Jonas Prising - Chief Executive Officer Mike Van Handel - Chief Financial Officer Jeff Joerres - Executive Chairman

Andrew Steinerman - JPMorgan Tim McHugh - William Blair & Company Kevin McVeigh - Macquarie Capital Anj Singh - Credit Suisse Tobey Sommer - SunTrust Gary Bisbee - RBC Sara Gubins - Bank of America Merrill Lynch George Tong - Piper Jaffray & Co.

Good morning, and welcome to the third quarter 2014 conference call. With me are our Chief Financial Officer, Mike Van Handel as well as our Executive Chairman, Jeff Joerres.

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 and I will cover some additional thoughts on our progress after that. But before we go any further into our call, I would like Mike to read the safe harbor language.

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 in 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 information for investors. We include a reconciliation of those measures where appropriate to GAAP on the Investor Relations section of our website at manpowergroup.com.

Thanks Mike. Our third quarter performance was strong, exceeding our expectations.

Revenue was in line with where we thought it would be while gross margin performance was at the high-end of our expectations. And this in combination with continued return, smart simplification efforts and efficiency focus resulted in earnings that exceeded our estimates.

Our revenues were $5.4 billion in the third quarter, up 5% from prior year. We managed this revenue and gross profit growth in a disciplined way and had nice flow-through resulting in good leverage with our operating profit increasing to $212 million, an increase of 24% in constant currency excluding prior year restructuring charges which is an operating profit margin increase of 60 basis points compared to the same time period last year.

And this resulted in our earnings per share coming in at a $1.61, which is 28% above the prior year of strong performance. We had anticipated that the market conditions in Europe in particular would be somewhat patchy and that is in effect what we saw in our business, particularly towards the end of the quarter.

Emerging markets were also mixed, while the U.S. market continued its path of good growth.

We continue to expect that the strength of the global recovery will be uneven, particularly in parts of Europe and some emerging markets in Asia and Latin America. I'm not going to pretend that this is my preferred scenario in terms of global market growth and recovery, but having said that, we continue to explore very good revenue growth opportunities in discussions with our clients.

As some labor market experienced an uneven and protracted recovery, we may benefit from this market uncertainty by being a preferred form of flexibility, as we have seen in a number of countries already over the course of this year and I'll expand on that thought a little later on in this call. In this environment, we remain very focused on generating profitable revenue growth with disciplined pricing and strong productivity management so we can drive operational performance improvement even if global market conditions continue to be choppy.

And markets only improve at a modest pace in the short-term. From what I can see right now, I believe we're seeing a cycle within a cycle, a pause in some markets if you will not the beginning of a broad-based out turn.

We will look at opportunities with that lens and not be shortsighted in terms of adding sales people and recruiters in the markets where we see growth opportunities. Mike and I will provide some more detail, some thoughts on our view of the market as we go through the rest of the call.

And as always, our results for this quarter and thanks to our great teams in the field serving our clients and candidates and everyone in support functions helping them make this possible. We are committed to helping our clients win and the changing while they work and also provide meaningful and dignified work for millions of our associates across our brands and geographies.

And with that, I would like to turn it over for Mike for some additional information and detail on the segment.

As Jonas mentioned, we had a good financial performance in the quarter. Our constant currency revenue growth of 4.6% was just below the midpoint of our range.

Our reported dollar revenue growth was 4.4%, slightly below our range as the dollar strengthened during the quarter relative to several currencies and in particular the euro. In short, we were expecting a favorable impact from currencies of 1% on revenue growth and $0.02 in earnings per share, but the actual impact from currency in the quarter on both revenue and earnings per share was negligible.

In comparing our reported earnings per share of $1.61 to the midpoint of our guidance of $1.50, $0.04 of the outperformance is attributable to operations and $0.09 is attributable to a lower tax rate coming in at 35.5% versus the forecasted 39%. Other expense was slightly higher than expected which caused us a penny, but this is offset by a lower share count due to the share repurchases in the quarter.

Lastly as I mentioned earlier, currency was neutral in the quarter compared to a forecasted favorable $0.02. There were no restructuring charges in the quarter or on a year-to-date basis.

In the prior year's third quarter, we had restructuring costs of $8.1 million or $6.2 million after-tax which was $0.08 per share. I’ll exclude these prior year restructuring amounts when doing my segment review so that you can get the true picture of the underlying performance.

Our gross profit margin came in at the high-end of our guidance at 16.7% compared to 16.5% in the prior year. Driving this expansion in gross profit margin was an improvement in staffing and interim margins at Manpower and Experis adding 20 basis points year-over-year.

Our permanent recruitment business contributed 20 basis points to the margin expansion as we saw very strong permanent fee growth of 17% in constant currency in the quarter. This is a meaningful acceleration from the 4% growth we saw last quarter.

The acceleration in permanent recruitment fees occurred in all of our operating segments. I’ll discuss this further in my segment review later in the call.

Our gross profit margin was negatively impacted by a shift in business mix as our higher gross margin right management business had a revenue decline of 8% in constant currency in the quarter. Next I’d like to take a look at our business line performance.

Consistent with our strategy, we're seeing the highest growth from higher margin, professional and solutions businesses while at the same time taking advantage of good growth opportunities in our more traditional services under our Manpower brand. Our Manpower brand contributed two thirds of our gross profit in the quarter and delivered constant currency gross profit growth of 6% which drove a strong business line contribution growth of 14%.

