MANPOWERGROUP INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

See the Financial measures section on page 31 for more information on non-GAAP constant currency and organic constant currency financial measures.

Forward-looking statements

This Quarterly Report on Form 10-Q contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Exchange Act of 1934, as amended, (each a "forward-looking
statement"). Statements made in this quarterly report that are not statements of
historical fact are forward-looking statements. In addition, from time to time,
we and our representatives may make statements that are forward-looking.
Forward-looking statements are based on management's current assumptions and
expectations and are subject to risks and uncertainties that are beyond our
control and may cause actual results to differ materially from those contained
in the forward-looking statements. Forward-looking statements can be identified
by words such as "expect," "anticipate," "intend," "plan," "may," "believe,"
"seek," "estimate," and other similar expressions. Important factors that could
cause our actual results to differ materially from those contained in the
forward-looking statements include, among others, the risk factors discussed in
Item 1A - Risk Factors in our annual report on Form 10-K for the year-ended
December 31, 2021, which information is incorporated herein by reference. Such
risks and uncertainties include, but are not limited to, the impacts of the
COVID-19 pandemic and related economic conditions and the Company's efforts to
respond to such impacts; volatile, negative or uncertain economic conditions,
including as a result of the Russia-Ukraine War, any sanction, supply chain
disruptions or increased economic uncertainty related to the ongoing conflict;
changes in labor and tax legislation in places we do business; failure to
implement strategic technology investments; and other factors that may be
disclosed from time to time in our SEC filings or otherwise. We caution that any
forward-looking statement reflects only our belief at the time the statement is
made. We undertake no obligation to update any forward-looking statements to
reflect subsequent events or circumstances.

Company overview

Our business is cyclical in nature and is sensitive to macroeconomic conditions
generally. Client demand for workforce solutions and services is dependent on
the overall strength of the labor market and secular trends toward greater
workforce flexibility within each of the segments where we operate. Improving
economic growth typically results in increasing demand for labor, resulting in
greater demand for our staffing services while demand for our outplacement
services typically declines. During periods of increased demand, as we
experienced in the first quarter of 2022, we are generally able to improve our
profitability and operating leverage as our cost base can support some increase
in business without a similar increase in selling and administrative expenses.
By contrast, during periods of decreased demand, our operating profit is
generally impacted unfavorably as we experience a deleveraging of selling and
administrative expenses, which may not decline at the same pace as revenues.

During the first quarter of 2022, changes in the foreign currency exchange rates
had a 5.4% unfavorable impact on revenues from services and an approximately
$0.10 per share unfavorable impact on net earnings per share - diluted in the
quarter. Substantially all of our subsidiaries derive revenues from services and
incur expenses within the same currency and generally do not have cross-currency
transactions, and therefore, changes in foreign currency exchange rates
primarily impact reported earnings and not our actual cash flow unless earnings
are repatriated. To understand the performance of our underlying business, we
utilize constant currency or organic constant currency variances for our
consolidated and segment results.

During the first quarter of 2022, we experienced a 24.8% revenue increase in the
Americas, primarily driven by our acquisition of the ettain group in the United
States in the fourth quarter of 2021, which now operates as part of our Experis
brand, and increased demand for our staffing/interim services. We refer to the
ettain group acquisition as the "Experis acquisition." During the first quarter
of 2022 compared to the first quarter of 2021, revenues increased 1.6% in
Southern Europe due to increased demand in Italy, Switzerland and Israel. In the
first quarter of 2022 compared to the first quarter of 2021, we experienced a
3.5% revenue decrease in Northern Europe, primarily due to unfavorable exchange
rates. We experienced a 1.5% revenue decrease in APME in the first quarter of
2022 primarily due to the unfavorable currency exchange rate impact, partially
offset by the increase in our Manpower staffing/interim and Experis business.

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From a brand perspective, we experienced revenue decreases in Manpower, and
revenue increases in Experis and Talent Solutions during the three months ended
March 31, 2022 compared to 2021. The revenue decrease in our Manpower brand was
due to unfavorable currency exchange rates. On a constant currency basis,
Manpower brand experienced improved demand for staffing services and an increase
in our permanent recruitment business. In our Experis brand, the revenue
increase was primarily due to the Experis acquisition in the United States,
improved demand for our interim services and an increase in our permanent
recruitment business. On an overall basis, the revenue increase in our Talent
Solutions brand, which includes Recruitment Process Outsourcing (RPO), TAPFIN -
Managed Service Provider (MSP) and our Right Management offerings, was driven
mostly by increased demand for our RPO and MSP services.

