Thank you for standing by and welcome to ManpowerGroup’s First Quarter Earnings Results Conference Call. [Operator Instructions] This call will be recorded. If you have any objections, please disconnect at this time. And now I will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. Sir, you may begin.

Good morning. Welcome to the first quarter conference call for 2020. On the call with me today is our Chief Financial Officer, Jack McGinnis. We will start by going through some of the highlights of the first quarter, then Jack will go through the operating results and the segments, our balance sheet and cash flow. Jack will comment on some considerations for the second quarter of 2020. And I will then share some concluding thoughts before we start our Q&A session. Before we proceed, Jack will now cover the Safe Harbor language.

Good morning, everyone. This conference call includes forward-looking statements, including statements regarding the impact of the COVID-19 pandemic which are subject to known and unknown risks and uncertainties. These statements are based on management's current expectations or beliefs. Actual results may differ material -- materially from those projected in the forward-looking statements. We assume no obligation to update or revise any forward-looking statements. Slide 2 of our earnings release presentation includes additional forward-looking statement considerations and important information regarding previous SEC filings and reconciliations of non-GAAP measures.

Thanks, Jack. The first quarter of 2020 was an unprecedented one for our company. The magnitude and speed of the change in market conditions that occurred in the last couple of weeks of March was unlike anything we've seen in our over 70-year history. With that in mind, I would like to begin by thanking the ManpowerGroup team around the world for their incredible response to what is a health crisis first and an economic crisis next, with a significant impact on our people and business. The health and well-being of our people, our employees, our clients and our associates has been and continues to be our top priority. With our talented teams and their expertise, we have responded with speed to this global emergency, enabling us to support our associates and clients around the world. Our global footprint has allowed us to leverage the learnings from our APME business as we experienced the first wave of the COVID-19 pandemic move from Asia to Europe to North America and to Latin America. We have a robust enterprise risk management framework and our business continuity plans were executed with speed and efficiency at a global, regional and country level. The technology investments we've been making for some years as part of our transformational journey have been critical in allowing us to respond immediately in response to the global pandemic. In a matter of 10 days in March, we were able to shift more than 80% of our people to remote working. And have also extended our cyber and information security capability to accelerate the ability for some of our associates and consultants to work at home for clients where this was previously not possible. As has been well reported by the end of March, significant lockdown measures had already been implemented…

Thanks, Jonas. As a result of the COVID-19 related impacts, on March 18 we disclosed we're withdrawing our previous guidance for the first quarter. Revenue in the quarter represented a reported decline of 8% year-over-year and on a constant currency basis represented a decrease of 6%. Acquisitions offset the impact of dispositions in the quarter and did not have a significant impact on the revenue trend in the quarter and more billing days this year contributed to about 1% of additional revenue. This results in an organic, constant currency days adjusted revenue decline of 7% in the first quarter and compares to the fourth quarter decline of 1.5% on a similar basis. Our revenue trend during the quarter on a billings day adjusted basis included the monthly year-over-year constant currency revenue decline of 17% in March. In March, the majority of the decline was driven by our European businesses during the last two weeks of the month as government's issued states of emergency and related lockdown requirements. Our gross profit margin was down 30 basis points year-over-year and reflected lower permanent recruitment fees and higher sickness and absenteeism in certain countries, as well as increased direct costs associated with early termination of client contracts during the COVID-19 crisis in March. Our first quarter performance resulted in operating profit decline after restructuring costs of 41% or 39% on a constant currency basis. This reflects a significant and sudden operational deleveraging experienced in March. This resulted in operating profit margin of 1.9%, excluding restructuring costs. On a reported basis, earnings per share was $0.03, which included restructuring costs, which had a $0.68 negative impact and a previously disclosed pension settlement charge, which had an $0.11 negative impact. Excluding these costs, earnings per share was $0.82. Regarding our effective tax rate, previously, we…