Within Manpower, we are seeing the strongest revenue growth from industrial skills, which was up 8% in the quarter. Our office and clerical business continued to show slight contraction on a consolidated basis.

This is very typical in the early stages of recovery to see greater strength on the industrial side with improving growth on the office and clerical side following thereafter. Experis comprised 18% of total gross profit of which 70% is IT skills, 10% finance, 10% engineering and 10% other.

Experis had strong gross profit growth in the quarter, growing 9% in constant currency, a slight improvement from the 8% growth we saw in the second quarter. Experis saw 7% growth in Interim Staffing and Project Solutions and 15% growth from permanent recruitment fees.

From a skill standpoint, IT gross profit was up 8%, engineering was up 5%, and financing and accounting was up 4%. Our ManpowerGroup Solutions business contributed 10% of total gross profit in the quarter.

ManpowerGroup Solutions is comprised of our market leading RPO and MSP offerings as well as Talent Based Outsourcing, Borderless Talent Solutions and language services. Our offerings continued to be well received by the market with growth accelerating to 17% in constant currency in the quarter.

Growth in our RPO and MSP offerings were particularly attractive, up over 20% over the prior year. Our Right Management business contributed 5% of gross profit in the quarter and saw a 10% gross profit decline, primarily stemming from the counter-cyclical outplacement business.

I'll discuss Right's trends later in my segment operating review. Our SG&A costs excluding the prior year restructuring were up $14 million in constant currency or 2% to $693 million.

We continued to maintain a tight control on costs while investing in revenue growth opportunities on a selective basis. Our focus has been on driving greater efficiency and productivity through our delivery channels, while enhancing our client experience.

Our SG&A expense as a percentage of revenue favorably declined to 12.8% from 13.2% in the quarter. On a full year basis, our SG&A costs excluding prior year restructuring and after currency impact increased $15 million or 1%.

This has resulted in a reduction in our SG&A as a percentage of revenue from 13.8% to 13.4%. We have recognized the majority of the benefits from the simplification plan which was implemented in 2013.

We have now set the company up on a lower cost base and have positioned ourselves well for greater efficiency and leverage on revenue growth going forward. Now, I’d like to turn to review of our operating segments.

Beginning with the Americas, revenue came in about as expected at $1.2 billion, an increase of 7% in constant currency or 4% in U.S. dollars.

Our OUP in the quarter came in at $57 million, an increase of 22% in constant currency over the prior year. This reflected a 70 basis-point improvement in OUP margin to 4.8%.

This margin expansion was primarily driven by strong SG&A leveraging as expenses were well controlled, and productivity initiatives were realized. The gross profit margin was stable as staffing gross margins were down slightly and permanent recruitment fees were very strong up 13% over the prior year.

Our U.S. operation which represents about two-thirds of the Americas segment had revenue of $800 million, up 5% over the prior year which was in line with expectations.

This was a slight acceleration from the 4% growth rate we experienced in the second quarter. OUP was quite strong in the quarter at $42 million, an increase of 22% and an OUP margin of 5.2%, an increase of 70 basis points.

Our gross profit margin was slightly up in the quarter, as a result of a slight improvement in staffing gross profit margins as well as strong growth in permanent recruitment fees. Permanent fees were up 14% over the prior year and 18% sequentially.

We saw accelerating permanent fees growth at Manpower in an RPO, while Experis was down from the prior year. Now let's take a look at brand performance within the U.S.

market. Our Manpower brand represents 57% of U.S.

revenues, Experis 35%, and ManpowerGroup Solutions 8%. Manpower delivered revenue growth of 6% over the prior year, which was slightly stronger than the 5% realized in the second quarter.

We continue to see the strongest growth in the SMB market, which was up 8% in the quarter. From a skills perspective, we see the strongest growth in industrial skills, which was up 11% in the quarter.

We also saw improving trends in office and clerical skills. Our Experis business continued to show improving revenue trends with revenues flat with the prior year.

Within Experis, IT revenue growth strengthened to 3% while engineering, and accounting and finance softened during the quarter and contracted in the mid single-digits. The gross profit performance at Experis continues to be very good with the interim gross profit margin up 100 basis points over the prior year.

ManpowerGroup Solutions in the U.S. had a very strong quarter with revenues up 23%, resulting in strong growth in business line contribution.

Both our RPO and MSP business had an excellent performance in the quarter. Our Mexico operation represents 12% of the Americas segment and had improving, but modest revenue growth of 1% in constant currency.

Despite the modest top line growth, Mexico was able to deliver good OUP gains through strong gross margin management and superb cost control. We are beginning to see good activity in the Mexico market and expect revenue trends to gradually improve over the next several quarters.

The situation in Argentina continues to be very difficult. While revenues are up 20% in constant currency due to inflation, billable hours are down by 9%.

Our team is doing a very good job maintaining profitability in a chaotic economic environment. Other markets within Latin America are somewhat mixed, however we are seeing very good growth in Colombia which is up almost 50% in constant currency and Brazil which is up over 10%.

Next let’s review our Southern Europe segment, which represents 37% of global revenues. Revenue in Southern Europe was $2 billion, an increase of 5% in constant currency, just a touch above the midpoint of our guidance.

OUP in the quarter came in at $105 million, an increase of 42% in constant currency over the prior year. The OUP margin showed very good expansion, up 140 basis points over the prior year to 5.2%.

This expansion was driven by strong improvement in the gross profit margin, as well as a reduction in SG&A from the prior year resulting from numerous efficiency initiatives. France is the largest market within Southern Europe representing just over 70% of segment revenues.

