Welcome to ManpowerGroup's second quarter earnings results conference call. At this time, all participants are in a listen-only mode until the Q&A session after today's conference. This call will be recorded. If you have any objections, please disconnect at this time. Now I will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. Sir, you may begin. Welcome to the second quarter conference call for 2021. Our Chief Financial Officer, Jack McGinnis, is on the call with me today. For your convenience, we have included our prepared remarks within the investor relations section of our website at manpowergroup.com. I will start by going through some of the highlights of the quarter. Jack will go through the second quarter results and guidance for the third quarter. I will share some concluding thoughts before we start our Q&A sessions. 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 might differ materially from those projected in the forward-looking statements. We assume no obligation to update or revise any forward-looking statements. Slide two of our earnings release presentation further identifies forward-looking statements made in this call and factors that may cause our actual results to differ materially, and information regarding reconciliation of non-GAAP measures. Thanks, Jack. Halfway through 2021, I am increasingly optimistic about the strength of the global recovery. As vaccine rollouts gain momentum and lockdown restrictions ease, we're seeing dramatic increases in hiring optimism. The pace of the recovery is strong, with hiring intent picking up much faster than after the previous economic downturn. Although the recent infection increases are concerning, we do not believe they will materially impact the positive recovery trajectory. I spent a considerable amount of time during the second quarter in Europe with our market leaders, teams, and clients. This included time with our French team at Viva Technology, one of the world's largest technology conferences in Paris, which I will talk about later as part of our innovation update. Together with other global leaders, I also spent time with President Macron and his government at the Choose France event. I believe that the future for France looks bright as the government continues on its path to make France more competitive, and our business is very well positioned to benefit as their economy grows. It is clear from my discussions with clients that demand is coming back very strongly for our services across all of our brands. This is evidenced in temporary and permanent placement activity, as well as demand for workforce solutions. Companies increasingly need our help in finding and reskilling talent to enable them to leverage the fast-improving economic recovery and accelerate their digital transformation to emerge stronger post-pandemic. Turning to our financial results, in the second quarter, revenue was $5.3 billion, up 31% year-over-year in constant currency. We grew revenue significantly in our key markets, and this resulted in better than expected financial performance. Our operating profit for the quarter was $117 million. Operating profit was up significantly as we anniversary the depth of the pandemic's financial impact. Operating profit margin was 3.2%, and after excluding special charges in the prior year, operating profit margin increased 260 basis points. Earnings per diluted share was $2.02. As we welcome a stronger economic recovery than anticipated, we also see our clients experiencing supply constraints, with much tighter labor markets in many countries and competition for talent heating up. Our most recent talent shortage survey of 42,000 employers in 43 countries found that 69% of employers globally, a 15-year high, are reporting difficulties hiring skilled workers across many industries. Although vaccinations are more widespread, workers are still dealing with issues created by the pandemic, such as healthcare and childcare concerns. Unemployment benefits and related programs are also having a lingering effect on worker supply. We expect the pandemic-related talent shortages to ease over the coming quarters, but over the medium to long term, the impact of digitization and other structural labor market changes are here to stay. This means hiring of skilled talent and supporting people to reskill and upskill for growth roles will be a driver of demand into the foreseeable future. It is a workers' market right now, and as a result, we're also beginning to see employers respond to what workers want. Wage increases in places, more flexibility, skills development, and a clear commitment to ESG, especially clarity around an organization's social and climate impact. I would now like to turn it over to Jack to take you through the financials and country performance details. Thanks, Jonas. Revenues in the second quarter came in at the high end of our constant currency guidance range. Gross profit margin came in well above our guidance range. Operating profit was $170 million, representing a significant increase from the prior year period, which was heavily impacted by the pandemic. Operating profit margin was 3.2%, which was 80 basis points above the midpoint of our guidance. Breaking our revenue trend down into a bit more detail, after adjusting for the positive impact of currency of about 10%, our constant currency revenue increased 31%. The impact of net dispositions and slightly more billing days was very minor, the organic days adjusted revenue increase was also 31%. Comparing to pre-pandemic revenues, our second quarter revenues were below 2019 levels by 4% on an organic days adjusted constant currency basis, representing a 1.5% improvement from the first quarter trend on the same basis. Turning to the EPS bridge on Slide four, earnings per share was $2.02, which significantly exceeded our guidance range. Walking from our guidance midpoint, our results included improved operational performance of $0.55, slightly higher than expected foreign currency exchange rates, which had a positive impact of $0.03, a slightly better than expected effective tax rate that added $0.02, and favorable other expenses, which added $0.02. Looking at our gross profit margin in detail, our gross margin came in at 16.3%. Staffing margin contributed 60 basis point increase, which included 20 basis points related to direct cost accrual adjustments in France, representing a 40 basis points underlying improvement in staffing margin. Permanent recruitment contributed a 50 basis point GP margin improvement as hiring activity was strong across our largest markets. Our Experis managed services business in Europe contributed 10 basis point margin improvement. These increases were partially offset by other business mix factors, primarily involving a lower mix of Right Management career transition business. Next, let's