Our gross profit margin improved in the first quarter of 2022 compared to the
first quarter of 2021 primarily due to a favorable change in business mix and
growth in higher margin offerings. This is primarily driven by an increase in
our permanent recruitment business of 48.3% (54.8% in constant currency and
51.8% in organic constant currency) during the quarter as a result of stronger
hiring activity during the first quarter of 2022 compared to the first quarter
of 2021.The increase in gross profit margin was also due to the improvement in
our Manpower staffing margins and a higher percentage of revenue mix coming from
our higher-margin consulting and MSP services. These increases were partially
offset by a lower mix of revenues coming from our higher-margin Right Management
career transition business.

We recorded a net loss on the sale of our Russia business of $8.0 million, which
was comprised of a $9.7 million loss in selling and administrative expenses,
offset by a $1.7 million gain in interest and other expenses. We also incurred
acquisition integration costs of $3.7 million in the first quarter of 2022
relating to our Experis acquisition, which closed in the fourth quarter of 2021.

Our operating profit increased 40.9% in the first quarter of 2022 while our
operating profit margin increased 70 basis points compared to the first quarter
of 2021. Excluding the loss of $9.7 million in selling and administrative
expenses from the disposition of our Russia business and acquisition integration
costs of $3.7 incurred in the first quarter of 2022, our operating profit was up
54.6% while operating profit margin was up 100 basis points compared to the
first quarter of 2021. The operating profit margin increased due to the
improvement in our gross profit margin.

We continue to monitor expenses closely to ensure we maintain the benefit of our
efforts to optimize our organizational and cost structures, while investing
appropriately to support the ability of the business to grow in the future and
enhance our productivity, technology and digital capabilities. We are focused on
managing costs as efficiently as possible in the short-term while continuing to
progress transformational actions aligned with our strategic priorities.


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Results of operations – Quarters ended March 31, 2022 and 2021

The following table presents selected consolidated financial data for the three months ended March 31, 2022 compared to 2021.

Constant

Cash

(in millions, except per share data)     2022          2021         Variance        Variance
Revenues from services                 $ 5,143.3     $ 4,924.4            4.4 %           9.8 %
Cost of services                         4,246.2       4,156.3            2.2 %           7.6 %
Gross profit                               897.1         768.1           16.8 %          22.2 %
Gross profit margin                         17.4 %        15.6 %

Selling and administrative expenses 758.4 669.7 13.2% 18.2% Operating income

                           138.7          98.4           40.9 %          49.3 %
Operating profit margin                      2.7 %         2.0 %
Interest and other expenses, net             2.7           5.4          (50.8 )%
Earnings before income taxes               136.0          93.0           46.3 %          54.7 %
Provision for income taxes                  44.4          31.0           43.2 %
Effective income tax rate                   32.6 %        33.3 %
Net earnings                           $    91.6     $    62.0           47.8 %          56.3 %
Net earnings per share - diluted       $    1.68     $    1.11           51.4 %          60.4 %
Weighted average shares - diluted           54.4          55.7           

(2.3)%

The year-over-year increase in services revenue of 4.4% (9.8% in constant currency and 6.5% in constant currency organic) was attributed to:

a revenue increase in the United States of 46.1% (15.2% on an organic basis)
primarily driven by our Experis acquisition in the fourth quarter of 2021,
increased demand for our staffing/interim services, an increase in our permanent
recruitment business of 89.4% (78.0% on an organic basis), including our RPO
offering, and increased demand for our MSP offering; and

a revenue increase in Southern Europe of 1.6% (8.4% in constant currency).
France, the largest market in Southern Europe, experienced a revenue increase of
0.3% (7.7% in constant currency), which was primarily due to the increased
demand for our Manpower staffing services and a 29.7% increase (39.3% in
constant currency) in the permanent recruitment business. Italy, also part of
Southern Europe, experienced a revenue increase of 10.5% (18.6% in constant
currency), which was primarily due to the increased demand for our Manpower
staffing services and Experis interim services and a 38.7% increase (49.0% in
constant currency) in the permanent recruitment business; partially offset by

a revenue decrease in Northern Europe of 3.5% (increase of 2.0% in constant
currency), primarily due to the unfavorable impact of foreign currency exchange
rates and the disposition of our Russia business, partially offset by the 50.9%
increase (59.8% in constant currency) in the permanent recruitment business. We
experienced revenue decreases in the United Kingdom, Germany and the Netherlands
of 3.1%, 10.1% and 9.1%, respectively (-0.3%, -3.5% and -2.4%, respectively, in
constant currency). The decreases were partially offset by revenue increases in
the Nordics and Belgium of 8.0% and 0.1%, respectively (15.9% and 7.5%,
respectively, in constant currency);