Revenues in our French business were right on forecast growing 2% to $1.5 billion. While, this growth rate is very similar to what we saw in the first and second quarters, it is important to note that revenue trend softened in September and in the first few weeks of October.

OUP in the quarter was $84 million increasing 43% in constant currency. OUP margin also improved nicely, up 170 basis points to 5.7%.

OUP margin expansion was due to strong improvement in the gross profit margin, as well as a reduction in SG&A costs. Our SG&A cost reductions reflect branch consolidations and efficiency enhancements.

Improvements in the gross margin are primarily driven by the impact of the higher CICE payroll tax credits, as well as strong growth in permanent recruitment. This is the first quarter in the last 10 that we have witnessed growth in permanent recruitment fees in France.

Revenue growth in Italy continued to have a nice level, up 9% over the prior year in constant currency to $294 million. OUP growth was strong, up 32% in the quarter to $15 million, an improvement of 90 basis points in OUP margin to 5%.

The gross profit margin was down slightly in the quarter as we continue to see some price pressure in the market. Permanent recruitment fees continue to be strong, up 26% in constant currency.

Our SG&A costs were tightly controlled and below the prior year resulting in good operating leverage and flows through the bottom line. Revenue growth in Spain continued to be very good in the quarter, up 25% in constant currency.

This growth combined with good SG&A productivity improvements resulted in very strong OUP growth. Revenue in Northern Europe was up 6% in constant currency which was at the lower end of our guidance range.

Revenue performance across Northern Europe was mixed with some countries above expectations and others below. OUP in the quarter was $60 million, an increase of 12% over the prior year in constant currency.

OUP margin was up 20 basis points to 3.8%. The gross profit margin was fairly stable with the prior year as some pressure on the staffing gross margin was offset by strong growth of 31% in permanent recruitment fees.

Organically permanent recruitment fees were up 13% in the quarter, the strongest growth coming from UK which was up 38% and Germany which was up 18%. Within Northern Europe, our Manpower brand represents 74% of revenue, Experis 22% and ManpowerGroup Solutions, 4%.

During the quarter, we saw good revenue and profit growth across all brands. Our Experis brand saw good growth in the UK, Netherlands and Belgium with contraction in other Northern European markets that are still trying to gain traction.

Within Northern Europe, we are seeing the greatest demand for our services in UK which is consistent with the macro data you are reading. UK revenues were up 17% in constant currency with strong OUP gains.

Revenue in the Nordics was down 1% in constant currency. This reflects stable revenues in Sweden with continued contraction in Norway.

While we are encouraged by the improving opportunities in the Swedish market, demand for our services in Norway is softening against the weaker macro environment tied to the oil economy. Revenue trends in Germany were stable with the prior quarter, up 2% in constant currency over the prior year.

Revenue trends remained solid in the Netherlands, up 9% over the prior year and improved in Belgium where revenues were flat with the prior year. Revenues in Asia Pacific, Middle East were $592 million, a decline of 1% in constant currency slightly short of our expectations.

Despite the modest top-line contraction, OUP grew 7% in constant currency to $22 million reflecting 30 basis points improvement in OUP margin to 3.7%. This margin expansion was primarily due to an improved gross profit margin as a result of 8% growth in permanent recruitment fees.

Our Japan operation is the largest single country in the Asia Pacific, Middle East segment representing 36% of revenues. Revenue growth in Japan was down 1% in constant currency from the prior year.

This is an improvement from the 4% decline we experienced in the second quarter. While there is some growth in the Japan market, the labor market is very tight.

We continue to work on recruiting initiatives to drive order fulfillment. Revenue growth in Australia was up 1% in constant currency in what continues to be a challenging macro environment.

Despite the weak revenue line, we were able to deliver strong OUP growth as a result of good growth in permanent recruitment fees. Other markets in Asia Pacific, Middle East were up 1% in constant currency, a very good growth coming out of India, Korea, Taiwan, Singapore and the Philippines.

This was off by revenue contraction in China and Hong Kong probably due to legislative changes that were introduced in China a year ago but also due to a softer demand environment. Right Management revenue came in at $72 million, a decline of 8% in constant and currency.

Within Right Management, our outplacement business represents 65% of revenues and contracted 11% in constant currency. The other 35% is comprised of Talent Management which saw a slight contraction of 2% in constant currency.

OUP in the quarter was $6 million, a decline of 16% from the prior year. While SG&A expenses were down during the quarter, the reduction in cost was not enough to offset the decline in gross profit.

Now, I would like to take a look at our cash flow and balance sheet at quarter end. Free cash flow defined as cash from operations less capital expenditures was favorable in the quarter, bringing our year-to-date free cash flow to $72 million.

This was slightly below last year, despite stronger earnings this year, as we utilized more working capital compared to the prior year. This was primarily due to an increase in accounts receivable at quarter end and cash payments related to prior year restructuring charges.

The increase in receivables was due to a combination of greater revenues and an increase in average days sales outstanding of 1.5 days. This was primarily driven by timing of month-end collections.

Our capital expenditures for the nine-month period were $33 million, slightly down from last year's level. During the quarter, we purchased 720,000 shares of stock, bringing our year-to-date purchases to 940,000 shares or $73 million.

At the end of the quarter, we had 7.1 million shares available for repurchase under our authorization. Our balance sheet was in good shape at quarter end with $661 million of cash and total debt of $484 million, bringing our net cash position to $177 million.

