ManpowerGroup Inc. (MAN)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

in millions, except share and per share data

Financial Measures — Constant Currency And Organic Constant Currency

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 of our operations. We use constant currency results in our analysis of subsidiary or segment performance, including Argentina which operates in a hyperinflationary economy. 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 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 included in the Financial Measures section found in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Results of Operations - For Years of Operation Ending December 31, 2024 and 2023

The financial discussion that follows focuses on 2024 results compared to 2023. For a discussion of 2023 results compared to 2022, see the company’s Annual Report on Form 10-K for the year ended December 31, 2023.

During 2024, revenues decreased -5.6% compared to 2023. Our 2024 results reflected the negative impact of economic uncertainty, particularly in Europe and North America, as we saw decreased demand for our staffing and permanent recruitment services, partially offset by increased demand for our Right Management outplacement services as well as increased demand in Asia Pacific and Latin America. As Europe represents a significant portion of our operations, we continue to monitor economic conditions in our Southern Europe and Northern Europe segments. Inflation has eased in Europe and the United States resulting in both markets reducing interest rates during the year. However, employers are continuing their cautious approach with many employers retaining their current workforce, delaying hiring decisions or reducing their demand for contingent labor as they remain focused on managing the macro-economic and geopolitical challenges impacting their businesses. Many employers are still hesitant to increase their spend and expand their workforce until they perceive a significant improvement in economic outlook. As a result of these factors, we expect the business environment will continue to be challenging, which could further negatively impact our operations in future periods.

During 2024, the United States dollar strengthened, on average, relative to the currencies in most of our markets, and overall had an unfavorable impact on our reported results. The changes in the foreign currency exchange rates had a -2.2% unfavorable impact on revenues from services and an approximately $0.15 per share unfavorable impact on net earnings per share – diluted in 2024. Substantially all of our subsidiaries derive revenues from services and incur expenses within the same local 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.

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During 2024, we experienced the following quarterly changes to our consolidated revenues compared to 2023: a -7.3% decrease in revenue in the first quarter due to softening demand for staffing services due to increased economic uncertainty, partially offset by an increase in demand for our Right Management outplacement services; a revenue decrease of -6.9% in the second quarter due to the continued softening demand for staffing and permanent recruitment services; a revenue decrease of -3.1% in the third quarter due to the continued softening demand for staffing services, partially offset by an increase in demand for our Right Management outplacement services; and ending the year with a -5.0% revenue decrease in the fourth quarter of 2024 due to the continuing decrease in demand for our staffing services.

During 2024 compared to 2023, most of our markets experienced revenue decreases due to softening demand for our staffing and permanent recruitment services and the strengthening of the dollar in certain markets, partially offset by increased demand for our Right Management outplacement services. We experienced a -4.3% revenue decrease in the Americas primarily driven by the unfavorable impact of currency exchange rates and a decrease in demand for our Experis interim services, partially offset by an increase in demand for our Manpower staffing services, an increase in demand for our Talent Based Outsourcing (TBO) business and an increase in demand for our Right Management outplacement services. We experienced a -3.5% revenue decrease in Southern Europe, primarily driven by a decrease in demand for our Manpower and Experis staffing/interim services and a decrease in demand for our permanent recruitment services, partially offset by an increase in demand for our Right Management outplacement services. We experienced a revenue decrease of -11.8% in Northern Europe, primarily due to decreased demand in our Manpower and Experis staffing/interim services, decreased demand in our permanent recruitment business and decreased demand for our Experis solutions services, partially offset by increased demand in our TAPFIN - Managed Service Provider (MSP) business and increased demand for our Right Management outplacement services. We experienced a -6.9% revenue decrease in APME, primarily driven by the unfavorable impact of currency exchange rates, decreased demand in our permanent recruitment business and a decrease in demand in our TBO business, partially offset by an increase in demand for our Manpower and Experis staffing/interim services.

From a brand perspective, we experienced a revenue decrease in Manpower, Experis and Talent Solutions during 2024 compared to 2023. The revenue decrease in our Manpower brand was due to decreased demand for our staffing services and the unfavorable impact of currency exchange rates. In our Experis brand, the revenue decrease was primarily due to decreased demand for our interim services and decreased demand for our Experis solutions services. The revenue decrease in our Talent Solutions brand, which includes Recruitment Process Outsourcing (RPO), TAPFIN - MSP, and our Right Management offerings, was driven primarily by decreased activity in our RPO permanent recruitment business, partially offset by increased demand for our Right Management outplacement services and increased demand in our MSP business.

In 2024 our gross profit margin decreased 50 basis points compared to 2023 primarily due to decreases in our permanent recruitment business, including Talent Solutions RPO, as permanent hiring demand continued to soften and experienced reduced levels from the prior year period and a decrease in staffing/interim margins due to mix shifts and lower volumes while pricing remained stable. The decrease was partially offset by increased career transition activity in Right Management as outplacement activity increased.

In 2024 our operating profit increased 19.6% while our operating profit margin increased 30 basis points compared to 2023. The operating profit margin increased primarily due to a reduction in selling and administrative expenses, including wind down charges related to our Germany Proservia business and goodwill impairment charges in 2023, as a percent of revenue, partially offset by the overall decrease in our gross profit margin, as noted above.

During the year, we initiated significant restructuring actions on businesses heavily impacted by the continuing decline in activity. With these actions, we expect our overall cost structure to decline. We expect to continue to monitor expenses closely to maintain the benefit of our efforts to optimize our organizational cost structures. At the same time, we plan to invest appropriately to enable 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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Consolidated Results - 2024 compared to 2023

The following table presents selected consolidated financial data for 2024 as compared to 2023.

The year-over-year decrease in revenues from services of -5.6% (-3.4% in constant currency and -3.0% in organic constant currency) was attributed to:

•
a revenue decrease in the Americas of -4.3% (increase of 3.1% in constant currency) primarily driven by the $325.8 unfavorable impact of currency exchange rates and a $144.8 decrease in demand for our Experis interim services, partially offset by a $248.8 increase in demand for our Manpower staffing services, a $24.4 increase in demand for TBO and a $9.3 increase in demand for our Right Management outplacement services. The United States, our largest market in the Americas, experienced a revenue decrease of -3.5% primarily driven by a $105.4 decrease in demand for our Manpower and Experis staffing/interim services and a $6.7 decrease in demand for our permanent recruitment services, partially offset by a $7.9 increase in demand for our Right Management outplacement services;