a revenue decrease in APME of 1.5% (increase of 6.0% in constant currency)
primarily due to the increased demand for our staffing/interim services and a
10.2% increase (17.9% in constant currency) in our permanent recruitment
business, partially offset by the unfavorable impact of change in currency
exchange rates and the unfavorable impact of approximately one fewer billing
day; and

a decrease of 5.4% due to the impact of exchange rate variations.

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The year-over-year gross profit margin increase of 180 basis points was mainly due to:

a positive 90 basis point change in business mix, with higher margin permanent staffing activity representing a higher percentage of revenue mix;

a favorable impact of 40 basis points from the improvement in staffing/interim margins;

a favorable impact of 30 basis points from the acquisition of Experis in United States;

a favorable impact of 20 basis points from the margin improvement in the non-staff part of our Experis business; and

a favorable impact of 10 basis points from direct cost adjustments North Europe; partially offset by

a 20 basis point unfavorable change in business mix, with the higher-margin Right Management career transition business accounting for a lower percentage of revenue mix.

The 13.2% increase in selling and administrative expenses in the first quarter
of 2022 (18.2% in constant currency; 13.6% in organic constant currency) was
primarily attributed to:

a 13.6% increase (18.5% in constant currency and 14.3% in organic constant
currency) in personnel costs due to the increase in salary costs related to
additional headcount as we invested in incremental recruiters and sales talent
to support revenue growth. The increase in salary costs was also due to an
increase in variable incentive costs as a result of increased profitability in
most markets;

a 5.3% increase (10.3% in constant currency and 7.8% in organic constant currency) in non-staff costs, excluding acquisition integration costs and loss on disposal of our Russia business completed in the first quarter of 2022, to support the increase in revenue;

a loss on disposal of our Russia business of $9.7 million incurred in the first quarter of 2022;

the $3.7 million acquisition integration costs incurred in the first quarter of 2022; and

an increase of 5.0% due to the impact of exchange rate variations.

Selling and administrative expenses as a percent of revenues increased 110 basis
points in the first quarter of 2022 compared to the first quarter of 2021 due
primarily to:

a 70 basis point unfavorable impact as personnel costs increased, due to the
investment in incremental recruiters and sales talent based on increased market
activity, without a similar rate of increase in revenues;

an unfavorable impact of 20 basis points from the loss on the sale of our Russia
business completed in the first quarter of 2022; and

an unfavorable impact of 10 basis points from the integration costs of the acquisition of Experis incurred in the first quarter of 2022.

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Interest and other expenses, net is comprised of interest, foreign exchange
gains and losses and other miscellaneous non-operating income and expenses,
including noncontrolling interests. Interest and other expenses, net was $2.7
million in the first quarter of 2022 compared to $5.4 million in the first
quarter of 2021. Miscellaneous income increased to $6.7 million in the first
quarter of 2022 from $4.2 million in the first quarter of 2021 primarily due to
a translation gain from the sale of a subsidiary and increase in the returns on
pension plan assets.

We recorded income tax expense at an effective rate of 32.6% for the three
months ended March 31, 2022, as compared to an effective rate of 33.3% for the
three months ended March 31, 2021. The 2022 rate was favorably impacted by the
scheduled reduction in the French corporate tax rate to 25% and a higher level
of pre-tax earnings with a more beneficial mix diluting the impact of the French
business tax. The 32.6% effective tax rate in the first quarter of 2022 was
higher than the United States Federal statutory rate of 21% primarily due to the
French business tax, tax losses in certain countries for which we did not
recognize a corresponding tax benefit due to valuation allowances, and the
overall mix of earnings.

Net earnings per share - diluted was $1.68 in the first quarter of 2022 compared
to $1.11 in the first quarter of 2021. Foreign currency exchange rates
unfavorably impacted net earnings per share - diluted by approximately $0.10 per
share in the first quarter of 2022. The net loss from the disposition of our
Russia business in the first quarter of 2022 negatively impacted net earnings
per share - diluted by approximately $0.15 in the first quarter of 2022. The
acquisition integration costs in the first quarter of 2022 negatively impacted
net earnings per share - diluted by approximately $0.05, net of tax.

