Q4 2024 ManpowerGroup Inc Earnings Call
The End
Welcome to Manpower Group's 4th Quarter Earnings Results Conference Call.
Speaker Change: You'll be put in listen-only mode until the question-and-answer time begins. This call is being recorded. If you care to drop off now, please do so. I would like to turn the call over to Manpower Group's Chairman and CEO, Mr. Jonas Prising. Sir, you may begin.
Speaker Change: Welcome, and thank you for joining us for our fourth quarter 2024 conference call.
Speaker Change: Our Chief Financial Officer, Jack McGinnis, is with me today, and for your convenience, we have included our prepared remarks within the Investor Relations section of our website at manpowergroup.com.
Speaker Change: I will start by going through some of the highlights of the quarter and the full year. Then Jack will go through the fourth quarter results and guidance for the first quarter of 2025. I will then share some concluding thoughts before we start our Q&A session. Jack will now cover the Safe Harbor Language.
Jack Mcginnis: Good morning, everyone. This conference call includes forward-looking statements, including statements concerning economic and geopolitical uncertainty, which are subject to known and unknown risks and uncertainties.
Jack Mcginnis: 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.
Jack Mcginnis: 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.
Speaker Change: Thanks, Jack. Last week, I attended the World Economic Forum annual meeting in Davos, Switzerland. This gathering of business and government leaders from various countries offered an opportunity to connect with CEOs, policymakers, and thought leaders involved in areas relevant to our business.
Speaker Change: Our main insights from this year's meeting focused on two themes.
Speaker Change: the global economic outlook across regions, and harnessing the potential of AI. The unpredictable economic and geopolitical global outlook was a key theme.
Speaker Change: The sentiment among business participants with regards to the U.S. economic outlook appears to have improved, especially among U.S. organizations.
Speaker Change: In contrast, concerns over European economic growth were evident, with leaders noting the continued weakness within the EU, and in Northern Europe specifically.
Speaker Change: and the urgent imperative of getting back to economic growth that keeps pace or reduces the gap with the U.S. and China.
Speaker Change: Since we've seen this gap reflected in our own business and the staffing industry more broadly, I am encouraged that addressing the competitiveness of Europe has become an important priority for policymakers in that region.
Speaker Change: An action plan for growth was presented, and we're pleased by this urgency and alignment, along with a helpful backdrop of lower inflation and interest rates trending in the right direction in Europe.
Speaker Change: The other main theme was the continued optimism and belief that the broad adoption of AI can generate significant growth opportunities for companies and nations.
Speaker Change: While last year's focus was on adopting Gen AI across enterprises, this year's discussions centered optimistically on how to translate adoption to business impact and productivity gains.
Speaker Change: We see a clear tension between employers and employees in this regard, with approximately half of business leaders believing AI will translate to business growth this year, and 50% of workers are fearful of the impact of AI on their roles.
Speaker Change: Ensuring people have the skills to maximize tech investments and leaders bring their workforce along during the transition is critical to realize the potential of AI. This continues to be an area of significant promise for our own productivity enhancement and revenue growth.
Speaker Change: Our experienced Tech Talent Outlook found 58% of employers believe AI will be a job creator, and many of them are training their current workforce to address tech staffing challenges.
Speaker Change: We aim to exploit this opportunity by providing re-skilling and up-skilling solutions to our clients and candidates as they strive to fill roles requiring different and increasingly specialist skills.
Speaker Change: Turning to the current environment, our most recent Manpower Group Employment Outlook survey of 40,000 employers supports the need for specialized skills.
Speaker Change: Employers report cautious yet steady hiring intentions for the three months ahead, with many prioritizing retention and attraction of workers with an adaptable mindset to adjust to the evolving requirements.
Speaker Change: Tech and data skills remain high demand across industries and we see growing focus on the soft skills that enable businesses to unlock wealth.
Consistent hiring intentions, particularly among larger organizations, point to stability.
And we hope to see this trend continue throughout 2025.
based on our 75-year history.
Speaker Change: We are experienced at navigating various economic cycles, and in periods like this, we are constantly positioning the business to be able to manage our productivity and accelerate into recovery.
Speaker Change: Though we are seeing our industry affected in some new ways compared to previous downturns.
particularly labor hoarding post-pandemic.
Speaker Change: coupled with prolonged hesitancy from employers due to the uncertain economic and geopolitical landscape, we remain convinced that traditional industry dynamics will play out over time in both North America and Europe. To that point, although still in the early stages,
Speaker Change: We are seeing some encouraging performance in parts of our business.
Speaker Change: Specifically, our U.S. manpower brand, which is typically on the leading edge of recovery, has crossed over to growth in the second half of 2024. And similarly, our talent solutions business globally has also crossed over to growth in the same time period.
Speaker Change: Sustaining these trends will be an important next step, and we will be monitoring the evolution closely as we move forward into 2025. Now to our results. In the fourth quarter, revenue was $4.4 billion, down 3% year-over-year in constant currency.
Speaker Change: A reported EBITDA for the quarter was $76 million. Adjusting for restructuring costs and other special items, which we'll cover in the financial review, EBITDA was $94 million, representing a decrease of 12% in constant currency year-over-year.
Speaker Change: Reported EBITDA margins was 1.7% and adjusted EBITDA margins was 2.1%.
Speaker Change: Earnings per diluted share was 47 cents on a reported basis while earnings per diluted share was one dollar and two cents on an adjusted basis.
Adjusted earnings per share decreased 27% year-over-year in constant currency.
Speaker Change: In the fourth quarter, staff and gross profit margins remain solid in a challenging environment.
Speaker Change: From a geographic perspective, we saw the continuation of a challenging environment in Europe and North America during the quarter, while demand for our services in LATAM and APME remained good.
Speaker Change: Turning to the full-year results for a few moments, reported earnings per share for the year was $3.01. As adjusted, earnings per share was $4.55 and represented a constant currency decrease of 21%.
Speaker Change: Revenues for the year decreased 3% in constant currency to $17.9 billion and reported EBITDA was $339 million.
Speaker Change: And as suggested, EBITDA was $403 million, which represented a 15% constant currency decrease year over year.
Speaker Change: I will now turn it over to Jack to take you through the results in more detail. Thanks, Jonas. Going back to the quarterly results on slide 3, revenues in the fourth quarter were significantly impacted by the strength in U.S. dollar, and after adjusting for currency impacts, came in slightly above the midpoint of our constant currency guidance range.
