Q1 2025 ManpowerGroup Inc Earnings Call
Speaker Change: Welcome to ManpowerGroup's first quarter earnings results conference call. You'll be put in the snowly mode until the question and answer time begins. This call is being recorded. If you care to drop off now, please do so.
Speaker Change: I would not like to turn the call over to ManpowerGroup's Chair and CEO , Mr. Yee-owness Prising. Sir, you may begin.
Speaker Change: Welcome, thank you for joining us for our first quarter 2025 conference call.
Speaker Change: A Chief Financial Officer, Jack McGinnis, is with me today. For your convenience, we've 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. Jack will go through the first quarter results and guidance for the second quarter of 2025.
Speaker Change: Hey, we'll then share some concluding thoughts before we start our Q&A session. Jack will not 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 uncertainties.
Jack: These statements are based on management's current expectations or beliefs. Extra 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: Slide 2 of our earnings release presentation further identifies forward-looking statements made in this call. In fact, as they may cause our actual results different materially, and information regarding reconciliation of non-GAAP measures .
Speaker Change: Thank you, Jack. This quarter, I spend time with many of our clients and leadership teams across our key markets in Europe , Latin America and Asia Pacific, as well as here in North America. Broadly, the consensus is the quarter has been of two halves.
Speaker Change: with the gang the year, with a sense of optimism for economic growth in the U.S. particularly, and a greater acknowledgement among EU policymakers that Europe needed to do more to remain competitive.
Speaker Change: The last several weeks have impacted the sense of confidence, and the mood is significantly more uncertain and cautious as a result of recent trade policy announcements in the US, with ripple effects far beyond.
Speaker Change: At this stage, most of our clients are adopting a wait and see approach.
Speaker Change: And it is difficult to provide any concrete assessment of how significantly this might affect the man from our customers in our major markets around the world.
Speaker Change: As always, we're staying very close to our clients during this time and taking an industry and country-specific view as announced terrorist impact in different ways. We remain agile and are monitoring demand changes closely.
Speaker Change: At the same time, the benefits of a flexible workforce are highly visible during periods of increased uncertainty, and we know that those closest to their clients will win opportunities to deliverable flexible workforce solutions in a time of need.
Speaker Change: Our message to our organization and leadership teams in our 75-plus countries and territories around the world is clear.
Speaker Change: Control, which you can control, stake low-start lines in candidates, and build agility so we can act quickly to anticipate and respond to evolving client needs.
Speaker Change: The remain plenty of opportunities to win in the market and provide value to those we serve, and we are determined to be the partner of choice during unsettled times Now, for the results.
Speaker Change: In the first quarter, revenue was $4.1 billion, down 5% Euro the year in constant currency.
Speaker Change: A reported Abita for the quarter was $36 million. Adjusting for restructuring costs, Abita was $52 million, representing a decrease of 32% in currency year-over-year.
Speaker Change: Reported Avidah margin was 0.9%, and adjusted Avidah margin was 1.3%. Earnings per diluted share was 12 cents on a reported basis, while earnings per diluted share was 44 cents on an adjusted basis.
Speaker Change: Adjusted earnings per share decreased 51% year-over-year in constant currency In the first quarter, we saw the continuation of a challenging environment in Europe and North America, while demand for our services in Latin and APME remained good [inaudible]
Speaker Change: Staffing Margin will solve it, reflecting business mix changes, and ongoing discipline to pricing. However, permanent recruitment softened further, and we so reduced out placement volumes which impacted our margins.
Speaker Change: We took further cost actions to mitigate these trends and we will continue to adjust as needed as the environment involves.
Speaker Change: But we have seen a period of volatility relating to the tariff announcements and uncertainty is elevated right now. Underlying economic indicators, including labor markets, continue to be relatively stable.
Based on what we see today.
Speaker Change: We expect employers to continue to cautiously look at hiring select talent, particularly those with in-demand skills that enable their businesses to transform.
Speaker Change: Indeed, as AI accelerates, we expect to see a greater focus on skills development as organizations seek to guide their workforce to a period of transition and prepare them to work alongside AI.
This is supported by our most recent experienced CIO report.
Speaker Change: which found that more than half of the companies are planning on up-skilling existing talent with AI skills and one in three are hiring people with the ability to collaborate across functions to solve business challenges.
Speaker Change: Thanks, Jonas. US dollar reported revenues in the first quarter were impacted by foreign currency translation, and after adjusting for currency impacts, came in above the high end of our constant currency guidance range.
Speaker Change: Although conditions remain challenging, a revenue trends demonstrate we continue to perform well in the market [inaudible]
Speaker Change: Following various recent sale and franchise arrangements, our revenues from franchise offices are significant and are included within system-wide revenues, which equal 4.5 billion for the quarter. Additional information on franchise offices can be found in our press release financials
Speaker Change: Cross-profit margin came in just below the low end of our guidance range driven by weaker permanent recruitment .
Speaker Change: As adjusted, EBITDA was 52 million, representing a 32% decrease in currency compared to the prior year period. As adjusted, EBITDA margin was 1.3% and came in just below the low end of our guidance range.
Speaker Change: representing 50 basis points of decline year-over-year. Fort currency translation drove a 2.5% unfavorable impact to the US dollar reported revenue trend from the constant currency decrease of 4.5%.
Speaker Change: Organic Days Adjusted Concentrancy Revenue Decrease 1% in the quarter, which was favorable to our guidance.
Speaker Change: Turning to the EPS bridge, reported net earnings per share was 12 cents. Adjusted EPS was 44 cents and came in 3 cents below our guidance range
Speaker Change: Blocking from our guidance midpoint of 52 cents, our results included a lower operational performance of 9 cents, a foreign currency impact that was 4 cents favorable to our guide.
An interest in other expenses which was $3.00 unfavorable [inaudible]
Speaker Change: Higher tax charges from a France law change imposed for a one-year period for 2025 and updated country earnings mix for the current environment represented $0.06 and restructuring costs represented $0.26 resulting in the report of EPS of $0.12
Next, let's review our revenue by business line.
Speaker Change: Year over year, on an organic currency basis, the Manpower brand declined 2% in the quarter, the experienced brand declined by 5%, and the Town Solutions brand declined by 2%. When in Town Solutions, our RPO business experience is slight year over year revenue decrease.
