Welcome to ManpowerGroup Q4 2023 Earnings Call. You will be put into listen-only mode until the question-and-answer time begins. This call is being recorded. If you care to drop off now, please do so. I would like now to turn the conference over to ManpowerGroup Chairman and CEO, Mr. Jonas Prising. Sir, you may begin. Welcome, and thank you for joining us for our Q4 2023 Conference C all. Our Chief Financial Officer, Jack McGinnis, is 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 and the Full Year, and Jack will go through the Q4 results and guidance for the Q1 of 2024. I will then share some concluding thoughts before we start our Q&A session. Jack will now cover the safe harbor language. Good morning, everyone. This conference call includes forward-looking statements, including statements concerning economic and geopolitical uncertainty, 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. Thank you, Jack. Two weeks ago, I attended the World Economic Forum Annual Meeting in Davos, Switzerland. The themes from the meeting centered on the uncertain outlook for 2024, caused by increasing geopolitical tensions and slowing economic growth in many parts of the world. At the same time, AI was a major discussion topic, with many believing we are entering a new era of accelerated digital transformation, with developments in AI holding the promise of accelerating productivity and growth. Most organizations are just at the beginning of their AI journey. They are committed to responsible adoption of AI throughout their enterprise, yet they know they need data quality and infrastructure, along with a skilled workforce, to truly maximize its impact. Our own recent data finds 58% of employers believe AI will have a positive impact on their organization's headcount in the next two years, and more than 70% cite training staff, finding qualified talent, and redefining roles as the top challenges to fully leverage the technology. We are committed to being a partner of choice for companies and people to navigate the significant transformation, where the digital transition will require a skills transition at speed and scale. Looking at our real-time data and research, and following discussions with our teams around the world during our annual strategic roadshows, it is clear the outlook we have been predicting and tracking for the last few quarters continues to play out. Employers, particularly in large enterprise organizations, remain cautious, pausing on non-critical investments and postponing projects until more clarity on the outlook emerges. Our industry is always the first to feel the impact of economic softening, and this cycle is no different, as we have seen employers reduce their temporary and permanent hiring while lowering their project spend appetite. This is most noticeable in Europe and in North America. We haven't seen any inflection point yet of improving demand for our services and solutions in those regions. It is important to note that at the same time, we have seen signs of stabilization of activity at lower levels in certain markets and offerings. We have taken significant cost reduction actions to adjust our resources to the current environment in many markets, while maintaining the talent we need to take advantage of the market turnaround when it happens. We are confident in our ability to navigate this environment and ensure that we are well-positioned for profitable growth when demand improves. Turning to our financial results. In the Q4, revenue was $4.6 billion, down 5% year-over-year in constant currency. Our reported EBITDA for the quarter was $24 million. Adjusting for restructuring costs, non-cash impairment charges, and other special items, which we'll cover in the financial review, EBITDA was $116 million, representing a decrease of 30% in constant currency year-over-year. Reported EBITDA margin was 0.5%, and adjusted EBITDA margin was 2.5%. Losses per diluted share was $1.73 on a reported basis, while earnings per diluted share was $1.45 on an adjusted basis. Adjusted earnings per share decreased 30% year-over-year in constant currency. In the Q4, staffing gross profit margins remained resilient in a challenging environment. From a geographic perspective, we saw the continuation of a challenging environment in North America and Europe during the quarter, while demand for our services in LATAM and APME remained solid. Turning to the Full Year results for a few moments. Reported earnings per share for the year was $1.76. As adjusted, earnings per share was $6.04 and represented a constant currency decrease of 28%. Revenues for the year decreased 4% in constant currency to $18.9 billion, and reported EBITDA was $346 million. As adjusted, EBITDA was $497 million, which represented a 27% constant currency decrease year-over-year. Although no one can predict when conditions will improve, be certain that a skilled and agile workforce remains at the heart of an organization's ability to adapt and grow as they execute their business strategy. Companies also remember the difficulties they experienced trying to hire post-pandemic, and they know they are not immune to demographic challenges presented by aging populations and persistent talent shortages. We are focused on helping them overcome these obstacles by finding the best talent in the market today and into the future. I will now turn it over to Jack to take you through the results in more detail. Thanks, Jonas. Going back to the quarterly results on slide three, revenues in the Q4 came in slightly above the midpoint of our constant currency guidance range. Gross profit margin came in at the high end of our guidance range. As adjusted, EBITDA was $116 million, representing a 30% decrease in constant currency compared to the prior year period. As adjusted, EBITDA margin was 2.5% and came in at the high end of our guidance range, representing 100 basis points of decline year-over-year. During the quarter, year-over-year foreign currency movements had an impact on our results. Foreign currency translation drove a 1% favorable impact to the US dollar reported revenue trend compared to the constant currency decrease of 5%. Organic days adjusted constant currency revenue also decreased 5% in the quarter. Turning to the EPS bridge on slide five, reported losses per share was $1.73, which included $3.18 related to restructuring costs, a non-cash goodwill impairment charge, and other items. Excluding these costs, adjusted EPS was $1.45. Walking from our guidance midpoint, our results included a stronger operational performance of $0.10, slightly lower weighted average shares due to share repurchases in the quarter, which had a positive impact of $0.01. A foreign currency impact that was $0.01 better than our guidance due to the strengthening of the euro and the pound during the quarter, and other expenses had a positive $0.11 impact. Next, let's review our revenue by business line. Year-over-year, on an organic constant currency basis, the Manpower brand declined by 3% in the quarter. The Experis brand declined by 11%, and the Talent Solutions brand had a revenue decline of 14%. Within Talent Solutions, our RPO business experienced a year-over-year revenue decline in line with the trend from the Q3. Our MSP business also experienced revenue declines in the quarter as we continue to reduce certain lower margin activity, while Right Management experienced year-over-year revenue growth on higher outplacement volumes in the quarter. Looking at our gross profit margin in detail, our gross margin came in at 17.5% for the quarter. Staffing margin contributed a 10 basis point reduction due to mix shifts as margins remained strong. Permanent recruitment, including Talent Solutions RPO, contributed a 60 basis point GP margin reduction, as permanent hiring activity in the Q4 remained stable at lower levels, consistent with the Q3 trends. Right Management career transition within Talent Solutions contributed 20 