Weighted average shares - diluted decreased to 54.4 million in the first quarter
of 2022 from 55.7 million in the first quarter of 2021. This decrease was due to
the impact of share repurchases completed since the first quarter of 2021,
partially offset by shares issued as a result of exercises and vesting of
share-based awards.

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Segment Operating Results

Americas

In the Americas, revenues from services increased 24.8% (25.7% in constant
currency and 6.9% in organic constant currency) in the first quarter of 2022
compared to the first quarter of 2021. In the United States (which represents
71% of the America's revenues), revenues from services increased 46.1% (15.2% on
an organic basis) in the first quarter of 2022 compared to the first quarter of
2021, primarily driven by the Experis acquisition in the United States in the
fourth quarter of 2021, increased demand for our staffing/interim services, an
increase in our permanent recruitment business of 89.4% (78.0% on an organic
basis), including our RPO offering, and increased demand for our MSP offering.
In Other Americas, revenues from services decreased 8.2% (-5.9% in constant
currency) in the first quarter of 2022 compared to the first quarter of 2021
primarily due to decreased demand for our Manpower staffing services and the
unfavorable impact of currency exchange rates, partially offset by the increase
in our permanent recruitment business of 83.6% (89.5% in constant currency).
This decline was driven by a decrease in Mexico of 61.6% (61.3% in constant
currency) due to labor legislation implemented in the third quarter of 2021 that
prohibits the provision of traditional temporary staffing services, only
allowing outsourced worker assignments for specialized services outside of the
client's core business. Although we believe the new labor legislation will
continue to result in significant comparative revenue reductions in Mexico over
the next two quarters, we believe the shift will improve the margins of our
Mexico business over time. Our Mexico operations generated approximately 1.9% of
our consolidated global revenues for the year ended December 31, 2021. The
decline was partially offset by increases in Canada, Colombia, Argentina, Peru
and Chile of 23.4%, 20.4%, 14.2%, 11.1% and 42.6%, respectively (23.5%, 32.3%,
18.0%, 15.5% and 59.2%, respectively, in constant currency).

Gross profit margin increased in the first quarter 2022 compared to the first
quarter 2021 primarily due to the Experis acquisition, improvements in the
staffing/interim margins, increases in our permanent recruitment business and
increases in revenues from our higher-margin MSP and RPO offerings in the United
States. These increases were partially offset by the unfavorable changes in
business mix as the higher-margin Right Management career transition business
represented a lower percentage of the revenue mix.

In the first quarter of 2022, selling and administrative expenses increased
35.6% (36.2% in constant currency and 20.3% in organic constant currency),
primarily due to the Experis acquisition, an increase in salary-related costs as
a result of a higher headcount as we invested in incremental recruiters and
sales talent based on increased market activity. The increase in salary-related
costs was also due to an increase in variable incentive costs as a result of
increased profitability in certain markets. The increase was also due to
acquisition integration costs of $3.7 million incurred in the first quarter of
2022 and an increase in consulting costs related to certain technology
initiatives.

Operating Unit Profit ("OUP") margin in the Americas was 5.8% and 4.4% for the
first quarter of 2022 and 2021, respectively. In the United States, OUP margin
increased to 6.6% in the first quarter of 2022 from 4.8% in the first quarter of
2021 primarily due to the Experis acquisition, increased operating leverage, an
increase in the gross profit margin and an increase in salary-related costs due
to higher headcount, partially offset by the acquisition integration costs
incurred in the first quarter of 2022. Other Americas OUP margin increased to
4.0% in the first quarter of 2022 from 3.8% in the first quarter of 2021
primarily due to the gross profit margin improvement.

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southern Europe

In Southern Europe, revenues from services increased 1.6% (8.4% in constant
currency) in the first quarter of 2022 compared to the first quarter of 2021. In
the first quarter of 2022, revenues from services increased 0.3% (7.7% in
constant currency) in France (which represents 54% of Southern Europe's
revenues) and increased 10.5% (18.6% in constant currency) in Italy (which
represents 20% of Southern Europe's revenues). The increase in France is
primarily due to the increased demand for our Manpower staffing services,
although supply chain constraints impacted the demand for our services from our
automotive clients, a 29.7% increase (39.3% in constant currency) in the
permanent recruitment business, partially offset by the unfavorable impact of
changes in currency exchange rates. The increase in Italy was primarily due to
the increased demand for our Manpower staffing services and Experis interim
services and a 38.7% increase (49.0% in constant currency) in the permanent
recruitment business, partially offset by the unfavorable impact of changes in
currency exchange rates. In Other Southern Europe, revenues from services
decreased 2.1% (2.7% increase in constant currency) during the first quarter of
2022 compared to the first quarter of 2021, due to the unfavorable impact of
changes in currency exchange rates, partially offset by increased demand for our
Manpower staffing services and an increase in our permanent recruitment business
of 37.2% (45.3% in constant currency).