review our gross profit by business line. During the quarter, the Manpower brand comprised 64% of gross profit, our Experis professional business comprised 21%, and Talent Solutions comprised 15%. During the quarter, our Manpower brand reported an organic constant currency gross profit year-over-year growth of 51%. Our Manpower business experienced the biggest decline a year ago, and as a result, experienced the biggest increase this period in the recovery. Compared to pre-pandemic levels, this represented a decrease of 4% from the second quarter of 2019 on an organic constant currency basis. Gross profit in our Experis brand increased 23% year-over-year during the quarter on an organic constant currency basis. This represented a decrease of 1% from the second quarter of 2019 on an organic constant currency basis. Talent Solutions includes our global market leading RPO, MSP, and Right Management offerings. Organic gross profit increased 27% in constant currency year-over-year. This represented an increase of 12% from the second quarter of 2019 on an organic constant currency basis. Our RPO business posted double-digit GP growth during the quarter on significant growth in hiring activity. Our MSP business, which has performed well for several quarters, continued to experience double-digit growth in gross profit in the quarter. Our Right Management business continues to see a runoff in outplacement activity as the recovery strengthens and experienced a reduction in gross profit of about 9% year-over-year. Our SG&A expense in the quarter was $690 million and represented a 10% increase on a reported basis from the prior year. Excluding goodwill and other impairment charges in the prior year, SG&A was 17% higher on a constant currency basis. This compares to an increase in gross profit of 40% in constant currency and reflects balanced investment, allowing for strong gross profit flow through during the quarter. Operational costs increased by $96 million, and net dispositions represented a $1 million reduction. Currency changes reflected an increase of $42 million. SG&A expenses as a percentage of revenue represented 13.1% in the second quarter, representing ongoing improvement in our efficiency as revenue recovers. The Americas Segment comprised 20% of consolidated revenue. Revenue in the quarter was $1 billion, an increase of 23% in constant currency. OUP was $56 million. Excluding impairment costs in the prior year, OUP increased 116% in constant currency, and OUP margin increased 230 basis points to 5.4%. The U.S. is the largest country in the Americas Segment, comprising 60% of segment revenues. Revenue in the U.S. was $629 million, representing a 22% increase compared to the prior year. Adjusting for franchise acquisition in days, this represented a 21% increase. Excluding impairment charges in the prior year, OUP for our U.S. business increased 149% year-over-year to $38 million in the quarter. OUP margin was 6%. Within the U.S., the Manpower brand comprised 35% of gross profit during the quarter. Revenue for the Manpower brand in the U.S. increased 36% during the quarter. While the U.S. ManpowerGroup business continues to recover, we have noted softness in candidate supply during the second quarter and expect this to continue during the summer months. The Experis brand in the U.S. comprised 32% of gross profit in the quarter. Within Experis in the U.S., IT Skills comprise approximately 80% of revenues. Experis U.S. revenues grew 5% during the quarter. We are encouraged by the current trends in our U.S. Experis business and anticipate continued improvement into the third quarter. Talent Solutions in the U.S. contributed 33% of gross profit and experienced revenue growth of 14% in the quarter. This was driven by RPO, which experienced dramatic revenue growth as hiring programs continue to strengthen. The U.S. MSP business continued to perform well and experienced double-digit revenue growth in the quarter. Career transition activity continued to run off as the economy strengthens, which contributed to revenue reductions in Right Management in the U.S. In the third quarter, we expect ongoing underlying improvement in revenue growth for the U.S. in the range of 11%-15% year-over-year. Comparing estimated third quarter revenues to pre-crisis levels in constant currency, this represented a 2% decline compared to 2019 levels in the third quarter using the midpoint of our guidance. Our Mexico operation experienced revenue growth of 6% in constant currency in the quarter. On April 23rd, the Mexican government passed labor legislation that will prohibit certain types of temporary staffing not considered specialized services beginning on July 23rd. As such, companies operating in Mexico will be prohibited from using temporary staffing for functions that are already deemed to be in-house core competencies of their workforce. We have been working with our clients as the market absorbs this legislation and anticipate that we will have a reduction in revenues in our Mexico business beginning in the third quarter as clients navigate through the legislation and shift their workforce strategies accordingly. Although this will result in revenue reductions over the next few quarters, we believe the mix shift towards more specialized staffing will improve the margin profile of our Mexican business. We also believe there may be additional revenue opportunities over time as clients adjust their workforce strategies. Although it is difficult to forecast based on how quickly the legislation is being enacted, we are currently estimating a revenue decrease for the Mexican business in the third quarter in the range of -28% to -32% in constant currency. Mexico represented 2.8% of our 2020 revenues. Revenue in Canada increased 22% in days adjusted constant currency during the quarter. Revenue in the other countries within Americas increased 40% in constant currency. This was driven by significant constant currency revenue growth in Argentina, Colombia, Peru, and Chile. Southern Europe revenue comprised 46% of consolidated revenue in the quarter. Revenue in Southern Europe came in at $2.4 billion, growing 51% in constant currency. This reflects ongoing improvement driven by France and Italy. OUP equaled $115 million, and OUP margin was 4.8%. France revenue comprised 56% of the Southern Europe segment in the quarter and increased 67% in days adjusted constant currency. Compared to the same period in 2019, France revenues were down 12%. Although restrictions had an impact on the rate of revenue improvement during the quarter, the French business continued to perform well in a challenging environment. We expect ongoing improvement now that the majority of the restrictions have been lifted. OUP was $66 million in the quarter, and OUP margin was 4.9%. As previously referenced, direct