basis points of improvement as outplacement activity continued to be solid in the Q4. Other items resulted in 20 basis point margin decrease. Moving on to our gross profit by business line. During the quarter, the Manpower brand comprised 60% of gross profit. Our Experis professional business comprised 24%, and Talent Solutions comprised 16%. During the quarter, our consolidated gross profit decreased by 8% on an organic constant currency basis year-over-year, representing a slight improvement from the 9% decline in the Q3. Our Manpower brand reported an organic gross profit decrease of 4% in constant currency year-over-year, representing a slight improvement from the 5% decline in the Q3. Gross profit in our Experis brand decreased 15% in organic constant currency year-over-year, representing a slight additional decline from the 14% decrease in the Q3, driven by Continental Europe. Gross profit in Talent Solutions decreased 14% in organic constant currency year-over-year, representing a slight improvement from the 15% decline in the Q3. The year-over-year decreases in RPO and MSP were partially offset by Right Management and increased outplacement activity. Reported SG&A expense in the quarter was $850 million. Excluding restructuring costs, goodwill impairment, and other items, SG&A was 4% lower year-over-year on a constant currency basis, representing a sequential improvement from the 2% decline in the Q3 on the same basis. This reflects additional cost actions, resulting in further organic headcount reduction of 3% in the quarter and a year-over-year organic reduction at year-end of 9%. At the same time, our corporate expense reflects our progression of the next phase of our digitization strategy, focused on back-office functions. These strategic investments are expected to drive medium and long-term productivity and efficiency enhancements across our technology and finance functions worldwide, through shared service centers leveraging leading global technology platforms. The underlying SG&A decreases largely consisted of operational costs of $24 million, offset by currency changes of $11 million. Adjusted SG&A expenses as a percentage of revenue, represented 15.2% in constant currency in the Q4. Restructuring costs and other items totaled $92 million, with the largest component related to the wind down of our Proservia business in Germany. The goodwill impairment relates to our Netherlands business, which experienced further market declines in recent quarters. The Americas segment comprised 23% of consolidated revenue. Revenue in the quarter was $1.1 billion, representing a decrease of 4% compared to the prior year period on a constant currency basis. As adjusted, OUP was $40 million, and OUP margin was 3.7%. The US is the largest country in the Americas segment, comprising 65% of segment revenues. Revenue in the US was $702 million during the quarter, representing a 14% days adjusted decrease compared to the prior year. As adjusted to exclude restructuring costs, OUP for our US business was $21 million in the quarter, representing a decrease of 54%. As adjusted, OUP margin was 3%. Within the U.S., the Manpower brand comprised 25% of gross profit during the quarter. Revenue for the Manpower brand in the U.S. decreased 16% on a days adjusted basis during the quarter, which was a stable trend from the 16% decrease in the Q3 on the same basis. The Experis brand in the U.S. comprised 45% of gross profit in the quarter. Within Experis in the U.S., IT Skills comprised approximately 90% of revenues. On a days adjusted basis, Experis U.S. revenue decreased 13% during the quarter, a slight improvement from the 15% decline on the same basis in the Q3. Talent Solutions in the U.S. contributed 30% of gross profit and experienced revenue decline of 14% in the quarter. This was an improvement from the 18% decline in the Q3. Our RPO revenue declines in the U.S. reflect ongoing lower levels of permanent hiring programs in the Q4. The U.S. MSP business saw revenue declines as we continued to reduce some lower margin activity, while outplacement activity within our Right Management business drove strong revenue increases. In the U.S., RPO and MSP experienced an improved sequential rate of decline. Right Management in the U.S. experienced a stable level of revenues sequentially from the Q3. In the Q1 of 2024, we expect a smaller year-over-year revenue decline for our U.S. business overall as compared to the Q4 decline in the U.S. as we begin to anniversary the more significant pullback in demand in the year ago period. Southern Europe revenue comprised 46% of consolidated revenue in the quarter. Revenue in Southern Europe was $2.1 billion, representing a 4% decrease in constant currency. As adjusted, OUP for our Southern Europe business was $94 million in the quarter, and OUP margin was 4.5%. France revenue comprised 57% of the Southern Europe segment in the quarter and decreased 4% in days adjusted constant currency. As adjusted, OUP for our France business was $48 million in the quarter, representing a decrease of 24%. As adjusted, OUP margin was 3.9%. The business in France experienced an additional softening of revenues during the Q4. Activity to date in January 2024 indicates a slight further decrease. We are estimating the year-over-year constant currency revenue trend in the Q1 for France to be down slightly from the Q4 trend based on January activity trends. Revenue in Italy equaled $415 million in the quarter, reflecting a decrease of 3% on a days adjusted constant currency basis. As adjusted, OUP equaled $32 million, and OUP margin was 7.8%. We estimate that Italy will also have a slightly lower constant currency year-over-year revenue trend in the Q1 compared to the Q4. Our Northern Europe segment comprised 19% of consolidated revenue in the quarter. Revenue of $914 million represented a 10% decline in constant currency. After excluding restructuring costs and the goodwill impairment of our Netherlands business, adjusted OUP was $4 million, and OUP margin was 0.4%. The largest component of our restructuring charges in the region are driven by Germany, which I will discuss on the next slide. Our largest market in the Northern Europe segment is the UK, which represented 35% of segment revenues in the quarter. During the quarter, UK revenues decreased 13% on a days adjusted constant currency basis. This reflects a slight improvement from the rate of decline from the Q3. We expect a similar year-over-year revenue trend in the Q1 compared to the Q4. In Germany, revenues increased 4% in days adjusted constant currency in the quarter, driven by our Manpower business. The previously announced wind down of our Proservia managed services business in Germany is largely complete, having substantially agreed terms with applicable workers councils and impacted clients during the H2 of 2023. The restructuring costs reported in the quarter largely concludes the wind down related one-off costs for our Proservia business. We have some final client transition activity running off in the H1 of 2024, which will generate operating losses, which we will carve out separately for this discontinued business, which I will discuss in our guidance. The wind down of our Proservia business removes a significant drag on our Germany operations and represents a significant step in strengthening the business for the future. In the Q1, we are expecting a year-over-year revenue decline as certain automotive clients experience isolated supply chain-related production slowdowns. In the Netherlands, revenue decreased 8% on a days adjusted constant currency basis, and this represented a further rate of decline from the Q3 on this same basis. As previously referenced, based on the deteriorating market conditions in the Netherlands in recent quarters, we updated our goodwill impairment assessment at year-end and recorded a non-cash impairment charge of $55 million. We continue to monitor our Netherlands business