Speaker Change: Gross profit margin came in at the low end of our guidance range.
Speaker Change: As adjusted, EBITDA was $94 million, representing a 12% decrease in constant currency compared to the prior year period.
Speaker Change: As adjusted, EBITDA margin was 2.1% and came in at the low end of our guidance range, representing 40 basis points of decline year-over-year. Foreign currency translation drove a 2% unfavorable impact to the U.S. dollar reported revenue trend, in addition to the constant currency decrease of 3%.
Speaker Change: Organic days adjusted constant currency revenue decreased 2.5% in the quarter which was favorable to our guidance of a 4% decrease on the same basis.
Speaker Change: Turning to the EPS bridge, reported net earnings per share was 47 cents, adjusted EPS was $1.02 and came in very close to the midpoint of our guidance range.
Speaker Change: Walking from our guidance midpoint of $1.03, our results included a slightly lower operational performance of $0.01.
Speaker Change: A lower weighted average share count due to share purchases in the quarter, which had a positive impact of $0.01. A slightly lower tax rate, which had a positive $0.02 impact.
Speaker Change: and a foreign currency impact that was $0.03 worse than our guidance. Restructuring costs and other items represented $0.55 resulting in the reported EPS of $0.47.
Next, let's review our revenue by business line.
Speaker Change: year-over-year on an organic constant currency basis, the Manpower brand declined 1% in the quarter, the Experience brand declined by 6%, and the Talent Solutions brand had a revenue increase of 6%. Within Talent Solutions, our RPO business experienced a year-over-year revenue increase
Speaker Change: which was an improvement from the trend in the third quarter. Our MSP business recorded a strong double-digit revenue increase compared to the prior year, while right management experienced a year-over-year revenue decline in the quarter as outplacement activity began to slow.
Speaker Change: Looking at our gross profit margin in detail, our gross margin came in at 17.2% for the quarter.
Speaker Change: Staffing margin contributed 30 basis point reduction due to mixed shifts, lower bench utilization in December in select countries, and lower volumes while pricing remained stable. Experience services contributed 10 basis point reduction due to lower volumes.
Other items resulted in a 10 basis point margin increase.
Speaker Change: Moving on to our gross profit by business line, during the quarter the Manpower brand comprised 59% of gross profit, our experienced professional business comprised 23%, and Talent Solutions comprised 18%.
Speaker Change: During the quarter, our consolidated gross profit decreased by 4% on an organic constant currency basis year-over-year, representing a stable trend from the 4% decline in the third quarter.
Speaker Change: Our Manpower brand reported an organic gross profit decrease of 3% in constant currency year-over-year, a slight decline from the 2% decrease in the third quarter.
Speaker Change: Gross profit in our experience brand decreased 11% in organic constant currency year-over-year, a slight improvement from the 12% decrease in the third quarter.
Speaker Change: Gross profit in talent solutions increased 7% in organic constant currency year-over-year, representing ongoing growth, although at a slightly lower pace than the third quarter increase of 9%.
Speaker Change: Our P.O. and M.S.P. saw improved year-over-year gross profit growth in the fourth quarter compared to the previous quarter, while right management gross profit declined slightly.
Speaker Change: Reported SG&A expense in the quarter was $687 million. SG&A as adjusted was down 4% year-over-year on a constant currency basis and down 3% on an organic constant currency basis.
Speaker Change: The year-over-year SG&A decreases largely consisted of reductions in operational costs of $20 million.
Speaker Change: Underlying corporate costs continue to include our back-office transformation spend and these programs are progressing well with expected medium and long-term efficiencies.
Speaker Change: Currency changes also contributed to a seven million dollar decrease. Adjusted SG&A expenses as percentage of revenue represented 15% in constant currency in the fourth quarter.
Speaker Change: Adjustments represented restructuring costs of $16 million and a loss on sale related to our Austria business recorded in SG&A of $2 million. The America segment comprised 24% of consolidated revenue.
Speaker Change: Revenue in the quarter was $1.1 billion, representing an increase of 7% compared to the prior year period on a constant currency basis.
Speaker Change: As adjusted, OUP was $39 million, and OUP margin was 3.6%. Restructuring charges of $4 million largely represented the U.S. and Canada.
Speaker Change: The U.S. is the largest country in the America segment, comprising 65% of segment revenues.
Speaker Change: Revenue in the U.S. was $692 million during the quarter, representing a 1% days-adjusted decrease compared to the prior year.
Speaker Change: This represents an improvement from the 4% decline in the third quarter, as Manpower and Talent Solutions' growth partially offset a decline in experience. As adjusted, OUP for our U.S. business was $19 million in the quarter. As adjusted, OUP margin was 2.8%.
Speaker Change: Within the U.S., the Manpower brand comprised 26% of gross profit during the quarter.
Speaker Change: Revenue for the Manpower brand in the U.S. increased 2% on a days-adjusted basis during the quarter, which was an improvement from the 1% increase in the third quarter. The Experience brand in the U.S. comprised 39% of gross profit in the quarter.
Speaker Change: With inexperience in the U.S., IT skills comprise approximately 90% of revenues.
Speaker Change: Xperia's U.S. revenue decreased 6% on a day's adjusted basis during the quarter, an improvement from the 11% decline in the third quarter.
Speaker Change: Talent Solutions in the U.S. contributed 35% of gross profit and saw a revenue increase of 16% in the quarter, an improvement from the 10% increase in the third quarter.
Speaker Change: RPO experienced double-digit revenue increases in the U.S. reflecting increased activity in select client programs.
Speaker Change: The US MSP business executed well during the quarter, posting strong double-digit revenue increases as well, while outplacement activity within our right management business was down slightly year-over-year as outplacement activity slowed.
Speaker Change: In the first quarter of 2025, we expect the rate of revenue decline to range from similar to a slight further decline than the fourth quarter trend for our overall US business.
Speaker Change: Southern Europe revenue comprised 47% of the consolidated revenue in the quarter. Revenue in Southern Europe was $2 billion, representing a 3% decrease in constant currency.
Speaker Change: As adjusted, OUP for our Southern Europe business was $73 million in the quarter and OUP margin was 3.6%.
Speaker Change: Restructuring charges of 2 million primarily represented actions in Spain and Italy. France revenue comprised 56% of the southern Europe segment in the quarter and decreased 7% on a days adjusted constant currency basis.