Speaker Change: Aaron's P-business recorded a strong double-digit revenue increase compared to the prior year. All right management experience, the year-over-year revenue declined in the quarter, as outplace and activity continued to swell. Looking at our gross profit margin in detail, our gross margin came in at 17.1% to the quarter.
Speaker Change: Staffing margin contributed 10 basis point reduction due to mixed shifts and lower vent utilization and select countries, while pricing remained stable permanent recruitment was weaker than expected and contributed 10 basis point to P margin reduction as permanent hiring activity in the first quarter decreased year over year.
Speaker Change: Bright Management Career Transition with Intel Solutions contributed 10 basis point reduction is outplace an activity decreased in the quarter. Other items resulted in a 10 basis point margin decrease.
Speaker Change: Moving on to our gross profit by business line, during the quarter the Manpower brand comprises 59% of gross profit, our experienced professional business comprise 24% and talent solutions comprise 17% [inaudible]
Speaker Change: During the quarter, our consolidated growth profit decreased by 6% on an organic currency basis year-over-year, representing a sequential step down from the 4% decline in the 4th quarter.
Speaker Change: Our Manpower brand reported an organic gross profit decrease of 2% in currency year-over-year, a slight improvement from the 3% decrease in the fourth quarter.
Speaker Change: Cross-profit and our experienced brand decreased 11% in organic consequences a year over a year, flat from the 11% decrease in the fourth quarter [inaudible]
Speaker Change: Gross profit and talent solutions decrease 5% in organic, constant currency year over year, representing a step down from the fourth quarter increase of 7%. MSP saw continued year over year gross profit growth in the first quarter.
Speaker Change: While RPO and Wright Management gross profit declined due to the end of select client projects and lower outplacement volumes.
Speaker Change: Report of SGNA expense in the quarter was $670 million. SGNA, 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 SGNA decreases largely consistent of reductions in operational costs of 18 million. 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: This position's represented a decrease of 8 million and currency changes contributed to a $15 million decrease.
Speaker Change: Adjusted S-GNA expenses as a percentage of revenue represented 15.9% in constant currency in the first quarter. Adjustments represented restructuring costs of 16 million.
Speaker Change: The American segment comprised 25% of consolidated revenue. Revenue in the quarter was 1.1 billion, representing an increase of 5% year over year on a constant currency basis. OUP was 25 million, and OUP margin was 2.4%.
Speaker Change: The US is the largest country in the America segment, comprising 65% of segment revenues.
Speaker Change: Revenue in the U.S. was $689 million during the quarter, representing a 2% day's adjusted increase compared to the prior year. This represents an improvement from the 1% decline in the fourth quarter, as Manpower and Town Solutions had revenue growth while the rate of decline
Speaker Change: OUP for our U.S. business was 11 million in the quarter, OUP margin was 1.6%. Within the U.S., the Manpower brand comprised 25% of gross profit during the quarter, revenue for the Manpower brand and the U.S. increased 7% on a day's adjusted basis during the quarter.
Speaker Change: which represented strong market performance and an improvement from the 2% increase in the fourth quarter.
Speaker Change: The experienced brand in the US comprises 42% of gross profit in the quarter. Within the experience in the US, IT skills comprise approximately 90% of revenues.
Speaker Change: Experience US revenue decreased 2% on a day's adjusted basis during the quarter, an improvement from the 6% decline in the fourth quarter. The improvement in the first quarter was driven by seasonal healthcare IT go live projects, and the remaining business was relatively stable from the previous quarter.
Speaker Change: Town Solutions in the US contributed 33 percent of gross profit and saw a revenue increase of 3 percent in the quarter. A decrease from the 16 percent increase in the fourth quarter driven by RPO and right management.
Speaker Change: RPO experienced a modest revenue increase in the U.S. during the quarter following the completion of higher volume seasonal projects in the previous quarter.
Speaker Change: The US MSP business executed well during the quarter, posting strong double-digit revenue increases, while I'll place an activity within our right management business was down year over year, as I'll place an activity slowed.
Speaker Change: In the second quarter of 2025, we do not anticipate the seasonal, experienced healthcare IT projects to be significant, and we expect the overall US business to have a low single digit year-over-year revenue decline.
Speaker Change: Southern Europe revenue comprises 45% of consolidated revenue in the quarter
Speaker Change: Revenue in southern Europe was 1.8 billion, representing a 5% decrease in constant currency.
Speaker Change: As adjusted, OUP for our Southern Europe business was $54 million in the quarter, and OUP margin was 2.9%. Restructuring charges of $3 million primarily represented actions in Spain and Portugal.
Speaker Change: France revenue comprised 53% of Southern Europe segment in the quarter and decreased 8% on a day's adjusted constant currency basis.
Speaker Change: France has historically managed our Morocco business as a small component of their overall business.
Speaker Change: In line with regional management changes, beginning with this 2025 reporting cycle, we have reclassified Morocco to other southern Europe , and have restated prior periods to reflect like for like year-over-year variances.
Speaker Change: That said, we saw an improvement in the rate of revenue decline in France from January to March.
in March
Speaker Change: The largest month, revenue decreased 7.5%. As adjusted, OUP for our France business was 21 million in the quarter, adjusted OUP margin was 2.2%.
Speaker Change: Activity to date in April is similar to the month of March, and we are estimating the second quarter trend to be similar to the month of March trend.
Speaker Change: OUP equal 25 million, and OUP margin was 6.2%. We estimate that Italy will have a similar currency revenue trend in the second quarter compared to the first quarter.
Speaker Change: For Northern Europe's segment comprised 18% of Consolidate revenue in the quarter.
Speaker Change: Revenue of $731 million represented a 14% decline in currency. As adjusted, OUP equaled to $6 million loss. The majority of the restructuring charges of 12 million was recorded in the Nordics, Belgium, and the UK.
Speaker Change: A largest market in the Northern Europe segment is the UK, which represented 35% of segment revenues in the quarter. During the quarter, UK revenues decreased 16% on a day's adjusted currency basis.
Speaker Change: In Germany, revenues decreased 26% on a day's adjusted currency basis in the quarter. Germany manufacturing trends have been weak driving further declines.
Speaker Change: In the second quarter, we are expecting a similar to slightly improved year-over-year revenue decline compared with the first quarter trend.
Speaker Change: Within the Nordics, Sweden is experiencing the largest declines based on a weak manufacturing environment and the adjustment to new temporary work term limits discussed in previous quarters.
