Welcome to the ManpowerGroup's Second Quarter Earnings Results Conference Call. All lines will be able to listen-only until the question-and-answer portion of the call. Today's conference is being recorded. If anyone has any objections, you may disconnect at this time. I'd now like to turn the call over to CEO, Jonas Prising. Thank you. You may begin. Jonas Prising - Chief Executive Officer & Director: Good morning and welcome to the second quarter 2015 conference call. With me is our Chief Financial Officer, Mike Van Handel. I will start our call by going through some of the highlights for the quarter and then Mike will go through the details of each segment, the relevant balance sheet items, cash flow as well as forward-looking items for the next quarter. I will cover some additional thoughts on our progress after that. And before we go any further into our call, Mike will read the Safe Harbor language. Mike Van Handel - Executive Vice President & Chief Financial Officer: Good morning, everyone. This conference call includes forward-looking statements, which are subject to known and unknown risks and uncertainties. These statements are based on management's current expectations or beliefs. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements can be found on the company's Annual Report on Form 10-K and in the other Securities and Exchange Commission filings of the company, which information is incorporated herein by reference. Any forward-looking statement in today's call speaks only as of the date of which it is made and we assume no obligation to update or revise any forward-looking statements. During our call today, we will reference certain non-GAAP financial measures which we believe provide useful…

Thank you, sir. Our first question is Mr. Mark Marcon with R.W. Baird. Your line is open. Mark S. Marcon - Robert W. Baird & Co., Inc. (Broker): Good morning and congratulations on the strong results. I was wondering, Jonas and Mike, you spent more time talking about capital allocation and the structure of the balance sheet. Just to make sure I heard things correctly, it sounds like there is an increased comfort with regards to taking on more debt, if I heard you correctly, and then potentially that we could see even more acquisitions. Is that a correct interpretation of what you were saying or am I reading too much into it? Mike Van Handel - Executive Vice President & Chief Financial Officer: (35:31-35:45) and we have been for a number of years. And so, from a balance sheet perspective, it's quite strong. I do think that the business can handle more leverage quite efficiently. And it is certainly a cheaper cost of capital. So, I think there is capacity there. I think there is capacity in the balance sheet. I think whether it actually makes sense to issue debt, of course, we have to have needs and uses for the cash. So, I think that'll play itself out, but if, in fact, the needs arise, certainly, we've got the firepower in the balance sheet to do that. I think as it relates to acquisitions, whether we have strength in the balance sheet or not, really doesn't directly impact our acquisition strategy. I think Jonas laid our strategy out quite nicely. I think the strategy hasn't changed. We think about acquisitions as a way to accelerate our more professional and solution side of our business, but it has to be the right type of company and at the right…

Thank you. Next question is Mr. Manav Patnaik of Barclays. Your line is open.

Yeah, I'm here. Hi, guys. Good morning. Just first question, obviously, you gave a lot of color on the top-line, like macro around the countries. I was just wondering in this, what you guys characterize as a slow and uncertain recovery, is that now for you guys to look at your margin targets and move that up or do you need a more sort of recovery globally for that to happen? Mike Van Handel - Executive Vice President & Chief Financial Officer: I think from a margin standpoint, our overall margin target of 4% is out there, and we continue to progress well toward that. Certainly, an improving economy or a little bit faster growth rate will get us there a little bit faster. As you look back, I know some of you are quite familiar with our roadmap to 4% and the simplification plan got us there, added a lot to our overall margin, about 90 basis points. And then, the gross profit side, we're seeing expand through more permanent recruitment. So, that's behaving quite well. And then, the other point was leveraging efficiency and productivity, which comes from internal initiatives, as well as new revenue growth. And certainly, that new revenue growth, if it comes on faster, we're going to get there faster, we'll get a little bit more leverage. You did see a little bit of leverage in the quarter come through, about 10 basis points on SG&A, and so we are able to get a little bit of leverage at these levels of growth rate, but, certainly, if we were to move from mid-single digit constant currency growth rate up to upper single digit currency growth rate, you'd see margin expansion happen more quickly, for sure.