Speaker Change: As adjusted, OUP for our France business was $36 million in the quarter, adjusted OUP margin was 3.2%.
Speaker Change: Activity to date in January is lower than the trends experienced in the fourth quarter.
Speaker Change: and we are cautiously estimating the first quarter trend to reflect a slight further decline.
Speaker Change: from the fourth quarter trend. Revenue in Italy equaled $419 million in the fourth quarter, reflecting a decrease of 1% on a days-adjusted constant currency basis.
OUP equaled $26 million and OUP margin was 6.3%.
Speaker Change: We estimate that Italy will have a similar to slightly improved revenue trend in the first quarter compared to the fourth quarter.
Speaker Change: Revenue of $768 million represented a 16% decline in constant currency.
As adjusted, OUP was a $10 million loss.
Speaker Change: This is the most challenged part of our business, subject to low economic growth rates, with many markets operating a bench model, which creates higher financial and operational pressures than we see in other markets.
Speaker Change: The majority of the restructuring charges of $6 million was recorded in Germany, with modest additional charges in the Netherlands, Sweden, and the UK.
Speaker Change: A largest market in the Northern Europe segment is the UK, which represented 34% of segment revenues in the quarter.
Speaker Change: During the quarter, U.K. revenues decreased 22% on a days-adjusted constant currency basis.
Speaker Change: The UK market continues to be very challenging and we expect the rate of revenue decline to continue to be similar in the first quarter compared to the fourth quarter.
Speaker Change: In Germany, revenues decreased 24% on a days-adjusted-consequency basis in the quarter. Germany manufacturing trends have been weak, driving further declines.
Speaker Change: In the first quarter, we are expecting a similar year-over-year revenue decline compared to the fourth quarter trend. The Nordics continue to experience very difficult market conditions with revenues decreasing 21% in days adjusted constant currency in the quarter.
Speaker Change: Within the Nordics, Sweden is experiencing the largest declines based on a weak manufacturing environment and the adjustment to new temporary worker term limits discussed last quarter.
Speaker Change: The Asia-Pacific Middle East segment comprises 12% of total company revenue. In the quarter, revenues equaled $522 million, representing an increase of 7% in organic constant currency after incorporating the sale and franchising of our South Korea business
which completed as expected on November 1st.
Speaker Change: As adjusted, OUP was $27 million, and OUP margin was 5.1%.
Speaker Change: Restructuring charges of $1 million relate to the actions taken in our new Caledonia business.
Speaker Change: The largest market in the APME segment is Japan, which represented 57% of segment revenues in the quarter.
Speaker Change: Revenue in Japan grew 7% on a days adjusted constant currency basis.
Speaker Change: We remain very pleased with the consistent performance of our Japan business, and we expect continued strong revenue growth in the first quarter. I'll now turn to cash flow and balance sheet. In full year 2024, free cash flow equaled $258 million, compared to $270 million in the prior year.
Speaker Change: In the fourth quarter, we drove a strong finish to the year, and free cash flow represented $236 million and compares to $91 million in the prior year. At year-end, day sales outstanding decreased by about three days to just under 52 days.
During the fourth quarter, capital expenditures represented $11 million.
Speaker Change: During the fourth quarter, we repurchased 552,000 shares of stock for $34 million.
Speaker Change: As of December 31st, we have 2.6 million shares remaining for a purchase under the share program approved in August of 2023. Our balance sheet ended the quarter with cash of $509 million and total debt of $953 million.
Net debt equaled $443 million at quarter end.
Speaker Change: Our debt and credit facility arrangements are displayed in the appendix of the presentation.
Speaker Change: Next, I will review our outlook for the first quarter of 2025.
Speaker Change: Based on trends in the fourth quarter and January activity to date, our forecast is cautious.
Speaker Change: and anticipates that the first quarter will continue to be challenging in Europe.
Speaker Change: When considering our guidance for the first quarter, it is also important to note the following unique considerations which drive lower revenue and earnings per share impacts year-over-year. One, the strength in U.S. dollars created a significant year-over-year negative foreign currency translation impact.
Speaker Change: Two, there are less working days in the first quarter of 2025, driven by the leap year and the prior year.
Speaker Change: Three, there's always a meaningful sequential seasonal decrease in earnings from the fourth quarter to the first quarter.
Speaker Change: the prior year period benefited from an unusually low effective tax rate.
Speaker Change: and the current tax rate guidance is more aligned to the expected full year rate.
Speaker Change: Because the first quarter is typically the lowest earnings level of the calendar year, these impacts have a more significant impact on the first quarter's earnings than would be the case in other quarters. With that said, we are forecasting earnings per share for the first quarter to be in the range of 47 cents to 57 cents.
Speaker Change: The guidance range also includes an unfavorable foreign currency impact of six cents per share and our foreign currency Translation rate estimates are disclosed at the bottom of the guidance slide
Speaker Change: Our Constant Currency Revenue Guidance ranges between a decrease of 5% and 9%, and at the midpoint is a 7% decrease.
Speaker Change: Considering a slightly lower number of working days and the impact of our dispositions, our organic days adjusted constant currency revenue decrease represents 5% at the midpoint.
Speaker Change: Even a margin for the first quarter is projected to be down 30 basis points at the midpoint compared to the prior year.
Speaker Change: We estimate that the effective tax rate for the first quarter will be 36%, which reflects the overall mixed effect of lower earnings from lower tax geographies in the current environment, as well as the impact of valuation allowances in certain markets that will reverse in the future when those markets rebound.
Speaker Change: We estimate 36% for the full year effective tax rate as well.
Speaker Change: As the government of France has not enacted any of their previously proposed corporate tax changes, we have not incorporated any increase in France corporate taxes into our guidance.
Speaker Change: In addition, as usual, our guidance does not incorporate restructuring charges or additional shareware purchases, and we estimate our rated average shares to be $47.5 million.
Speaker Change: I will now turn it back to Jonas. Thank you, Jack. In late 2019, we recognized that we were operating in a new environment, and that to continue to be successful, we needed a refreshed strategy to respond to tech acceleration, structural talent scarcity, and increasing demand for specialist talent.
Speaker Change: This context persists today. Our latest talent shortage survey of 38,000 employers found talent shortages remain very high, with 74% of companies struggling to find the skilled specialist talent they need to be successful, up from 36% a decade ago.
To position us for success, we introduced our DDI strategy.
diversification, digitization, and innovation with three clear objectives.