•
a revenue decrease in Southern Europe of -3.5% (-3.3% in constant currency and -3.1% in organic constant currency) primarily driven by a $273.0 decrease in demand for our Manpower and Experis staffing/interim services and a $23.9 decrease in demand for our permanent recruitment services, partially offset by a $14.6 increase in demand for our Right Management outplacement services. France, the largest market in Southern Europe, experienced a revenue decrease of -5.1% (-5.1% in constant currency) primarily driven by a $248.2 decrease in demand for our Manpower staffing services, partially offset by a $12.6 increase in demand for our Right Management outplacement services. Italy, our second-largest market in Southern Europe, experienced a revenue decrease of -1.9% (-1.8% in constant currency) primarily driven by a $24.7 decrease in demand for our Manpower staffing services and a $7.0 decrease in demand for our permanent recruitment services;

•
a revenue decrease in Northern Europe of -11.8% (-12.9% in constant currency), primarily due to decreased demand of $390.1 for our Manpower and Experis staffing/interim services, decreased demand of $33.7 in our permanent recruitment business and decreased demand of $78.7 for our Experis solutions services, partially offset by the $39.5 favorable impact of currency exchange rates, increased demand of $11.9 within our MSP business and increased demand of $6.2 for our Right Management outplacement services. Within our Northern Europe segment, we experienced revenue decreases in the United Kingdom of $157.3, the Nordics of $175.2, Germany of $84.5, the Netherlands of $6.7 and Belgium of $10.9, which represented revenue decreases of -12.1%, -21.8%, -15.1%, -1.8% and -3.4%, respectively (-14.5%, -21.2%, -15.2%, -1.8% and -3.4%, respectively, in constant currency); and

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•
a revenue decrease in APME of -6.9% (-2.3% in constant currency and an increase of 1.2% in organic constant currency) primarily driven by the $107.4 unfavorable impact of currency exchange rates, a $53.9 decrease in demand for our permanent recruitment services and a $44.3 decrease in demand in our TBO business, partially offset by a $46.3 increase in demand for our Manpower and Experis staffing/interim services.

The year-over-year 50 basis point decrease in gross profit margin was primarily attributed to:

•
a 40 basis point unfavorable impact due to decreases in permanent recruitment, including Talent Solutions RPO, as permanent hiring demand continued to soften and experienced reduced levels from the prior year period; and

•
a 20 basis point unfavorable impact from the decrease in staffing/interim margins due to mix shifts and lower volumes while pricing remained stable; partially offset by

•
a 10 basis point favorable impact from increased career transition activity in Right Management as outplacement activity increased.

The -10.4% decrease in selling and administrative expenses in the year ended December 31, 2024 (-8.8% in constant currency; -8.5% in organic constant currency) was primarily attributed to:

•
a $72.8, or -5.3% decrease (-3.7% in constant currency and -3.4% in organic constant currency) in personnel costs primarily due to a $42.2 decrease in salary costs, a $15.7 decrease in bonuses and sales commissions and a $14.9 decrease in other personnel costs as we saw the effects of restructuring actions taken in 2023;

•
a $55.1 decrease in goodwill impairment charges as no impairment was recorded in 2024;

•
restructuring costs of $53.6 in 2024 compared to $149.2 incurred in 2023;

•
a $49.9, or -1.6% decrease due to the impact of changes in currency exchange rates; and

•
a $24.7, or -4.0% decrease (-2.8% in constant currency and -2.4% in organic constant currency) in non-personnel costs, primarily due to a $15.1 decrease in office lease and other office costs and a $14.6 decrease in consulting and outside services costs.

Selling and administrative expenses as a percent of revenues decreased 80 basis points in the year ended December 31, 2024 compared to the year ended December 31, 2023 due primarily to:

•
a 50 basis point favorable impact as a result of lower restructuring costs incurred in 2024 compared to 2023; and

•
a 30 basis point favorable impact as we anniversaried the impact of goodwill impairment charges in 2023.

Interest and other expenses, net is comprised of interest, foreign exchange gains and losses and other miscellaneous non-operating income and expenses, including those associated with noncontrolling interests. Interest expense, net was $56.7 in 2024 compared to $45.5 in 2023 primarily due to increased revolver and other short-term borrowings at a higher interest rate during the period. Foreign exchange loss, net was $6.2 in 2024 compared to $21.8 in 2023 primarily due to a reduction in foreign currency exchange losses in Argentina. Miscellaneous income, net was $13.7 in 2024 compared to $17.4 in 2023.

We recorded income tax expense at an effective rate of 43.5% for 2024, as compared to an effective rate of 56.9% for 2023. The 2024 rate was lower than the 2023 rate primarily due to a higher level of pre-tax earnings with a more beneficial mix driven by fewer restructuring costs in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances and the Netherlands non-deductible goodwill impairment charge recorded in 2023. The 43.5% effective tax rate for 2024 was higher than the United States Federal statutory rate of 21% primarily due to restructuring costs in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances, the French business tax and the overall mix of earnings.

Net earnings per share - diluted was $3.01 in 2024 compared to $1.76 in 2023. Restructuring costs recorded in 2024 and 2023 negatively impacted net earnings per share - diluted by approximately $1.10 and $2.74 per share, net of tax, in 2024 and 2023, respectively. Losses related to our Proservia Germany wind down in 2024 unfavorably impacted net earnings per share - diluted by approximately $0.19, net of tax, in 2024. Foreign currency exchange rates in 2024 unfavorably impacted net earnings per share - diluted by approximately $0.15 per share, net of tax, in 2024. The pension settlement expense recorded in 2024 and 2023 negatively impacted net earnings per share - diluted by approximately $0.08 and $0.12, net of tax, in 2024 and 2023, respectively. Goodwill and other impairment charges recorded in 2023 negatively impacted net earnings per share - diluted by approximately $1.13 per share, net of tax, in 2023, respectively.

Weighted average shares - diluted decreased to 48.3 million in 2024 from 50.4 million in 2023. This decrease was due to the impact of share repurchases completed in 2024, partially offset by grants of share-based awards.

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Segment Results

We evaluate performance based on operating unit profit (“OUP”), which is equal to segment revenues less direct costs and branch and national headquarters operating costs. This profit measure does not include goodwill and intangible asset impairment charges or amortization of intangible assets related to acquisitions, corporate expenses, interest and other income and expense amounts or income taxes.

Americas

In the Americas, revenues from services decreased -4.3% (increase of 3.1% in constant currency) in 2024 compared to 2023. In the United States, revenues from services decreased -3.5% in 2024 compared to 2023, primarily driven by a $105.4 decrease in demand for our Manpower and Experis staffing/interim services and a $6.7 decrease in demand for our permanent recruitment services, partially offset by a $7.9 increase in demand for our Right Management outplacement services. In Other Americas, revenues from services decreased -5.8% (increase of 15.2% in constant currency) in 2024 compared to 2023 primarily driven by the $325.8 unfavorable impact of foreign currency exchange rates, partially offset by a $202.1 increase in demand for our Manpower and Experis staffing/interim services and a $24.6 increase in demand for our TBO business. The constant currency increase in Other Americas was primarily due to inflation in Argentina. Within our Other Americas segment, we experienced decreases in Argentina and Canada of $60.6, or -32.4%, and $43.1, or -12.1%, respectively (125.3% and -10.8%, respectively, in constant currency), partially offset by a revenue increase in Mexico of $3.9, or 1.6% (4.5% in constant currency).