closely and are taking various actions to improve profitability. The Asia Pacific Middle East segment comprises 12% of total company revenue. In the quarter, revenue was down 1% in organic constant currency to $552 million. OUP was $22 million. OUP margin was 3.9%, flat year-over-year. The largest market in the APME segment is Japan, which represented 51% of segment revenues in the quarter. Revenue in Japan grew 10% in constant currency, or 8% on a days adjusted basis. We remain very pleased with the consistent performance of our Japan business, and we expect continued strong revenue growth in the Q1. I'll now turn to cash flow and balance sheet. In Full Year 2023, free cash flow equaled $270 million, compared to $348 million in the prior year. In the Q4, free cash flow represented $91 million, compared to $115 million in the prior year. At year-end, days sales outstanding decreased about a day and a half to 54 days. During the Q4, capital expenditures represented $23 million. During the Q4, we repurchased 695,000 shares of stock for $50 million. As of December 31, we have 4.6 million shares remaining for repurchase under the share program approved in August 2023. Our balance sheet ended the year with cash of $581 million and total debt of $1 billion. Net debt equaled $421 million at year-end. Our debt ratios at year-end reflect total gross debt to trailing twelve months adjusted EBITDA of 1.83, and total debt to total capitalization at 31%. Our debt and credit facilities remained unchanged during the quarter. Next, I'll review our outlook for the Q1 of 2024. Based on trends in the Q4 and January activity to date, our forecast is cautious and anticipates that the Q1 will continue to be challenging, with further declines in our businesses in Europe, which include expected lower seasonal bench utilization in the Q1 in certain markets, such as the Nordics. Our forecast for Q1 also anticipates ongoing low levels of permanent recruitment activity. It is also important to note that there is typically a meaningful seasonal sequential decrease in earnings from the Q4 to the Q1. With that said, we are forecasting earnings per share for the Q1 to be in the range of $0.88-$0.98, which excludes a forecasted unfavorable impact of $0.14 related to the runoff of the discontinued Proservia Germany business, which will cease activity after the Q2. The guidance range also includes an unfavorable foreign currency impact of $0.02 per share, and our foreign currency translation rate estimates are disclosed at the bottom of the guidance slide. Our constant currency revenue guidance range is between a decrease of 4% and 8%, and at the midpoint represents a 6% decrease. The impact of net dispositions and less working days contributes to an organic days adjusted constant currency revenue trend of about a 5% decrease at the midpoint. This represents a similar rate of decrease from the Q4 trend on the same basis. Excluding the discontinued Proservia runoff business impact on the Q1 of 2024, EBITDA margin is projected to be down 100 basis points at the midpoint. We estimate that the effective tax rate for the Q1 will be 31%, which reflects the mix effect of lower earnings from lower tax geographies in the current environment, with some expected offsetting tax items. We expect the Full Year 2024 effective tax rate to be approximately 32.5%, which incorporates a modest reduction in the French business tax, as discussed last quarter, and the current mix of earnings trends. When business in our lower rate geographies begin to improve, we expect the tax rate will begin to return to the lower underlying rates. As usual, our guidance does not incorporate restructuring charges or additional share repurchases, and we estimate our weighted average shares to be 49.2 million. Our guidance also does not include the impact of the non-cash currency translation adjustment for our hyperinflationary Argentina business, and we will also report that separately. I will now turn it back to Jonas. Thank you, Jack. We have taken decisive actions to manage costs and improve our business and are accelerating our transformation roadmap to simplify our operations to drive sustainable efficiencies. The actions we have taken within our Germany Proservia Managed Services business simplify our Germany business and position it for success. We remain confident in our diversification, digitization, and innovation DDI strategy and are making strong progress across many key pillars of our plan. Diversification is how we accelerate growth of higher-margin business in all our brands. The Manpower brand is our history and our future, and the diverse clients we serve across verticals has enabled us to pivot to opportunities as economic uncertainty has impacted some sectors to a greater extent than others, and some geographies more than others as well. Last quarter, we saw solid demand in automotive, public sector, and logistics in several markets, offsetting pressures in other manufacturing verticals across our portfolio. We also continued to strengthen the flexibility of our delivery models, so our teams serve our clients in ways that best work for them. The growing demand for integrated on-site solutions with our clients is strengthening our relationships while we achieve increased productivity and revenues. Our focus on specialized skills is also beginning to deliver profitability improvements as we continue to boost skills and employability with our Manpower MyPath program, creating talent at scale in response to skill shortages and demographic trends. Today, every company is a tech-enabled company. To meet the varied needs of our clients, we're diversifying, delivering on our Experis IT resourcing and services brand with offshore and nearshore solutions, including our IT talent hub in India, that is bolstering enterprise client fulfillment. At the same time, our Experis academies continue to develop IT talent for growth roles in our key practice areas. As workforce complexity grows, clients value the breadth of offerings within our Talent Solutions brand. Our Right Management, recruitment process outsourcing, and TAPFIN managed services provider offerings have all been recognized as global leaders in 2023. Talent acquisition, development, and transformation continue to be key priorities for our enterprise clients. As economic uncertainty persists, we have seen good growth in our Right Management business as companies seek to right-size their organization, which has helped offset the reduction in recruitment activities impacting other offerings in the current environment. Turning to digitization, we've made great progress in our technology roadmap during 2023, and we are proud to be leading the global industry through the deployment of PowerSuite, our global cloud-based platforms for front and back office. I'm pleased with the work that we're doing to line our data using these platforms across our operations globally. By the end of 2023, the majority of our global revenues were using the PowerSuite front office, and by the end of 2024, substantially all of our revenues will be running through common technology, front office, and web platforms. We also continued to make very good progress on our back-office platform, with significant country implementations in progress, including major businesses such as France and the U.S. Innovation is how we future-proof our organization, accelerating the deployment of our AI recruitment tools and leveraging machine learning to enhance recruiter productivity. We continue to make progress with scalable pilots in key markets. Our leading global technology infrastructure positions us very well for deploying AI-driven innovations and recruiter productivity tools at scale and speed. Each year, we provide an update on our sustainability progress, and we're proud of our ongoing commitment to people and the planet. In November, we released our third annual Working to Change the World report, citing