The $484 million of debt is primarily comprised of a $350 million Euro Note due in June of 2018. In addition, we have a 600 million revolving credit agreement, which had no balances outstanding during the quarter.

Finally, I’d like to discuss our outlook for the fourth quarter. As you are aware, the macro environment, particularly in Europe has softened over the last several weeks.

This has resulted in slightly weaker demand for our services in some markets, while growth in other markets has remained stable. The other factor to consider is the impact of the weaker Euro relative to the U.S.

dollar. For purposes of the forecast, I'm using a $1.26 as Euro exchange rate, which is off about 7% from the average in the fourth quarter of last year.

Although weaker Euro has a near-term impact on our reported financial results and maybe a positive longer term for the European economies and the underlying demand for our services as it could generate export led growth in the Eurozone. With these factors in mind, we’re looking for constant currency revenue growth between 2% and 4% in the fourth quarter, slightly softer than the 4.6% growth we had in the third quarter.

We expect these exchange rates to negatively impact revenue growth about 5%, resulting in reported U.S. dollar revenue, down from 1% to 3%.

With the exception of the counter-cyclical Right Management, we expect all of our operating segments to have positive growth in the fourth quarter in constant currency with the Americas being the strongest between 5% and 7%. We expect our gross profit margin to fall in the range of 16.8% to 17%, reflecting a typical seasonal uptick from the third quarter.

Our operating profit margin is expected to range between 3.5% and 3.7% and we are projecting a tax rate of 35%. This will result in earnings per share in the range of $1.39 to $1.47, which includes an unfavorable impact from currency of $0.08.

As you think about earnings growth compared to the prior year, it is important to keep in mind that we recognized an additional month of the CICE tax credit in the fourth quarter of last year. If you adjust for this item and exclude the prior year restructuring charges, our forecasted operating profit growth for the quarter is 10% and earnings per share is up 9% and 3% revenue growth following constant currency and assuming the midpoint of our guidance ranges.

As many of you know, I typically gave some initially thoughts on our first quarter on this third quarter call as the seasonally weaker first quarter can sometimes be a bit trickier to model. Given the current uncertain macro environment looking ahead one quarter is challenging much, let's say two quarters.

My hope is that by the time we reach the first quarter, the pause we are seeing in some markets would return to better growth. As you can see from our third quarter results and our fourth quarter guidance, we're able to get good operating leverage on mid single-digit constant currency revenue growth, but little leverage on low single-digit revenue growth.

I'd expect this principle to hold in the first quarter of next year as well as constant currency revenue growth will be the key driver of performance for the first quarter and all of 2015 for that matter. And of course, if the euro remains where it is today, we will have an unfavorable impact from currency.

The average Euro rate in the first quarter of 2014 was $1.37, so it’s currently about 7% less than that at the moment. With that I'd like to turn things back to Jonas.

Thanks Mike. The third quarter was a strong quarter for us.

With good execution and focus on our strategic priorities, we delivered 24% earnings growth in constant currency over prior year. As you can tell from our near-term outlook, this is not a straight and linear recovery from the global economic troubles we have been living with for some time.

But I believe there is reason for optimism in terms of our opportunity. And this belief is largely based on conversations I have with increasingly sophisticated client companies all over the world.

In our conversations they looked at the geopolitical volatility, the limited visibility into their future demand and as a consequence, the much more strategic and analytical approach they have to their existing workforce strategies. They intend to build their companies so that they’re much more agile and able to deliver value in shorter timeframes as they adjust economic cycles and in some cases cycles within an industry or a specific geography.

And the sophistication extends beyond the global companies to mid-sized clients that know they are likely to be affected by what happens around them whether they have business abroad or not. And I believe this is a structural evolution and as such a secular growth opportunity for us.

On top of the cyclical growth we should expect to see when economy is struggling right now see some growth return. Our clients are increasingly looking for workforce solutions that can help them across multiple operations, have seamless delivery across brands and countries and combined offerings in a way that helps them adjust to whatever the market conditions maybe like.

And this is something we’ve been hearing for some time and these conversations are also occurring right now. Our unrivaled global footprints with market leading coverage of American markets, our strong global brands that can be combined to form unique and innovative workforce solutions, but in particular our strength in the solutions business with world’s leading RPO, MSP and other talent-based solutions make me very optimistic that notwithstanding any shorter-term market turbulence we are well positioned for continued success as the leading global workforce solutions company.

I also believe that our long history of stellar reputation in terms of ethical behavior and high levels of integrity will stand us in good stead as jobseekers, companies and governments will want serious, stable and reputable companies that can help them through these turbulent times, being an integral part of the solutions that solve the vexing labor market issues in many countries. So, in summarizing the third quarter results, we're pleased to see their efforts in driving disciplined revenue growth are continuing to show progress.

And we will remain committed to seizing growth opportunities aligned with our strategies also in the future, achieving good leverage on that growth and continuing to build the diversified business. The balance of pursuing good revenue growth opportunity with disciplined pricing and strong execution will be very important as the overall global situation is still in the early innings of a choppy on-off recovery.

I anticipate that we could be buffeted by some volatility and that some markets may pause for sometime before picking up steam again. Our aim is to improve our performance even under these uncertain conditions.

And with our strong management team committed to driving profitable growth; we are focused on building on the progress we've made so far in the year. And with that, we come to the end of our prepared remarks.

And I would like the operator to start our Q&A session.

Good morning. Mike you kind of dictate to really highlight, the France trending in kind of September, October.