Speaker Change: Strengthen EBITDA, grow our overall revenues at or above market, and position our company for many more successful decades to come.
Speaker Change: Diversification includes increasing the weighting of higher margin offerings across each of our strong and distinct brands. Manpower, experience, and talent solutions.
Speaker Change: enabled by data-driven insights informing us where we need to move the needle to win in the market.
Speaker Change: with talented teams equipped with the insight and specialist offerings to win in priority segments.
Speaker Change: This, combined with our AI-enabled dashboards, sourced from our data platforms,
Speaker Change: reducing volatility to market variances, enabling greater agility to pursue new market opportunities, and prioritizing our sales team's time on the opportunities that will provide the greatest business impact.
Digitization is a key enabler for productivity and innovation.
Speaker Change: providing the data and insights that create greater value for our clients and candidates while leveraging analytics and AI to drive recruiter productivity and improve the candidate journey.
We're pleased with our progress in this area.
our industry-leading technology platform, PowerSuite.
Speaker Change: enables us to harness our rich, high-quality global data together with AI to focus our activities where they will make the most impact.
Speaker Change: unlocking candidate potential, and enabling our talent agents and recruiters to focus their time on mentoring, coaching, and guiding the millions of candidates we interact with each year.
Speaker Change: Despite the challenging market conditions in 2024, we made good progress on executing our DDI strategies and competed well in many markets, setting us up for continued progress into 2025 and beyond.
Speaker Change: We continue to take a laser-focused approach to managing costs, adjusting to the current environment in many markets, while maintaining our investment in technology and digitization, and retaining the talent we need for improved competitive performance.
Speaker Change: Thank you to our teams around the world for all they do each day to connect even more people to meaningful work and to our clients and candidates for trusting us as their workforce and career partners. I'd now like to open the line to Q&A. Operator?
Speaker Change: Thank you. If you'd like to ask a question please press star 1 1. If your question has been answered and you'd like to remove yourself from the queue please press star 1 1 again.
Speaker Change: Our first question comes from Andrew Steinerman with J.P. Morgan. Your line is open.
Andrew Steinerman: Hi, Jack. I'm really just going to ask you to repeat the bridge between the adjusted $1.00 and $2.00 that we just...
reported in the midpoint 52.
Andrew Steinerman: sense guided for the first quarter. I know you're guiding for, you know, bigger revenue declines in first quarters.
Andrew Steinerman: Naturally, seasonally skinny quarter, so that revenue effect has more of an SG&A effect. But just, if you could walk us through from the 102, like what would be a normal, seasonal first quarter EPS, and then layer on the factors that you gave in the prepared remarks.
Speaker Change: Thanks for the question, Andrew. I guess I'd like to start in explaining that with the EBITDA margin, which is what it all is driven by.
Speaker Change: And as we look sequentially from Q4 to Q1, and as you referenced, my prepared remarks.
Speaker Change: walk through some of the considerations as we start the year from when we ended the year. But we're effectively moving down 60 basis points sequentially from the 2.1 that we just posted to the guide of 1.5%.
Speaker Change: And I'd say that is in line with what we've seen traditionally as we end the year and start the year. If you go back the last two years, we were down about 70 BIPs.
Speaker Change: sequentially from Q4 to Q1, take the pandemic years out of the mix, and if you go back to pre-pandemic...
Speaker Change: We've been down 130 bips at times, so it really just kind of depends on what's happening.
Speaker Change: Where we are now, in line with what we talked through, I'd say underlying levels are generally stable across a lot of our large markets in Europe and North America. We did call out a couple areas.
Speaker Change: where perhaps there's a little more pressure going into Q1. And we did say we're a bit cautious on France currently. But I'd say when you put all that together, that is what is driving, you know, the sequential drop-down.
Speaker Change: in the bottom line. It's driven by the EBITDA dollars, EBITDA margin that's coming. I think on the revenue side,
Speaker Change: I think we also laid out the revenue is impacted significantly by net disposition, so we talked about Korea.
Speaker Change: And then we just announced Austria as well as part of our disposition. That would not have been in what people were looking at in terms of expectations for Q1. So now that's being introduced.
Speaker Change: And we have less days. And so we've talked about that as well. So I think when you put all that together, our revenue trend on an organic days adjusted basis.
Speaker Change: is down in a range of about 2% sequentially. And I think as you consider that, you can think about APME and LATAM, which is saying, you know, a traditional lack of seasonality going into the first quarter from the fourth quarter.
Speaker Change: as a lot of that Q4 work, seasonal work, runs off and we start the year again and reset a lot of those quarterly contracts. A bit of that in the U.S. as well. We had, you know, a relatively good Q4 in talent solutions.
Speaker Change: on some select RPO programs that drove revenues and manpower had an encouraging...
Speaker Change: strong second half of the year in the U.S. as well, and we see, as we move into Q1, traditional seasonality and the reset of some of those contracts as well. And we don't mention it much, but Canada would be another one that's seeing a bit of an impact based on the pullback on the government.
Speaker Change: public sector spend, particularly on the experience side. So I'd say those are those are the main drivers when we think about revenues and bottom line earnings.
Great. Thanks for the details.
Speaker Change: Thank you. Our next question comes from Manav Patnik with Barclays. Your line is open.
Speaker Change: Hi, good morning. This is Princey Thomas on for MANA. Thanks for taking my question. So I wanted to dig into the macros. If they say bad as they are, what actions will manpower take to right size? And when do you typically decide that?
Speaker Change: Thanks for the question, Princey. Yeah, I'd say you saw that we took some additional actions in Q4.
Speaker Change: As we look at the environment, and to your question, clearly we're seeing a lot of pressure in certain markets in northern Europe. And that's where, when we look at the actions we've been taking,
are the most significant.
Speaker Change: and I'd say they pretty much follow what you're seeing in terms of the revenue trend.
As we look at FTEs and cost reductions,
Speaker Change: Northern Europe in the fourth quarter is down 15 percent. So, very much aligned to what we've been seeing there in the revenue trends.
In Southern Europe, you'd see more mid-single-digit percentage declines.
Speaker Change: kind of in line with what we're seeing in certain markets in France and elsewhere.
Speaker Change: And I'd say similar in the U.S., you know, continuing to take actions to preserve bottom line to the greatest degree possible.