Thank you, Jack. As we mentioned earlier, we're taking actions to maintain margins through GDP preservation programs and SG&A reductions to preserve operating profit margin to the greatest degree in the short-term, while keeping our operational and financial strength positioned to rebound when market conditions improve. We believe we have an opportunity to accelerate our strategies in several areas in the short-term with the intend to emerge stronger and better positioned in the market over the long-term. As we manage through this crisis and prepare the business for future opportunities, I'd like to emphasize the following points. First, our number one priority is to support our clients, candidates and employees through this difficult healthcare and economic crisis. As a global leader in workforce solutions, we can provide our clients with customized solutions as they continue to adjust their workforce during the crisis and prepare for the recovery and help our candidates navigate a turbulent labor market, finding new opportunities and acquiring new skill sets. Our employees will go above and beyond to achieve these objectives, and we will provide the necessary tools, processes and learning opportunities to ensure we help them to fulfill this mission. Second, we have a leadership team with deep experience in managing through significant downturns. And this is certainly the case in key markets where many of our operational leaders have previously managed the business through the great recession. This experience, together with our additional capability and technology and innovation, will allow us to identify and capitalize on new opportunities as they emerge. We will also be well-positioned to respond to industry rebounds, and I believe this is a competitive advantage as we manage through this crisis. Third, we're leveraging our diversification. Different from the last recession, we now have a larger portion of our business…

Thank you. [Operator Instructions] Our first question is from the line of Andrew Steinerman of JPMorgan. Your line is now open.

Hi. Good morning. This is Michael Cho on for Andrew. Thanks for taking my question. My first question is, as we think about the restructuring costs in the quarter, I guess if this downturn is prolonged, how should we think about various more cost actions in the future?

Mike -- Michael, this is Jack. I think on the restructuring costs as we've talked about, we'll start to see those savings fully ramp up in the third quarter. We'll be pretty close, I think probably about 80% of the run rate effect in the third quarter. So we will start to see some immediate impact on that in addition to all the other actions that we've talked about. But I would say we definitely have more opportunity to continue to take out costs from the organization. I think what you've seen us do in phases is take out back office costs in different regions. And we've done that in a very significant way in North America and we continue to do that based on the restructuring actions we've just announced. And we're doing that more significantly in Europe at the moment and we're doing that in Germany as we've talked about in our prepared remarks. So I would say as we continue to optimize our organization, these type of programs will continue to be rolled out to other large markets. And there's further opportunity as we move ahead. So I think you should expect that, that is clearly one of the key levers we're going to continue to pull is ongoing optimization. At the moment, we're dealing with very short-term actions that we've talked about to immediately take SG&A down as a result of the crisis. But we are continuing to move forward our strategic programs and we haven't stopped those. And so we are -- we will continue to move forward our transformation programs, which includes taking out back office costs.

Great, thanks for the color, Jack. If I could just squeeze one more in. You gave some great color around trends through April and I guess I'm particularly thinking about Europe and the U.S., but there are temps at work today in April, despite the broad government shutdowns. Is there any reason to think that they won't remain with clients in the near-term if the downturn is prolonged?

No, I'd say, what we're seeing now, and I think we talked about in our prepared remarks where we are seeing some growth opportunities and -- particularly, food and consumer goods are an area where we continue to see good activity, logistics, transportation, we continue to see good activity. And there are parts of manufacturing related to those segments that are continuing to be quite strong. So I think, what we've seen is -- our model is working for a lot of our clients continues to be an important part of their workforce. And we don't see that changing. I think, if anything -- as we emerge from this crisis, I think we'll start to see an increase. And I think a lot of employers will continue to see the benefits of temporary staffing on their business models as a result of this crisis and as we continue to emerge from it. So I don't see -- there is a lot of core underlying work continuing to your point, and I don't see that changing.

Okay, great. Thanks, Jack.

Thank you. The next question is from the line of Hamzah Mazari of Jefferies. Your line is now open.

Hey, guys. This is Ryan Gunning on for Hamzah. Just real quick. Could you update us on any regulatory changes you're seeing upcoming in the business you're tracking across the various regions?

Maybe, Hamzah or rather Ryan, the regulation changes that we've talked about were -- be it prior was really around Japan as well as the Netherlands. And in the case of Netherlands, as Jack mentioned in his prepared remarks, we've not really seen an impact to the business as far as those regulations were concerned. And also in Japan, so far at least, we are seeing no material impact to the equal pay legislation that was introduced earlier this year. So I think both of those are really something that we don't expect to see any major business impact from.