Are there any other countries that you want to kind of highlight when talking about September and October trends?

Yes. Good morning, Andrew.

I think in terms of seeing a change in direction or a little bit of softening, I think France was really the one that I would call out. I think when you look across Europe generally, I think what we’re seeing is an uneven recovery or uneven progress.

Certainly, we saw a little bit of softening in France. Some of the other markets just feel a little bit more cautious, if you go to the likes of Italy or the Netherlands, I think a little bit more caution in some of those markets.

Other markets are still going just as they had been; certainly the U.S. continues on a fairly stable path, the UK is doing quite well.

So you certainly see a fair -- some unevenness across as we look, but the France is the one that probably -- it just didn’t quite pick up from the summer holiday period like we would normally expect in September and therefore seeing revenue a little bit down from where we were in July and August. So the good news I guess in the quarter is July and August were actually a little bit stronger than expected in France, but then September just didn’t comeback quite as good as we would have expected.

Andrew this is Jonas, I would say that the description uneven is a really good word to describe what we saw because if you look at Europe and you see what’s happening there, we have some markets that are actually really strong. If you look at UK, like you mentioned Mike, Sweden is getting better on the Manpower side, you’ve got Spain that is continuing to do really well and also Italy but then clearly some of the markets that are a little bit softer and actually softened quite late in the game in the quarter.

So uneven, I think is a great description of what we’re seeing across in particularly Europe.

Right. And Jonas, could you just make a quick comment about the responsibility and solidarity act or pact in France how is that progressing?

And of course my question is around how will this impact CICE. I know back in the spring while there was still conversations going on, Manpower's position was that this should turn to be a net positive for the industry.

Well, in terms of the CICE, I actually don't see any news around that. It is what it is before which is the French government’s structural labor market reform and helping France become more competitive as it relates to the cost of labors.

So, there is no news there; it's the same as it's been and it is now fully implemented and accepted as part of that structure reform package. There were some family subsidies that are going to be implemented in 2015.

They are not finalized yet although they’ve had some stages of the approval process in the French parliament and that's going to come a little bit later on. That takes the form of more traditional subsidies.

And we'll see how those play out as they get approved in the final stages and then as they get implemented into 2015. And like we said last time, hard to gauge exactly the magnitude of that but on the whole, we think they should be net positive.

Perfect, thank you.

Thanks Andrew.

Yes, thanks. Can you just give a sense I guess in terms of the guidance here relative to what you've seen kind of fall off here the last couple of weeks in terms of the growth rate?

Are you assuming that the growth trend continues to soften throughout the quarter? Have you kind of extrapolated some of the more recent trends?

I guess given things have changed fairly recently, just trying to get a sense of relative to that change how you’ve approached the guidance?

Sure, absolutely Tim. So as we look at again the fourth quarter our view is for revenue constant currency growth to be in the 2% to 4% range.

So, slightly softer than the 4.6% range that we saw in the third quarter. I think as we looked at it we took a good look at September, took a good look at what was -- where we were in the first few weeks of October.

And to the previous comments, there clearly was some unevenness and there was some stability in some countries and other countries moving a little bit better, there is a little bit worse. But our guidance really is predicated on what we had seen for those, let’s call it September and early October with not a lot of anticipation of further weakening or further strengthening for that matter.

So, it was more of an extrapolation of what we saw. And then on the euro, we did use $1.26 on the euro rate which at the moment is a little bit stronger than that prior closer $1.27 and changed $1.28 almost.

So, but that’s changing by the day, so that’s how we approach it.

And Tim, maybe to add to that this is Jonas. This is just like Mike says; it’s our extrapolation on a situation or rather a trend that we saw in September.

But as I mentioned in my prepared remarks, as I look at this I truly see this as a cycle within a cycle or pause in some markets and not the beginning of a broad-based downturn because it is uneven, we see some markets that are still doing really well. So, this is our view that -- it will get a little bit bumpier and some markets are little bit softer, but this is not a significant shift in trend that we're talking about.

It's just a little bit softer in some markets.

And maybe Tim, just to add, I made a comment on my prepared remarks, but maybe just to underscore; as you do look at it compared to prior year, we did have an extra month or four months of CICE benefit included in last year that added about 25 basis points overall to the operating margin in the quarter last year. So, when you compare it on a year-on-year basis, the guidance looks like operating profit margin is flattish at the midpoint, but after you adjust for that item in the prior year, you actually do get a little bit of operating profit margin expansion.

And as I said at the midpoint on 3% revenue growth, you get about 10% constant currency earnings, operating profit growth on that.

Can you add on that last comment, Mike, relative to -- you also made a comment that as you go into low single-digits margin leverage becomes tougher; I guess, I think you had said SG&A was up 2% constant currency? Is that kind of a fair ballpark as we think about 2015 that north of that you should get some leverage, but as close starts to drift down towards that kind of 2% range it will be tougher to see much margin left?

Well, I think it does become more challenging because you're dealing with averages of course with different markets and different economies moving in different direction. So, within that average you may have one market contract and be de-levering while other markets maybe seeing some growth with some leverage, but maybe not as much as the deleveraging.

So, it gets a little bit difficult. And of course there is just an inflation in wage rates that comes through as well.

So as that growth rate, top-line growth rate does drop, it does become more difficult to get that operating leverage. So that’s what you’re seeing.

And as you saw in the third quarter with 4.6% growth we were able to get some good leverage with 2% expense growth. It gets a little bit tougher when that top-line drops down into that 3% range.