Gross profit margin decreased 50 basis points in 2024 compared to 2023. This decrease was primarily due to decreased margins in our Experis interim services, which contributed 120 basis points to the decrease. These decreases were partially offset by favorable impacts of currency exchange rates, which had a 50 basis point impact and increased margins in our Right Management outplacement business, which had a 20 basis point impact.

Selling and administrative expenses decreased -4.9% (increase of 0.1% in constant currency) in 2024 compared to 2023, primarily driven by the $43.1 favorable impact of currency exchange rates and a $9.5 decrease in consulting and outside services costs, partially offset by an $11.6 increase in salary related costs.

OUP decreased -14.5% (-8.9% in constant currency) in 2024, which represents a 3.4% OUP margin, a decrease from 3.8% in 2023. This decrease was primarily due to decreased profitability in our United States business of $16.7, which experienced decreased activity in our higher-margin permanent recruitment business, as noted above, partially offset by decreases to selling and administrative expenses as a percent of revenue. In the United States, OUP margin decreased to 2.8% in 2024 from 3.3% in 2023 primarily due to decreased activity in our higher-margin permanent recruitment and Manpower and Experis staffing/interim businesses, as noted above, partially offset by a decrease in our selling and administrative expenses as a percent of revenue. Other Americas OUP margin decreased to 4.4% in 2024 from 4.6% in 2023 primarily due to an increase in our selling and administrative expenses as a percent of revenue and decreased gross profit margins across our staffing and interim services.

Southern Europe

In Southern Europe, revenues from services decreased -3.5% (-3.3% in constant currency and -3.1% in organic constant currency) in 2024 compared to 2023. In France, revenues from services decreased -5.1% (-5.1% in constant currency) in 2024 compared to 2023, primarily driven by a $248.2 decrease in demand for our Manpower staffing services, partially offset by a $12.6 increase in demand for our Right Management outplacement services. In Italy, revenues from services decreased -1.9% (-1.8% in constant currency) in 2024 compared to 2023, primarily driven by a $24.7 decrease in demand for our Manpower staffing services and a $7.0 decrease in demand for our permanent recruitment services. In Other Southern Europe, revenues from services decreased -0.9% (flat in constant currency and increase of 0.6% in organic constant currency) in 2024 compared to 2023, primarily driven by the $16.2 unfavorable impact of currency exchange rates and an $18.9 decrease in demand for our Experis solutions services, partially offset by a $13.5 increase in demand in our TBO business and an $8.8 increase in demand for our Manpower and Experis staffing/interim services. Within our Other Southern Europe segment, we experienced revenue decreases in Switzerland of $50.4, or -10.4% (-12.2% in constant currency), partially offset by a revenue increase in Spain of $18.1, or 3.7% (3.7% in constant currency).

Gross profit margin decreased 50 basis points in 2024 compared to 2023. This decrease was primarily due to decreased activity in our higher margin Manpower staffing services, which contributed 30 basis points to the decrease, a decrease of activity in our permanent recruitment services, which contributed 20 basis points to the decrease and decreases across our Experis solutions services, which contributed 10 basis points to the decrease. These contributions were partially offset by increased demand in our higher-margin Right Management outplacement business which had a 10 basis point impact.

Selling and administrative expenses decreased -3.7% (-3.6% in constant currency and -3.3% in organic constant currency) during 2024 compared to 2023 primarily due to a $12.6 decrease in salary-related costs, a $7.5 decrease in restructuring related expenses, a $6.8 decrease in bonuses and sales commissions and a $4.3 decrease in consulting and outside services costs.

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OUP decreased -15.0% (-14.8% in constant currency and -15.2% in organic constant currency) in 2024, which represents a 3.7% OUP margin, a decrease from 4.2% in 2023. This OUP decrease was primarily due to decreased profitability in the France reporting unit of $36.4. In France, the OUP margin decreased to 3.3% in 2024 compared to 3.9% in 2023 primarily driven by an increase in selling and administrative expenses as a percent of revenue and a decrease in our higher-margin permanent recruitment business. In Italy, the OUP margin decreased to 6.7% in 2024 from 7.3% in 2023 primarily driven by an increase in selling and administrative expenses as a percent of revenue and a decrease in our higher-margin permanent recruitment business. In Other Southern Europe, the OUP margin decreased to 2.0% in 2024 from 2.3% in 2023 primarily due to a decrease in gross profit margin as we saw decreased activity in higher-margin Experis solutions services, as noted above, partially offset by a decrease in selling and administrative expenses as a percent of revenue.

Northern Europe

In Northern Europe, the largest country operations include the United Kingdom, the Nordics, Germany, the Netherlands and Belgium (comprising 35%, 19%, 14%, 11% and 9%, respectively, of Northern Europe’s revenues). In the Northern Europe region, revenues from services decreased -11.8% (-12.9% in constant currency) in 2024 compared to 2023, primarily due to decreased demand of $390.1 for our Manpower and Experis staffing/interim services, decreased demand of $33.7 in our permanent recruitment business and decreased demand of $78.7 for our Experis solutions services, partially offset by the $39.5 favorable impact of currency exchange rates, increased demand of $11.9 within our MSP business and increased demand of $6.2 for our Right Management outplacement services. Within our Northern Europe segment, we experienced revenue decreases in the United Kingdom of $157.3, the Nordics of $175.2, Germany of $84.5, the Netherlands of $6.7 and Belgium of $10.9, which represented revenue decreases of -12.1%, -21.8%, -15.1%, -1.8% and -3.4%, respectively (-14.5%, -21.2%, -15.2%, -1.8% and -3.4%, respectively, in constant currency).

Gross profit margin increased by 10 basis points in 2024 compared to 2023 primarily due to increased activity in our MSP business, which contributed 40 basis points to the increase, a shift in business mix towards our higher-margin Right Management outplacement services, which contributed 30 basis points to the increase, and the wind down of our lower margin Germany Proservia business in 2023. These contributions were partially offset by decreased activity in our permanent recruitment business, which had a 40 basis point unfavorable impact and decreased activity in our higher margin Manpower staffing services, which had a 20 basis point unfavorable impact.