Speaker Change: The Asia-Pacific Middle East segment comprises 12% of total company revenue. In the quarter, revenues equaled $476 million, representing an increase of 7% in organic constant currency.
OUP was 20 million and OUP margin was 4.2 percent [inaudible]
Speaker Change: Our largest market in the APME segment is Japan, which represented 60% of segment revenues in the quarter. Revenue in Japan grew 9% on a day's 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 second quarter.
Speaker Change: I'll now turn the cash flow and balance sheet. In the first quarter, free cash flow represented an outflow of 167 million compared to an inflow of 104 million in the prior year. Timing of payables impacted the level of outflow in the first quarter.
Speaker Change: Outflow a free cash flow in the first half of the year typically follows strong free cash flow in the second half.
Speaker Change: At quarter end, day sales outstanding decreased by about half a day to 54 days.
During the first quarter, capital expenditures represented 14 million.
Speaker Change: During the first quarter, we were purchased 433,000 shares of stock for $25,000,000 We were purchased 433,000 shares of stock for $25,000,000,000,000,000,000,000
Speaker Change: As of March 31st, we have 2.2 million shares remaining for a purchase under the share program approved in August of 2023.
Speaker Change: Our balance sheet ended the quarter with cash of 395 million and totaled that of 1.07 billion.
Speaker Change: Net debt equaled $677 million at quarter-end. Our debt ratios at year-end reflect total gross debt to trailing 12-month suggested EBITDA of 2.5, and total debt to total capitalization at 34%. Our debt and credit facility arrangements are displayed in the appendix of the presentation.
Speaker Change: Next, I'll review our outlook for the second quarter of 2025.
Speaker Change: Based on trends in the first quarter and April activity to date, our forecast is cautious and anticipates the second quarter will continue to be challenging in Europe and North America.
Speaker Change: is important to note that our forecast reflects demand trends we are currently experiencing.
Speaker Change: If TERF policy-related matters have an additional significant dampening effect on demand for our services globally, this is not included in our guidance.
Speaker Change: With that said, we are forecasting earnings per share for the second quarter to be in the range of $0.65 to $0.75 [inaudible]
Speaker Change: As I mentioned earlier, the increased French income tax for the one year period of 2025 and the updated country mix effects [inaudible]
Speaker Change: have increased our global effect of tax rate, which will have the impact of decreasing our second quarter EPS estimate by 14 cents from the beginning of the year tax rate guidance.
Speaker Change: The guidance range also includes a favorable foreign currency impact of three cents per share, and our foreign currency translation rate estimates are disclosed at the bottom of the guidance slide
Speaker Change: Our council currency revenue guidance range is between a decrease of 3% and 7%.
and at the midpoint is a 5% decrease.
Speaker Change: Considering the impact of our dispositions in the slightly lower number of working days, our organic day's adjusted Concentre Currency Revenue Decree represents 2% at the midpoint.
Speaker Change: Even the margin for the second quarter is projected to be down 60 basis points at the midpoint compared to the prior year.
Speaker Change: We estimate that the effect of tax rate for the second quarter will be 46.5%
Speaker Change: which represents the previously mentioned French tax charge for the one year period of 2025.
Speaker Change: and the overall mix effect of lower earnings from lower tax geographies in the current environment including the impact evaluation allowances in certain markets which will reverse in the future when those markets rebound.
Speaker Change: In addition, as usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares to be $47.3 million. I will now turn it back to Jonas.
Thank you, Jack.
Speaker Change: We are confident in our strategic plan to diversify, digitize and innovate. In our next call, we will share more detail on the progress of our technology
Speaker Change: We're preparing to showcase this at Viva Tech in Paris in May, one of the world's largest tech conferences
Speaker Change: We'll be sharing how we're partnering with best-in-class platforms to build tailored solutions with candidate experience and data privacy front and center.
Speaker Change: We know our approach to buy-best in-class and build to differentiate will stand as a part and we are focused on ensuring we have a strong foundation of data and online global systems that enable us to scale, drive efficiencies and create even more value for our clients and candidates.
Speaker Change: Executing our diversification, digitization, and innovation strategy at speed and scale requires process convergence across our global enterprise and continue discipline to manage cost at the center for the benefits of our brands and countries where business is done.
Speaker Change: In our last call, we shared that we had evolved our organizational structures to align our global brands, manpower, experience and talent solutions within the strength and global commercial function to drive profitable revenue growth.
Speaker Change: In Q1, we continued this progress, expanding alignment of our global functions, advancing the centralization and standardization of finance, technology, marketing, people and culture and legal across countries and regions [inaudible]
Speaker Change: This is already enabling us to better leverage subject matter expertise for greater global consistency and efficiency.
Speaker Change: Because we help our clients build workforces with the best specialist talent, we need to attract and retain the best people. And to that end, we're delighted to have been named a world's most ethical company for the 16th time.
Speaker Change: We know this accolade matters to our people and to our clients. It is one of the reasons, talent and organizations whose Manpower Group and its family of brands, Manpower, experience and talent solutions.
Speaker Change: In closing, we have been through uncertain times before and are confident in our ability to manage the business for short-term performance and long-term success.
Speaker Change: We are committed to being nimble and taking actions as needed, adjusting our cost base, and adding resources to respond to demand opportunity.
Speaker Change: We continue to transform our business at pace, investing in technology, process and talent across our brands to serve our client needs globally, all while maintaining a strong local presence in every market research.
Speaker Change: Finally, I want to thank our dedicated teams around the world for supporting our clients, replace their trust in us, and for guiding millions of people eager to contribute their skills and talent to make organizations successful.
Speaker Change: I would not like to open the line to Q&A. Operator?
Speaker Change: Thank you. If you'd like to ask a question, please press star 11. If your question has an answer and you'd like to remove yourself from the queue, please press star 11 again.
Speaker Change: Our first question comes from Andrew Steinerman with JP Morgan. Your line is open.
Andrew Steinerman: Good morning, Jonas. You know, I definitely heard ManpowerGroup's second quarter guide does not include the prospective impact of pending tariffs, but I was trying to think about if there was a resolution of U.S. tariffs that was considered reasonable for trade between U.S. and Europe , but what kind of rebound might ManpowerGroup anticipate in that scenario.
Speaker Change: Good morning Andrew, thank you and that's a great question. As you could tell from our earnings release, the first quarter really progressed.