Got it. And in terms of the internalization fees and so forth, so is that still other opportunities and potential in the work or is it now just relying on the top-line growth to flow through? Mike Van Handel - Executive Vice President & Chief Financial Officer: Well, I think we're always working on driving productivity and efficiency into our branch model and so we've got a number of initiatives in place to continue to drive our delivery model. When you look at our overall simplification plan, one of the four elements was our delivery model. And that one we talked about as being an evolution over time. And certainly, we are driving efficiency with better segmentation of our clients, making sure those that want high-touch are getting the high-touch services that they require and those that we can do more efficiently from more of a centralized model and not through the more expensive branch model, we are delivering in that fashion. So a number of things we're doing there, but I don't see those as being a step-function like you did on the simplification plan. I think that's going to be more of just driving efficiency on a day-in day-out basis.

Okay. And then just one quick follow-up to your capital allocation discussion, can you maybe just use Germany as an example and tell us what was different about this? You did say it was larger than you've typically done. And I think you've not done a whole lot because, I guess, it is a people's business and you prefer to do that organically. So, what was it specific about Germany that made it that exception to go out and do that acquisition? Jonas Prising - Chief Executive Officer & Director: Well, we've talked about Germany being an interesting market. It's a 90 million population. It's a strong market. Penetration rates are still below the average of the European penetration rate. So, we still think that there is good market growth opportunities in Germany. And we wanted to enhance our market position in Experis and our Solutions business as well as in Manpower. And we have been working within that market for quite some time. And then, we had some good dialog with the owners of 7S. And it was a good strategic, as well as good cultural, fit for us. So, it is a geography that we were interested in and we were fortunate to find a company that fit our profile so that we could apply our discipline and make it happen. Mike Van Handel - Executive Vice President & Chief Financial Officer: And I think when you look at our history, while we haven't done too many of size of late, certainly 2010 was COMSYS and 2004 was Right Management. Both of those were much larger than 7S. So, yeah, they tend to be a little bit lumpy in terms of how they might come in. And that, of course, is all reflective of the opportunity we see and what we're trying to accomplish from an overall network standpoint.

All right, thanks a lot, guys. Good quarter.

Thank you. Next is Mr. Kevin McVeigh with Macquarie. Your line is open. Kevin D. McVeigh - Macquarie Capital (USA), Inc.: Great, thank you. Hey, I wonder, given the run-off in the currency, are you seeing any impact from a fundamental perspective in terms of certain segments of the market being stronger than what you would have expected from a manufacturing perspective or is that still kind of early stages and on the come? Jonas Prising - Chief Executive Officer & Director: I think it might be in the early stages, but as you heard from our prepared remarks, we've seen the industrial side here in the U.S. soften a bit between the first and the second quarter. And we think some of that is attributable to bigger clients with exposure to international markets trimming back and adjusting their cost bases. They find it more difficult to deliver the value that they want from export markets, but I wouldn't over-estimate that that impact now. It is probably more a function of our own business mix exposure to industrial clients, but certainly it is a component of what we think is happening. Kevin D. McVeigh - Macquarie Capital (USA), Inc.: Got it. And then, Jonas, you had an interesting comment in terms of higher penetration rates within Europe. Should we think about the delta similar to what the step-up in the U.S. is or just any thoughts on that in terms of how much higher the penetration could be? And if you had any specific commentary by country, that would be helpful. Jonas Prising - Chief Executive Officer & Director: The penetration rates in Europe, on average, are still below their prior cyclical peak. So, just as when we talked about this a number of years ago in the U.S., we think it's premature to say how much higher the peak could be in Europe, but we can observe that the current penetration rates are well below their prior peak, probably, depending on countries, could be as low as 20% below, 15% below and, in some cases, a little bit more even. So, there is still some room for growth just to get back to prior peak, but this kind of environment, as we described, of slow and patchy recovery means that companies are going to experience some demand growth, but, at the same time, be very wary of adding additional head count themselves. So, we believe that that desire for more agility is also going to drive secular growth, which is exactly what we've seen play out in the U.S. and we believe that we will see exactly the same thing play out across Europe as well, when they reach their prior peaks and move on from there. Kevin D. McVeigh - Macquarie Capital (USA), Inc.: Helpful. Thank you.

Thank you. Next is Tobey Sommer with SunTrust. Your line is open.