Selling and administrative expenses decreased -18.9% (-19.7% in constant currency) in 2024 compared to 2023. The decrease is primarily driven by a $45.3 decrease in total personnel costs as we experience the impacts of significant restructuring actions taken in 2023 and $30.6 in restructuring costs incurred in 2024 compared to $120.4 in 2023.

OUP in Northern Europe improved 61.8% (60.9% in constant currency) in 2024, which represents a -1.3% OUP margin, an increase from -3.1% in 2023. The OUP improvement was driven by an OUP improvement in Germany of $92.9, partially offset by a decrease in profitability in the Nordics, which experienced an aggregate decrease of $12.5. The OUP improvement was also driven by a decrease in selling and administrative expenses as we saw the effects of restructuring actions taken in the prior year period, as noted above.

APME

Revenues from services decreased -6.9% (-2.3% in constant currency and an increase of 1.2% in organic constant currency) in 2024 compared to 2023. In Japan, revenues from services increased 0.5% (8.4% in constant currency) primarily driven by a $94.1 increase in demand for our Manpower and Experis staffing/interim services, partially offset by the $89.1 unfavorable impact of currency exchange rates. In Australia, revenues from services decreased -39.3% (-38.9% in constant currency), primarily driven by a $57.0 decrease in our permanent recruitment business driven by the non-recurrence of a Talent Solutions RPO government contract from the prior year period and a $27.3 decrease in demand for our Manpower and Experis staffing/interim services.

Gross profit margin decreased 70 basis points in 2024 compared to 2023 primarily due to decreased activity in our permanent recruitment business, particularly Talent Solutions RPO, which contributed 140 basis points to the decrease, and a decrease in activity across our higher-margin outplacement services, which contributed 20 basis points to the decrease. These contributions were partially offset by improvement in our staffing/interim margins, which had a 90 basis point impact.

Selling and administrative expenses decreased -11.0% (-6.7% in constant currency and -4.3% in organic constant currency) in 2024 compared 2023. The decrease is primarily driven by the $12.5 favorable impact of currency exchange rates, an $11.6 decrease in salary related costs from a reduction in headcount and a $9.3 decrease in office lease costs and other office related costs and a $4.4 decrease in consulting and outside services costs.

OUP in APME decreased -9.7% (-4.0% in constant currency and -1.4% in organic constant currency), in 2024, which represents a 3.9% OUP margin, a decrease from 4.0% in 2023. This OUP decrease was primarily driven by the decreased activity in our permanent recruitment business, partially offset by a decrease in selling and administrative expenses, as noted above.

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Financial Measures

Constant Currency And Organic Constant Currency Reconciliation

Certain constant currency and organic constant currency percent variances are discussed throughout this report. A reconciliation of these Non-GAAP percent variances to the percent variances calculated based on our annual GAAP financial results is provided below. (See Financial Measures - Constant Currency and Organic Constant Currency on page 31 for information.)

Cash Sources and Uses

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 lending, and some local credit lines to meet funding needs and allocate our capital resources among our various entities. As of December 31, 2024, we had $348.8 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 corporate activities. As of December 31, 2024, deferred taxes related to non-United States withholding and other taxes were provided on $1,353.5 of accumulated unremitted earnings of non-United States subsidiaries that may be remitted to the United States. As of December 31, 2024 and 2023, we have recorded a deferred tax liability of $25.9 and $23.1, respectively, related to these non-United States earnings that may be remitted. As of December 31, 2024, we had an additional $289.4 of accumulated unremitted earnings of non-United States subsidiaries for which we have not provided deferred taxes as amounts are deemed indefinitely reinvested. We have not estimated the deferred tax liability on these earnings as such estimation is not practicable to determine or immaterial to the financial statements.

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Our principal ongoing cash needs are to finance working capital, capital expenditures, debt payments, interest expense, dividends, share repurchases and acquisitions. Working capital is primarily in the form of trade receivables, which generally increase as revenues increase. The amount of financing necessary to support revenue growth depends on receivables turnover, which differs in each market where we operate.

Cash provided by operating activities was $309.2, $348.2 and $423.3 for 2024, 2023 and 2022, respectively. Changes in operating assets and liabilities generated $65.4 of cash, compared to $98.7 generated and $139.7 utilized in 2024, 2023 and 2022, respectively. The decrease in 2024 from 2023 was primarily attributable to decreased accounts receivable collections and an increase in capitalized implementation costs related to our cloud computing arrangements, partially offset by an increase in accounts payable. The change in 2023 from 2022 was primarily attributable to a decrease in accounts receivable due to the slowdown in the demand for our services.

Accounts receivable decreased to $4,297.2 as of December 31, 2024 from $4,830.0 as of December 31, 2023. The decrease was partly attributable to the impact of changes in currency exchange rates. DSO decreased by two and a half days from December 31, 2023 to 52 days as of December 31, 2024 due to an increased emphasis on cash collections.

Cash used in investing activities were $68.2, $74.1 and $85.3 for 2024, 2023 and 2022, respectively. Capital expenditures were $51.1, $78.2 and $75.6 during 2024, 2023 and 2022, respectively. These expenditures were comprised of purchases of computer equipment, office furniture and other costs related to office openings and refurbishments, as well as capitalized software costs of $10.1, $12.0 and $34.2 in 2024, 2023 and 2022, respectively. The higher expenditures in 2022 were primarily due to additional technology investments and the timing of capital expenditures.

Cash used in financing activities were $282.4, $349.5 and $482.1 for 2024, 2023 and 2022, respectively. Net debt borrowings were $16.1 in 2024 as compared to net debt repayments of $16.2 and $58.7 in 2023 and 2022, respectively. The larger repayments in 2022 were mainly due to the $75.0 repayment of our revolving credit facility to clear the outstanding borrowings as of December 31, 2021 related to an Experis acquisition. The acquisition was funded through cash on hand and a $150.0 draw on our revolving credit facility on October 1, 2021 which was repaid in 2022.

The Board of Directors authorized the repurchase of 5.0 million and 4.0 million shares of our common stock in August 2023 and August 2021, respectively. 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. In 2024, we repurchased a total of 2.0 million shares under the 2023 authorization, at a total cost of $140.9 including excise tax on share repurchases of $0.9. In 2023, we repurchased a total of 2.4 million shares comprised of 2.0 million shares under the 2021 authorization and 0.4 million shares under the 2023 authorization, at a total cost of $181.5 including excise tax on share repurchases of $1.7. In 2022, we repurchased a total of 3.2 million shares comprised of 1.2 million shares under the 2019 authorization and 2.0 million shares under the 2021 authorization, at a total cost of $270.0. As of December 31, 2024, there were 2.6 million shares remaining authorized for repurchase under the 2023 authorization and no shares remaining authorized for repurchase under the 2021 authorization.