Speaker Change: As we had anticipated with one exception actually revenues came in a bit stronger we saw good good and positive revenue girls in the US
Speaker Change: Italy, Spain, and of course continued strong performance in Latham and APME, but we had weakness in PURM most notably in France.
Speaker Change: and in a couple of other European countries and that's the GP that we were missing.
Speaker Change: really in terms of what we had planned to execute for the quarter.
Speaker Change: Now, some of that perm hesitation or slowing we believe came from continued caution by employers and that's really what we're guiding to a continued trend of stability with
Speaker Change: You know, operations continuing more or less with the trends that they have, but we note that there's a lot of caution.
Speaker Change: Now, if you look at this from a uncertainty level, the cause of this uncertainty is a U.S. trade policy that's been communicated across the world, which is not great in terms of our visibility, but
Speaker Change: The good news for that is, as quickly as it came on, it can, when this gets removed, lead to a very quick change going the other way [inaudible]
Speaker Change: And that coupled with the optimism that we talked about in our last earnings call around what Europe needs to do to become more competitive and I think those conversations are continuing.
Speaker Change: You know, in our biggest market France. Last time we spoke, there was still budget uncertainty. Today, we have a budget that's been approved by the legislator. We think that's positive.
Speaker Change: As you can tell, our US business is actually seeing growth in all of our, in talent solutions in Manpower for three consecutive quarters.
Speaker Change: and we have a number of European countries that are big for us, Italy for instance, that is, you know, moving forward with good growth and good profitability as well [inaudible]
Speaker Change: So when a policy that's disrupted it gets to a good resolution in a reasonable way
Speaker Change: There is a path to an actual quick turnaround in terms of employer confidence, because in the end it's all about employer confidence, what they think could happen, and how they feel about the future when it comes to increasing their workforce.
Thank you, Jonas.
Thanks, Andrew.
Speaker Change: Thank you. Our next question comes from Manoff Patnik with Barclays. Your line is open.
Speaker Change: Thank you. Good morning. Just a couple of things. You want to see if I could follow up on the comment on the permanent weakness that you're seeing. It sounds like...
Manav Patnik: Most of it is just a freezing acquiring decisions but I was just wondering if you're starting to see any signs of layoffs and earn it to the indicator of something as you've seen in prior cycles of what happens in that area typically. Okay.
Manav Patnik: I would say it follows, you know, our discussion and our prepared remarks when employers adopt a wait and see approach.
Manav Patnik: They become more cautious, and in the first phase of that caution, they pull back.
Manav Patnik: on their temporary staffing, as you can tell, in many countries.
Manav Patnik: You know, we have stabilized and in some we've actually seen an improvement you know when before we saw a more pronounced pullback. [inaudible]
Manav Patnik: So, what then happens is they move to their permanent hiring, but I would provide this color though that I think is an interesting element that we also talked about in our prepared remarks, which is that the pullback on the program. [inaudible]
Manav Patnik: is primarily focused around lower skills. We are still seeing good demand.
Manav Patnik: on more specialized skills, more technical skills within manufacturing in logistics, other parts of our client segments.
Manav Patnik: And I think that distinction tells you that this notion of
Employers are uncertain, but they're holding on to their workforces, they are not-
You let it go of workforces.
Manav Patnik: to any major degree. They're also not hiring to any major degree. They are, however, when they need any workforce, they are coming to us.
Manav Patnik: Which, which you can see reflected in a number of our countries actually performing [inaudible]
with better revenues than what we had anticipated.
when we gave our guidance for the first quarter.
Speaker Change: So, it is a pretty traditional dynamic when employers get cautious later on. They will pull back on in term, but the distinction here is, more specialized skills are still very important as companies are in full transit.
Manav Patnik: Formation Mode in many areas of their businesses and it's the skills that are easier to replace at a later point that we're seeing a little bit more weakness. [inaudible]
Speaker Change: Okay, got it. That's helpful. And just one more, you know, you talked about how uncertainty is typically a benefit for kind of services, but you know, I think there's always that
Speaker Change: Level, like when it gets too uncertain, which is probably what it is now, it isn't and my question is more when do you start deciding that you need to you know right size your cost space and workforce you know even more than perhaps what you've already done [inaudible]
Speaker Change: Well, it's something that we're looking at on an ongoing basis and it very much depends on, you know, which country we're talking about.
Speaker Change: What do we anticipate in terms of the demand? What are we seeing coming in terms of the future pipeline?
Speaker Change: So it's a balance that we're managing each country on a continuous basis as you've seen in our results in the first quarter clearly we've taken some significant additional action in northern Europe .
Speaker Change: because there is a clear dichotomy in Europe , Southern Europe is performing much better, Northern Europe continues.
Speaker Change: to struggle. A lot of that is tied to their economic outlook in terms of the country, and we're seeing that reflected in our business, and then we take actions. But we try to do this in a balanced way.
Speaker Change: because we want to protect our ability to deliver great service to our clients and to drive.
Speaker Change: Increased performance in terms of our market share. And I think our results this quarter illustrate that we're managing that that quite well. The revenues came in higher and I think that is a testament to competing well in the market across the world.
Okay, thank you very much.
Speaker Change: Thank you. Our next question comes from Alexander Sinatra with Beard. Your life is open.
Hey, this is Mark Marcon.
Speaker Change: Cut the dial in through Alex O'Line. There was a little snafu.
Andrew Steinerman: Jonas, you started your presentation by mentioning that you had, you know, been to Europe recently and met with, you know, both your clients and your leadership teams.
Andrew Steinerman: And I'm wondering if you could communicate to an even greater extent.
Andrew Steinerman: You know, settle down and you know, potentially go back to the way it was, or are they in the early stages of trying to prepare for, you know, a new reality. [inaudible]
Speaker Change: Good morning, Mark. Well, I would say, as we mentioned in our prepared remarks, first of all, no one is making any...
Speaker Change: Big moves right now. They are adopting a wait and see approach. If their business is progressing, we're seeing good staffing trends in those countries. If their business isn't, they're more cautious. Overall, as I just mentioned, from the perm perspective, we're seeing a little bit more softening. [inaudible]
Speaker Change: But most of them anticipate that this is a negotiation tactic to change the trade dynamics, but that ultimately this will result in a settlement that is different than what was announced on April the 2nd.
Speaker Change: So that is the belief in the vast majority of client conversations.
Speaker Change: that we've had. Now, the uncertainty comes from each country is different.
You know that they...