cost accrual adjustments representing approximately $10 million benefited France's results. As we begin the third quarter, we are estimating a year-over-year constant currency increase in revenues for France in the range of 12%-16%. Comparing estimated 3rd quarter revenues to pre-crisis levels in constant currency, this represents a 5% decline compared to 2019 levels in the 3rd quarter using the midpoint of our guidance. Revenue in Italy equaled $469 million in the quarter, reflecting an increase of 57% in days adjusted constant currency. Through the 2nd quarter, revenues in Italy continued to exceed 2019 levels. OUP equaled $32 million, and OUP margin was 6.8%. We estimate that Italy will continue to perform very well in the 3rd quarter with year-over-year constant currency revenue growth in the range of 20%-24%. Revenue in Spain increased 12% in days adjusted constant currency from the prior year, and revenue in Switzerland increased 33% in days adjusted constant currency. Our Northern Europe segment comprised 22% of consolidated revenue in the quarter. Revenue increased 23% in constant currency to $1.2 billion, driven by all major markets. OUP represented $18 million, and OUP margin was 1.5%. Our largest market in the Northern Europe segment is the U.K., which represented 37% of segment revenues in the quarter. During the quarter, U.K. revenues grew 30% in days adjusted constant currency, which included significant new business. The U.K. continued to perform above 2019 levels in the second quarter. We expect continued strong growth in the 34%-38% constant currency range year-over-year in the third quarter. In Germany, revenues increased 9% in days adjusted constant currency in the second quarter. Although Germany continues to be a difficult market for our industry, we expect to see ongoing revenue improvement in Germany in the third quarter. In the Nordics, revenues grew 17% in days adjusted constant currency. Revenue in the Netherlands increased 9% in days adjusted constant currency. Belgium experienced days adjusted revenue growth of 24% in constant currency during the quarter. Revenue in other markets in Northern Europe grew 41% in constant currency in the quarter. This was driven by strong revenue growth in Poland, Russia, and Ireland. The Asia-Pacific Middle East segment comprises 12% of total company revenue. In the quarter, revenue grew 6% in constant currency to $620 million. OUP was $22 million, and OUP margin was 3.6%. Revenue in Japan grew 10% in days adjusted constant currency, which represents an improvement from the 6% growth rate in the first quarter. Our Japan business continues to lead the market in revenue growth, and we expect ongoing mid to high single-digit revenue growth in the third quarter. Revenues in Australia were down 11% in days adjusted constant currency. Revenue in other markets in Asia-Pacific Middle East grew 9% in constant currency. I'll now turn to cash flow and balance sheet. During the first six months of the year, free cash flow equaled $171 million compared to $577 million in the prior year quarter, reflecting significant accounts receivable declines in the prior year period. At quarter end, day sales outstanding decreased year-over-year by almost two days to 56 days. Capital expenditures represented $12 million during the quarter. During the second quarter, we purchased 432,000 shares of stock for $50 million. Our year-to-date purchases stand at 1.5 million shares of stock for $150 million. As of June 30th, we have 1.9 million shares remaining for repurchase under the six million share program approved in August of 2019. Our balance sheet was strong at quarter end with cash of $1.46 billion and total debt of $1.09 billion, resulting in a net cash position of $368 million. Our debt ratios at quarter end reflect total gross debt to trailing 12 months adjusted EBITDA of 1.79 and total debt to total capitalization at 31%. Our debt and credit facilities did not change in the quarter. In addition, our revolving credit facility for $600 million remained unused. Next, I'll review our outlook for the third quarter of 2021. Our guidance continues to assume no material additional lockdowns or business restrictions impacting our clients in any of our largest markets beyond those that exist today. On that basis, we are forecasting earnings per share for the third quarter to be in the range of $1.86-$1.94, which includes a favorable impact from foreign currency of $0.04 per share. Our constant currency revenue guidance growth range is between 12% and 16%. The midpoint of our constant currency guidance is 14%. A minor decrease in billing days in the third quarter and the slight impact of net dispositions impact the growth rate slightly, resulting in an outlook for organic days adjusted revenue growth of 15% at the midpoint. Adding the context of comparisons to pre-crisis activity levels, this would represent a third quarter organic constant currency decline in the range of 1%-3% compared to 2019 revenues. We expect our operating profit margin during the third quarter to be up 50 basis points at the midpoint compared to the prior year. This reflects another quarter of continued strong sequential underlying improvement. We estimate the effective tax rate in the third quarter will be 33%. Based on our improved earnings mix, we are now estimating the full year effective tax rate will approximate 33%, a 1% improvement from our previous estimate of 34% provided last quarter. As usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares will be 55.2 million. I will now turn it back to Jonas. Thanks, Jack. We continue to invest in technology and are making great progress on our acceleration plans to diversify, digitize, and innovate. Starting with diversification, we've been recognized again for award-winning RPO business within our Talent Solutions brand, scoring highly for our strong tech ecosystem, our consulting capabilities, data-driven solutions, and business intelligence. This is the 11th year we have been named a global leader in RPO in the Everest Group PEAK Matrix Assessment. We've also just been named MSP leader for the eighth consecutive year by Everest, recognizing us at the top in market impact. They also recognized our global leadership and tech as well as our workforce strategies, data-driven approach, and scope of solutions, including Right Management and our consulting capabilities. I congratulate our Talent Solutions colleagues for our leadership in the RPO and MSP space, which is an important component of our diversification strategy to grow higher margin value business. On digitization, we continue to rapidly execute our technology and web transformation. Our PowerSuite tech stack is helping us to grow our competitive advantage as we shift to cloud platforms, improving our customer experience while streamlining our candidate management. Our approach ensures we are always current, able to plug in with the best tech, and the capability to scale while turning our data into a key asset. We continue to move at speed. 