And so I just got to be mindful of that. It doesn’t mean that we’re not still driving efficiencies and productivity across the business.

We still see opportunities to continue to drive on our delivery channels and how we're delivering our clients and customers and we’ll be continuing to look at that and try that next year and see some opportunities there. But no doubt that top-line comes down; leverage becomes a bit more difficult.

And of course you can see how the leverage comes back quite nicely when you get a little bit of growth; the leverage clearly is in the model and shows up quite quickly.

But there is not enough room to take cost out now at this point as we think about towards next year that really we would expect to see a lot less than kind of a low single-digit growth in expenses?

Well, I think you can always take cost out. I think whether it’s prudent to take cost out is maybe the question.

And given what we’re seeing today, we don’t see reason to take dramatic cost out at this point. We feel good about our cost base with the simplification plan that we went through last year.

We reset the cost base. We've got clear visibility we think in terms of where those costs are, where the opportunities are.

So, I don’t see a massive cost restructuring or cost cutting exercise, but it doesn’t mean that we won’t be determining and certainly those markets that are seeing contraction there will be more opportunities in another markets. But I wouldn’t want to characterize it as an overall cost reduction effort per se.

Okay. Thank you.

Thanks Tim.

Great. Thanks.

This is pretty interesting that permanent fees are really starting to firm and accelerate in what seems to be a bit of a pause or cycle within a cycle if you would. Any sense of why that's been occurring?

Yes. On the first side, I think that was really good to see and I think it does indicate that there still is some out there and some opportunity.

When you look at overall perm growth in the quarter was up 17% in constant currency, was up 4% constant currency last quarter. So you're seeing it and you're seeing it across a number of markets.

The Americas had growth of 13% overall with the U.S. up 14%.

So that was -- and U.S. was fairly flat a quarter ago.

The UK organically was up 38% and Italy was up 26%. So I think what you're seeing here is the markets still have some hiring happening and I think what you're also seeing is the industry, our clients are looking at us and our industry in a different way in terms of how they’re using us to bring in their permanent workers and what we can do to help them find the right talent.

So I think that's really why you're still seeing some growth despite what in some markets some softer conditions. Jonas, certainly I think you want to add that.

No, I think your comment there in terms of how our clients see us is an important one because we’ve been working on deploying capabilities within the perm area for quite some time. And I think many of our clients now see us as a company to go to not only for staff augmentation but also for permanent recruitment.

And what's interesting in the perm numbers is that you're actually also seeing it not only in markets where you’re seeing good growth within the market but also in markets that are having a little bit of a tougher time. And I think we’re now starting to take a position also in those markets where we’re seeing as a company that has a diversified portfolio of services and solutions including perm.

And I think you’re starting to see some of that secular growth in terms of how they see us come through as well.

Understood. And then Mike, as we’re thinking about the cycle within a cycle, is that kind of a feel like relative to the past, is that kind of like ‘11 to ‘12 where things slowed down a bit and then came back or I know it’s early but just anything we should look at in terms of indicators other than present data and then ultimately how we’re thinking about relative to past slowdowns just from a modeling perspective?

I know it’s hard to model but anything in terms of past issue completely users have got?

Yes, it’s a good question, Kevin. I’m not sure I’ve got a good answer to it, because I think there is -- trying to look back at history is somewhat difficult because I think we’re in such a unique cycle in terms of where we are and where the economies are going that I am not sure looking at the past will do us a whole lot of good.

Our own sense is that at this point, it does not feel like a rollover in Europe, it does certainly does feel like there is some pausing there which is while we’ve referred to it as a cycle within a cycle, how long that it may go and I think we’d be speculating to put something on that. But I think overall, we feel we’re well-positioned and we’ll take advantage of what opportunities are in the marketplace.

And I think the important thing is we’re still seeing some good opportunities in the marketplace today and we’re going to, where it makes sense, we're going to invest in those opportunities selectively and in those markets where we don't have opportunities, we’re of course going to drive efficiency and productivity as best as we can.

And this is really the kind of environment that we've been preparing for. I mean this is something we recognized that this recovery wasn't going to be typical, a typical cyclical recovery, but a very uneven and it could stop and start at various times.

So, the fact that we've reset our cost base that we have very disciplined pricing approaches and that we are selectively investing in the areas when we see growth come back I think is going to be pretty typical of how we're going to be looking at this also in the future. So, this could take a little bit longer, it could be just a brief pause.

But we're ready to manage well in both of those scenarios or whatever scenario comes in our way.

Okay. Thank you.

Hi. Thanks for taking my questions.

I guess first off just on what has already been asked, but a little bit more clarity on what gives you confidence that this is going to be more of a pause? What is the nature of your client discussions that gives you that sort of visibility that things won't get materially worse?

If you can just give us some color on that.

Well, I think as you look at the -- the overall picture is that the slowdown on the patchiness is fairly concentrated in Europe to some markets at this point. So, when you look at this and you say Europe is softening, that's not really the case.

You have a number of markets that are actually doing extremely well. You have many markets that are stable and where we consider it that at this point at least to continue being stable and in some markets that's softened.

So this is not a broad-based trend, it is some softening in some markets and some of those markets are reasonably big. But within that let’s remember that the softening even in France is reasonably modest.

So that would be the first observation. I would also say just as I mentioned in my prepared remarks that our client conversations are still positive.