Okay, great. And just a quick follow-up. Could you just talk a little bit about how the MAN business today is different versus 2009 recession? And alongside that, any thoughts in general, how are you thinking about your downturn playbook during this pandemic?

Yes. So stepping back and thinking about what -- how this evolve compared to the 2008, 2009 recession, of course, this is very different both in terms of why it's occurred, it's a health care crisis, first. And the speed and magnitude of the change that happened in waves across different parts of the world was really -- is very, very different from what we've experienced in the 2008, 2009 recession. As it relates to us, what we've really seen is we were able to very quickly adapt to remote working, which, of course, helps when it's a health care crisis. And we have to practice social distancing. Our business mix is much stronger today than it was in the last recession. Experis today is 23% of our business and back into '08, it was 14%. Our Solutions business was only 4% in '08 and it's now 11%, excluding Right Management. We also have a lower percentage of fixed SG&A than we did in the last recession. And taking as an example, we had 4,500 physical branches in 2008, and now we have less than 2,500. And we've really been able to move. Thanks to the technology investments that we've made a lot of activity online, which should help us in terms of moving this to a more flexible cost structure. And finally, we also went through a simplification initiative in 2012 and 2013 to really lower -- structurally lower our cost base as well. So it is in terms of our preparedness essentially allows us to be more flexible in cost. We have more technology impacting the business and we're able to adjust and adapt much more -- much quicker to a changing environment than we would have been in 2008 and 2009.

And I would just add, as we mentioned in our prepared remarks, the one other item that's very different now is the strength of the government programs and the very immediate term. So we are much better to leverage those. So to Jonas's point, this has moved much faster than it did in the last big downturn. And as a result, the governments have responded with bigger programs in the immediate term. So we are better able to leverage those programs now, which wouldn't have existed to the same degree previously.

Great. Very helpful. Thanks, guys.

Thank you. The next question is from the line of Jeff Silber of BMO Capital Markets. Your line is now open.

Thank you so much. Really appreciate the color in March and April by the different regions. I think you mentioned that France was down 65% in April to date. I just want to confirm that. And if so, why is that country doing so much worse than some of the other countries you're in? Thanks.

Yes, that's correct. So that is the run rate we're seeing in April in France. And before I answer your question around why, it's, of course, our view as we look across the world and we see the different levels of lockdowns occurring. I should say that for France, and that is true also across Europe, the effects of the lockdown appear to have stabilized across Europe. So what we're seeing in France today is roughly what we saw a few weeks ago and that's true all across all of Europe as well. So the reaction to by the market and to our business volumes appears to have stabilized in Europe. As to your question as to what and why is France so much deeper than most of the other markets, France implemented the strongest lockdowns that we've seen across Europe on March 16. And there are a few things that are different in France. You have very strong union representation, number one. The President -- President Macron said that we will lock the country down at whatever cost -- whatever it may cost. And that means from an employer perspective and an employee perspective, they're essentially being held whole by the French government for the duration of the lockdown. And third, all of those programs that were in place -- were put in place, were known by the 16 of March. In many of the other countries, the lockdown was established and then it took a number of weeks for companies to know how they would be compensated and what rules were in place for the employee support programs that Jack mentioned. In France, this was all established from the very beginning. And essentially in terms of the workers, they are covered virtually to 100% of lost income for the duration of the lockdown. And companies are also getting support activities. So I think it's a combination of the severity of the lockdown, the massive financial support program and the fact that they were very transparent and knew what those support programs were that essentially shut the country down within the course of 48 hours, which was something, of course, that we've never experienced, that we've never experienced before. So if you take this in equivalent terms to the U.S., it would be the same as having roughly 70 million to 80 million people not working and out of the workforce, because that's roughly the percentage of workers that are today on the temporary unemployment programs in France, or 50% of private employment today is subject to these programs. So the numbers were massive and all of it happened within 36 to 48 hours.

That was very helpful. I really appreciate that. Switching gears, Jonas, I think in your prepared remarks at the beginning, you talked about maybe some of the lessons that you learned in APME since the crisis started a little bit earlier there. Can you give us some color what you learned? And I know China because of the deconsolidation, you may not be as privy to the issues there, but I'm wondering if we're seeing any green shoots in China in your business? Thanks.