Application of this trade
Speaker Change: Policy, you know, is different country by country industry by industry.
Speaker Change: And I think that is what's causing a great degree of uncertainty. But there is a pretty uniform view that this is going to be part of a negotiated settlement.
Speaker Change: Most of them don't anticipate that it's going to be exactly the way it was before They accept that there's going to be changes
But they believe that the changes...
Speaker Change: or they hope, I should say, that those changes are going to be manageable in different form what was announced.
on April the 2nd. [inaudible]
Speaker Change: Now, some of the regions, as I mentioned in my prepared remarks, I was in Latin America recently, that's a region that has seen relatively mild changes to tariff arrangements.
Speaker Change: There are opportunities and there is a belief that we can see good growth come back or accelerate if we just get past this policy hurdle.
Speaker Change: Great. You took some actions in northern Europe . Can you describe the savings that you may get from those?
Speaker Change: and how we should think about it. And then secondly, can you also describe what the outlook is in terms of the French taxes for the balance of the year, how we should think about that and
Speaker Change: Is this a one-year deal or could it continue into 26 as well?
Jack Mcginnis: Mark, this is Jack, I'd be happy to talk to that. So specifically on the restructuring charges so you can see for the quarter overall we took 15.8 million.
Speaker Change: As Jonas said, if you look at our Northern Europe slide, you can see that's where we've been experiencing the most pressure, that's where the majority of our actions are happening. So at the top of the list would be the Nordics, about 5 million of the total charge is the Nordics.
Speaker Change: Next would be Felgem in the UK, about $2.5 to $3 million each. You can see in the UK continue to see very difficult conditions there.
Speaker Change: And I'd say lastly, the Netherlands continues to be a market we're focused on right sizing as well based on current demand levels.
Speaker Change: and a bit in Spain as well. So the rest were relatively small. In terms of your point, Mark, on payback.
Speaker Change: Generally, when we look at the majority of the action, the majority of them are FTE related, so we see a pretty quick payback, and there are a small number of office.
Speaker Change: Optimization efforts there as well, but generally our overall payback is about nine months.
So we won't start to see that improvement in the future.
coming through in Q2.
Speaker Change: And I should say also, we did restructuring, of course, in the second half of 2024 and you see some of that coming through now, particularly in Northern Europe .
Speaker Change: where we took some very significant actions, we're taking more now, but we took some good actions last year that are actually helping improve the sequential.
Speaker Change: Profitability in that region and we're very focused on getting northern Europe back to break even and then profitability which you can see through these actions. So that's what I'd say about the restructuring activities in terms of your question on the France tax rate.
Speaker Change: Yes, it is enacted as a one year increase, so that is the legislation.
Speaker Change: As you can see in our materials, we estimate that about a 5.3% increase in our, I should say 5.6% increase in our overall tax rate.
Speaker Change: That gets us to the new effective tax rate that I've guided to.
Speaker Change: In terms of France and whether or not there will be any changes beyond this year.
Speaker Change: I would say, you know, everything we've seen from the administration is they're very, very focused on the competitiveness of France and for that reason.
Speaker Change: We believe at this point that this is a one year increase as as day inactive .
Speaker Change: and for them to increase it further, they would have to do that through new legislation and through a new budget at the end of the year.
Speaker Change: And at this stage we just don't see any signs that would indicate that that is a probability, so we are viewing this as it's been enacted in the law as a one year change.
Speaker Change: And as we go forward, as I mentioned previously, we would also expect some of the countries where we have valuation allowances.
Speaker Change: To start to see significant tax benefits as we move forward and we rebound in those markets back to profitability and you'll see the tax rate improve pretty significantly once that happens in the future.
Speaker Change: Great, thank you. And then one last one, this perm is a percentage of gross profit and you know what your expectations are as it relates to the second quarter of the print.
Speaker Change: Yes, so Perm as a percentage of GP and Q1 was 16.4 percent.
Speaker Change: Because Q1 is our lowest quarter of earnings in GP dollars, that's a bit inflated generally because the staffing base is a bit lower in Q1.
Speaker Change: As we ended the year last year, we were at about 15 and a half percent so I think that's a reasonable guideline as we go forward.
Speaker Change: I think Perm overall, to Jonas' point, that we talked about that really was the key factor in the earnings this quarter As we ended the year last year, we actually saw the year over year Perm trend really come in line with what was happening with staffing at that time so Perm was down about
Speaker Change: 3% organically, and we saw, you know, staffing GP down around 4% of the earth.
Speaker Change: for a little bit higher than that, but very closely aligned.
Speaker Change: And as we walked into the first quarter, we saw Perm step down further year over year. So Perm was down
Speaker Change: about 8% year-over-year in the first quarter, and that really was what drove.
Speaker Change: The Lower. We had seen some good stabilization, but as you know, the set is stepped down a bit further in the first quarter. So as we go forward, I think we're being cautious, as you heard me say in the guide, and I think our perm expectations for Q2 are pretty much aligned to what we just experienced in Q1.
Great. Thank you very much.
Speaker Change: Thank you. Our next question comes from Kartik Mehta with North Coast Research. Your line is open.
Karthik Mehta: Good morning. I didn't want to ask you a little bit of a bigger picture of question and I know, you know, temporary staffing fundamentals have been under stress for almost three years now.
Speaker Change: But have you seen any impact from other technologies that might be impacting temporary staffing, whether it's LinkedIn or other apps or is there any pressure on the business from
and the Secondary Competitors.
Speaker Change: Well, as we look out over the world, you know, what's important to remember is...
Speaker Change: You know, when we talk about difficulties for three years, we have two regions that have been progressing all during this time and growing revenues and improving their profitability in Asia pack and let them.
Speaker Change: Europe's economy has been very challenged, PMI has been well below 50 for more than two years coming up to three, and the biggest engine in Europe , Germany has been in recession for two
As you look at the industry dynamics
Really the country that sticks out is the U.S. [inaudible]
Speaker Change: Because we've had good growth, solid employment, although both of those factors are cooling right now, yet as an industry we have seen negative growth.
Speaker Change: for those three years. So the question then is, you know, why do we think these are, you know, this is the case. And a lot of that we think has to do with the post-pendemic.
you know,
Speaker Change: Strong hiring right after the pandemic, probably over hiring employers realizing that finding skilled talent is difficult and they've been holding on to their workforce . . .
Speaker Change: So this element of labor hoarding we think has been a feature as to why our industry has been impacted in this way.