Gross profit margin increased in the first quarter of 2022 compared to the first
quarter of 2021. The increase was primarily due to the increase in our
staffing/interim margins in several markets and the increase of 34.8% (44.1% in
constant currency) in the permanent recruitment business.

Selling and administrative expenses increased 1.0% (7.8% in constant currency)
during the first quarter of 2022 compared to the first quarter of 2021 primarily
due to the increase in salary-related costs due to higher headcount to support
an increase in revenues in the quarter, and an increase in variable incentive
costs as a result of increased profitability in certain markets. The increase is
also due to the higher non-personnel related costs to support the growth in
revenues and the unfavorable impact of changes in currency exchange rates.

OUP margin in Southern Europe was 4.3% for the first quarter of 2022 compared to
3.4% for the first quarter of 2021. In France, the OUP margin was 4.2% for the
first quarter of 2022 compared to 3.6% for the first quarter of 2021. The
increase in France was primarily due to our ability to increase revenues without
a similar increase in expenses and the increase in the gross profit margin. In
Italy, the OUP margin increased to 6.5% for the first quarter of 2022 from 4.8%
for the first quarter of 2021 primarily due to our ability to increase revenues
without a similar increase in expenses and the increase in the gross profit
margin. Other Southern Europe's OUP margin increased to 3.0% in the first
quarter of 2022 from 2.0% in the first quarter of 2021, primarily due to the
increase in the gross profit margin.

North Europe

In Northern Europe, the largest country operations include the United Kingdom,
the Nordics, Germany, the Netherlands and Belgium (comprising 38%, 23%, 13%,
10%, and 7%, respectively, of Northern Europe's revenues), revenues from
services decreased 3.5% (2.0% increase in constant currency and 3.8% in organic
constant currency) in the first quarter of 2022 compared to the first quarter of
2021. We experienced revenue decreases in the United Kingdom, Germany and the
Netherlands of 3.1%, 10.1% and 9.1%, respectively (-0.3%, -3.5% and -2.4%,
respectively, in constant currency). The decreases were partially offset by
revenue increases in the Nordics and Belgium of 8.0% and 0.1%, respectively
(15.9% and 7.5%, respectively, in constant currency). The revenue decrease in
Northern Europe was primarily due to the unfavorable impact of changes in
currency exchange rates and the sale of our Russia business, partially offset by
increased demand for our Experis staffing services and the 50.9% increase (59.8%
in constant currency) in the permanent recruitment business.

Gross profit margin increased in the first quarter of 2022 compared to the first
quarter of 2021 primarily due to increases in our staffing/interim margins, a
direct cost adjustment and the increases in our permanent recruitment business.

Selling and administrative expenses increased 10.0% (16.8% in constant currency)
in the first quarter of 2022 compared to the first quarter of 2021. The increase
is primarily due to the increase in salary-related costs due to higher
headcount, the loss on the sale of our Russia business, and the increases in
non-personnel related costs to support the increase in revenues.

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OUP margin for Northern Europe decreased to 0.3% in the first quarter of 2022
from 0.4% in the first quarter of 2021.The decrease was primarily due to the
loss on the sale of our Russia business, partially offset by the increase in
gross profit margin.

APME

Revenues from services decreased 1.5% (6.0% increase in constant currency) in
the first quarter of 2022 compared to the first quarter of 2021. In Japan (which
represents 47% of APME's revenues), revenues from services increased 2.5% (12.5%
in constant currency) due to the increase in our Experis business, increased
demand for our Manpower staffing services and a 26.0% increase (38.1% in
constant currency) in our permanent recruitment business, partially offset by
the unfavorable impact of currency exchange rates. In Australia (which
represents 12% of APME's revenues), revenues from services decreased 31.7%
(27.1% in constant currency) due to the exit of a low margin client arrangement
in the second quarter of 2021. The revenue increase in the remaining markets in
APME is primarily due the increased demand for our staffing/interim services and
a 10.2% increase (17.9% in constant currency) in our permanent recruitment
business, partially offset by the unfavorable impact of change in currency
exchange rates and the unfavorable impact of approximately one fewer billing
day.