Well, I'll start with your last part first. In China, since we've deconsolidated and we IPO the business in the summer of last year, we don't really have any operational insights. And the last earnings release came out, covering the period towards the end of 2019. So they'll be releasing results later on. So we don't really have operational insights other than what you can read from the papers of what's happening in China. But in terms of the lessons learned in APME was really going through our business continuity process and starting to ramp up all of the measures we would take to protect the business, both in terms of remote working as well as the safe working for those that were not able to work remotely and really just establish our processes because we expected that the waves starting in Asia would make it to Europe as they did, and then they would move from Europe to North America and subsequently to Latin America. So our businesses really benefited from the global visibility of what we needed to prepare for. So whilst the changes in France were very, very sudden and the change in Italy and Spain a little bit less sudden, but still very quick over the arc of 2 weeks, we had process in place as a company, both from a technology perspective, from a business continuity perspective, from a employee safety and health and well-being perspective that we could activate and in some cases already anticipate. And that's been very helpful in our ability to adapt to this rapidly changing environment very, very quickly.

Okay, great. Thank you so much.

Thanks, Jeff.

Thank you. And our next question is from the line of Seth Weber of RBC Capital Markets. Your line is now open.

Hi. Good morning, guys. Question on the Experis. Margin was better than kind of what we would have expected. Do you think that is -- is that sustainable, that you can continue to outperform on the gross margin side on Experis or is there just some sort of lag effect there that you think will -- that will soften more going forward? Thanks.

I would say that, if you step back, generally speaking, all of our businesses were performing to expectations up until the middle of March. Manpower was facing the headwinds we had anticipated as it relates to the slowdown in global manufacturing. But Experis was showing very -- was showing good growth and our Talent Solutions business was showing very strong growth. But the Experis business, as we would expect, holds up better because the projects are of a longer term nature. The skill sets remain very -- in very high demand and technology is going to be a sector that after -- before the pandemic and after the pandemic is going to be a very good sector to be in. And our margin profile in the Experis business is stronger than what we had in the Manpower business. Now having said all of that, of course, we just saw a delayed action in some of the cases and most of the downturn we saw in the Experis business would be occurring in the bench markets that we have in Germany and in the Netherlands, in Europe. For the first quarter, we really didn't see much of a change in Experis in the rest of the world. And now, of course, as Jack talked about in his prepared remarks, we are starting to see some of that come through. But they are the much smaller nature than we would than we would see within Manpower. But we do expect to see some softening in the Experis business as a whole. But we continue to feel really good about our positioning overall and the opportunity for profitable growth when growth returns for the Experis business.

Okay. Thanks. And then maybe, Jack, in your prepared remarks, you mentioned something about early termination of contracts. Is there any more color around that, whether it's sizing? Just how the mechanics of that will look? Anything you could add to sort of flush that out? Thanks.

Yes. No, I would say Seth on that, it really was getting out at the very end of March when some of the contracts typically with some of the staffing contracts, they’re shorter terms and commonly they will end at the end of the month, end of a quarter. So we had a lot of contracts maturing at the end of March. So as we worked with our clients and Jonas mentioned what was happening in France, and France was a piece of this. We had to work with our clients on early termination of those contracts, which meant looking at the associates on assignment and ensuring that they were going to get paid through the end of a contract and some specifics and those type of items. So as a result of that, we ended up absorbing a little bit more direct cost than we normally would have. I would say that's isolated to March because it really was dealing with what was happening with those contracts mid-month. A lot of those contracts have been reset at the beginning of April. So I wouldn't anticipate that that's going to be an ongoing issue for the second quarter. It was really trying to get at we were experiencing a bit more direct costs in absorbing a bit more costs as we unraveled some of that activity at the very end of March. We also had the impact of our bench countries. I would say that's a bit different. That's where we had a bit more unutilized time and higher degrees of absenteeism and sickness, which we absorb as part of that. But as we mentioned, the good news is we're able to leverage some of those government programs beginning in April. So we wouldn't expect to have that same degree at the end of March that we have that we will have in April.

Okay. It's very helpful. Thank you, guys.

Thank you. And the next question is from the line of Mark Marcon of Baird. Your line is now open, Mark.

