is part of the company's strategy to strengthen the company's presence in the rapidly growing RPO market. Management believes that by consolidating the RPO business across the world, the company has the opportunity to become the global market leader in this segment. In the second quarter of 2008, the company acquired Spirit, a permanent recruitment firm focused on IT and financial recruitment in France.

Right Management was initially disappointing after its acquisition in January 2004, but turned the corner in 2007. Right is the world's largest career transition and organizational consulting services firm with 250 offices in 35 countries. Manpower merged its Empower operations into Right, which ultimately required significant downsizing as lower demand for career transition services from improving economies resulted in pricing pressure within the outplacement business. In 2005, revenues declined 5.8% while operating profit declined 4.7% on a constant currency basis. In 2006, Right Management's operating margin deteriorated as operating unit profit (OUP) declined 28% on a 4% decline in revenue. However, during 2007, Right Management's revenues increased 5.8% and OUP increased 89% from $18.3 million to $34.6 million. The trend continued during the first nine months of 2008 as revenues increased 5.5% and operating unit profit increased 19.8% from $22.8 million to $27.6 million.

Strong cash flow allows management to return value to shareholders in the form of share repurchases. In 2007, Manpower generated a 22% improvement in free cash flow, up to $341 million and repurchased 6.1 million shares for $430.5 million. During the first nine months of fiscal 2008, free cash flow (cash from operations less capital expenditures) increased 62.7% to $379 million. The increase in cash flow was primarily attributable to the liquidating of accounts receivables. In October 2006, a $325 million repurchase plan was authorized, followed by a $400 million share repurchase program for 5 million shares in August 2007. During the first nine months of 2008, the company repurchased 2.2 million shares for $113 million. Approximately 300,000 shares remaining under the share repurchase program.

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