Gross profit margin increased in the first quarter 2022 compared to the first
quarter 2021 primarily due to the increase in our staffing/interim margins and
the increase of 10.2% (17.9% in constant currency, respectively) in our
permanent recruitment business.

Selling and administrative expenses increased 3.6% (11.3% in constant currency)
in the first quarter of 2022 compared to the first quarter of 2021. The increase
is primarily due to the increase in salary-related costs due to higher headcount
to support an increase in revenues and increase in variable incentive costs as a
result of increase in profitability in certain markets, and the increases in
non-personnel related costs to support the increases in revenues.

The OUP margin for APME increased to 3.1% in the first quarter of 2022 from 3.0% in the first quarter of 2021 due to the increase in gross profit margin.

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Financial measures

Reconciliation in constant currencies and in organic constant currencies

Changes in our financial results include the impact of changes in foreign
currency exchange rates, acquisitions, and dispositions. We provide "constant
currency" and "organic constant currency" calculations in this report to remove
the impact of these items. We express year-over-year variances that are
calculated in constant currency and organic constant currency as a percentage.

When we use the term "constant currency," it means that we have translated
financial data for a period into United States dollars using the same foreign
currency exchange rates that we used to translate financial data for the
previous period. We believe that this calculation is a useful measure,
indicating the actual growth or decline of our operations. We use constant
currency results in our analysis of subsidiary or segment performance. We also
use constant currency when analyzing our performance against that of our
competitors. Substantially all of our subsidiaries derive revenues and incur
expenses within a single country and, consequently, do not generally incur
currency risks in connection with the conduct of their normal business
operations. Changes in foreign currency exchange rates primarily impact reported
earnings and not our actual cash flow unless earnings are repatriated.

When we use the term "organic constant currency," it means that we have further
removed the impact of acquisitions in the current period and dispositions from
the prior period from our constant currency calculation. We believe that this
calculation is useful because it allows us to show the actual growth or decline
of our ongoing business.

The constant currency and organic constant currency financial measures are used
to supplement those measures that are in accordance with United States Generally
Accepted Accounting Principles ("GAAP"). These Non-GAAP financial measures may
not provide information that is directly comparable to that provided by other
companies in our industry, as other companies may calculate such financial
results differently. These Non-GAAP financial measures are not measurements of
financial performance under GAAP, and should not be considered as alternatives
to measures presented in accordance with GAAP.

Constant currency and organic constant currency percent variances, along with a
reconciliation of these amounts to certain of our reported results, are provided
below:

                                                   Three Months Ended March 31, 2022 Compared to 2021
                                                                                                Impact of
                                                                                               Acquisitions          Organic
                                                                             Constant        and Dispositions        Constant
                           Reported         Reported        Impact of        Currency          (In Constant          Currency
                           Amount(a)        Variance        Currency         Variance           Currency)            Variance
Revenues from services:
Americas:
United States                   889.4            46.1 %              -            46.1 %                  30.9 %          15.2 %
Other Americas                  361.8            (8.2 )%          (2.3 )%         (5.9 )%                    -            (5.9 )%
                              1,251.2            24.8 %           (0.9 )%         25.7 %                  18.8 %           6.9 %
Southern Europe:
France                        1,192.4             0.3 %           (7.4 )%          7.7 %                     -             7.7 %
Italy                           445.0            10.5 %           (8.1 )%         18.6 %                     -            18.6 %
Other Southern Europe           556.5            (2.1 )%          (4.8 )%          2.7 %                     -             2.7 %
                              2,193.9             1.6 %           (6.8 )%          8.4 %                     -             8.4 %
Northern Europe               1,094.5            (3.5 )%          (5.5 )%          2.0 %                  (1.8 )%          3.8 %
APME                            618.2            (1.5 )%          (7.5 )%          6.0 %                     -             6.0 %
                              5,157.8
Intercompany
Eliminations                    (14.5 )
Consolidated                  5,143.3             4.4 %           (5.4 )%          9.8 %                   3.3 %           6.5 %
Gross Profit                    897.1            16.8 %           (5.4 )%         22.2 %                   5.6 %          16.6 %
Selling and
Administrative Expenses         758.4            13.2 %           (5.0 )%         18.2 %                   4.6 %          13.6 %
Operating Profit                138.7            40.9 %           (8.4 )%         49.3 %                  12.9 %          36.4 %


(a)

In millions for the three months ended March 31, 2022.