During 2024, 2023 and 2022, the Board of Directors declared total cash dividends of $3.08, $2.94 and $2.72 per share, respectively, resulting in total dividend payments of $145.8, $144.3 and $139.9, respectively.

We have aggregate commitments of $2,268.2 related to debt, operating leases, purchase obligations for global technology and financial shared services, restructuring costs, transition tax resulting from the Tax Act and certain other commitments, as follows:

(a)
Includes local information technology contracts and other vendor commitments.

Our liability for unrecognized tax benefits, including related interest and penalties, of $11.4 is excluded from the commitments above as we cannot determine the years in which these positions might ultimately be settled.

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We recorded net restructuring costs of $53.6, $149.2 and $3.6 in 2024, 2023 and 2022, respectively, in selling and administrative expenses, primarily related to severance, office closures and consolidations, and professional and other fees related to restructuring in multiple countries and territories. The costs paid out of our restructuring reserve were $93.7 in 2024.

We have entered into guarantee contracts and stand-by letters of credit that total $571.0 as of December 31, 2024 ($524.2 for guarantees and $46.8 for stand-by letters of credit). 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 obligation in cash. Due to the nature of these arrangements and our historical experience, we do not expect to make any significant payments under these arrangements. Therefore, they have been excluded from our aggregate commitments identified above. The cost of these guarantees and letters of credit was $1.4 for 2024.

Total capitalization as of December 31, 2024 was $3,079.7, comprised of $952.8 in debt and $2,126.9 in equity. Debt as a percentage of total capitalization was 31%, 31% and 29% as of December 31, 2024, 2023 and 2022, respectively.

Acquisitions

From time to time, we acquire and invest in companies throughout the world, including franchises. The total cash consideration paid for acquisitions, net of cash acquired, for the years ended December 31, 2024, 2023, and 2022 was $7.7, $0.0 and $20.2, respectively. The 2024 payments represent a consideration payment for a franchise in the United States and contingent consideration payments related to a previous acquisition. The 2022 payments primarily represent a consideration payment for the acquisition of Tingari, a talent solutions company in France. Also included in the 2022 payments are consideration payments for franchises in the United States and contingent consideration payments related to previous acquisitions, of which $3.8 had been recognized as a liability at the acquisition date.

As of December 31, 2024, goodwill and other intangible assets resulting from the 2024 acquisitions were $1.4 and $3.1, respectively. We did not make any acquisitions in 2023.

Dispositions

Occasionally, we dispose of parts of our operations based on risk considerations and to optimize our global strategic and geographic footprint, as well as improve our overall efficiency. On October 15, 2024, we disposed of our Austria business in our Southern Europe segment for cash proceeds of $0.1 and simultaneously entered into a franchising agreement. In connection with the disposition, we recognized a one-time net loss on disposition of $7.7, of which $4.9 was included in selling and administrative expenses and $2.8 was included in interest and other expenses in the Consolidated Statements of Operations in the year ended December 31, 2024.

On November 1, 2024, we disposed of our South Korea business in our APME segment for cash proceeds of $20.6 and simultaneously entered into a franchising agreement under which the new ownership will operate Manpower Korea under the Manpower brand. In connection with the disposition, we recognized a one-time net loss on disposition of $0.4, consisting of a $3.3 gain in selling and administrative expenses and a $3.7 loss in interest and other expenses in the Consolidated Statements of Operations in the year ended December 31, 2024. The franchise arrangement represents a significant component of the transaction. Our South Korea business contributed $349.9 and $324.2 of revenues for the year ended December 31, 2023 and 2022, respectively.

On September 29, 2023, we disposed of our Philippines business in our APME segment for total consideration of $6.5. In connection with the disposition, we recognized a one-time net loss on disposition of $1.3, which was included in interest and other expenses in the Consolidated Statements of Operations in the year ended December 31, 2023.

On January 17, 2022, we disposed of our Russia business in our Northern Europe segment for cash proceeds of $3.2. In connection with the disposition, we recognized a one-time net loss on disposition of $8.0, of which $9.7 was included in selling and administrative expenses and a gain of $1.7 was included in interest and other expenses in the Consolidated Statements of Operations in the year ended December 31, 2022. On September 30, 2022, our Belgium business disposed of its Service Voucher Division and recognized a one-time gain of $4.1, which was included in selling and administrative expenses in the Consolidated Statements of Operations in the year ended December 31, 2022. On December 15, 2022, we disposed of our Hungary business in our Southern Europe segment and recognized a one-time loss of $2.1, of which $0.9 was included in selling and administrative expenses and $1.2 was included in interest and other expenses in the Consolidated Statements of Operations in the year ended December 31, 2022.

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Part II

Euro Notes

On June 30, 2022, we offered and sold €400.0 aggregate principal amount of the Company’s 3.50% notes due June 30, 2027 (the “€400.0 notes”). The proceeds from the €400.0 notes were used in July 2022 to repay our €400.0 1.875% notes due September 11, 2022. The €400.0 notes were issued at a price of 99.465% to yield an effective interest rate of 3.514%, net of a favorable impact of a forward starting interest rate swap. Interest on the €400.0 notes is payable in arrears on June 30 of each year. The Notes are unsecured senior obligations and rank equally with all of the Company’s existing and future senior unsecured debt and other liabilities.

On June 22, 2018, we offered and sold €500.0 aggregate principal amount of the Company’s 1.750% notes due June 2026 (the “€500.0 notes”). The net proceeds from the €500.0 notes of €495.7 were used to repay our €350.0 notes due June 22, 2018, with the remaining balance used for general corporate purposes, which included share repurchases. The €500.0 notes were issued at a price of 99.564% to yield an effective interest rate of 1.809%. Interest on the €500.0 notes is payable in arrears on June 22 of each year. The €500.0 notes are unsecured senior obligations and rank equally with all of the Company’s existing and future senior unsecured debt and other liabilities.

Both the €500.0 notes and €400.0 notes contain certain customary non-financial restrictive covenants and events of default and are unsecured senior obligations and rank equally with all of our existing and future senior unsecured debt and other liabilities. These notes have been designated as a hedge of our net investment in subsidiaries with a Euro-functional currency as of December 31, 2024. Since our net investment in these subsidiaries exceeds the respective amount of the designated borrowings, the related translation gains or losses are included as a component of accumulated other comprehensive loss. (See the Significant Matters Affecting Results of Operations section and Notes 8 and 12 to the Consolidated Financial Statements found in Item 8. "Financial Statements and Supplementary Data" for further information.)