Great. Good morning, Jonas and Jack. I was wondering if you could just -- first, what are your capital allocation priorities and specifically, how are you thinking about the dividend?

Yes. So, Mark, I'd say our capital allocation strategy remains consistent. And we've been pretty clear on that in the past. So the dividend has been a priority for us in the past and we continue to rank that very high on the list. If we look at excess cash beyond that, we tend to look at whether there's an acquisition that needs cash. If that's the case, we will devote excess cash to that. If there isn't an acquisition and there haven't been any -- very, very significant acquisitions for us, then excess cash has been returned through share repurchases. Now, with that being said, we don't pre-announced share repurchase activity. You can see we did -- we were active in the first quarter. But we also said at this time we're very focused on a very strong -- preserving a very strong balance sheet as we get through the second quarter. On the dividend specifically, Mark, that is typically an action that we review with our Board at our May Board meeting. So after that meeting, we have an announcement on the dividend for the next 12 months. And we will wait to review that with our Board in May and we'll make an announcement after that meeting.

Okay, great. And then, you gave really good color in terms of what you're seeing thus far in April. Some of the lockdowns are going to be coming off. I’m wondering how are you thinking about what the magnitude of the rebound is going to end up being when the lockdowns come off, particularly, any sort of experiences or color that you're getting from your clients in some of the markets where either it's happened, such as in China or, markets that are just at the early stages like Austria or Germany is talking about it for in the very near future. What's the discussion like, what's the expectation in terms of the rebound?

Well, Mark, it's a great question and it's very hard to tell. And the reason it's hard to tell is at this point, as we mentioned, we don't really have much operational insight into the China rebound more than what you read about various industries coming back in China. And I don't know that China is a good proxy for the rest of the world. What I can say, though, is that, we are relatively pleased in terms of -- we're not pleased with the lockdown effects, of course, in our business, but we are pleased to see that across Europe, the trend has stabilized at the levels that that Jack described. So we would expect once the lockdowns open up that trend will improve. Now the difficulty in predicting how that improvement will take shape is the lack of specificity and the lack of clarity on part of the governments on which sectors are opening up, what is essential, what is non-essential and how that all plays out in the various countries. And frankly, the Austrian opening up or Denmark opening up, is still -- it's still too early to see any meaningful trend that we can extrapolate. And that's why, in summary, it's so hard for us to predict where it's coming back. But, of course, what we expect to see -- so we've seen stabilization in Europe, which is a good starting point. And when the lockdowns come off, we would expect to see improvement in those trends. The degree and the momentum of which is very difficult to guess at this point, just as we couldn't guess that the French market would drop down to 65% in the course of 48 hours. So we'll monitor that, of course, very carefully. We would expect North America to…

Great. And then just wondering with regards to the U.S., how do you think the widespread use of furloughs is going to impact kind of the demand for temporary staff when things eventually start rebounding?

It's hard to tell. I mean, the furloughs in the U.S. are really -- it's a very different mechanism. But the aim of the furlough mechanism and the support the PPP support programs and others are very similar to what all of the European governments and other governments in Asia are trying to achieve, which is less than the economic crisis by making the pain of unemployment not felt by the employees, so that when the economy starts to come back that they haven't had a material reduction in their purchasing power to the greatest degree possible. So one would expect that, of course, those employees are going to be coming back. But by the same token, the ability to flex the workforce is going to be important, if not more important going forward as well. So we would expect this to look similar after the economy starts to gain traction again, that this would play out in a similar way to what we've seen in past recessions.

Right. Thank you.

Thanks, Mark.

Thank you. Our next question is from the line of Gary Bisbee of Bank of America. Your line is now open.

Hey, guys. This is Jay Hanna on for Gary this morning. Just to get a little more granular on the, I guess, the differentiation in market performance, all the insight you gave on France was great, but to be expecting a 65% decline in April versus just, I believe you said, 20% to 25% in Italy in April. I mean, that seems like a pretty big difference, particularly it seems like Italy was maybe even hit a little bit harder. And that goes for Spain as well, just a 25% decline. So what's really driving that gap there?