continued progress in upskilling people for in-demand roles and leading the way in ethical AI governance, developing best practice guardrails to help us and the clients we serve navigate this new space. A recent survey of 38,000 global hiring managers also found 70% of employers are urgently recruiting or planning to recruit green talent, with the highest demand in renewable energy, manufacturing, operations, and IT. We're committed to taking a pragmatic, industry-specific approach to green jobs, and we're pleased to partner with our clients at the World Economic Forum in Davos to highlight the new skills and jobs that will be created as companies seek to compete better and become greener and more sustainable. Our DDI strategy is positioning us for profitable growth and winning in the market, and we're making good progress in a challenging environment. During times of great change, our teams are passionate about bringing people along as we shape the future of work and the future for workers. Our talented colleagues around the world are dedicated to providing practical solutions to upskill people for success and providing companies with resilient, adaptable talent, so they can flex and strengthen their workforces to deliver on their business strategy. I'd now like to open the line to Q&A. Operator? Thank you. If you would like to ask a question, please press star one one on your telephone. If your question has been answered and would like to remove yourself from the queue, please press star one one again. Please stand by while we compile the Q&A roster. The first question comes from Andrew Steinerman with JP Morgan. Your line is now open. Good morning, Jonas. It does seem more likely that the Fed will orchestrate a soft landing here in the U.S., and obviously, the stock market has received that favorably. Obviously, a soft landing still needs to be executed, and that would be slowing GDP and rising unemployment rate. So I wanted to note about your Q1 guide. I know you used the word cautious, but it does include a more narrow year-over-year revenue decline in the U.S. compared to the Q4. Is that only about the year-over-year comps, or do you feel like that's the early effect of a soft landing as well? I'm only talking about the U.S. Good morning, Andrew. I'd say that our Q1 guide reflects both because what we've seen, and I mentioned this in our prepared remarks, in a number of markets, including the U.S., we've seen stabilization in terms of our trends at a lower level, for our brands as well as for the various offerings such as Perm. So that stabilization carries us through into the Q1, and that means, the comparable decline, of course, lessens. So that's why you're seeing the improvement. So comps do play a role, but also the fact that we're seeing, sequential stabilization across brands and offerings in the U.S. and a number of other countries as well. Okay. Jonas, could you just say a little bit more about how a soft landing in the U.S. would affect, you know, Manpower's U.S. business? ... Well, if we, if we see that the economy improves, then what will drive the biggest difference to our business is that employer confidence broadly improves. That will clearly mean that we could reach then the inflection point and see an upturn in demand for our services across all of our brands. I think that is, of course, will be welcome news when it happens. As we mentioned in our prepared remarks, we're not seeing that inflection point yet, but a soft landing in the U.S. would, of course, be very welcome. Thank you very much. The next question comes from Jeff Silber with BMO. Your line is now open. Thanks so much. Just a follow-up from Andrew's question. Maybe if I can ask the same thing about Europe. Obviously, trends there are a little bit weaker, but what do you think will take to get that either economy moving again or your business moving again in that region? Morning, Jeff. Yes, as you might have seen this morning, the economic trends in Europe are noticeably weaker, and they just declared across the Eurozone a no-growth environment for Q4. Some of the reasons behind that lack of economic growth are higher energy costs, less government stimulus. I think what is clear from speaking to clients in Europe is they consider the environment tough, the outlook uncertain, but the headwinds manageable. So they still have a constructive outlook as they look into 2024, and they're they are clearly telling us, "We're not seeing the upturn yet, but we expect things to improve as the economy improves." If you look at the distribution of where the economic pain is the greatest, I think it's clear that Northern Europe, and Germany in particular, faces major economic headwinds and other parts of Northern Europe as well, Netherlands and Scandinavia, and we can see that reflected in our business. T hen we have Southern Europe, with France, you know, getting a little bit softer, but Italy and Spain actually still being relatively strong from an economic growth perspective. So all of this to say, Europe is lagging the U.S. in terms of economic growth, which could also mean that as we think about a softer landing, the U.S. could come back, sooner and quicker than Europe, potentially. So the likelihood of a major step down today, as we look out and we talk to the companies that we serve, appears to be more focused on black swan-like events related to geopolitical events that are very hard to predict. Other than that, their outlook is constructive into a recovering economy, so they believe it will. They just don't know when. Okay, that's helpful. If I could go more broadly, and we could talk about, billing rates and, spreads. I know every region is different, but if you can give us some high-level color in terms of what's going on there, I'd appreciate it. Thank you. Jeff, sure. This is Jack. Yeah, I'd be happy to talk to that. I mean, I'll talk more generally since we don't publish specific billing rates due to the number of major markets we're in. W hat I would say, and this aligns very much to what you saw in the GP margin walk, is staffing is holding up very, very well. So we're seeing stable margins on the staffing side, and that's coming through in terms of bill rates. I'd say pretty stable overall for the Q4. A s you think about our guide into the Q1, we expect that to continue. Our guide does reflect on the staffing margin and the gross profit margin side. A little more pressure in Northern Europe. We do expect to see a little more sickness in some of the bench countries based on what we're seeing in January. Nothing that we would say would be a concern as we get through the first... after the Q1, but we, we do expect a little bit, but that's really more an impact on utilization. S o far, I'd say, spreads and bill rates are holding up and are actually have been quite resilient. Okay, great. Thanks so much. Please stand by for the next question. The next question comes from Josh Chan with UBS. Your line is open. Hi, good morning, Jonas and Jack. I guess my first question is on margins. Could you talk about in Q4 what transpired to be slightly better than you expected on the margin front? T hen if you roll over into Q1, how much of that sequential margin decline from Q4 to Q1 is just reflective of typical normal seasonality, and how much of the change is anything structural or demand related? Thank you. Yeah, sure. I'd be happy to talk to that. So yeah, we did come in at the higher end of our GP margin range, which was great. The way I would explain that, and we, you saw the year-over-year bridge on the margin, but generally, as we looked at the guide, France came in a bit better. We did say that we had a bit of a cautious guide on France in the Q4. So France came in a bit better, and those higher levels of activity at higher margin year-over-year in France came through, which helped the staffing margin a bit. I 'd say perm came in very close to what we were expecting. So what you're