Revolving Credit Agreement

On May 27, 2022, we entered into a new Credit Agreement (the “Credit Agreement”) with a syndicate of commercial banks with a termination date of May 27, 2027 to replace our previous $600.0 revolving credit facility. The Credit Agreement includes terms generally consistent with our previous 5-year credit facility, except the Credit Agreement uses the Secured Overnight Financing Rate (SOFR) as the base rate index instead of London Interbank Offered Rate (LIBOR). The Credit Agreement allows for borrowing of $600.0 in various currencies, and up to $150.0 may be used for the issuance of stand-by letters of credit. We had no borrowings under this facility as of December 31, 2024 and 2023. Outstanding letters of credit issued totaled $0.4, hence additional borrowings of $599.6 were available to us under the facility as of both December 31, 2024 and 2023.

Under the Credit Agreement, a credit ratings-based pricing grid determines the facility fee and the credit spread that we add to the applicable interbank borrowing rate on all borrowings. At our current credit rating, the annual facility fee is 10 basis points paid on the entire facility and the credit spread is 102.5 basis points on any borrowings. A downgrade from both credit agencies would unfavorably impact our interest and facility fees and result in additional costs ranging from approximately $0.2 to $0.5 annually.

The Credit Agreement contains customary restrictive covenants pertaining to our management and operations, including limitations on the amount of subsidiary debt that we may incur and limitations on our ability to pledge assets, as well as financial covenants requiring, among other things, 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. The Credit Agreement also contains customary events of default, including, among others, payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy or involuntary proceedings, certain monetary and non-monetary judgements, change of control and customary ERISA defaults.

As defined in the Credit Agreement, we had a net Debt-to-EBITDA ratio of 1.97 to 1 (compared to the maximum allowable ratio of 3.5 to 1) and a Fixed Charge Coverage ratio of 3.27 to 1 (compared to the minimum required ratio of 1.5 to 1) as of December 31, 2024.

Other

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 December 31, 2024, such uncommitted credit lines totaled $290.5, of which $266.1 was unused. Under the Credit Agreement, total subsidiary borrowings cannot exceed $300.0 in the first, second and fourth quarters, and $600.0 in the third quarter of each year. Additional borrowings of $266.1 could have been made under these lines as of December 31, 2024.

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Part II

Our long-term debt has a rating of Baa1 with stable outlook from Moody's Investor Services and BBB from Standard and Poor's with negative outlook. Both of the credit ratings are investment grade. Rating agencies use proprietary methodology in determining their ratings and outlook which includes, among other things, financial ratios based upon debt levels and earnings performance.

Assessment of the Liquidity Position

We have assessed our liquidity position as of December 31, 2024 and for the near future. As of December 31, 2024, our cash and cash equivalents balance was $509.4. We also have access to the previously mentioned revolving credit facility that could have immediately provided us with up to $600.0 of additional cash, less any outstanding borrowings and letters of credit, and we have an option to request an increase to the total availability under the revolving credit facility by an additional $300.0 and each lender may participate in the requested increase at their discretion. Furthermore, we have access to the previously mentioned credit lines of up to $300.0 ($600.0 in the third quarter) to meet the working capital needs of our subsidiaries, of which $266.1 was available to use, in addition to $150.0 of uncommitted credit facilities at our parent company, as of December 31, 2024. Our €500.0 ($516.6) notes mature in June 2026, and our €400.0 ($411.8) notes mature in June 2027. 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.

Application of Critical Accounting Policies

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts. A discussion of the more significant estimates follows. Management has discussed the development, selection and disclosure of these estimates and assumptions with the Audit Committee of our Board of Directors.

Defined Benefit Pension Plans

We sponsor several qualified and nonqualified pension plans covering permanent employees. The most significant plans are located in Switzerland, the United Kingdom, the Netherlands, Germany and France. Annual expense relating to these plans was $18.0, $21.7 and $18.6 in 2024, 2023 and 2022, respectively. Pension expense is estimated to be approximately $15.0 in 2025.

The calculations of annual pension expense and the pension liability required at year-end include various actuarial assumptions such as discount rates, expected rate of return on plan assets, compensation increases and employee turnover rates. We review the actuarial assumptions on an annual basis and make modifications to the assumptions as necessary. We review market data and historical rates, on a country-by-country basis, to check for reasonableness in setting both the discount rate and the expected return on plan assets. We determine the discount rate based on an index of high-quality corporate bond yields and matched-funding yield curve analysis as of the end of each fiscal year. The expected return on plan assets is determined based on the expected returns of the various investment asset classes held in the plans. We estimate compensation increases and employee turnover rates for each plan based on the historical rates and the expected future rates for each respective country. Changes to any of these assumptions will impact annual expense recorded related to the plans.

In determining the estimated 2025 pension expense for non-United States plans, we used a weighted-average discount rate of 2.7% and weighted-average expected return on plan assets of 3.4%, both of which are unchanged from 2024. Absent any other changes, a 25 basis point increase in the weighted-average discount rate would increase our 2025 consolidated pension expense by $0.1, and a 25 basis point decrease in the weighted-average discount rate would increase our 2025 consolidated pension expense by $3.0. Absent any other changes, a 25 basis point increase or decrease in the weighted-average expected return on plan assets would decrease or increase our 2025 consolidated pension expense by $1.4. (See Note 9 to the Consolidated Financial Statements found in Item 8. "Financial Statements and Supplementary Data" for further information.)

Income Taxes

The accounting guidance related to uncertain tax positions requires an evaluation process for all tax positions taken that involves a review of probability for sustaining a tax position. If the probability for sustaining a tax position is more likely than not, which is a 50% threshold, then the tax position is warranted and the largest amount, based on cumulative probability, that is greater than 50% likely of being realized upon settlement is recognized. An uncertain tax position, one which does not exceed the 50% threshold, will not be recognized in the financial statements.

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Part II

We provide for income taxes on a quarterly basis based on an estimated annual tax rate. In determining this rate, we make estimates about taxable income for each of our largest locations worldwide, as well as the tax rate that will be in effect for each location. To the extent these estimates change during the year, or actual results differ from these estimates, our estimated annual tax rate may change between quarterly periods and may differ from the actual effective tax rate for the year.

Goodwill Impairment

In accordance with the accounting guidance on goodwill, we perform an annual impairment test of goodwill at our reporting unit level during the third quarter, or more frequently if events or circumstances change that would more likely than not reduce the fair value of our reporting units below their carrying value.

We evaluate the recoverability of goodwill utilizing an income approach that estimates the fair value of the future discounted cash flows to which the goodwill relates. This approach reflects management’s internal outlook of the reporting units, which is believed to be the best determination of value due to management’s insight and experience with the reporting units. Significant assumptions used in our goodwill impairment tests include: expected future revenue growth rates, operating unit profit margins, working capital levels, discount rates, and a terminal value multiple.