Well, Jay, if you look at how the government implemented the lockdowns, it was in a social lockdown was announced early, but for all intents or purposes, companies could still operate reasonably unimpeded except some sectors up until probably the last week of March in Italy and following on with Spain really starting in April. So there was a lot of social distancing and the evidence sector, certain high contact sectors like hospitality and restaurants and hotels and all of those were impacted early on. But a lot of the businesses that that we serve continue to operate well further into March. And that's one of the reason why you're seeing a smaller effect in Italy and in Spain. But as I mentioned earlier in our Q&A, the very severe impact in France is, I think unique to France due to the severity and the speed of the lock down, the very transparent employer and employee support programs that were well known and strong union influence, those are a number of factors that made France's reaction come on faster and go deeper. So France is really a bit of an outlier at this point. So that those would be the reasons that I think you can think of there being a difference between Italy, Spain and France, for instance, that otherwise have reasonably similar labor market structures.

Okay. And then, obviously it seems like Experis is held in there a little bit better. Have you seen any meaningful success, I guess, in the other lines with temps working remotely?

Yes, we've had customers also within Manpower as well as on our Talent Solutions business where we’re able to run parts of that business remotely with remote recruiters engaging with clients. And all of that is really thanks to some of the technology investments we've made over a number of years. And we think that this pandemic and actual effect is going to accelerate and give us more flexibility in how we deploy technology, not only how to run our own internal operations, but how we support our clients and how we engage with candidates. And I think you're seeing that on the Experis side, but we've also seen it on the Talent Solutions side and in some cases also on the Manpower side.

And I would just add, Jonas, within Talent Solutions, MSP has been holding up fairly well so far, too. So obviously that's going to depend on what happens next with some of the restrictions and so forth in the U.S. But MSP so far through mid-March has been actually holding up well.

Right. Thanks, guys and good luck from here.

Thank you.

Thank you. The next question is from the line of Ryan Leonard of Barclays. Your line is now open.

Yes. Hey, guys. Thanks for squeezing me in here. Yes, I was just curious, as we look out -- I think you walk through some of the rationale for, I guess, not providing official guidance, even though you give a lot of detail on the trends. Is it safe to say that the trends you've seen in April are your expectations for the worst case, or is there still a number of -- enough uncertainty out there that you don't really want to put numbers out there until you have a better sense of how these different countries start to recover?

Yes. So I would say, the trends for April, clearly based on what Jonas was giving some color to in terms of what we're seeing in Europe. We have seen consistent levels. At these lower levels, they've been consistent in the last couple of weeks here in April where we see really the height of the restrictions in place in many of those countries. So, the question will be to the extent that -- does the U.S see some additional pressure? We're not sure. I think Jonas mentioned that, the U.S is behind a couple of weeks from what we saw in Europe. It could be that the U.S. ends up very consistent for the rest of the restriction period at the levels we're seeing right now. We just don't know that for sure. So, is April a pretty good view of what will be kind of the low point for the quarter? Very likely, but it's just really hard to say at this point. So for that reason, we wanted to be very transparent in what we were seeing in April. It really is going to be the quarter overall is going to be dependent on the impact of the restrictions being lifted and how that impacts the demand for our services immediately upon those restrictions being ease. So that's what we can't predict at this stage and that's why we provided all that color on April.

Got it. That's helpful. And then just on the U.S. Experis business, down mid single-digits in April, it's relatively stable. Is that the nature of existing contract that are already ongoing, or maybe can you comment on like new business trends that you're seeing there just to help kind of understand what's like the lagging versus the leading indicator?

Yes, I would say it's a mix, but I'd say largely it's a continuation of our business and our strategy in the U.S. I think, what we've talked about in the last couple of quarters is our convenience business has been very, very strong in the U.S. And that's actually contributed to GP margin increase in the last few quarters and that continues. So, the Experis business, as we mentioned, was down about 3% days adjusted in the first quarter and it's only come off very slightly so far at the minus 5% or so here in April. So it's holding up well. And that's largely due to the existing clients. We continue to serve. But there actually have been wins in there as well. And we've had wins in April that are part of that as well, which have helped to offset some replenishment of other business. So we feel good about that and we also mentioned that U.K. was flat in the quarter overall as well. So -- and U.K. will likely see some pressure, as we mentioned in the U.K. overall, we expect to see declines in April. But I would say Experis specific to the U.S where your question was, it's a bit of both. And there have been some wins as part of that in April.