starting to see, and I know you inquired on this last quarter, is, you know, did perm peak in previous quarters at that -70 basis points year-over-year? You look in Q4, you see us go to -30. T o your question on Q1 expectations, we continue to see that anniversary impact on perm having a lesser impact year-over-year on the GP margin trend. So we would expect that trend to continue. It will be a less year-over-year decline into the Q1. A s you look at the gross profit margin for Q1 at that 17.3 at the midpoint, really, that reflects continued stable staffing margins, as I mentioned, with a little pressure in Northern Europe on some utilization issues, but I would say that's isolated and perm continues at stable activity levels, as we talked about. I think the other item with Q1 is, you know, as I mentioned in my prepared remarks, it is typically our smallest quarter, and they get hit by some seasonal trends and all that impact the margin a bit as well, when you look sequentially from Q4 into Q1. So, I'd say those are the main considerations as you think about GP margin. Okay, that, that's really helpful. Thank you. T hen on the, on the U.S., could you just comment on how you're seeing the seasonal ramp up in the, in the staffing business? Usually, you ramp up starting in January 1 and progresses through the next couple of months. So just any comment on the pace of that ramp up versus normal? T hen if you can have any finer color on how much better the Americas decline in Q1 would be versus Q4, that would be helpful. Thank you. So I'll take the first question, part of your question, Josh, and then I'll have Jack jump in on the second part. So the seasonal ramp that we expect, that we expect to see in the beginning of the year is a little bit slower than you would normally expect, which is not surprising given the economic headwinds that we're seeing across Europe and the U.S. and Canada specifically. So it is incorporated in our guide, and it's a little bit slower. Of course, you know, we're early in the quarter, so this may all change, but that's what we're seeing right now. J osh, I would just say on your question on the guide for the Americas for Q1. So you can see Americas overall at the midpoint at that -1% in constant currency. Breaking that down between North America and Latin America, what that really means for the U.S., the U.S. just completed a pretty stable trend in the H2 of 2023, down 14% days adjusted in Q3 and Q4. W e see, you know, pretty consistent levels of activity at lower, lower levels. As we walk into Q1, that means from a year-over-year perspective, the U.S. will be high single digit decline, improving, but, you know, again, this came up earlier, a big part of that is the comparable from the prior year, where the U.S. did step down in the Q1. I think the main takeaway is activity levels remain relatively stable. I'd say it's very similar for Canada. We don't talk a lot about Canada, but Canada has been performing very well on a margin perspective, but experiencing declines, not dissimilar to what we've been seeing in the US market as well. So, you know, that's pretty consistent in the H2 of the year and into the Q1. Then Latin America continues to do very well, so we anticipate growth. Again, that's what's driving that only -1% for the region overall. Latin America has been performing quite well. It's good to see Mexico back to double-digit growth in the Q4, and we anticipate the Q1 will be a good environment for Latin America from a revenue perspective. Thanks. Great. Thank you both for the color and the time. Please stand by for the next question. The next question comes from Mark Marcon with Baird. Your line is open. Good morning, Jonas and Jack. I was wondering, with regards to perm, what percentage of GP is perm currently running at? Yeah, Mark, thanks for that. Perm is currently at 15.3%, and I know you inquired on this last quarter as well. It has stepped down a little bit. Last quarter, it was about 16.5, and I think that just reflects, you know, the continued stabilization. I think year-over-year, the rate in perm decline year-over-year was about the same, and we're just seeing that work its way in. So I think that reflects, and I think we commented a little bit on this last quarter as well. I think that reflects a range that's in line with where we were pre-pandemic. So perm has stabilized quite a bit and is more of a typical mix of our GP on an overall basis. That's great. T hen you, you've got a number of, you know, efficiency initiatives in place. I'm wondering, do you have any updates with regards to, as you know, as we think about the unwinding of the Proservia business? You know, what that would end up doing with regards to German margins, you know, all things being equal. T hen Jonas, you mentioned, you know, a number of initiatives that you've put in place, including, you know, we've got the deployment of PowerSuite. We've got some new AI initiatives in place. A s we go out, say, six months to a year from now, how much more efficient could Manpower be? So I'll start that, Mark, with your question on, Germany specifically. Y es, I think the wind down of Proservia is a major step forward in improving the profitability of Germany. It was a very complex wind down. We're very happy with the way that was conducted, and as I mentioned in our prepared remarks, we've substantially, concluded all the one-off actions related to that. So where we are now is just we're down to the final runoff of client contracts through the H1 of next year. In my guide, we don't disclose profitability outside the major markets, but what I will say, directionally to, to answer your question, in my guide, I do carve out the runoff impact of, Proservia for the Q1. So I said that that's about 20 basis points on the margin, if you were to include it. If you do the math, that would indicate a loss of about $7 million at the midpoint, for that business. So I think directionally, that gives you a bit of an idea of... That will run off after the Q2, and that will be removed from the run rate. S o that will have a significant impact in improving Germany's profitability, once we get to the midpoint of 2024. Gives you a little bit of an idea of the improvement, and we feel very good about the progress we've made on the Manpower side, as you've seen from the revenue growth rates in Germany, and that will be very good for us in the H2 of the year. M ark, to talk a bit about the efficiencies, a good starting point is probably DDI. So our diversification strategy is all about improving our margin mix within and between our brands so that we move into higher margin businesses, and I think we've made some excellent progress. A s we've noted in our prepared remarks, our margins, our GP margin has been resilient, and that's really great to see. S ome of that comes, of course, from an improved business mix within our brands as well as between our brands. The digitization efforts that we've been working on almost for four years now have really established us at the forefront of our industry because we're deploying common global platforms for front and back office and web properties. W e are implementing now the last big operations, and as I mentioned in the prepared remarks, by the end of this year, substantially all of our revenues will run through the same web and front office platforms. T hat's where what we're really excited about, because we think that there are clearly efficiencies and productivity initiatives that we can now drive, not only in each country, but across geographies and implement it at speed and scale in a way we were never able to do before. I t also means that we can improve recruiter productivity and drive fill rates up in a way as we transfer best practices and we implement new tools to support our recruiters become even more successful and productive, at a scale and speed that we've never been able to do before. A s I also mentioned during my