Thank you. I was wondering in July, you said the overall business growth rate is relatively stable, except for France. What region may be offsetting that slight slowdown in France? Mike Van Handel - Executive Vice President & Chief Financial Officer: Yeah, I think, when you look at – I guess, what you're asking, Tobey, is in terms of where we are. Overall, our average daily revenue, I think we mentioned, was just under 6% in June. And I think, your question asked, (46:20) we said France softened a little bit going into the third quarter. I think when you look at where we are, I think our revenue guidance anticipates that France might bounce back a little bit, but it might not. If not, there is a few other geographies as well. I think when you look at overall, we're looking at Asia Pacific Middle East getting a lit bit stronger as we go into the third quarter. The Americas, we're assuming about constant currency growth, about the same level overall. And Northern Europe, we're assuming similar constant currency growth in Q3 overall.

Northern Europe, I think you talked about business mix maybe impacting gross profit margin. Is that a transitory issue or is there something structural that you're dealing with an ongoing basis? Thanks. Mike Van Handel - Executive Vice President & Chief Financial Officer: No. I think it really has to do with client mix and where we're seeing the demand. And overall, for Northern Europe, our overall staffing gross margins were stable. But within that mix, we did see a couple of geographies where we had some growth in some of the larger clients with lower margin. So, it really was just a client mix, not a pricing issue, but really just a mix issue is what it was, in terms of where we're seeing the growth in the marketplace.

Thank you very much.

Thank you. Next is Mr. George Tong with Piper Jaffray. Your line is open. George K. F. Tong - Piper Jaffray & Co (Broker): Hi, good morning. Jonas, can you elaborate on your expectations for lower revenue growth in France heading into the third quarter and what the potential catalysts are for reacceleration in growth in that area is? Jonas Prising - Chief Executive Officer & Director: As we've talked about on prior calls, the recovery in France is uneven, and they have very low economic growth. Their labor markets, as you all have seen, still have rising unemployment, so it's a very difficult environment. And now, we believe that between a lower currency, in terms of euro being weaker, lower oil prices, as well as the ECB stimulus, all of Europe should experience some support from those events. And that should eventually translate into some more robust economic growth for France. And when that happens, you'll also see some better labor market evolution, but this is all about where France is. And the team has done a very good job, so far, even in such a volatile environment, in terms of generating some growth. So, we think it's going to continue to be a little bit lumpy. It can move, as you've seen in the second quarter. It moved quite a bit between the various months. And as we enter into July, we assume between June and July, that what we've seen so far, it looks about the same, and maybe a little bit weaker into July. So that's what we base our outlook on. Mike Van Handel - Executive Vice President & Chief Financial Officer: Yeah, and maybe just to add to that, as you've heard us say in the past, for the third quarter, really moving into…

Thank you. Next is Ms. Sara Gubins, Bank of America Merrill Lynch Your line is open.

Hi. Thank you. You've talked about pricing pressure in a couple of markets, particularly the Netherlands, but also France and Nordics. Could you just talk about the trends that you saw in the second quarter and how you're thinking about pricing pressure continuing into the third quarter and the back half of the year? Jonas Prising - Chief Executive Officer & Director: I don't think we're seeing any increased pricing pressure today. The pricing pressure we refer to in the Netherlands in the prior quarter really led us to walk away from some client engagements. And that's why you've seen us not being able to make up that larger volume client engagement as quickly as we'd want to, but nor we would expect to because it was a larger client engagement. The pressure in France is really on the second tier competitors, mid-sized competitors, but I would characterize overall the pricing environment as rational and stable between the two quarters.

Great. And then, just separately, did you continue to add permanent recruiters in the second quarter on a net basis and could you give us a sense of what that head count has looked like over time? Mike Van Handel - Executive Vice President & Chief Financial Officer: Yeah. So we do continue to add, Sara. We added a little bit more aggressively in the latter part of last year and the first quarter of this year. We're focused on driving productivity of those recruiters. We still see great opportunity in the marketplace across a number of markets overall. So, as we said, overall perm was up 19% in the quarter, but very good performances. The U.S. was up 40%; UK, 35%; Italy, 45%. So, we're seeing good opportunity. We're still feathering in more recruiters in those growth markets, but we're also being sure that we're getting the productivity from those recruiters. So we still see a good market going forward, and we expect that we're going to continue to add recruiters, but clearly only as needed.

Thank you.