Speaker Change: But at the same time, making sure we have enough capacity on sales so that we're ready for the uptick when it begins. We did talk about the progress we're seeing in U.S. manpower.
which is really encouraging, and
Speaker Change: And then we're also continuing to spend on our transformation programs, and we've been very consistent on that as well. So that continues to be, you know, an ongoing focus for us.
Speaker Change: we believe we'll be very well positioned to take market share when demand comes back.
Speaker Change: Got it. And then switching over to more about the transitions.
Speaker Change: Man's been leading in tech but I wanted to know if there's any use cases in Gen AI being an enabler for manpower and also any competitive threats that you're seeing within the space?
Speaker Change: Thanks for the question, Princeton. As we mentioned in our prepared remarks, this was a big theme, you know, amongst all of the companies.
Speaker Change: in the meeting that I attended a few weeks ago. And I would say that many companies are investing in AI. They believe in the tremendous opportunity ahead.
Speaker Change: they have yet to see any meaningful impact at scale, and a lot of that has to do with putting the right
talent with the right skills.
in combination with
Gen AI.
And from our perspective, we have been preparing.
for this kind of technology evolution. And we're very pleased.
to see.
Speaker Change: the best fit for those candidates to the job orders and automating parts of the process.
Speaker Change: But I'd say that we are very much still at the beginning of this evolution. And it's a very exciting evolution because we are able to take our global infrastructure and
Speaker Change: technology platforms that generate significant, rich data to inform and feed those models.
Speaker Change: so that we can keep honing and driving greater productivity, identifying revenue growth opportunities, which we've already seen some good indications of where the likelihood is for growth, and we focus our sales efforts there.
Speaker Change: But it is right at the beginning. We're extremely well-placed to take advantage of this, and we're excited about the opportunity. Ultimately, though,
Speaker Change: The last mile delivery and the judgment and the human capabilities is what makes the difference.
Speaker Change: And that's why we're also investing in our talent agents and our recruiters, both to help them adapt to make data-driven decisions.
Speaker Change: but fully leverage the tools and the insights that those tools generate to drive actions that may be different from what they traditionally would have experienced or done.
Speaker Change: if they just were to go on experience and instinct. So, we're very encouraged. It's early days and I think we're right where we want to be in terms of being very well placed to take advantage of this evolution as it continues.
Appreciate the call.
Speaker Change: Thank you. Our next question comes from Mark Marcon with Baird. Your line is open.
Thank you.
Mark Marcon: Good morning, Jonas and Jack. Thanks for taking my questions. With regards to, you know, the U.S.
Mark Marcon: You mentioned that, you know, there is an increasing level of confidence.
Mark Marcon: and we've certainly seen that in certain surveys. I'm just wondering, is this, have you seen any indication that it's actually translating to an increase in orders? Can you give us any sense for what's happened post-election with regards to this?
Speaker Change: order volume, tone of discussions with clients, anything along those lines, both in terms of the Manpower brand as well as Xperis.
Speaker Change: Thanks, Mark. Yeah, as we said in our prepared remarks, the tone has changed and the level of
Speaker Change: optimism or hope is palpable, but it has yet to translate into anything meaningful in terms of change in employer behavior.
Speaker Change: So it's all about employer confidence and you know, we we are hopeful that given the overall sentiment this
Speaker Change: increased employer confidence translates in an increase in demand over time, but it's really too early to see any effects of that yet. As you point out, you know, we're pleased to see that our manpower business turned to growth.
Speaker Change: in the second half of the year, which we think is positive.
Speaker Change: Very encouraged to see that US PMI is getting closer to 50, which is another positive aspect.
Speaker Change: So there are some indicators and signals that could say it's starting to move. Manpower tends to be the brand leading the way in terms of the rebound from a cyclical industry cycle.
Speaker Change: And from an experienced perspective, we're really not seeing any change in terms of demand. It is stable at lower levels.
Speaker Change: We can still see a challenging demand environment as it relates to enterprise clients.
Speaker Change: Although our convenience clients are faring a little bit better, they're holding up better, it's still a low-demand environment for both Manpower and Experis, but we're seeing some degree of...
Speaker Change: Shall we say optimism looking ahead as it relates to the US
Speaker Change: Thanks for that. And then with regards to Europe, obviously, it's been.
Speaker Change: difficult for multiple years. You mentioned at Davos that there was an increased sense of urgency. I mean, from your perspective,
Speaker Change: How long before we actually start seeing some improvement in the underlying
Speaker Change: macro, obviously we're going up against, increasingly go up against easier and easier comps, but just in terms of getting to an inflection.
Speaker Change: you know, what would be some of the catalysts that we should look for? And I'd be particularly interested in any comments with regards to France, you know, particularly given their fiscal deficits.
Speaker Change: and any more commentary with regards to the prospects in terms of the French tax rate.
Speaker Change: Okay, well stepping back looking at Europe as a whole, for many of you on the call who have been tracking Europe, you'll
Speaker Change: You'll be somewhat surprised to see that, you know, it's really shifted between Northern Europe and Southern Europe. Northern Europe used to be the engine of growth.
Speaker Change: and Southern Europe was always trailing behind. And right now, it's exactly the opposite, which is precisely what we're seeing.
in our business as well, Italy and Spain.
and others are actually growing well and maintaining profitability.
Speaker Change: yet Northern Europe is struggling significantly. And I would say this, Mark, there are a number of factors that, of course, is...
Speaker Change: impacting the performance in particular Northern Europe, which for us of course makes it even more difficult because many of the countries in Northern Europe operate bench models So when volumes go down, it's difficult for us to quickly adjust our cost base
Speaker Change: so that we can mitigate the impact of that drop in demand.
Speaker Change: But Europe has been hit over the past couple of years with continued economic slippage against other nations, you know, China, the U.S. It's undergoing a significant environmental transition.
Speaker Change: and which is costing a lot of money and causing industry troubles in terms of the cost of energy being high.
which is another disrupting factor.
So...
Speaker Change: These are elements that are really weighing, especially on northern Europe, in particular on Germany, which used to be the engine of growth. It has seen the longest post-war industrial decline in terms of length of time.
Speaker Change: But I would say this, aside from the clearly beneficial effects of the ending, the cessation of hostilities in Ukraine, that would be a positive mark.
Speaker Change: The underlying trends in terms of, you know, reduction of, or estimated reduction, to be announced probably by the ECB a bit later on today, continued declines in interest rates.
Speaker Change: will be a positive. Continued decline in inflation will be a positive. And at some point, if U.S. leads the way and starts to
produce growth.