prepared remarks, one of the things that I've learned as it relates to AI in general and generative AI in particular, is that to take advantage of these new technologies, which look immensely promising in so many areas, the requirement to be able to take advantage of those is to have a modern technology infrastructure. O f course, that's exactly what we have been building for a number of years. So it's too early to talk about the impact of large language models and generative AI now, but the promise they hold, we think is immensely exciting, and we feel very good about how we are positioned to take advantage of those improvements as they come to market, because we have a global platform where we can deploy them across all of our global organization at the same time, and that is exactly what we're working on as we look ahead into the future. Thanks for that, Jonas. T hen Jonas, you were at Davos. You know, obviously get to talk to lots of European leaders while you're there, as well as your own people. How are your clients in Europe thinking about the economic environment unfolding for this year? You mentioned it, you know, it lags the U.S., but you know, there's obviously supply chain constraints that might be you know, impacted by what's occurring geopolitically at this point in time, and you know, fuel prices continue to be high, and then you've got farmers that are revolting. What's the general sense there in terms of you know, how far along are we in terms of this you know, period of softness and when we might see an inflection? I know you're hesitant to say when the inflection could occur, but just, does it feel like it's getting worse or is it stabilizing? Well, I think it's, it depends on which country you're in, Mark. I f I step back and you think about what happened during and after the pandemic, we came out of the pandemic in 2021 with tremendous supply chain shortages and companies ordering anything and all the products and services they could get in a pipeline that they largely started to start consuming and see a return to normal supply chain functioning sometime end of 2022. A ll the way through 2023, they've been working off the inventories that they've been getting, and as they look ahead, they are constructive on the outlook. Because they note that the uncertainty exists primarily due to geopolitical events, but the economic news are actually quite encouraging. Labor markets remain strong, inflation is coming down, energy prices have stabilized, and their supply chain issues have normalized post-pandemic. So from an economic perspective, as you look out, many of the European business leaders we spoke with were quite upbeat in terms of, you know, their outlook for 2024. They note that geopolitical uncertainties could, you know, impact that, but that's nothing they control. So within the things they control, they felt constructive about 2024, but they know we don't know when it's going to be improving. We don't know when interest rates are going to come down, but overall, they are probably, you know, very much thinking that this is an environment that is tough, challenging headwinds in a number of industries, but they can see the elements of a recovery are there, and until then, they're waiting, they're holding, but they are getting ready for the recovery. That's my sense. Terrific. Thank you. Please stand by for the next question. The next question comes from Kartik Mehta with North Coast Research. Your line is open. Thank you. Good morning. Jack, I wanted to go back to a statement you made about bill rate spreads and them holding fairly stable. S o I'm assuming competition hasn't picked up. I f that's an accurate statement, are you at all surprised, considering what's going on with revenue trends, that competition hasn't picked up? Well, you know, I would say on that, Kartik, you know, really, if you look at the labor markets, to Jonas' earlier comments, you know, the backdrop to all of this is the labor market's still relatively tight. It's been incredibly resilient, and as a result, it's still relatively hard to get quality workers. So our clients are willing to continue to pay, you know, I'd say, stable, bill rates and margins have been holding for that reason. Even though demand has been down, I think the backdrop of labor markets still being relatively tight is a big part of the equation that's holding, staffing margins to where they are. I would say, you know, it isn't broad-brushed. There are, you know, as we said, there are a lot of markets that are actually not seeing the same degree of pressure that we're seeing in some of North America and some of the European markets. T hat's been, that's been a positive as well, I think, in terms of, you know, stronger demand in certain markets. You know, if you take a step back and you look at markets like Italy, only down low single digits, right? So it's really in the markets where you're seeing the bigger, declines, that I think it, it is a fair question to ask, you know, why aren't you seeing a little more pressure? I think if you look at the labor markets in those countries, that's really the reason why it's been holding up quite well. I wanted to get your perspective, your and Jonas's perspective on Right Management. You know, we're here, at least in the headlines, more layoffs, more companies kinda right-sizing their labor force. I'm wondering, as you, just the outlook on that business. Kartik, what we have seen is an increased demand for the services of Right Management, but I think we need to put that within the context of what we're seeing employers doing overall. S ome are trimming their workforces, most employers are still holding on to their workforce, and any reduction in workforce, for now, has been really mostly felt by our industry and other indicators of, you know, labor market flexibility. It doesn't touch their specific workforce. Clearly, you've seen the tech company, the large enterprise tech companies do this early into 2023 and resize their workforce, and you now have other organizations that are also trimming their workforces for various reasons. A s we look into the Q1, what we're estimating is that we'll continue to see good demand for Right Management resources, but not an accelerated demand for those offerings. T hat would indicate that the employer attitude is still, by and large, hold on to our workforce and, you know, wait for the economic conditions and, you know, to come back, employer confidence to increase, as opposed to preparing for larger scale layoffs that would indicate a much stronger growth in Right Management. So that's how we would think about it. Thank you very much. Appreciate it. Please stand by for the next question. The next question comes from Manav Patnaik with Barclays. Your line is open. Thank you. Good morning. Jonas, apologies if this is an overgeneralization, but what environment, I guess, is perfect for you guys? So in the U.S., I suppose if there's a soft landing and, you know, job growth is still moderating, perhaps, you know, there's more temp than permanent hiring activity because of that. T hen in Europe, you know, if things seem to be, you know, worse, not along the same lines. So is that just bad that there's no hiring temp or permanent? Just trying to, you know, appreciate what the right mix is. Manav, the perfect environment for us is global demand for our services and solutions is booming, but that is not the case for our industry in this moment, at least. I would say, you know, when we think about the demand for our services, this is an economic cycle that is increasingly looking similar to many other cycles that we have seen. As we discussed in our last quarter earnings call, from what we're seeing, while, you know, our industry is absorbing a lessening of demand, taking within a historical context, you know, this is still within the realms of a softer economy, whether it's a soft landing or a light, a lighter recession, you know, that's