So, this is not clients coming to us telling us that they don’t need our people anymore that they would like to reduce their workforce in any drastic or dramatic way, quite to the contrary in some markets and in others it’s a lack of acceleration and a lack of increase and maybe a little bit less in some markets, but it’s not a dramatic shift from where they have been before, so an increased cautiousness in some of the markets. So the way we look at this now and those are the conversations we’re having now that could change, but right now that’s what we’re hearing.

And based on that, our view is that this is a pause and a cycle within a cycle as opposed to a broad-based downturn and acceleration or as you mentioned Mike a rollover in Europe. We don’t see that in our conversations.

Yes. This is Jeff.

I would add; there is a big difference in the field, there is no surprised conversation, whereas in previous ones you’d get that our backlog has certainly going bad and we’re not going to need certain people. But there are no conversations like that at all; this is all kind of anticipated.

We talk to our fresh people, they will say, well, of course. We haven’t done some structural things within the country; we haven’t done certain things this way.

So this in a cycle that turns down, you get a cross industry somewhat of a little bit of a surprise feel compliance. The clients are relatively calm that doesn’t mean their businesses are easy and they’re not working really hard.

But I think that’s the biggest difference which gives us the confidence as Jonas was saying, the cycle within the cycle, because these things will happen as -- we'll just become much more global. So I think that's one of the big differences that we're seeing.

If there is no surprise, there is no panic; there is no restructuring conversation that we're having.

And maybe just to add a little bit further detail. In the French market in particular, while things have softened a little bit on a year-on-year basis in September and early October, it's not spiraling down.

What we've seen in the last several weeks has been fairly consistent from an overall revenue trend standpoint which has been what we look out -- what our outlook is for the fourth quarter which is for us flat to slightly down and that's what we've seen in France over the last several weeks. So it's not like it's heading in a direction right now that would have overly concerned.

Got it. That's super helpful.

Thanks for the color there. Shifting gears a little bit to Experis, I know you've mentioned in that past that you're going to be feathering in recruiters and that's an ongoing process.

I'm wondering if you have any insight into when you can start to achieve above market growth there or is your expectation right now to sort of grow in line with market.

Well, we still have some work to do. And I'm pleased to see that the plans that we've put in place are starting to show some traction on the IT side, but I still think that while I'm pleased with the progress, we know this takes some time as we feather in recruiters and sales people to meet the supply and demand, we still have some way to go to get to markets.

So I think that will be our first focus is to get to market and then move beyond there. But I'm pleased to see that we've continued to make progress just as we did in the last quarter.

We continued to move in the right direction and look forward to seeing that continue.

Okay, great. Thank you.

Thanks. I’m curious within perm, are you seeing any wage inflation or rising compensation, any visibility into occupations or industries in which that may be occurring?

The wage inflation is not broad-based of course; it now depends on which countries you’re talking about. So I am going to take a very broad-based answer which is skills in high demand as you’d expect within engineering and then IT, maybe in some sales and marketing positions are seeing some wage inflation but lots of other skill sets are still under pressure and are not seeing much wage inflation.

So, on average, do I see massive wage inflation? No, I don’t.

But I know that underneath that average, there are some skill sets where some candidates will see some better ability to get better wages, but those are pretty specific skill sets.

If we were to narrow the discussion to the U.S. market, would that answer still hold?

Yes, I think that would still hold, but it is coming a little bit more noticeable in some skills in the manufacturing sector. So, it’s becoming a little bit more broad-based actually here in the U.S., not enough so that you can see it as you look at the Labor Department numbers yet, but I think we’re at a point where we could expect to see a little bit more broad-based wage inflation in the U.S.

and that of course would then translate into some of that as we look at the perm fees as well.

Thank you. I was wondering if you could give a little bit of additional color regarding the trends you’re seeing in Recruitment Process Outsourcing.

Well, Recruitment Process Outsourcing for us continues to be a great, great story as does all of our solutions business under ManpowerGroup Solutions. But it is a case of our clients wanting to build more agile organizations and really seeing us as a partner that they can work with that gives them a great deal of flexibility and agility, so they can ramp up with our recruiters if they have big projects for 2,000 people or they want to do a hiring process and implement hiring process across the world, they come to us.

And we provide the common process, the common approach and then we deliver the talent that they need to them, when they need it and at the price levels and the wage levels that they have determined is what they are looking for. So, it is really nice to see that that has and continues on a good growth trajectory.

What's also very interesting to see that some of these solutions are leapfrogging from more mature markets into emerging markets. Of course we have a tremendous footprint and we're able to leverage that footprint to deploy those solutions to clients that are looking for them which means we can take very early and strong positions in those emerging markets with our solutions business as a whole which is exciting to see in terms of a growth opportunity for those kinds of solutions there as well.

Thank you.

Thanks Tobey.

Hi guys, good morning. I guess a question, what's allowing markets like Spain and Italy where there is obviously reasonably weak GDP growth to show among the best growth rates in your portfolio?

Is it competitive dynamics in the country or you doing something different there that's allowed that? I know you had for a while some M&A in Spain, but it seems like it's more than that.

Well, I think that both in Spain and Italy the teams are doing a great job and we’re -- we’ve really seen some good improvement in our own performance. But I do think that part of this growth also comes from what I referred to in prepared remarks that in markets that are very difficult, there will be hiring, even in markets that maybe in a recession such as Italy, there will be hiring.

People retire and particularly in Europe when they say they retire maybe at 55 and maybe at 57, they actually do leave the workforce, they don’t stay on which means there is a demand for new people getting hired. And in those markets and under those circumstances, we are a preferred choice or one of the choices I should say and clearly in the case of Italy and Spain a preferred choice of flexibility for many companies.