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Cash and capital resources

Cash used to fund our operations is primarily generated through operating
activities and provided by our existing credit facilities. We believe our
available cash and existing credit facilities are sufficient to cover our cash
needs for the foreseeable future. We assess and monitor our liquidity and
capital resources globally. We use a global cash pooling arrangement,
intercompany borrowing, and some local credit lines to meet funding needs and
allocate our capital resources among our various entities. As of March 31, 2022,
we had $703.0 million of cash held by foreign subsidiaries. We have historically
made and anticipate future cash repatriations to the United States from certain
foreign subsidiaries to fund domestic operations.

Cash provided by operating activities was $70.6 million and $140.9 million
during the three months ended March 31, 2022 and 2021, respectively. Changes in
operating assets and liabilities utilized $66.1 million of cash during the three
months ended March 31, 2022 compared to $58.9 million generated during the three
months ended March 31, 2021. These changes were primarily attributable to the
decrease in accounts payable due to timing. Accounts receivable decreased to
$5,440.0 million as of March 31, 2022 from $5,448.2 million as of December 31,
2021 due to the impact of changes in currency exchange rates. Days Sales
Outstanding ("DSO") increased by two days to 57 days as of March 31, 2022 from
December 31, 2021 due to higher activity levels and to unfavorable mix changes,
with higher growth in countries with a higher average DSO.

The nature of our operations is such that our most significant current asset is
accounts receivable and our most significant current liabilities are payroll
related costs, which are generally paid either weekly or monthly. As the demand
for our services increases, as we experienced during the three months ended
March 31, 2022, we generally experience an increase in our working capital
needs, as we continue to pay our associates on a weekly or monthly basis while
the related accounts receivable is outstanding for much longer, which may result
in a decline in operating cash flows.

Conversely, as the demand for our services declines, we generally experience a
decrease in our working capital needs, as the existing accounts receivable are
collected and not replaced at the same level, resulting in a decline of our
accounts receivable balance, with less of an effect on current liabilities due
to the shorter cycle time of the payroll related items. This may result in an
increase in our operating cash flows; however, any such increase would not be
expected to be sustained in the event that an economic downturn continued for an
extended period.

Capital expenditures were $19.4 million for the three months ended March 31,
2022 compared to $12.7 million for the three months ended March 31, 2021. These
expenditures were primarily comprised of purchases of computer equipment, office
furniture and other costs related to office openings and refurbishments, as well
as capitalized software costs. The higher expenditures in 2022 compared to 2021
are primarily due to additional technology investments and the timing of capital
expenditures.

From time to time, we acquire and invest in companies throughout the world,
including franchises. No cash consideration was paid during the three months
ended March 31, 2022. For the three months ended March 31, 2021, the total cash
consideration paid for acquisitions, net of cash acquired, was $12.9 million,
which represents consideration payments for franchises in the United States and
contingent consideration payments related to previous acquisitions.

Occasionally, we dispose of parts of our operations based on risk considerations
and to optimize our global strategic and geographic footprint and overall
efficiency. On January 17, 2022, we disposed of our Russia business in our
Northern Europe segment for cash proceeds of $3.2 million and simultaneously
entered into a franchise agreement with the new owner of the Russia business. In
connection with the disposition, we recognized a one-time net loss on
disposition of $8.0 million.

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Net debt payments were $28.0 million in the three months ended March 31, 2022,
as compared to net debt borrowings of $2.8 million in the three months ended
March 31, 2021. The 2022 payments include a $25.0 million repayment into our
revolving debt facility, against which we had outstanding borrowings of $75.0
million as of December 31, 2021 related to the Experis acquisition. We intend to
repay the remaining $50.0 million over the next six months.

Our €500.0 million notes and €400.0 million notes are due June 2026 and
September 2022, respectively. We plan to refinance the €400.0 million notes.
When the €500.0 million notes mature, we plan to either repay the amounts with
available cash or borrowings under our $600.0 million revolving credit facility
or a new borrowing. The credit terms, including interest rate and facility fees,
of any replacement borrowings will be dependent upon the condition of the credit
markets at that time. We currently do not anticipate any problems accessing the
credit markets upon replacement of either the €500.0 million or €400.0 million
notes.

As of March 31, 2022, we had $50.0 million borrowings and letters of credit of
$0.4 million issued under our $600.0 million revolving credit facility.
Additional borrowings of $549.6 million were available to us under the facility
as of March 31, 2022.