for others to say. T he stabilization of perm recruitment across a number of quarters now, in the context of a strong labor market, means that companies are still hiring people. They are just being much more deliberate, much more cautious, and much more precise in what talent they're bringing in. I 'd say the same thing applies for temporary staffing. Yes, we've seen a drop in demand, in particular, from an enterprise client perspective and in certain sectors, but overall, both geographically in LATAM and in Asia Pacific, as well as in other parts of Europe, you can see that there is still demand for temporary staffing and our experienced consultants with the IT skills and specializations that they have. What we believe is going to be an important turning point is when employers' caution moves into employer confidence in an improved outlook. As we've seen in past recoveries, the time when employers are more confident but not fully confident in the recovery, is when we see a big move upwards in demand for our services and solutions across our brands. Because a lot of companies, of course, are reducing their own hiring. Their talent acquisitions teams are either, gone or are reduced, and that means they need additional capacity to ramp up the workforce they need to be able to compete and to prepare, you know, to execute, and continue their business strategy. That's, I think, where we are. Right now, employers are more cautious. They have, they think it's manageable, and you can see that in our overall numbers. W hen they get more confident, and they feel the turning point is here, that's when we will see it in our business, both in the U.S. as well as in Europe. Got it. J ust as a quick follow-up, I mean, given, you know, a lot of this, as you've described, is an economic cycle. When you review your businesses, like in Germany, Proservia, and then in the Netherlands or whatever, like, at what point do you decide it's more, like, how do you decide it's more than just a economic cycle and you need to get out of those businesses? Like, what are some of the common traits that lead you to that decision? Well, I think the Germany example with Proservia is really a unique one-off situation with a specific business that we took over from a client. It ran very well for a number of years, but then structural issues within that business have proven to be very difficult for us to turn around. A t this point, and with the German economy being the state that it is, we feel that it's time to make a significant change, which is what you saw us doing. The other aspect of the Proservia business, it's also non-core to our strategies. So it is really a unique situation in Germany, and that's why we made the change. The situation in Netherlands is not at all on the same at that level. It is a... It's a market that's struggling and where we felt that this was a good time to make, you know, this, this adjustment. O verall, we expect to compete and do well in Netherlands over time, just as we expect and feel really good about the German market. Got it. Thank you. Please stand by for the next question. The next question comes from Toby Sommer with Truist Securities. Your line's open. Thanks. I wanted to touch on something you just mentioned. We've heard that large companies, in general, have not reduced their own internal recruiting capacity as much as might be normal in this by historic terms in slowdown. Could you talk about what you're seeing in terms of internal recruiting capacity at customers and what that may imply for demand for staffing, perm, RPO, for example, in a recovery? Toby, I think what we're hearing is that the team, since there's not a lot of hiring going on in many sectors, those individuals have been reallocated. Y ou know, as you look at to other functions and/or have left and are doing different things. So in our conversations, as it relates to, for instance, opportunities within RPO, many of our customers are getting ready for an upturn or asking us to prepare. They are not ready to pull the trigger yet, but they are clearly thinking about the recovery and what they need to be doing when they are confident that the market is coming back for their products and services. We really expect this to play out more or less the same way that we've seen other returns and bounce backs as far as the industry is concerned, both here in the U.S. and across the world, frankly. Okay. So it sounds like internal recruiting capacity at corporations is being drawn down. Great. What are you experiencing in domestic IT staffing demand? I n particular, I was wondering if you could comment on the financial services vertical and in tech, including global tech? Thanks. As we mentioned in a couple of calls ago, the first slowdown really came from enterprise tech. Y ou know, then what we've seen there is a stabilization at the lower level. Contingent clients are holding up much better than enterprise tech, and they are actually, you know, significantly better because of the skill shortages still prevalent in that market. So I would say the tech demand has stabilized at a lower level, better for contingent than for large enterprise organizations. The banking and the finance sector is now feeling a bit more, a bit more headwind, but I would characterize it as manageable, and you saw our outlook for Experis overall is sequentially stable to slightly improved in the U.S. looking into the Q1. Thank you very much. Please stand by for the next question. The next question comes from Trevor Romeo with William Blair. Your line is open. Hi, good morning. Thanks so much for taking the questions. Just one maybe on Japan, which, you know, might get lost in the shuffle a bit given all the focus on Europe, but I think it's been a real bright spot. You know, the performance there has been strong and consistent. So could you maybe just talk about the drivers behind the strength there in Japan? What outlook you have there in the near term? Well, thanks for bringing that up, Trevor. It's the 37th consecutive quarter of growth in Japan. I think Japan is a really interesting example of a country that is struggling demographically, and has a shortage of labor, but where we've managed to position ourselves, both from a Manpower and Experis perspective, as really the experts in finding and creating talent at scale. T hat's really been one of the key factors of how we've made progress in Japan is, of course, excellent recruitment and delivery capabilities, but each of our brands also has a very strong, reskilling and upskilling arm of that brand. So we are generating a lot of talent with marketable skills and scale in Japan, and that is really a main factor of, you know, the progress that we've seen. We've also moved into some interesting, healthcare areas, elder care, as well as childcare in Japan. Given the aging population, we see that as a very good opportunity, and that's been an investment, that we've made over a number of years, and that is starting to take hold. W e think that will continue to be an important part of our business. So the team in Japan has done an excellent job, really finding the opportunities, that exist in a market where you have an aging, demographic, a shrinking workforce, and being seen as a solutions provider by not only finding great talent, but creating talent at scale. That's exactly what we intend to do as we see similar trends play out, both in Europe and in the U.S., through our Experis Academy, as well as our Manpower MyPath programs, making sure that we are known as the company that has great ability to find, but also to create the needed talent for our clients, which helps us deliver the best talent in the market, in time and at speed. Trevor, I would just say for the Q1 guide for Japan, Japan's been running at days adjusted, just about double digits to high single digits, and we anticipate that for the Q1, maybe closer to the very high single digits, days adjusted. So very