Thank you. Next is Mr. Gary Bisbee, RBC Capital Markets. Your line is open.

Hi, guys. Good morning. I wanted to ask about the U.S. segment. I think for really four years now, you've trailed market growth in the U.S. and you've talked at times about pruning lower margin business and price discipline. And I guess this quarter, it was in industrial and financing, accounting, and engineering being a little weaker. But can you just talk about the drivers there and what the prospects are to grow, at some point in the future, more in line with the market? And in the second part of the question, despite that sluggish growth, you've had really good profit growth over those four years, with margins up a lot. If the top line doesn't accelerate, how much longer can you continue to drive the margin, as you've done, to grow profits in the U.S. segment? Thanks. Jonas Prising - Chief Executive Officer & Director: Well, we've seen some good progress in a number of areas, that you've talked about. So, we've had very strong pricing discipline. We've improved our bill rates in both Manpower and especially in Experis. We're up over 100 basis points in the first half of the year, in terms of our gross margins. And the business that we're attracting has higher value skills, that our clients are willing to pay more for. So that's been work that we have been ongoing. Now, the business that we have is sometimes project-oriented, from an Experis perspective, which means they start and they drop off. So, we're really trying to balance that part of the portfolio, which is doing very well, with also an increased presence in the SMB segment. But for both Manpower and Experis, we believe that there are good growth opportunities for us. And in the case of Manpower, if part of our segments are taking a little bit of a harder hit due to currency and others in the industrial segment, we're going to be focusing on other segments that aren't as exposed to that, and that's where we're putting sales focus on right now to make sure that we get back on track on the Manpower side. And from an Experis perspective, we keep feathering in more recruiters, so that we can help transition Experis, not only to a very good gross profit margin, as well as profitability story, but also making sure that we are improving our top-line growth going forward, because we think that for both of those brands, we have some good opportunities. And as you've seen, our Solutions business has done exceptionally well in the U.S. So, in combination, we're very pleased with where the progress that we've seen in the U.S., over the last four years. But we certainly believe that for Experis and for Manpower in particular, we still have upside opportunity. And that's where we're focused on.

Okay. And any comment on the second part of the question around margins, is that really just Solutions keeps growing well, Experis gets back to growing at some point and there is mix shift? Is that the driver from here or is there anything else that you'd point to? Jonas Prising - Chief Executive Officer & Director: Well, we have the opportunity and continue to have the opportunity on the Solutions side. Our perm business has done very well and we have opportunities there as well. And then, when we see some better revenues, we will have the opportunity to leverage the revenues also more than we've been able to do now. So we're looking forward to moving forward on the Experis brand and getting some more traction in the market, so we could get closer to market.

Great, and then just a quick follow-up, the Solutions business, you've had terrific gross profit growth the last four quarters. Should we think about starting to comp against that more moderate pace of growth in the back half or is the momentum in the top-line, which you don't always provide, is that such that thinking about continued very healthy growth from Solutions is the right way to think about third quarter and beyond? Thank you. Jonas Prising - Chief Executive Officer & Director: We've actually had very good growth over the last eight quarters and we've had in the low to mid-teens growth over the last five years in the Solutions business globally. So it is something that we've seen evolve very very well and we continue to make investments in our capabilities there. And part of this growth has come from parts of the world that are less penetrated in terms of their maturity of using those services. And, in particular, over the last two years, we've seen an acceleration in Europe, but also in emerging markets. And the maturity levels there are significantly below the maturity levels that you see, in particular, in the U.S. market. And we believe that we have good growth opportunities also going forward. Now, we've had some very good and strong growth, especially over the last four quarters. So, that may be a comp issue at some point, but, for now, we think we still have some good growth opportunities as we look ahead.

Thank you.

Thank you. Next is Mr. Jeff Silber of BMO Capital Markets. Your line is open.