Speaker Change: And at this stage, we are seeing no signs that this has anything to do with a technological change or structural change.
Speaker Change: We think this is primarily due to pandemic anomalies that are playing out and through. We anticipate that they will normalize on the traditional dynamics and our industry will come back into play.
Speaker Change: If there were to be any indication of a technology change, I would look at certain roles primarily in the technology sector and specifically as it relates to programmers.
Speaker Change: And, you know, so software coding and programming, you can really see how AI has made that much
Speaker Change: And you can see it also come through in the unemployment rate for software programmers here in the US, which is...
Speaker Change: which is above 7% right now and we're at 4.2% unemployment for the country so that would be the one area where we can clearly see that there is a structural change in demand in a specific
Speaker Change: Roll, where the application of technology is making those workers much more productive when they are augmented by GNII in particular.
Speaker Change: And then just as a pull-up, Jonas, I realize this might be a difficult question, but you talked about friends and meetings that are certainly around.
Speaker Change: when the budget was passed. Did you see as the budget was passed and the tax rate was increased?
Speaker Change: Was the certainly result in less demand? And maybe that's difficult because all this tariff stuff is going on But I'm wondering if that resulted in less demand and once the budget year is over could that increase demand?
Speaker Change: It definitely could. I think the current uncertainty around the trade policy.
Speaker Change: You know, clearly now causes more hesitation on the part of employers, but just as we said at the top of the call, you know as quickly as this trade uncertainty came on and was really solidified on April the 2nd.
Speaker Change: If it is negotiated and settled at a reasonable level, it could turn around the sentiment pretty quickly because
Speaker Change: You know, companies feel that Europe is on the path of becoming more or wanting to take steps.
Speaker Change: to become more competitive along the lines of the five pillars of the Droggy Plan, which talks about productivity, better innovation and technology, adoption, reducing regulation, things like that which would be good for business. You've also seen a surge in defense spending and announced willingness, especially in Germany. You've seen a surge in defense spending and announced willingness, especially in defense spending and announced willingness, especially in defense spending and announced willingness, [inaudible]
to finance, and for their part, greater. Thank you, Peter.
Speaker Change: Investments in that area, which from our perspective could be really good because we have a very strong position in aerospace and defense across all of our brands and especially exposure into Manpower which is our biggest brand in Europe .
Speaker Change: So we think that could be very good so you're absolutely right if the current overhang of the trade policy enactment gets resolved, things and sentiment could change pretty quickly.
Speaker Change: I would just add to that, Kartik, in France we actually saw that play out that uncertainty around the budget.
Speaker Change: Impacted the month of January specifically, so January was down the most in the quarter.
Speaker Change: and as that budget was passed and moved forward in February , we started to see...
Demandim Proof, and it actually...
Speaker Change: Ended the quarter at probably the best part of the average for the quarter overall, and we take that guide into Q2, so
Speaker Change: So we did see it play out to some degree in Q1 and we're now seeing trends that are more aligned with where we were early in the fourth quarter.
Okay, thank you very much both of you appreciate it.
Thanks, Kartik.
Speaker Change: Thank you. Our next question comes from Josh Chan with UBS. Your line is open.
Josh Chan: Hi, good morning, Jonas and Jack. Thanks for taking my question.
Josh Chan: I guess you mentioned that the perm weakness was primarily in France and a couple of European countries. Is there any insight that you can give as to why those countries are weaker in terms of perm? Because I would think the trade policy uncertainty would really impact the globe really, including even the US.
Jack Mcginnis: I think Jack just talked about, you know, in France there was a greater deal of uncertainty with the budget not having been passed and once that started to improve, we saw some improvement
Jack Mcginnis: I also think it depends on the composition you heard me talk earlier about how specialized skills that perm pipeline and sales and revenues actually holding steady and stable.
Jack Mcginnis: But it's the lower skilled where companies are making specific decisions, so I wouldn't read too much into it in terms of the various countries, but rather say overall, you know, there is stability with except with weakness in some in some countries and that we're being cautious looking into Q2 because we know [inaudible]
Hiring is highly dependent on employer confidence and confidence.
Jack Mcginnis: And when the uncertainty is increasing, employers hold back.
Jack Mcginnis: A little bit, a little bit more, and at this stage, that would impact PURM [inaudible]
Jack Mcginnis: to a greater degree than anything else. So, I think that would be our take on the perm trends. But overall, many countries held up well and we saw stability in many countries and actually good performance in the number of them as well.
Speaker Change: Okay, great. Yeah, thank you for that color, Jonas. And then maybe one question on cash flow. I think Jack suggested that it may be kind of timing related. Could you give us a little more color on, you know, what happened in in Q1 and kind of your confidence that cash flow can can bounce back over the rest of the year?
Speaker Change: Josh is Jack. I'd be happy to talk to that. Yeah, as I mentioned in the prepared remarks, we typically see
Speaker Change: Much softer cash flow and net outflows in the first half of the year. That's been the case actually in 2024 and 2023.
Speaker Change: The first half is in that outflow, and then we generally, seasonally, see very strong cash flows in the second half
Speaker Change: We certainly saw that last year as well, so that's definitely part of the equation. We would expect that dynamic to play out again this year. I think specifically on the payables, we have a very large market-leaning MSP business.
Speaker Change: And so, as we manage the spend under management, that actually has a pretty big impact on our balance sheet in terms of our payables. So there will generally be a little bit of volatility on the timing of payables as a result of the MSP business.
Speaker Change: and so that was a little bit of a factor in Q1, so I would say that generally works itself out over the course of the year as well. But I would say those are the main factors to think about in terms of three cash.
Law.
Great. Thank you both for the call and the time.
Thank you.
Speaker Change: Thank you. Our next question comes from Trevor Romeo with William Blair. Your line is open.
Speaker Change: Hi, good morning, Jonathan Jack. Thanks so much for taking the questions.
Trevor Romeo: First one I had was just kind of two quick ones on the US Manpower brand, thing in a quarter, it was up 7% nice improvement back into positive territory.
Trevor Romeo: What were some of the drivers of that improvement? Are you seeing any influence from from changes in US immigration policy there and then I guess over the medium term or the long term?
Trevor Romeo: You know, who knows what will happen with the tariffs, but if we do actually see, you know, reshoring and domestic manufacturing activity increase Any way to think about how much of a benefit that could be for the Manpower brand.