19 market deployments have been completed and another 16 are in flight. We look forward to providing a further update on this at year-end. We're also making great progress in innovation. In June, we joined the biggest names in tech at the world-famous Viva Technology conference in Paris. As the conference's only HR partner since its launch five years ago, this is a great opportunity for us to showcase our newest innovation and work with more than 30 HR startups on how we're using AI, machine learning, and data-driven predictive performance tools, together with our human expertise, to upskill people at speed and scale and match people to jobs with better accuracy and speed than either humans or machines could do on their own. Building a better, brighter future of work requires bold, disruptive ideas and collaboration across business, government, and education. This is how we'll create sustainable skills, resilient communities, and greater prosperity for all. I'd now like to open the call for Q&A. Operator? Thank you. We will now begin the question and answer session. The first question came from the line of Andrew Steinerman of JPMorgan. Your line is now open. Good morning, Jonas. It's Andrew. I wanted to ask you if you felt like we were at the beginning of a new economic expansion cycle. I definitely took note of your U.S. comments where you've said demand for your labor feels stronger than expected in a typical economic recovery. Then I heard the caveat that the supply, at least through the summer months, seemed more constrained than a typical economic recovery. So my question is, for the U.S. and for Europe, do you feel like this is the beginning of an economic expansion where Temporary Help really benefits for a couple of years? Do you feel like we're going to kind of get back to where we were in 2019? Good morning, Andrew Steinerman. Yeah, no, it's a great question. Our view would be twofold. First of all, there are some anomalies in terms of how we got into the economic recession and how we're getting out of that economic recession. The speed of the downturn, the speed of the recovery, the supply shortages that we're seeing in the U.S., and frankly also in other countries for various reasons, as we spoke about in our prepared remarks. Our feeling is that all of this leads to the beginning of a new economic cycle. We are seeing, stepping back from some of these anomalies, really the signs of what that would look like. To your point around the increased demand for strategic and operational flexibility, we truly believe that our penetration rates will continue to improve and will surpass prior peak levels from the previous cycle. If you ever needed a reminder of the benefit of flexibility, both in terms of increasing the need for workforce, adjusting to an unexpected event, but longer term, adjusting to structural changes with skills changing as companies want to make sure they have the skill sets in the workforce to take advantage of technological progress, and other structural drivers. We really feel that this is going to be a question of long-term demand for our services and solutions over this new economic cycle. Right. Just make a comment about supply. Do you feel like supply will improve in the U.S. as we get into the fall? Well, from what we can see today, workers clearly still have health concerns, they have childcare concerns, and we have a very significant stimulus package and unemployment benefits that for the most part, at least in terms of the additional unemployment benefits, will terminate around the 6th of September for a lot of states. Some of them already have ended those additional benefits. We feel that this has been a factor in the supply of the workforce back into the labor markets. Of course, we're also hopeful that vaccination rates will continue to improve. Those two in combination, we believe, will increase the supply of workers into the labor market so that we can see this normalize over the coming quarters. Well said. Thanks for your comments. Appreciate it. Thanks, Andrew. Thank you. Our next question is from the line of Jeff Silber of BMO Capital Markets. Your line is now open. Thank you so much. Along the lines of the supply constraints, is there anything you're doing on your own proactively to try to mitigate that might have been different now than it has been in the past? We are really adjusting to the supply constraints that we see by offering upskilling and reskilling opportunities for our existing associates. That's under the program called MyPath, where we have the ability to take our existing associates on assignment, retain them by offering them progression in terms of the skills and the job opportunities that we have. Of course, all kinds of other measures that we can, whether it's referral bonuses, assignment completion bonuses, all of those in collaboration with our clients, are clearly measures that we're taking to attract and retain the associates that we have on assignment. I would say this is something that we're seeing not only in the U.S., but it's also to a lesser degree evident in Europe. As I mentioned in my earlier remarks. We really see this as a temporary effect and an anomaly following the pandemic, and we expect it to normalize over the coming quarters and really expect to see some changes when, for the U.S., the additional unemployment benefits are running out in September. We would expect the situation to improve because we feel that there is ample supply, but it's being held back for various reasons, and those reasons will dissipate over time. Okay, fair enough. In looking at your operating margin guidance for the third quarter, it looks like the revenues compared to 3Q 2019 should be higher, yet your operating margin guidance of 3%-3.2% is lower than 3Q 2019's 3.6%. Is there something structurally going on now, or are you just maybe being a little bit more conservative? Jeff, this is Jack. No, I'd be happy to take that. We did say at the end when we gave the third quarter guide, when you compare to 2019, we're still below. We were down, I think the range we provided was down -1% to -3%, just to clarify, that was still below 2019. At the midpoint, that's about 2% below 2019 levels. I think if you think about our biggest businesses, France we mentioned was still below by 12% in the second quarter. That's going to improve in the third quarter, but they'll still be below by 5% from 2019 levels. That's the biggest business we have, 25% of our revenues, and that's having an impact. The good news is the operating margin is definitely improving on an underlying basis. As I look at the Q2, we did talk about