Speaker Change: and distribute that growth as it normally does, Europe will follow along.
Mark Marcon: after some delay. So the timing is difficult to estimate, Mark.
but we really don't see anything structurally broken.
Mark Marcon: in Europe and in particular in Northern Europe, we still see this as a cyclical downturn, a very challenging cyclical downturn. And lastly, I would say these changes that we heard about in terms of the action plan to really deregulate
and make it easier to do business in Europe.
Mark Marcon: make sure that they invest in their workforce and upskill and reskill and prepare for the green and support the green transition as well as the advent of AI, we think are positive steps as well. And I could really sense.
Mark Marcon: urgency and clarity that this was becoming very, very important, you know, from a policymaker perspective.
Mark Marcon: And then finally coming to to France. France has been in a politically very turbulent environment
Mark Marcon: The prior government lasted, you know, only a short time after presenting an aggressive budget that would reduce the deficit. The new government has taken a slightly less aggressive view on the budget, and that is supposed to be voted on in March.
Mark Marcon: And, you know, they're still trying to find a way to ensure that this budget gets the approval from all the various parties.
Mark Marcon: And, you know, we think that, you know, it's hard to tell. It's difficult in terms of predicting what that outcome would be.
Mark Marcon: But all the parties in France know that no elections can occur before June. So, I guess, my guess would be that the likelihood that it passes, it could come to pass in in March.
Mark Marcon: But we will we will continue to monitor the situation very carefully in France because it is going to be an important aspect of how we move forward and just as in the US and elsewhere, it's all about employer confidence.
Mark Marcon: would have been forecast maybe eight months ago. So they're still thinking this is going to be a growth economy, but they are very hesitant in terms of adding to their payrolls.
Jack: And to your last question on taxes, I'll switch it over to Jack.
Jack: Yeah, on the tax rate, Mark, it really is too early to tell at this stage. We do know that as part of the updated budget, there is a component in there that would
implement a higher tax rate for large
Jack: companies, we would fall into that bucket. But, you know, it really, there's a lot of discussions happening on components of the budget, so it's really hard to say, you know, what that is going to be. As I mentioned in my guide, it's not in our forecast any change to the current
Speaker Change: French tax corporate tax rate is not in is not factored in if something does get enacted as Jonas mentioned you know through the beginning of March
Speaker Change: We will adjust our effective tax rate for any changes coming out of any enacted rate changes in France as part of the new budget.
Speaker Change: Great. Can I sneak one more in just on the dispositions? We've had Korea, now Austria. Any more anticipated and, you know, can you discuss the pros and cons of those dispositions?
Speaker Change: Well, Mark, we're always looking at our geographic portfolio of where we're present with our own subsidiaries or where we think that maybe a different setup would be more beneficial for value creation.
Speaker Change: And our estimation was that Korea is a country that is where we have a strong business.
But the outlook in terms of
growth rates.
Speaker Change: the stability of the country in terms of what can happen in terms of legislation affecting our industry was less promising.
Speaker Change: And we had a very good partner that we could move with that is going to be able to compete better in those local markets.
Speaker Change: And this has been a process that we've been looking at each country, looking at our geofootprint.
Speaker Change: is something that we've been doing for a number of years, optimizing this footprint so that we really maximize our value creation opportunity in many markets. And over the past number of years,
Speaker Change: We've transitioned about 17 countries to franchise operations, and in most of those cases, they have actually seen some very good progress, and we're very pleased with how this has evolved. And as you can imagine, there have been other circumstances, such as...
Speaker Change: Russia, where we in a timely way Exited that market just ahead of the invasion. So we take a balanced view of opportunity
Speaker Change: value creation as well as risk and we will continue to make that assessment also in other markets and we will of course keep everyone informed of when we make any changes to that your portfolio
Super. Thank you very much.
Thanks, Mark.
Speaker Change: Thank you. Our next question comes from Trevor Romeo with William Blair. Your line is open.
Morning. I appreciate you taking the questions.
Speaker Change: One thing I wanted to dig into was the talent solutions brand. I think it's back to year-over-year growth for the second consecutive quarter now. You got some nice positive trends in RPO and MSP it sounds like, you know, but at the same time
Speaker Change: the staffing businesses are still challenged. So just kind of wondering if you could talk about what's driving the improvement in MSP and RPO and how you reconcile the difference in trends versus the staffing business there.
Speaker Change: Trevor, this is Jack. Yeah, I'd be happy to talk to that in terms of some of the trends I talked to when we were going through the brands.
Thank you.
Speaker Change: It's maybe starting with MSP within talent solution. So MSP has been growing steadily the entire year. And actually, you know, we started the year
Speaker Change: closer to, um, uh, flat ish. And then, as we've talked about, every quarter has actually gotten stronger from that point forward. So
Speaker Change: really strong double-digit growth in the fourth quarter, higher than the growth level in the third quarter. And so our business just continues to perform very, very well in the market. You know, we view ourselves as the leader of MSP and it's certainly coming through in the trends that we've been seeing.
Speaker Change: Our P.O. crossed over to growth in the fourth quarter globally for us, so after some significant declines in the first half of the year, which reflected the markets.
Speaker Change: clients that actually had some very good seasonal ramp-up work through the fourth quarter.
So that was a bit of a bright spot.
Speaker Change: still are not seeing broad-based hiring increases in line with what Jonas was talking about earlier, but we are encouraged by the select programs that have been quite strong.
Speaker Change: and we'll continue to monitor more the broader side of that. And then I'd say lastly on talent solutions, right management, you know, after growing pretty, pretty consistently in the first nine months of the year, we did see outplacement volumes
Speaker Change: start to soften in the fourth quarter. So, we did move into a very slight decline from a revenue perspective, closer to flat on an overall GP dollar progression year over year. And that's just reflecting what Jonas was referring to earlier, driven by the U.S.
Speaker Change: that outplacement activity has started to reduce, which we'll see. That's an early indicator in some ways for hopefully our staffing businesses, but but that that's really what we've been seeing on the talent solution side. So it's it's been really good to see that overall growth in the second half of the year.
and we take that into the beginning of 2025.
Jack: Great. Thanks, Jack. That's helpful. And then for my follow-up, I just had one on APME.
Speaker Change: I think you're guiding in organic constant currency, kind of down one to up three versus the up seven you did in Q4.