Speaker Change: Well, so Trevor, let me start with your last question with your questions in reverse order. So on the first one, you know, it's really hard to tell in terms of what impact and to what degree the I mean to
Speaker Change: But suffice to say that any increase in manufacturing employment will be good news for the country and will be good news from a manpower brand perspective.
Speaker Change: From an immigration perspective right now, as we all know, immigration really drove a lot of the economic growth that we've seen over a number of years.
Speaker Change: But as it relates to our business today we're not seeing any impact that we can directly relate to a tougher immigration policy so that's not been impacting our numbers.
Speaker Change: And then lastly, I would say the US team and Manpower has done an excellent job. We've really been working hard at innovating our offerings. You've heard us talk about
Speaker Change: Our branch openings in Walmart, which we think is a great innovation in terms of being where our candidates come and also where clients come to, so that's very encouraging. We've also been very strong in building a. [inaudible]
Pipeline of client opportunities across various industry verticals.
Speaker Change: And finally, we are seeing the very positive early signs of our investments in our data analytics and our technology investments, which we now leveraging AI.
Speaker Change: used to provide really unique and differentiated workforce insights to our clients.
Speaker Change: to help them optimize costs. And, you know, we can do this down to a very granular level. We can go into a particular work site, look at the overall wage levels with surrounding a client's location.
Speaker Change: Analyze with the help of data and AI the implications of their current workforce strategy and what we think can be an optimal workforce strategy that will result in cost optimization, productivity
Speaker Change: Things of that nature and so we can predict changes in outcome with the data that we have collected in the US and frankly leveraging our global database. We believe we have the biggest global database in the world as we are now collecting data points.
Speaker Change: from our digitization, our technology infrastructure in a way that is really starting to pay off for us.
Speaker Change: in our client engagements in the US. So the team has done a really nice job and we're very encouraged with these early indicators of what can happen when we apply technology and AI to drive better outcomes for our clients.
Speaker Change: Thank you, and that's really helpful. And actually a good segue into my other question, which was
Speaker Change: I think for Jack, Yee had mentioned the back-off is transformation spending and you're prepared remarks. I was just wondering if you could give an update on how much of that spend is currently flowing through the P&L and then how much of a, I guess, a margin benefit you'd expect whenever those investments are completed and the timing of that as well. Thanks.
Trevor Romeo: I'd be happy to talk to that. So you can see that actually through our corporate SGNA, the corporate component. That's where a lot of these spend on our transformation programs are coming through. And as I mentioned previously, it's been elevated as we continue to execute that transformation.
Speaker Change: To your point on where we are, in terms of the overall transformation, making very, very good progress, I think, you know, Jonas has covered the front office and the power suite front office [inaudible]
Speaker Change: Progress in the past, you know, with over 80 percent of our revenues now on our new cloud and evil market-leading power-sweep front-office.
Speaker Change: That will pay off as we get operational leverage back. It already is having significant benefits and recruited productivity and those type of things but you'll see it more meaningful.
Speaker Change: when operational leverage returns. On the back office side, we're doing really well on power suite back office as well. So we have just about 50% of our revenues going through the new platform. We have implementations going live again this quarter and some of our largest.
Speaker Change: countries, so we feel really good about that. And what goes hand in hand with that is our standardization of our processes and our shared service. [inaudible]
Speaker Change: So, making very, very good progress on that, I think we're up to seven countries now going through our shared service operations with another four to five in flight as we speak.
Speaker Change: Those will continue this year and into 2026, where we'll start to inflect [inaudible]
into savings from those programs during calendar year 2026.
Speaker Change: and you'll see a decrease in the overall spend on those programs as they complete, but you'll see the increase in efficiency.
Speaker Change: And you'll see that come through in our bottom line margin. So I think the efficiency is somewhere in the range of 25 basis points to drop off and spend as I've said in the past is another 15 to 25 basis points. So that will be a significant step change in our overall efficiency as we move forward with those programs.
Okay, thank you both very much. Appreciate the updates.
Speaker Change: Thank you. Our next question comes from Tobey Sommer with tourist securities. Your line is open.
Thanks. You've talked about the...
Speaker Change: Where you're managing expenses and where you're investing in the business in terms of broader capital deployment. How do you think about things now?
Speaker Change: and what might you be looking to add to the portfolio as you pursue a change in the mix over time?
Speaker Change: You know, if the recession occurs in the US, typically you've come out and deployed capital more to a greater extent.
After such a period. Thanks
Speaker Change: Yeah, thanks for the question, Tobey. I think, you know, I would start by just saying our overall strategy and capital allocation principles are unchained.
Speaker Change: So as you've seen you know in environments like this you see us continuing to do share with purchases
Speaker Change: and looking at our, when we look at our excess cash…
Speaker Change: We also look at whether or not there's opportunities for M&A and we've prioritized that in the past. In the current environment as we've talked.
It isn't very conducive to significant M&A.
Speaker Change: When we start to see an inflection point in the market, we would expect that would start to change. So as we look at our overall businesses, the areas that we have been successful in M&A is on the experience side.
Speaker Change: focused on IT services and also on talent pollution side. So I would say, you know, our PO would be an area that we continue to, you know, be very interested in opportunities to continue to add skill sets and expansion.
Speaker Change: in Key Markets. And as we've talked about before, we think the US market is a great opportunity. You've seen us do outsized acquisitions in that market in the past.
Speaker Change: And in terms of internally and as we continue to run the business, we continue to invest in key markets where there's great opportunities. You see us doing that in Italy.
Speaker Change: As Jonas talked about, Italy grew 5% days adjusted in the first quarter. That's a market where we continue to invest Japan.
Speaker Change: You know, continuing to have, you know, a great track record with 10 years of growth.
Speaker Change: We are investing in the Japan business and we're doing that in other markets as well like Israel and you know, Jonas talked about US Manpower. One of the reasons US Manpower is performing very well is we continue to invest in sales.
Speaker Change: Professionals is part of that, so we although we are continuing to balance the equation with cost, right sizing
Speaker Change: We're making sure we do not impact our sales capabilities so that we have opportunities to continue.
to take market share and win in the market. It's so-
Speaker Change: At this current environment, we're going to be very focused on allocating our internal capital into those businesses that have good opportunities and I think to my point when the market changes in the future, we'll probably talk more about other opportunities externally.