the accrual adjustment we had in France that added about 20 basis points. If you take that out, our 3.2 is about 3.0, if you look at the guidance into the Q3, that improves to the 3.1%. We are seeing sequential underlying improvement. In the U.S., we mentioned is still below 2019, we think with the forecast for the Q3, we're going to continue to narrow that gap as well. Those are the top two businesses. The good news is we are making progress in narrowing that gap. On an underlying basis, if you look back Q1, we were down from 2019 about 5.5%. Q2, as we mentioned, we were down about 4%, we saw that ongoing improvement. We're projecting another 2% improvement to minus 2% in the third quarter versus 2019. Quarter by quarter, we continue to narrow that gap, and you should expect that our operating profit margin will continue to improve with that same trend. Okay. I must have been looking at US dollars only. Thank you for the clarification. Appreciate it. Sure. Thank you. The next question is from the line of Hamzah Mazari of Jefferies. Your line is now open. Hi. Thank you. This is Mario Cortellacci filling in for Hamzah Mazari. Could you just comment on how much of your margin target of the 4.5%-5% is based on a further upside from leveraging gross margins? I guess specifically, how much more room is there to increase exposure to midsize customers versus enterprises or to drive that higher margin solution, and professional staffing mix? Just wondering where you are in that journey. Sure. I'd be happy to talk about that. Maybe first, I'll just say we are definitely still committed to the 4.5%-5% EBITDA margin target more than ever. I think we're very encouraged by the progress we've been making in this recovery quarter-over-quarter in terms of operating profit margin. What I'd say is how we're going to get there, to your question is certainly GP margin is going to be part of the equation. I think what we saw this quarter was good GP margin development. Perm came back very, very strongly this quarter. You can see the impact that that had in our GP margins. I would say the permanent hiring market is very, very strong in our largest markets right now. We talked about Italy, we talked about the U.S. The U.K. is coming back and narrowing that gap to pre-pandemic levels. GP margin mix is going to be part of the equation. You mentioned Talent Solutions and Experis. That is definitely part of our roadmap to improve the contribution from those businesses. This quarter was a great example of the opportunity there. Both Talent Solutions and Experis growing very strongly. That trend, we expect that trend to continue into the third quarter as well. Improving the mix, the contribution from those businesses going forward will definitely help. To your point on convenience, so we have the large enterprise, which, definitely from a mix shift was part of what we saw in 2020 became a bigger part. The convenience market, which is higher margin, is coming back, and we saw that start to happen in the U.S. The U.S. had very good GP margin improvement during the quarter. We expect conversions to continue to come back. I think there's more to go, in that regard, and that's going to help us be an additional tailwind in improving our staffing margin going forward as well. I think all of those factors are going to be initiatives that are going to help us increase GP margin. Along the same time, we've talked to a great extent about the technology investments we're making. Those technology investments are increasing our recruiter productivity. That's going to help our GP margin as well, and that's going to help our overall SG&A efficiency. That, along with our other cost transformation initiatives that we've talked about in the past in terms of our back office initiatives and other items, all of those are going to be part of the mix to continue to improve our operating profit margin progressively going forward. Great, thank you. My follow-up is on, excuse me, the bill pay rates. Could you walk us through maybe what you're seeing right now on those bill pay rates across your portfolio? Maybe you can talk us through how you're thinking about labor inflation and the impact on your business, and then maybe just as supply comes back into the market, how that labor inflation and maybe the timing of what you're expecting on that normalizing? Well, as a starting point, Mario, wage inflation is generally good for our business as we're able to increase our bill rates in line with at least that wage inflation. We are seeing some good pay bill gap expansion in a number of markets, notably the U.S. and Japan. We are seeing, especially for a number of Manpower skill sets, some very strong wage inflation right now. As I'm sure you've also seen, a lot of the efforts from employers to attract and retain their employees, also come not only with wage increases, but also one-time bonuses, be they referral, retention, and those kinds that are of a one-time nature so that wage inflation doesn't get out of hand. Employers are very well-versed on what it is that they can pay to be competitive in the market. Whilst we are seeing a spike a little bit in some of those wages, in some of the skill sets over time, we think that wage inflation will moderate and more accurately reflect then also of an improved supply into the labor market as the lingering effects of the pandemic and the stimulus initiatives start to wear off and you get a little bit more of a normalized labor market dynamic. We are seeing slightly higher wage inflation, in particular for some Manpower skills. We feel that this will get adjusted over time to more normalized level there as well. Great. Thank you. Thank you. The next question is from the line of Mark Marcon of Baird. Your line is now open. Good morning, Jonas and Jack. I've got a few different questions. One, Jonas, you made some fairly positive comments with regards to France from a longer-term perspective. I'm wondering if you can just discuss some of the things that are giving you reason for optimism with regards to just France becoming more competitive in general. Well, thanks, Mark. Yeah, no, I think we've been very positive on France for a while. If you recall the structural reforms that France has implemented as it relates to our industry from a labor market perspective, that have had a positive effect. The overriding ambition of France and the French administration is to make France more competitive in a global economy. That means lowering tax rates, making sure their labor costs are in line with their closest competitors in Europe and globally, and directing investments into areas that they believe are fast-growing parts of the economy. Having had the opportunity to spend some time with President Macron and his government, along with other global leaders, a few weeks ago in France, it