We performed our annual impairment test of our goodwill and indefinite-lived intangible assets during the third quarter of 2024, and determined that there was no impairment of our goodwill or indefinite-lived intangible assets as a result of our annual test. The excess of fair value over carrying amount for our goodwill reporting units, which exceeded 15% or more of the respective carrying amounts, was sufficient to conclude that no impairment was indicated.

While the excess of fair value over carrying amount exceeded 15% for our reporting units, we did see a lower level of excess fair value year over year in many of our North America and Europe reporting units including three of these reporting units which approximate $1,243.0 of the consolidated goodwill balance. Given the current macroeconomic conditions in these regions, our assumptions on near-term expected future revenue growth rates and operating profit margins were lower than in the prior year assessment. Market conditions in North America and Europe continue to remain challenging given the economic uncertainty including the uncertainty surrounding the timing of an inflection point for improving market conditions. Management closely monitors the results of the reporting units and comparisons to the key assumptions used in our fair value estimate at the time of our annual impairment test, in addition to operational initiatives and macroeconomic conditions, which may impact the results of the reporting units.

During the fourth quarter of 2024, in connection with the preparation of our annual financial statements, we assessed the changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair value of any reporting unit or indefinite-lived intangible assets were below its carrying amount. While we continued to see challenging market conditions in Europe which led to lower levels of revenue and OUP in certain of our reporting units than we had forecasted at the time of our impairment testing, we concluded based on our analysis performed, that the fair value of these reporting units continued to exceed the carrying value and did not identify a triggering event.

There could be significant further decreases in the operating results of our reporting units for a sustained period, which may result in a recognition of goodwill impairment that could be material to the Consolidated Financial Statements.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Financial Measures — Constant Currency And Organic Constant Currency

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 of our operations. We use constant currency results in our analysis of subsidiary or segment performance, including Argentina which operates in a hyperinflationary economy. 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 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 included in the Financial Measures section found in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Results of Operations - For Years of Operation Ending December 31, 2023 and 2022

The financial discussion that follows focuses on 2023 results compared to 2022. For a discussion of 2022 results compared to 2021, see the company’s Annual Report on Form 10-K for the year ended December 31, 2022.

During 2023, revenues decreased -4.6% compared to 2022. Our 2023 results reflected the negative impact of economic uncertainty, particularly in Europe and North America, as we saw decreased demand for our staffing and permanent recruitment services, partially offset by increased demand for our Talent Solutions outplacement services. As Europe represents a significant portion of our operations, we continue to monitor economic conditions in our Southern Europe and Northern Europe segments. The Americas market also experienced a challenging operating environment during 2023, driven primarily by elevated inflation and the United States' sensitivity to higher interest rates. As a result of these factors, we expect the business environment will continue to be challenging for us in future periods, especially in North America and Europe, with many companies delaying hiring decisions or reducing their demand for contingent labor. The current economic risks are driven by increasing geopolitical tensions and slowing economic growth in many parts of the world. Compounding the challenging business environment, the attack in Israel on October 7, 2023 and the subsequent hostilities in Gaza could negatively impact our operations in Israel, which represents 4.1% of our revenues in the Southern Europe region and 1.8% of our ManpowerGroup revenues. These evolving events could put further pressure on our results and may increase geopolitical risk and business caution more globally.

During 2023, the United States dollar was generally stable, on average, relative to the currencies in most of our markets, and overall had a slight unfavorable impact on our reported results. The changes in the foreign currency exchange rates had a -0.6% unfavorable impact on revenues from services and an approximately $0.14 per share unfavorable impact on net earnings per share – diluted in 2023. Substantially all of our subsidiaries derive revenues from services and incur expenses within the same local 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.

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During 2023, we experienced the following quarterly changes to our consolidated revenues compared to 2022: a -7.6% decrease in revenue in the first quarter due to softening demand for staffing services due to increased economic uncertainty, partially offset by an increase in demand for our Talent Solutions outplacement services; a revenue decrease of -4.3% in the second quarter due to the continued softening demand for staffing services, partially offset by an increase in demand for our Talent Solutions outplacement services; a revenue decrease of -2.6% in the third quarter due to the continued softening demand for staffing services, partially offset by an increase in demand for our Talent Solutions outplacement services; and ending the year with a -3.7% revenue decrease in the fourth quarter of 2023 due to the continuing decrease in demand for our staffing services, partially offset by an increase in demand for our Talent Solutions outplacement services.

During 2023 compared to 2022, most of our markets experienced revenue decreases due to softening demand for our staffing and permanent recruitment services and the strengthening of the dollar in certain markets, partially offset by increased demand for our Talent Solutions outplacement services. We experienced a -10.6% revenue decrease in the Americas primarily driven by decreased demand across our staffing and permanent recruitment services, partially offset by increased demand for our outplacement services. We experienced a -0.2% revenue decrease in Southern Europe, primarily due to decreased demand for our Manpower staffing services, partially offset by the favorable impact of currency exchange rates. We experienced a revenue decrease of -7.4% in Northern Europe primarily driven by decreased demand across our staffing/interim and permanent recruitment services, partially offset by increased demand for our Talent Solutions outplacement services. We experienced a -2.7% revenue decrease in APME primarily due to the unfavorable impact of changes in currency exchange rates and decreased activity in our RPO permanent recruitment business driven by the non-recurrence of a government contract mid-year and Experis interim services, partially offset by increased demand for our Manpower staffing services.

From a brand perspective, we experienced a revenue decrease in Manpower, Experis and Talent Solutions during 2023 compared to 2022. The revenue decrease in our Manpower brand was due to decreased demand for our staffing services and the unfavorable impact of currency exchange rates, partially offset by increased demand for our outcome-based solutions services. In our Experis brand, the revenue decrease was primarily due to decreased demand for our interim services. The revenue decrease in our Talent Solutions brand, which includes Recruitment Process Outsourcing (RPO), TAPFIN - Managed Service Provider (MSP) and our Right Management offerings, was driven primarily by decreased activity in our RPO permanent recruitment business, partially offset by increased demand for our Right Management outplacement services.

In 2023 our gross profit margin decreased 20 basis points compared to 2022 primarily due to decreases in our higher-margin permanent recruitment business as permanent hiring demand continued to soften and experienced reduced levels from the significant activity in the prior year period and decreased activity in our higher margin Experis solutions business. The decrease was partially offset by a change in business mix as our higher-margin Right Management outplacement business represented a higher percentage of the revenue mix and improvements in staffing/interim margins.