Speaker Change: So, could you just kind of speak to your outlook there? You know, it sounded like Japan is still pretty solid, so...
Speaker Change: you know, is there something else that's a bit of a headwind in Q1 or is that just a little conservatism? How should we think about that? Thanks.
Speaker Change: Yeah, no, I think it's exactly as you were indicating. It's a slower, you know, seasonal start in Q1 for us. We feel really good about APME and the trends. Japan...
India performing really, really well. We've done a great job.
Speaker Change: on bottom line margins in that market and and you know Jonas talked about
Speaker Change: South Korea, but we take a very, very strong franchise fee.
Speaker Change: into the future. So as that market continues to grow, we will benefit from that with a very strong franchise fee on that business growing into the future as well. So no, we feel good about APME and it's really just more you know, just resetting contracts and ramping up in the first quarter.
All right, thank you very much.
Speaker Change: Thank you. Our next question comes from Karthick Mehta with North Coast Research. Your line is open.
Karthick Mehta: Hey, good morning. Jack or Yonas, you've talked a little bit about capacity, and Jack, you've talked about trying to.
Karthick Mehta: maintain capacity and cost cuts as you try to figure out what's going to happen in the future. I'm wondering, is there a way to look at where you are from a capacity standpoint, both here in the U.S. and then maybe some of the European countries where, which are bench countries for you?
Well, Karthik, I think we've been very...
Karthick Mehta: careful in managing both costs and preserving firepower so that we're able to take advantage of improving market demand.
Karthick Mehta: take advantage of and improve the demand environment in Europe and the U.S., and we've done that intentionally, of course, because we know how these cycles evolve, and it's very important.
Karthick Mehta: to maintain strength in the markets, stay focused on our clients and candidates and our associates and drive a very strong pipeline.
Karthick Mehta: And we've been very pleased with the evolution of our sales pipeline. It's grown significantly over the last 12 months. Now in an environment like this, you know, those wins in that pipeline translate into maybe smaller deals, they take longer to close.
They don't accelerate as quickly, but when the market turns
Karthick Mehta: then that becomes a really, really good foundation for some strong market and revenue performance. So we've been very mindful of maintaining our strength in the market, yet also protecting the bottom line. So to finding that balance.
Karthick Mehta: is what we talk about every day for all of those markets where we're being and we're seeing challenging operating environments.
Speaker Change: And then just as a follow-up, just the pricing environment, I know up to this point, you've not seen a lot of increased competition, even though maybe the fundamentals aren't as good as you would like or, you know, the industry would like. And I'm wondering if there's been any change in the pricing environment.
Speaker Change: It always remains a competitive pricing environment, but at the same time, it's been rational, as you heard us say in our prepared remarks, the slight decline in margin, GP margin that we saw was related to mix.
Speaker Change: And I think this has a lot to do with the increasingly structural talent shortage and low unemployment that we're seeing both in the U.S.
as well as in Europe.
Speaker Change: So the importance of talent and the difficulty of talent and the expense of finding talent
remains high, and therefore, clients really appreciate the quality.
Speaker Change: of the specialized skills and the talent that we bring to them. And I think that is an indication that this is a bit of a difference compared to prior industry cycles that we were seeing in terms of the price stability, at least at this point.
Thank you for your time. I really appreciate it.
Speaker Change: Thank you. Our next question comes from Toby Sommer with tourist securities. Your line is open.
Toby Sommer: changes with regards to temporary worker rules or something that you could really latch on to that would be relevant in a catalyst for growth at manpower?
Toby Sommer: I would say they are following the blueprint of the so-called Draghi Plan, which was presented to the European Union as the idea of how to regain Europe's competitiveness.
Toby Sommer: And it's a five-pillar plan that talks about, you know, emphasizing the importance about growth industries, you know, making a green transition, which from a European perspective means eventually having access to cheaper energy.
Toby Sommer: Also, and this relates, of course, to our business, making sure that a skilled
Workforce is available.
Toby Sommer: And you've heard us say in the past that the defining challenge of our time will be to re-skill and up-skill the workforce.
at scale.
Toby Sommer: at the speed that we've never done before. And, of course, that, from our perspective, is a really, really good...
Toby Sommer: opportunity, the continued investment in innovation, and then finding the right positioning, the geopolitical strategy for
Toby Sommer: Europe is the fifth pillar and really finding the right place for Europe and and how Europe can compete with 450 million Citizens it is a very large 27 country economic bloc
Toby Sommer: But in many cases, it's still acting as a collection of 27 countries and getting them together to compete better in this changing multipolar world is a big imperative.
Toby Sommer: So I would say the focus on developing a skilled workforce is of course
Toby Sommer: perfectly aligned with our own strategies of developing re-skilling and up-skilling programs such as our Manpower brand MyPath program and our Experience Academy, so moving towards more specialized, higher-level skills that our clients are looking for today and will increasingly look for.
Toby Sommer: into the future. At the same time, I would say that our form of flexibility
Toby Sommer: restrictive labor regulation that we're seeing across Europe. Our form of responsible flexibility where we're paying for training, we're providing
that is also subject to country legislation.
But since we are on that point...
Toby Sommer: I would say, at this point, we're not seeing any changes to any regulatory environment in Europe that would be detrimental.
Toby Sommer: to our industry. And frankly, as we're talking about deregulation and making things more business-friendly across Europe, we can only think of that as being positive for our business going forward, when it happens.
Speaker Change: And then my follow-up, in bench countries such as Germany, have your restructuring efforts and actions positioned the company to be profitable at sort of current demand levels?
Toby Sommer: or do you need demand to improve for that level of profitability to kind of flow through?
Toby Sommer: Germany has been one of the countries we've spoken about where we have significant challenges and we've made good progress. Last year this time you heard us talk about a significant change.
Toby Sommer: where we're addressing structurally how we compete in the German market and moving out of our proservia business, which we feel very good about, making sure that we focus our efforts and our resources in areas where we can win in the market.
Toby Sommer: And we still have a long way to go in Germany. The country is in a big slump.
Toby Sommer: PMI is the lowest PMI of all major European countries and it's the longest post-war industrial declining environment. So it's been it's it's a it's tough sledding in Germany right now for the country as well as for our industry and ourselves.
Toby Sommer: We need we need to drive more demand and continue to look at, just as you saw in this quarter, what it is that we need to do to fine-tune our operations and make sure we become more efficient, effective, as well as making sure that we are competing well in the market. So more work to do.