is a program that they also intend to promote going forward. That, we believe, is a very positive sign. We think they have further opportunities, a number of areas to address labor markets, making them even more competitive, as well as further investments in infrastructure and specific sectors. All of this taken together gives us a great deal of optimism as it relates to France's role, and the opportunities that we will have as ManpowerGroup in France to see our business continue to grow. Great. Then can you talk a little bit about what you're seeing in the U.K. on a monthly or weekly basis? Obviously, they're further along in terms of the new wave with regards to Delta and the impact there in terms of the number of cases. How's that translating to actual demand on the street? What does that portend for the rest of the world? Yeah, Mark Marcon, this is Jack McGinnis. I'd be happy to talk to that. I would say the U.K. has actually been performing very well, despite the issues with the Delta variant that we've seen start to increase more recently. If I look at that trend, I think the year-over-year monthly trends aren't overly helpful because of the prior year was really the depth of the pandemic. What I would say, when you compare to 2019 levels, the U.K. has actually been above 2019 levels, in both the first quarter and the second quarter, and we expect that to continue. The U.K. has actually won some significant new business as well, which is great. I would say it hasn't really been a big factor in our business in the U.K. The outlook continues to look very strong in terms of demand from our customers in the U.K. I did mention perm, and the U.K. made some good progress in perm recruitment in the second quarter as well. Still not quite back to pre-pandemic, but definitely narrowing the gap quite significantly. I'd say on an overall basis, the U.K. business has actually been performing very well despite the recent increases in the Delta variant. Great. Last question is just with regards to gross margins, really nice improvement here in the second quarter. It's been a few years since we've achieved this level, and I know we had the 20 basis point improvement from the accruals in France in terms of the reversal. When I take a look at the performance and then I take a look at the midpoint of the guidance for the third quarter, is that conservatism or is it perhaps mix in terms of maybe places like France becoming a little bit bigger of a part of the mix? How should we think about the guidance for gross margins for the third quarter relative to the second quarter? Yeah. No. Good question, Mark. What I would say, it's generally in line with what we're seeing on an underlying basis currently. To your point, 16.3% in Q2. Take out the accrual adjustment that we called out for 20 basis points. On an underlying basis, 16.1%, we're guiding to 16.0% next quarter. That 10 basis points is largely a bit of a mix. Remember, in the third quarter, we do have the holiday impact in some of our European countries that put a little pressure on our bench as a result of that. It's not uncommon to see a little bit of pressure from the second quarter to the third quarter in those markets. On an overall basis, I'd say, generally in line and still, we expect good underlying positive momentum on staffing margin going into the next quarter. Great. Thank you. Thank you. The next question is from the line of Kevin McVeigh of Credit Suisse. Your line is now open. Great. Thanks. Hey, I guess in regard to where we are in the cycle, I guess, Jack or Jonas, obviously you've done a much better job with margins this cycle. Is there any way how we should think about just longer term, the impact on margins as we transition through the next up cycle? You were able to hold on to a lot more of the margin in this downturn as opposed to prior cycles. How should we think about that, as we're working our way through this upturn? Thanks, Kevin. I'd say this is a bit related to the previous discussion I think we've had in terms of our margin target, and to your point, and a bit related to our views on the cycle, in terms of the economic recovery and the opportunity going forward. I would say, we're very pleased by the margin progression that we've seen over the last few quarters. I think if you think about the opportunity to continue that, I think, perm, very strong this quarter. We actually are back to 2019 levels in perm, organically, which is great to see. Very strong. The perm contribution to margin is significant, and that is going to be an opportunity for us as we go forward. We've been investing in that. We've been investing in perm consultants in some of our key markets, and we're starting to see really good results as a result of that investment. As we look forward, I would say our GP margin initiatives, combined with the technology agenda that we've been implementing, and as Jonas mentioned, we're making very good progress on the technology agenda. We've been implementing at speed, on plan, and those are all proceeding very well. When we get to the end of this year, we'll really be down to just a handful of markets that we'll be implementing a new front office system, and we'll be very well positioned to continue to see the improvement from that recruiter efficiency going forward. I would say, we're very optimistic about the opportunity to march to that EBITDA margin target and one step at a time. Once we get to that, we'll talk more about what's next. I think, as Jonas said earlier, we look at this economic recovery as having some real legs and some real momentum, particularly in the manufacturing sector, that we've talked a lot about that really impacted our business quite significantly in the second half of 2018 and 2019, and we think that that's going to have a good run going forward as well. I think all of those factors give us the confidence that we have a very good opportunity to improve our operating profit margin over the medium term here. That helps. Jack, any thought as to kind of length of assignments, just given the tightness of supplier people keeping candidates on assignment a little bit longer? Or just anything you'd call out in terms of client conversations around tone, just as we're thinking about near-term trends? I'd say, Kevin, that the clients and us are very focused on keeping our associates on assignment. As you can imagine, it's a very tight labor market, the competition for talent is high. We probably see more churn than we would normally do. On the other hand, we've been able to manage it well, and this is our business, and we know how to recruit and attract and retain people. I think it depends, of course, on where you are in the world. Overall, it is a tight supply market from a workforce perspective, we are managing to mitigate those impacts reasonably well, I would