The $600.0 million revolving credit agreement requires that we comply with a
leverage ratio (Net Debt-to-Net Earnings before interest and other expenses,
provision for income taxes, intangible asset amortization expense, depreciation
and amortization expense ("EBITDA")) of not greater than 3.5 to 1 and a fixed
charge coverage ratio of not less than 1.5 to 1. As defined in the agreement, we
had a Net Debt-to-EBITDA ratio of 0.92 to 1 and a fixed charge coverage ratio of
5.56 to 1 as of March 31, 2022. Based on our current forecast, we expect to be
in compliance with our financial covenants for the next 12 months.

In addition to the previously mentioned facilities, we maintain separate bank
credit lines with financial institutions to meet working capital needs of our
subsidiary operations. As of March 31, 2022, such uncommitted credit lines
totaled $340.9 million, of which $319.7 million was unused. Under the Credit
Agreement, total subsidiary borrowings cannot exceed $300.0 million in the
first, second and fourth quarters, and $600.0 million in the third quarter of
each year. Due to these limitations, additional borrowings of $278.8 million
could have been made under these lines as of March 31, 2022.

We have assessed our liquidity position as of March 31, 2022 and for the near
future. As of March 31, 2022, our cash and cash equivalents balance was $777.3
million. We also have access to the previously mentioned revolving credit
facility that could have immediately provided us with up to $600.0 million of
additional cash, of which just $50.0 million was used as of March 31, 2022, and
we have an option to request an increase to the total availability under the
revolving credit facility by an additional $200.0 million and each lender may
participate in the requested increase at their discretion. In addition, we have
access to the previously mentioned credit lines of up to $300.0 million ($600.0
million in the third quarter) to meet the working capital needs of our
subsidiaries, of which $278.8 million was available to use as of March 31, 2022.
Our €500.0 million notes and €400.0 million notes that total $992.7 million as
of March 31, 2022 mature in June 2026 and September 2022, and we plan to
refinance the €400.0 million note in 2022. Based on the above, we believe we
have sufficient liquidity and capital resources to satisfy future requirements
and meet our obligations currently and in the near future.

The Board of Directors declared a semi-annual dividend of $1.36 and $1.26 per
share, respectively, on May 6, 2022 and May 7, 2021, respectively. The 2022
dividends are payable on June 15, 2022 to shareholders of record as of June 1,
2022. The 2021 dividends were paid on June 15, 2021 to shareholders of record as
of June 1, 2021.

In August 2021, the Board of Directors authorized the repurchase of 4.0 million
shares of our common stock, with terms consistent with the previous
authorizations. This authorization was in addition to the August 2019 Board
authorization to purchase 6.0 million shares of our common stock. Share
repurchases may be made from time to time through a variety of methods,
including open market purchases, block transactions, privately negotiated
transactions or similar facilities. During the first quarter of 2022, we
repurchased a total of 0.6 million shares under the 2019 authorization at a cost
of $59.9 million. During the first quarter of 2021, we repurchased a total of
1.1 million shares under the 2019 authorization at a cost of $100.1 million. As
of March 31, 2022, there were 4.0 million and 0.6 million shares remaining
authorized for repurchase under the 2021 authorization and 2019 authorization,
respectively.

We had aggregate commitments of $2,061.7 million as of March 31, 2022 related to
debt, operating leases, severances and office closure costs, transition tax
resulting from the Tax Act and certain other commitments compared to $2,156.7
million as of December 31, 2021.

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We also have entered into guarantee contracts and stand-by letters of credit
totaling $766.4 million and $769.3 million as of March 31, 2022 and December 31,
2021, respectively ($718.8 million and $717.7 million for guarantees,
respectively, and $47.6 million and $51.6 million for stand-by letters of credit
as of March 31, 2022 and December 31, 2021, respectively). The guarantees
primarily relate to staffing license requirements, operating leases and
indebtedness. The stand-by letters of credit mainly relate to workers'
compensation in the United States. If certain conditions were met under these
arrangements, we would be required to satisfy our obligations in cash. Due to
the nature of these arrangements and our historical experience, we do not expect
any significant payments under these arrangements. Therefore, they have been
excluded from our aggregate commitments. The cost of these guarantees and
letters of credit was $0.4 million and $0.5 million for the three months ended
March 31, 2022 and 2021, respectively.

We did not record any restructuring costs during the three months ended March
31, 2022 or 2021. During the three months ended March 31, 2022, we made payments
of $3.2 million out of our restructuring reserve, which is used for severances
and office closures and consolidations in multiple countries and territories. We
expect a majority of the remaining $20.1 million reserve will be paid by the end
of 2022.


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Recently issued accounting standards

See note 2 to the consolidated financial statements.

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