Very helpful. Thank you.

Thank you. And our next question is from the line of George Tong of Goldman Sachs. Your line is now open.

Hi. Good morning. This is Blake on for George. It sounds like labor strikes and the discussion of reforms have taken a bit of a backseat in France to the lockdowns. What are your expectations for discussion of labor reforms and strikes in France going forward once the labor market starts to pick up and we see more activity in France?

Well, as you might recall, the pension reform at this point has been passed. So that's already the new law. And those were the main -- that was the main reason for the strikes. And of course, the French labor market is always evolving with various initiatives. So it's -- there is nothing on the horizon that would say that we would know about further labor market tension coming in France since the pension -- the pension legislation has been passed by their parliament. So that being said, there's nothing we know of today, but that can, of course, certainly change. But overall, as we mentioned at our fourth quarter earnings call, whilst there were some strikes, the overall impact was reasonably limited at the time. And I think they've moved beyond that at this point in time. So France continues to work on their labor market reforms. But as it relates to our business, what we can see are the things and the changes that have been made are, by and large, favorable to our industry. And we don't see any of those in new legislations or reforms being reversed at this point.

Got it. That’s helpful. And then it looks like in 4Q we had seen some improving trends in bill pay spread pretty broadly across your businesses. How do you see bill pay spread evolving as labor markets absorb this sudden shock and sectors gradually reopen? Just curious what kind of trends you're expecting in terms of bill pay spreads.

I would say we were pleased to see that our staffing margin continued to improve in the first quarter, even though we were in this kind of environment. So that tells us that our underlying pay bill spread is looking good. And I would also, as an overall comment say that the changes that we're seeing in staffing GP staffing -- GP as well as overall GP today are all related to business mix changes as well as the changes that are occurring because of the COVID-19 pandemic. They're not due to any price pressures that we're seeing. So I think fundamentally what we had before, which was a good market and our ability to fairly price for the skills that our customers are looking for continued and we were pleased to see that that continued all the way through the first quarter. So there's not been really any change to that view.

Great. That's helpful. Thank you.

Thank you. Next question is from the line of Tobey Sommer of SunTrust. Your line is now open.

Thank you. I was wondering if you could comment on the scope of potential acquisitions as we come out of this and the areas of interest to the firm as you kind of see the experience in the Experis P&L versus the core Manpower brand and the rest of the business because you did come out pretty aggressively after the last downturn. Thank you.

Well, as Jack mentioned, our capital allocation, our strategy hasn't really changed. So as we focus, we focus on organic growth. But should we consider acquisitions? We are very careful. And -- but should we consider acquisitions? They would be in the area of Experis and Talent Solutions. So they would not be in the area of Manpower unless it relates to franchise acquisitions. And we are very careful on acquisitions in our industry, making sure that not only is it a good business, that it's a good strategic fit. It also has to be a very strong and good cultural fit so that we ensure we can retain the key talent within any business that we would be looking at. So our strategy and approach hasn't really changed.

In the RPO business, had there been any surprises in the performance and how do you see that evolving in this environment?

I think we saw some very good evolution in the fourth quarter and that strength carried on very nicely into the first quarter as well until the pandemic hit. And then, as you would expect, the number of our clients that were in sectors that were exposed in first line, such as airlines and other businesses in that particular case -- in those cases, they pulled back pretty strongly. And that's what we're reflect -- what we're seeing reflected in our activity right now. But the good news is none of those clients have left us. These are programs. That's why they work with us. We provide the strategic and operational flexibility for them. And when their business picks up again, we would expect to see a strong rebound also in the RPO side in those sectors that were affected. But of course, we're also doing business in many sectors that aren't affected. And as we talked about in our prepared remarks, we are seeing those -- some of those sectors actually be beneficial to our RPO business in the U.S. as well as elsewhere in the world.

Thank you.

And that brings us to the close of our first quarter earnings call. Thank you for participating today. And we look forward to speaking with you all again at our second quarter earnings call in July. Thanks and have a good rest of the day.

Thank you, speakers. And this does conclude today's conference call. Thank you all for participating. You may disconnect now.