say. Super. Thank you. Thank you. The next question is from the line of Tobey Sommer of Truist Securities. Your line is now open. Hey, good morning. This is Jasper Bibb for Tobey Sommer. I wanted to follow up on margin guidance and where the company is in the process of bringing back SG&A. Should we be looking for more SG&A in the fourth quarter, or is 3Q guidance pretty close to what the cost base can look like there going forward? Jasper, this is Jack. I would say what you've seen us do during the pandemic, we took costs down very sharply to manage our recovery ratio, and we did that very well. Now in the recovery, we've been investing in that growth. When I look back at the first quarter, our FTEs were still down year-over-year about 3%. On average in the second quarter, when we compare the second quarter to the first quarter, we're up about 3% in FTEs. I would expect as demand continues to improve and we continue to recover, you should expect that we will be continuing to invest in that. I think the key will be that we're managing that very carefully. During the pandemic, we talked a lot about the recovery ratio. Now it's all about GP flow through. That incremental GP year-over-year, we're seeing a good amount of that fall down to the bottom line. We will continue to invest, but we'll do that carefully to ensure that we continue to get good GP flow through going forward. You should expect that we will continue to take costs up with that increase in GP dollars coming through, but we'll do that carefully to ensure there's still good flow through down to operating profit dollars. Thanks. Then with respect to Talent Solutions and what's driving your new client wins there, beyond like a cyclical rebound, do you think more clients are looking to adopt solutions like RPO or MSP as they rethink their cost structures, talent management programs, et cetera, post-COVID? Talking to our clients, Jasper, they are clearly indicating that yes, right now they have a significant need, but the sudden onset of the pandemic also reminded them of the need to have flexibility, both ramping down and ramping up. We really see this as another impetus for market penetration in terms of human capital outsourcing solutions such as our RPO offerings and our MSP offerings under the Talent Solutions brand. We've been very encouraged by the progress and based on those offerings, and Talent Solutions as a whole is now above 2019 levels because of the strong resurgence of RPO and the continued very strong progress of our MSP offerings. We think that this is certainly benefiting from the cyclical rebound, but in terms of the new client wins we had and that we talked about in prior quarters that were of scale during the pandemic and our current pipeline, we feel very good about the progress that we've made and the outlook for Talent Solutions going forward as well. Got it. Nice quarter, guys. Thanks for taking the question. Thank you. The next question is from the line of Gary Bisbee of Bank of America Securities. Your line is now open. Hey, guys. Good morning. The first question, it's interesting that Italy, and I think you just said the U.K., are ahead of 2019. A few markets, it looks like in other Americas, clearly ahead, but yet a lot of markets are well behind. Is that just market factors, or in sort of what are the key variables determining how quickly the business has come back versus 2019? What are the gating factors, if any, to some of those trending more like the ones that are already ahead? Well, the starting point is probably the depth and the degree to which they were hit during the pandemic. As Jack noted earlier, France is making its way back to 2019 levels, but also their hit and how deep they went is, from our industry perspective, the steepest decline of all countries globally. The starting point would be how deep and how hard was the market hit, and after that, you have specific market conditions. What are the strengths of various sectors compared to others? What was the severity of the lockdowns and how much was business impacted and how quickly were those lockdowns released? Finally, what is the confidence and the speed around the vaccination rates? Those are the things that combined, make certain markets recover a little bit quicker. I would say the most important aspect of this is how deep did the market drop initially, and then how quickly are they able to make their way back? That would sort of be, on average, the reason why you see some disparity. Having said all of that, as we noted in our prepared remarks, the recovery is broad-based across markets and industries, manufacturing and services. That is a common factor across all of the markets where we operate, and the speed of the recovery against especially 2019 depends a bit on those factors I mentioned. Okay, great. There's been a lot of press reports around workers shifting from some industries to others. For example, maybe people not wanting to go back into hospitality jobs, but having moved to other industries where there's been more hiring during the pandemic. Are you seeing that in countries outside of the U.S., where I think it's been discussed a lot? What are the implications, if any, for your business from sort of shifts in the type of work that workers want to perform? First of all, I'd say that the labor market dynamics in the U.S. are probably a little bit unique. It is a highly dynamic, very open labor market, where we have a significant level of churn, even in a normal year, and certainly post-pandemic or within still the ending parts, hopefully of the pandemic. It's still a labor market that's impacted with some anomalies related to that pandemic. The fact that people are moving between industries, although it may be at somewhat of an accelerated pace right now, really is a hallmark of the U.S. labor market as a whole, and to a much lesser degree, this is a phenomena that we see in other markets. Overall, I think our task, and what we are very good at, is finding skilled workers for specific industries and meeting the needs of those workers as matching those with the demand from the employers. We have as one of our hallmarks to try and understand what skill sets are applicable not only to one specific industry, but to multiple industries, so that we can provide opportunities to workers. At this point, what is impacting our ability, or rather, what is impacting us in the U.S., as we mentioned in our prepared remarks, has to do with supply, not the churn and the increased movement between industries. That's really a factor that we are looking at. As I mentioned earlier, we expect that to dissipate over the coming quarters. This movement between industries is, frankly, quite logical. If a certain industry is heavily impacted and the outlook is uncertain, it is understandable that workers will do