strong outlook for the Q1 for Japan. Okay, that's great. Thank you both. T hen just quickly on SG&A, I guess, where do you think you are in terms of cost management? It sounds like you took some additional headcount reductions this quarter. How much room do you think you have for additional reductions, whether via headcount or other avenues, if the sluggish macro continues? Sure, I'd be happy to talk to that very quickly. So I think we feel good about the actions we've taken. We did, we talked about the additional headcount down. You know, personnel costs are about two-thirds of our overall costs. So as we end the year, we're down 9%. We moved another 3% down in the Q4. So I think we feel that we've taken the necessary actions for the most part, based on the current environment. Certainly, we've talked a lot about Germany and the change in improving the trend for that business once we conclude the Proservia here. I think we feel pretty good, but at the same time, continuing to balance that. So as Jonas said, we want to be prepared for the upturn when it happens. So it's a balance, and we want to make sure we have the right sales personnel and the right producers for when that happens. S o we are balancing that carefully, but you did see additional cost takeout in the Q4, and we expect that trend to continue into the Q1 on a trending basis. Okay, thanks so much. Please stand by for the next question. The next question comes from Heather Balsky with Bank of America. Your line is open. Hi, good morning. Thank you for taking my question. You talked with the first question in the Q&A about the U.S. and some of the signs of stabilization. I'm curious if you can elaborate further which markets beyond the U.S., you feel like things have stabilized? T hen a little bit more color on what you're looking at to get confidence in things stabilizing, just given all the macro challenges we see right now. Is it data out there? Is it what you're seeing in the underlying business through January? Is it what you're hearing from your customers? Just helpful to get your thought process. Thanks. Sure. Heather, I'll talk to that very quickly. So I think, you're right, U.S. is our second biggest business. We did see that stabilize in the H2 of the year. I think the other big one, number 4 business for us is the U.K. U.K. went from -15% days adjusted to -13% in Q4, so slight improvement, seeing underlying stabilization. We expect that, to continue based on the guide that we gave into the Q1. So I'd say of the bigger markets, those are the two big ones that we've seen good stabilization, in the H2 of 2023, and as I'd say, on activity levels going into the Q1. I will say, not quite, in that same camp, a little bit further decline, would be France and Italy, but very modest. So we're not talking about those markets seeing significant pullbacks. We're seeing more gradual easing. S o that's, you know, in our guide, that takes France from the -4 in Q4 to -5, and Italy moves from, you know, that -3 days adjusted to a little bit bigger of a decline into the Q1 as well. So those are the main countries when I think about stabilization of the big, the bigger countries we're in. T o your point, I think the second part of your question was what type of data points would be good to monitor as we look at that potentially changing? I think on the Manpower businesses, manufacturing PMIs are always a pretty good read-through in terms of demand. S o I'd say, you know, continuing to look at that, as we sit here today, Europe continues to be in the 43-44 range, so quite below the 50, and the U.S. as well. So I'd say that is important. T hen I think on the professional side, it's really going to come down to Jonas' earlier comments on employer confidence with restarting IT projects and related spend. So that's going to come down to, you know, elimination of deferring projects and moving more into scheduling those projects moving forward. A s you mentioned earlier, some of that's going to be predicated based on overall events in the economy and interest rates and other factors that give employers the confidence that we're moving into a more predictable environment. Thank you. It's helpful. J ust as a follow-up question, something we're at BofA paying attention to is what's going on in the Red Sea and Panama Canal. I'm just curious, have your customers started talking about that at all? Is there, you know, any sense of concern, or is it still too early? Thanks. Overall, Heather, I'd say it's still a bit early. There have been well-publicized circumstances around some of the automotive industry, and you know, that is well known, and so that may have an impact. Y ou know, and primarily in that case, you know, from our perspective, Germany. O ther than that, I think it's a little bit early still, Heather. I appreciate that. Thank you so much. Please stand by for the next question. We will take our last question from George Tong with Goldman Sachs. Your line is open. Hi, thanks. Good morning. The midpoint of your revenue guide points to a widening rate of constant currency decline, and you talked about weaker economic trends in Europe relative to the U.S. Based on business trends you've seen so far in Q1, can you elaborate on which regions in Europe are seeing the most amount of incremental softening in revenue? Yeah, George, I'd be happy to talk to that. So you know, you're right. On a constant currency basis, we do step down from -5 in Q4 to -6, but I would say days are a big factor in Q1. So, when you adjust for billing days, we're actually running very close to the same trend. So, days adjusted, organic days adjusted, we were at -5% in Q4, and we're also at -5% in Q1. T here are puts and takes in that, to your point. So the way, the way I would look at it is the rate of decline improves in the U.S., as we've talked about earlier, largely due to the fact that we start to anniversary a bit of a step down in the year ago, activity levels, relatively stable. I would say, the UK, similar, I would say, similar activity levels into Q1, a little more pressure in France and Italy, into Q1. I think if you offset that against, you know, favorable trends in APME and LATAM, that gets you to an overall days adjusted organic, constant currency, in line with what we just completed. So a bit of puts and takes. T hen I'd say that, you know, the other area where we're seeing a little more pressure is Northern Europe, that we talked about in the Nordics and the Netherlands market that we talked about earlier on the call. T hat's a bit of the rundown, on the, progression from Q4 to Q1. Got it. That's helpful. Y ou mentioned it's difficult to pinpoint when an inflection will happen with revenue. T hat the elements are there. How do you think about when operating margins will potentially inflect? Yeah, I would say very much in line with the revenue trends. So, I think we've done a lot of work on cost actions in the H2 of 2023. We feel good that that's going to work its way through in preserving margin as we go forward here. As you think about those inflection points on revenue, perm is going to be part of the equation. We talked about RPO. When hiring programs commence, again, in a bigger way, we'll see, you know, we would expect to see more RPO activity. The good news is we continue to have very strong global RPO clients. When demand and hiring requisitions recommence, we will see a surge in that business when that occurs. As the operational leverage comes back into the business, you'll see us expand our EBITDA margins accordingly with that. So I would say moving very much in line with revenue trends as we move forward. Great. Thanks very much. Thanks, everyone. That brings us to the end of our earnings call for the Q4. We look forward to speaking with all of you again, as we report our Q1 results sometime in May. Until then, thanks, everyone. This concludes today's conference call. Thank you for participating. You may now disconnect.