Thanks so much. Now that you're seeing what seems to be sustainable growth in a lot of your regions, I'm wondering how you're thinking about your office footprint. Should we be seeing more office openings in the future? Jonas Prising - Chief Executive Officer & Director: We will open offices when we believe that the need for a physical infrastructure will drive demand and delivery for our services, but, as you've heard us talk for a number of years now, with the help of technology, we are able to segment our markets, both in terms of last mile delivery, so our physical footprint and physical infrastructure where we are, but combine that with centers of recruitment and delivery that are remotely based. And that is the trend that we believe will continue to evolve, so it really depends on specific marketplaces whether we want to open and need to open a physical infrastructure there or whether we can service that location remotely through a centralized delivery structure. So I think you've seen us move more into centralized delivery and reduce our physical footprint. And over time, I think that our aim is to grow, grow our business without having to increase our physical infrastructure, but much of that will depend on client acceptance of these new delivery models as well as candidate acceptance, because this evolution is something that you need to be in sync with. If you're too far ahead of the curve of this change happening, you may lose share in certain markets. And, of course, if you're behind, it's making it more difficult to deliver the right value to the right client segments in a specific location. So you'll continue to see us work on this and continue to see the evolution in this area, but we've really made some very good progress certainly over the last two to three years in that respect.

Okay, great. And then, based on that, what should we be budgeting for capital spending this year and do you think that'll be meaningfully changed next year? Mike Van Handel - Executive Vice President & Chief Financial Officer: Yeah, I think it's fairly stable. I think we're probably, to be on the safe side and call it, $55 million or so. And I think that's going to be reasonably stable. That's pretty stable as last year. I think that's going to be reasonably stable with next year as well. So, a lot of that investment is maintaining the infrastructure we have, as opposed to opening new offices. While we are opening some new offices in new geographies, as Jonas has mentioned, on a net basis, our office count is down slightly.

All right, great. Thanks so much. Jonas Prising - Chief Executive Officer & Director: With that, we'll have the last question, please.

Yes. Next is Andrew Steinerman of JPMorgan. Your line is open.

Hi, all. Labor reform, is there anything we should be keeping our eye on that could change demand for temporary help? I remember there is Italian labor reform underway. Also, we hear a lot just about the definition of independent contractors in the U.S. What should we be keeping our eye on this year in terms of labor reform as it might affect temporary help? Jonas Prising - Chief Executive Officer & Director: And, Andrew, are you referring to global changes or are you referring to a specific market, because, as you know, there's been quite a number of changes or announcement of upcoming changes across a number of countries?

Right. So, I would like you to help us identify which geographies we should pay closest attention to? Jonas Prising - Chief Executive Officer & Director: So we have a number of recent discussions going on. First off, France, where we are now able to renew contracts twice during their 18 month duration, as opposed to once, and also the ability to provide these longer-term project employees not only for 18 months, which was the maximum duration before, and now it's up to 36 months. So we believe that could directionally be positive, but the impact of that remains to be seen.

Uh huh. Jonas Prising - Chief Executive Officer & Director: The Japanese Government, as you've seen, has eliminated the 26 categories that used to govern our industry. It's not implemented yet. And the details of what will happen and how it will be implemented remain to be seen, but, again, that directionally is positive for our industry, but the magnitude as well is difficult to know at this point, because some of the mechanics need to be decided still. But from an administration perspective, that should make it much easier. And then, I'm sure you've also heard about the discussions in Germany around the proposed bill, which we haven't seen yet, around potentially duration, implementing a duration as well as equal pay, neither of which we know enough about at this point to know how it would play out because the bill hasn't been proposed yet. But if the terms are equal pay, for our business, that is essentially what we have after four months in the most part, so we don't think that would have an impact. And in terms of the duration, 18 months is very similar to what we see in other markets as well. So, we wouldn't estimate that that impact, aside from high-skilled on longer-term project talent, would be very impactful to our business either. So those would be the biggest ones that I can think of that are new compared to the prior quarter discussion.

Right. And Italian labor reform doesn't have an impact? Jonas Prising - Chief Executive Officer & Director: Well, the Italian labor reform was now approved on the 25th of June, so it's now enacted. And we think it is going to be directionally positive, but, again, the magnitude is difficult to estimate. As you've seen, our Italian team has done exceptionally well in the markets and shown some great growth. And it is something that we think will be helpful going forward because it provides more flexibility. It removes some of the forms of flexibility that are less regulated and should favor our industry, in particular, but we'll wait to see and the overall impact as that law becomes enacted and active.

Got it. Thank you, appreciate it. Jonas Prising - Chief Executive Officer & Director: Thanks, everyone. So with that, we come to the end of our earnings call for the second quarter 2015 and we look forward to speaking with you again next quarter. Thank you.

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