Thank you.
Speaker Change: Our next question comes from Josh Chan with UBS. Your line is open.
Josh Chan: Hi, good morning, Jonas and Jack. Just two quick ones for me. So first one, circling back to the portfolio question. So as
Josh Chan: As certain countries experience steepening losses, does that change what you think about that country's viability of manpower? And then, I guess, structurally, do you feel like you have to be in certain countries in order to serve kind of your global client base?
Thank you.
Josh Chan: Well, let me start with the second part of your question first.
Josh Chan: Sometimes it's beneficial to have our own subsidiaries in different markets.
Josh Chan: but sometimes we're able to meet the client needs and see better growth opportunities and value creation by finding different formulas such as franchising our manpower business.
Jack Mcginnis: and really going after the market in a different way, and as Jack said, then being able to collect franchise fees.
and help the country continue to proceed.
Jack Mcginnis: And I'd say that we look at that through the lens of a few things, the size of the market, the complexity and the estimated complexity, in terms of regulations going forward.
the political stability, the general risk environment.
Jack Mcginnis: and what it is that we need to focus on in terms of directing our resources to the countries that require more resources. So it's really a balance of various items.
And, as you've seen in the past, we've taken...
Significant actions.
Jack Mcginnis: in many countries where we feel we need to be able to compete better and we just talked about.
Jack Mcginnis: Germany being one of them, and we keep evaluating what it is that we need to do to win in the market.
Jack Mcginnis: and make sure that we can service our clients and candidates in the best way possible and
generate profitable growth.
Jack Mcginnis: So that's something that we do on a continuous basis and you can expect us to continue to do so as we navigate through this challenging environment.
Speaker Change: Thanks for that color, Jonas. That's helpful. And then my second one is on corporate expense. As Jack mentioned, that's been
Speaker Change: curtailed in the last couple of quarters. I just wanted to ask about the sustainability of this lower level of corporate expense. Kind of how do you expect that to trend going forward? Thank you.
Speaker Change: So Josh, I'd be happy to talk to that. Yeah, so we did, we did continue to invest in our transformation programs.
Speaker Change: that is coming through in corporate, but you have seen us pull back.
spend elsewhere.
Speaker Change: And I'd say as we go into 2025 in the current environment, I think that's going to be continue to be the name of the game a bit, you know, balancing.
Speaker Change: the investments in the transformation with areas where we could help fund that by pulling back other spend. I would expect, you know, as we talked about last quarter, you know, there were some one-off items that benefited corporate in Q3.
Speaker Change: year-end. It was a bit lower based on our pullback. I would expect as we go into next year to see levels...
Speaker Change: Consistent with what you saw this year, you know, we have a lot
Speaker Change: A big push on the transformation, as we've talked about before, a lot of countries moving through transformation of back office, which is great. It's going to position us really, really well in 2026.
Great. Thank you both for your time.
Thanks, Josh.
Thank you. Our last question comes from...
George Tong with Goldman Sachs, your line is open.
Speaker Change: Hi, thanks. Good morning. In the U.S. you mentioned that first quarter revenue could experience a further decline than the fourth quarter trend. Can you describe what you're seeing that could cause trends to worsen in the U.S.?
Speaker Change: Yeah, George, you know that there's really a couple considerations around that. I think I talked about the fact that we had a very strong RPO finish to the year in the U.S.
Speaker Change: A lot of that was seasonal, and so that's going to roll off as we start the first quarter.
Speaker Change: That's one consideration. We still have those clients. We would anticipate strong seasonal work from them. Again,
Speaker Change: but it doesn't fall in the first quarter. So that's part of it. The other part of it on the Xperia side that we talked a lot about last year was healthcare IT and particularly the Go Lives that we do there.
Speaker Change: That is a little harder to forecast and is a bit bumpier in terms of exactly when that comes through.
Speaker Change: I'd say what we saw last year was some pent-up demand that came through very strongly in the first quarter. We will have, we are seeing good healthcare IT work this first quarter. It may not be at the exact same level as last year. That's another consideration. But as Jonas said, I think underlying, when you take that out of the mix, underlying activity is relatively stable.
Speaker Change: and we continue to be very encouraged by the progress on manpower.
Speaker Change: With that being said, there's a reset that happens on a lot of those contracts, which causes a bit of a ramp up as we get into the first quarter. So, seasonally, you'll see that step back a bit sequentially. But with all that being said, I think we feel good about stability in the U.S. as we discussed earlier.
Speaker Change: Got it. That's helpful. And then most of your restructuring charges in the quarter were in Northern Europe. Can you discuss what's been restructured to date and whether you think more actions may be necessary based on prevailing hiring conditions?
Speaker Change: Yeah, as I said, George, I think where we've taken the restructuring are in the markets that we've been talking about that have been the most challenged. So Germany, top of the list.
Speaker Change: I'd say other markets that we continue to look at the cost base in Q4 and Q3 were the Netherlands and the Nordics as we looked at Norway and Sweden, and we've talked about the declines in those markets.
Speaker Change: The other one, of course, is the UK. UK, we've done a really nice job improving the profitability of our UK business.
Speaker Change: But with demand down so significantly in that market, we've taken additional actions.
Speaker Change: in the fourth quarter as well. And so I think we feel good about the changes we've made there. That is going to help us preserve profitability.
Speaker Change: And as we go forward, George, it's really hard to say at this point, it's going to depend on how those markets continue to evolve. I think we feel good about the changes we've we've taken so far based on the current environment.
If the environment
Speaker Change: If it starts to improve, then we're gonna hold back and really run those markets very efficiently, which will help us.
Speaker Change: really maximize profitability in the short term. And if that doesn't play out and things continue to drift down a little bit, then you should expect that we're going to continue to look hard in those markets.
Speaker Change: Italy is a great market, continues to be a very strong market for us. We're investing heavily in Japan as well. So, it is a balance and we are continuing to, you know, monitor conditions in all of our major markets.
Got it. Very helpful. Thank you.
Speaker Change: Thank you. That concludes the question and answer session. I'd like to turn the call back over to Jonas Prising for closing remarks.
Speaker Change: Thanks everyone for all your questions and for participating in today's earnings call. We look forward to speaking with all of you again as we discuss our first quarter results a number of months from now. Until then thanks again and look forward to seeing you soon.
Speaker Change: Thank you for your participation. This does conclude the program and you may now disconnect. Everyone, have a great day.
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