And that’s why you’re seeing in the early stages of a recovery or even when there is no recovery that we can take a good share of whatever jobs growth is there. And then on top of that, our teams are performing well.

So we get a good share of that always applying our pricing discipline so that we make sure that we stay tuned to that and our strong execution that would be one of the reasons why you can see that which as you look ahead to many of the markets that have slower growth and that might be coming out of a recessionary period or just coming into more steady state of growth, that's where we see this opportunity, the secular opportunity of our services being used in a more consistent fashion to build strategic flexibility and agility for more companies going into the future.

Okay, great. And then the follow-up, obviously you’re incredibly well capitalized right now; I know you did some buyback this quarter.

But how are you thinking about the balance sheet, are there opportunities with the weakness that’s happening to attractive M&A opportunities, are you likely to do more buybacks, just any thoughts on the capital allocation?

Sure. So I think taking the first one, I think our view on the M&A front has not changed.

We continue to consider M&A to really accelerate our strategy around higher value solutions and professional businesses. So I think that remains intact.

So we're always looking for the right opportunities that we think would fit with our business with our culture and of course at the right price. So that has been consistent and hasn't changed.

And then just one last quick one, I realize it's early, but do you have any sense what would be a good assumption for tax rate in 2015? Is it more like the high 30s from the first half of this fiscal year or the mid-30s you reported this quarter or guiding to for next?

Thanks.

Yes. If you look at overall tax rate last year for the full year, it was about 37.5%.

I think this year it will come in a little bit over 37%. So, I think I would probably look at that 37% to 38% range on a full year basis.

It tend to be a little bit higher in the first part of the year just given some of the permanent items that impact the overall effective rate and how it comes through. So, you may see a little bit higher rate in the first quarter and particularly we’ve got the French CICE tax that comes through and that has a disproportionate impact when your earnings are lower so that will have more of an impact in the first quarter.

So, a little bit higher rate in the first quarter first half of the year and that will I expect to come down a little bit as we make our way through the year. But I think all-in for the year at this stage I would expect somewhere in that 37% to 38% range.

While there are not a lot of moving pieces, so it’s always a difficult one, but I think that’s a good start for right now.

Thank you.

Hi. Thank you for sneaking me in.

On pricing trends you’ve talked about remaining disciplined, is anybody getting more aggressive in any of the key market? And then just a quick follow-up question, are you seeing any market share shift in any key markets?

Thanks.

Well, good morning Sara. No, I think in terms of the pricing we see or you can always see some markets acting a little bit differently, but on the whole I would say that the pricing environment remains very competitive, but not this function in that you’d see some actions that would make no sense.

And then I think it remains competitive and our position is that we’ll be very disciplined in our pricing and carefully lay the opportunities because we know what happens when you lower pricing and margins go down, they tend not to come back up. So, we want to maintain that position.

I think if you look at some of the markets where we've done very well such as Spain and the UK, we are seeing some shifts in those positions; and of course also France has continued to be a place where we have taken some market share and the team is executing very well there. So, those would be in the markets that come to mind that would stick as these markets where we are seeing some shifts.

Thank you.

Thanks. Last question please?

Hi, good morning. Thanks for sneaking me in.

Quickly, going back to the stimulus measures being considered in France, can you comment around potential timing or how that factors in to your longer term operating outlook for revenues and margins?

Well, the stimulus that we refer to that is that exists today does not really moderate next years; it's projected to continue for ‘15. As I mentioned earlier, there are some subsidies that are being proposed and that will probably be enacted next year as of the first of January, whenever they decide to enact them that could give us some opportunities on the upside.

But this is also a country that introduces taxes and removes taxes. So, for now, we are cautious in terms of looking at the impact it would have, because we know as much as they are reductions and some further subsidies on the one hand, we also know that there are some additional ones that are coming in.

Our view right now would be that they’re still a net positive, but we’ll have to see when they actually get past and then get formalized and how they then get implemented that actually comes to past, but if it comes to past, it should come to past at the beginning of next year, but that’s -- this is always subject to change. So therefore until this past and we know the implementation date, we want to be somewhat cautious.

That’s helpful. And just a quick follow-up, in terms of other countries, are there other austerity measures that give you hope in terms of influencing your operating outlook?

I think the new labor legislation in Italy is a positive evolution for that labor market. So Renzi government is trying to make the labor market more competitive, the so called Jobs Act has been passed in the couple of instances there is still a lot of discussion that has to occur there.

And the main drivers of that labor market flexibility are -- first of all making it easier or feathering in new employees into organizations who gradually earned seniority as in labor protection over the first few years. So it’s easier to hire people and then letting them go within the first three years, which I think overall is a positive effect for the Italian labor market.

And more specifically to our industry, if it is implemented the way it’s purposed right now, which is still subject to change, there are some forms of flexibility, so called (inaudible) which was specific consultant contractor agreement, they would be abolished and that could give us a good opportunity to come in with our flexibility and take some of that market. But as I mentioned, this is -- the way it’s presented now, this could be a positive evolution for us the degree of which very much depends on the implementation and actually and frankly how it gets through the next discussions with union and the bill set that will need to be passing.

But I think if it goes through the way it’s looking now that could be a good upside in terms of our business in Italy.

Very helpful. Thank you.

Okay. Thank you very much.

That concludes our third quarter conference call. Have a good day.