everything they can to try and find gainful employment in another industry where their skill sets are applicable. That's what you're seeing happening now. I don't think this is going to impair the ability for the hospitality industry over the long term to attract workers. Certainly, they will adjust their hiring practices and offer better pay and conditions as they need to compete in the market for talent. Once they've done that, they will start to normalize that flow as the remaining and lingering effects of the pandemic start to decrease. I would just add, Gary, we did include our industry vertical update as an appendix to our earnings slides. As we show, we don't have significant exposure to the hospitality industry. If that trend does persist that you mentioned, that could be an opportunity from a worker supply side into some of the sectors that we are strong in. Thank you. That's helpful. Thank you. The next question is from the line of Manav Patnaik of Barclays. Please go ahead with your question. Thank you. I just had one quick question for you guys, and that is, obviously, you said your guidance doesn't assume any future lockdowns. It sounds like maybe the Delta variant will cause some of that. I was just curious, since we've been through this for a year and a half or so, how are you guys preparing for a potential lockdown? Maybe what are your clients saying? Just trying to gauge what the impact could be. I presume it would be less than what we saw last year. Just trying to see how you guys are thinking through that. Well, we've navigated through the existing lockdowns for the better part of the second quarter, and they then subsequently eased during June. In some places now, some countries are implementing additional lockdowns. What we saw in the second quarter, and frankly, for a large part of the pandemic, excluding the initial lockdowns, governments really focused on reducing social interactions to the greatest degree possible while allowing work to continue to the greatest degree possible. We think that there will be exactly the same objective going forward. I think the latest lockdowns that you're seeing, for instance, occurring in France, are making a clear distinction between those that are vaccinated in terms of how the lockdowns affect them, which is not very much, if at all, and those that are unvaccinated, which are the ones that unfortunately are the most impacted by the surge in Delta variants. That is certainly true in Europe. As far as other countries and other parts of the world with lower vaccination rates, Latin America is making its way through this pandemic and managing to keep their economic growth going and improving. Asia Pac is now seeing some resurgence, and of course, their strategy has been to isolate and close their countries. For the most part, when we look at Japan, has had maybe three or four state of emergencies. They have focused on maintaining their ability to go to work and reduce the social interaction. In summary, we would expect that governments would apply exactly the same principle of reducing social interactions in the areas where infections occur and focus on incentivizing increased vaccination rates. That is why, at this point, we don't expect any material impact of lockdowns. Clearly, as we mentioned, that can change. If governments navigate this as they have in the past, during more difficult times with no vaccination available, we expect this to be managed in exactly the same way, and therefore, at this point, not expecting material impact. All right. Thank you. Thank you. Our final question came from the line of George Tong of Goldman Sachs. Hi. Thanks. Good morning. I just wanted to follow up on that last question on the impact of lockdowns. Your guidance assumes no material additional lockdowns or business restrictions beyond those that exist today. Can you describe which of your markets are seeing the most restrictions currently? Obviously, things are in flux right now. You talked about the U.K. and France and parts of Asia. I guess, even though your guidance assumes no material impact from the Delta variant, how would you frame the downside risks in terms of potential impact? George, as I mentioned in my previous response, clearly, first of all, this can change. If the past is a guide to what we can think of what governments would do, they will want to continue to keep the economic growth engine going and minimize the impact of any restrictions to the greatest degree possible, certainly to economic growth and to their populations as well. What's different compared to the prior lockdowns, and of course, all of the progress that you've seen over the quarters here, over the last four quarters, really has been under quite severe lockdowns that have progressively been eased, but really majorly only been eased over the last quarter or so, and frankly, in the last part of the second quarter in many countries. We've shown an ability to adapt to those restrictions and still be able to serve our customers and meet the increased demand for flexibility and strategic and operational workforce additions on a temporary and on a permanent basis. It's very hard to predict, of course, what this resurgence would do, but we think the stance of governments will be very similar, if not even more focused on trying to keep the engine going, trying to motivate their people to get vaccinated. That in combination is why we are, at this point, believing that there won't be a major impact. As I mentioned, this can change. Based on what we are seeing today, that appears to be the case. Got it. Then lastly, can you discuss the competitive environment and if you've seen any changes in market shares in your key geographies as economies begin to recover? Really seeing a traditional dynamic in terms of a recovery, albeit maybe somewhat different in terms of the speed of certain of our services and solutions. As Jack mentioned, our permanent placement activity is actually above 2019, Normally permanent placement and permanent recruitment is a bit of a lagging offering in a traditional recovery. In this case, it's actually been synced with, and in some cases even ahead of the temporary staffing recovery. We think the dynamics overall are very similar to traditional recovery, maybe on somewhat faster speed. In terms of the market, it remains very competitive but also rational and there's really nothing I'd call out that is different from what we've talked about in prior quarters. Got it. Very helpful. Thank you. Thank you. That brings us to the end of our Q2 earnings call. We look forward to speaking with you again on our third quarter earnings call, and very importantly for today, go Bucks. Thanks, everyone. Have a great rest of the week. Thank you. That concludes today's conference. Thank you all for participating. You may now disconnect.