Speaker Change: Thanks, but could sneak in a follow-up and over long time, with respect to demand from your customers for upskilling?
What kind of occupations are they most focused on?
Speaker Change: in what you're hearing in customer conversations, because that could inform us about where AI may be impacting the labor force, thanks.
Speaker Change: Well, it's really early day still, but I would say, you know, generally speaking [inaudible]
Companies are really looking at...
Speaker Change: upscaling people so they can handle more technology or different technology.
Speaker Change: So, you know, the our view is that there is going to be a significant transformation with technology in general and with AI in particular, but we also believe that this is an augmentation of human capabilities.
So over time, we think that companies will want to…
A company and help the upskilling of their workers . . .
around areas that help them work better with AI, and that's what we're starting to see.
So.
generally.
Speaker Change: I think specifically the areas where we're seeing demand from AI perspective and where we can see skill sets really pulling is full stack developers, cyber security data analytics and as I earlier mentioned
Speaker Change: AI in particularly generative AI, although, you know, those volumes, the demand is there, but the volumes are not as strong.
and some of these skills are new to the market. [inaudible]
Speaker Change: This really plays well into our strength around the Experience Academy.
Speaker Change: and how we can continue to develop our consultants and candidates in these key areas to build the workforce of the future.
Speaker Change: And we doubled the amount of people going through our academy last year versus 2023 and we anticipate to see
Further strong growth in this area, also in 2025.
Speaker Change: And the same is true for ManpowerMyPath program where we have almost 300,000 people who have gone through various upskilling and re-skilling initiatives and we think this remains.
Speaker Change: A very strong differentiator for both Manpower and Experience, and I think into the future and the man for this is technology progresses at an accelerating pace. This will continue to be an area of great focus of ours, both in Manpower and in Experience.
Thank you.
Stephanie Moore: Thank you. Our next question comes from Stephanie Moore with Jeffries. Your line is open.
Hi, good morning. Thank you.
I wanted to maybe touch on certain hiring verticals.
Speaker Change: At your seeing any indication for, you know, maybe improved trends or a little bit more of a more favorable appetite in any certain verticals. I know in the past you talked about government hiring, health care and the likes of maybe being good indicators of an inflection in demand. So any specific industry vertical color would be helpful. Thank you.
Stephanie Moore: Thanks for the question, Stephanie, and good to have you on the call. I would say in terms of industry verticals where we
Stephanie Moore: Seen from Strength, I'd say Aerospace, for sure, has been a strength particularly in France for us [inaudible]
Stephanie Moore: I'd say food manufacturing generally has held up fairly well, while I'd say broader manufacturing has been weaker, as Jonas mentioned with lower manufacturing PMIs, but food has held up well
Stephanie Moore: in markets like the US, France, and Italy. I'd say a bit mixed on financials. I'd say certain markets have been holding up better than others.
Stephanie Moore: And then logistics, I think we've seen some strength in markets like Spain and again, a bit of a mix elsewhere, a bit lower in the UK A
Stephanie Moore: and in France. I think in terms of where it's been continued to be a bit more sluggish
Stephanie Moore: I'd say the public sector generally in the UK and Canada is the area where we've seen just a bit more of a pullback .
Stephanie Moore: Auto has been pretty well documented that that continues to be
Fairly sluggish and trending software.
Stephanie Moore: As I mentioned, manufacturing more broadly. I think in terms of technology, clearly a year ago that was down quite significantly, where that sits now is really just more stable at lower levels from our enterprise tech clients.
Stephanie Moore: And as you said, I think, you know, again, maybe a bit more caution and wait and see approach before we start to see that dynamic change significantly. Let's do it.
Speaker Change: Great. Well, I'll leave it at that. Thank you so much.
Speaker Change: Thank you. Our next question comes from George Tong with Goldman Sachs. Your line is open.
All right, thanks. Good morning.
Speaker Change: Can you talk about how demand trends exiting the quarter performed relative to earlier in the quarter in your key countries and to what extent these trends reflected early changes to hiring demand in response to tariff uncertainty given the quarter closed prior to major U.S. tariff announcements unable to second?
Speaker Change: George, thanks for the question. This was Jack. I'd be happy to talk to that briefly. I think
Speaker Change: You know, as I mentioned, it's some of our larger countries as we ended the quarter going into April .
Speaker Change: We thought trends that were fairly stable actually. So, you know, France really in line, what we've been seeing in April and we just received an update again this morning, pretty much showing trends pretty much in line with what we saw in France and the month of March, I should say. Okay, so...
Speaker Change: Fairly stable there. I would say similar in the US, I think in the US the item we highlight it was
Speaker Change: The Surgeon, the Healthcare IT, Seasonal Projects, and Q1. If you put that to the side, I think underlying activity levels were fairly stable in both experience.
Speaker Change: And Manpower, and as you mentioned in Manpower they've certainly seen a bit of an uptick so stable with some good underlying growth.
Speaker Change: And then I'd say the same thing really in terms of the UK, you know, pretty stable as we end the quarter.
Speaker Change: into April . So no significant movements, and then our fourth biggest business, Japan, very similar as well. We see good ongoing trends there. So I'd say, in terms of our biggest markets and biggest countries.
Speaker Change: The punchline is really so far April's pretty stable with what we saw in the month of March.
Speaker Change: That's helpful. You mentioned your two cute guide reflects demand trends that you're currently seeing. Can you quantify approximately how much tariffs may have lowered staffing demands so far across your business through mid-April and which countries you're seeing the most hesitation and hiring because of tariff uncertainty?
Jack Mcginnis: You know, I think we are really not reflecting any major changes in trend, just as Jack said we're looking stable. Well, both.
for the most part, the...
Uncertainty,
Jack Mcginnis: is really mostly reflected in the perm numbers that we think are going to be a little bit softer, but the overall staffing numbers as we look at this from a manpower and as well as from an experienced perspective, we expect to in our guide to be running along the trends that Jack just talked about.
Exactly.
Jack Mcginnis: Got it. Customers are adopting the wait and see approach which means we don't expect any major changes until they have clarity on what the trade policy actually means and how they estimate that it would impact the business.
All right, make sense. Thank you.
Thanks George.
Speaker Change: Thank you. There are no further questions at this time. I'd like to turn the call back over to Jonas Prising for closing remarks.
Jonas Prising: Thanks, everyone. We look forward to speaking with you again in our second quarter, Ernie Skoll, later on in July .
Have a good rest of the week!