In 2023 our operating profit decreased -56.0% while our operating profit margin decreased 150 basis points compared to 2022. Excluding the effects of currency exchange rates, restructuring costs of $149.2 million in 2023 and $3.6 million in 2022, goodwill impairment charges of $55.1 million in 2023 and $50.0 million in 2022, both of which were related to our Netherlands reporting unit, $2.2 million in software impairment charges in 2023, $14.7 million in acquisition integration costs incurred in 2022, and a $10.5 million loss on the disposition of subsidiaries in 2022, our operating profit decreased -28.5%. Excluding the impact of the items previously listed, our operating profit margin decreased 80 basis points compared to 2022. The operating profit margin decreased primarily due to selling and administrative expenses decreasing at a lesser rate than revenues and the overall decrease in our gross profit margin, as noted above.

During the year we initiated significant restructuring actions on businesses heavily impacted by the continuing decline in activity. With these actions, we expect our overall cost structure to decline. We expect to continue to monitor expenses closely to maintain the benefit of our efforts to optimize our organizational cost structures. At the same time, we plan to invest appropriately to enable 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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Consolidated Results - 2023 compared to 2022

The following table presents selected consolidated financial data for 2023 as compared to 2022.

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The year-over-year decrease in revenues from services of -4.6% (-4.0% in constant currency) was attributed to:

•
a revenue decrease in the Americas of -10.6% (-6.8% in constant currency) primarily due to the decreased demand of $246.4 million for our Manpower and Experis staffing/interim services, decreased activity of $59.1 million in our RPO permanent recruitment business and a decrease of $17.5 million in our MSP business as we exited lower margin arrangements, partially offset by the increase in demand of $29.9 million for our Talent Solutions outplacement services. The United States, our largest market in the Americas, experienced a revenue decrease of -15.4% primarily driven by decreased demand of $443.8 million for our Manpower and Experis staffing/interim services, decreased activity of $57.1 million in our RPO permanent recruitment business and a decrease of $18.1 million in our MSP business as we exited lower margin arrangements, partially offset by an increase in demand of $27.7 million for our Talent Solutions outplacement services;

•
a revenue decrease in Southern Europe of -0.2% (-2.4% in constant currency and -2.6% in organic constant currency) which was primarily due to decreased demand of $230.8 million for our Manpower staffing services, partially offset by the $185.9 million favorable impact of changes in currency exchange rates and a $31.4 million increase in demand for our Talent Solutions outplacement services. France, the largest market in Southern Europe, experienced a revenue increase of 1.7% (-1.0% in constant currency and decrease of -1.5% in organic constant currency), which was primarily due to $129.7 million favorable impact of foreign currency exchange rates and an increase in demand of $31.0 million for our Talent Solutions outplacement services, partially offset by decreased demand of $83.8 million for our Manpower staffing services. Italy, our second-largest market in Southern Europe, experienced a revenue increase of 0.1% (-2.5% in constant currency), which was primarily due to the $43.8 million favorable impact of foreign currency exchange rates, increased demand of $5.5 million for our consulting services, primarily driven by Experis, and increased demand of $2.6 million for our Manpower permanent recruitment services. The increase in Italy was partially offset by the decrease in demand of $51.8 million for our Manpower and Experis staffing/interim services;

•
a revenue decrease in Northern Europe of -7.4% (-7.3% in constant currency and -7.2% in organic constant currency), which was primarily due to decreased demand of $295.6 million for our Manpower and Experis staffing/interim services and decreased demand of $25.8 million in our permanent recruitment business, partially offset by increased demand of $7.5 million for our Experis outcome-based solutions and consulting services, increased demand of $6.7 million for our Talent Solutions outplacement services and increased demand of $4.8 million within our MSP business. Within Northern Europe, we experienced revenue decreases in the United Kingdom of $190.1 million, the Nordics of $150.4 million, and the Netherlands of $20.2 million, which represented revenue decreases of -12.7%, -15.8% and -5.0%, respectively (-13.0%, -9.8% and -7.4%, respectively, in constant currency). These decreases were partially offset by revenue increases in Germany of $28.2 million and Belgium of $18.8 million, which represented revenue increases of 5.3% and 6.2%, respectively (2.6% and 3.1%, respectively, in constant currency); and

•
a revenue decrease in APME of -2.7% (increase of 1.9% in constant currency and 2.3% in organic constant currency) primarily due to the $110.8 million unfavorable impact of foreign currency exchange rates, decreased activity of $32.7 million in our RPO permanent recruitment business driven by the non-recurrence of a government contract mid-year and decreased demand of $25.2 million for our Experis interim services, partially offset by increased demand of $86.7 million for our Manpower staffing services, particularly in Japan, increased demand of $13.1 million for our Manpower outcome-based solutions services and increased demand of $9.0 million for our Talent Solutions outplacement services.

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The year-over-year 20 basis point decrease in gross profit margin was primarily attributed to:

•
a 50 basis point unfavorable impact due to decreases in permanent recruitment, including Talent Solutions RPO, as permanent hiring demand continued to soften and experienced reduced levels from the significant activity in the prior year period; and

•
a 10 basis point unfavorable impact due to decreases in our staffing/interim margins driven by our Experis businesses; partially offset by

•
a 30 basis point favorable impact from a change in business mix as the higher-margin Right Management outplacement business represented a higher percentage of the revenue mix; and

•
a 10 basis point favorable impact from changes in currency exchange rates.

The 3.7% increase in selling and administrative expenses in the year ended December 31, 2023 (3.8% in constant currency; 3.7% in organic constant currency) was primarily attributed to:

•
an increase in restructuring costs to $149.2 million incurred in the year ended December 31, 2023 from $3.6 million in the year ended December 31, 2022;

•
a $45.3 million, or 5.1% increase (5.4% in constant currency and 4.9% in organic constant currency) in non-personnel costs, due to a $13.0 million increase in consulting and outside services costs associated with our technology and back-office transformation initiatives, an $11.1 million increase in software amortization and software maintenance related costs and a $9.2 million increase in costs related to office leases; and

•
an increase in our goodwill impairment charge to $55.1 million incurred in the year ended December 31, 2023 from $50.0 million incurred in the year ended December 31, 2022, both of which were related to our Netherlands reporting unit; partially offset by

•
a $59.1 million, or -3.2% decrease (-2.9% in constant currency) in personnel costs due to a $52.2 million decrease in bonuses and sales commissions costs;

•
the nonrecurrence of $14.7 million in acquisition integration costs incurred in the year ended December 31, 2022;

•
the $10.5 million loss on the disposition of subsidiaries in the year ended December 31, 2022; and

•
a $2.7 million, or 0.1% decrease due to the impact of changes in currency exchange rates.

Selling and administrative expenses as a percent of revenues increased 130 basis points in the year ended December 31, 2023 compared to the year ended December 31, 2022 due primarily to:

•
a 70 basis point unfavorable impact as a result of the increase in restructuring costs in the year ended December 31, 2023 compared to the year ended December 31, 2022;

•
a 50 basis point unfavorable impact as non-personnel costs increased due to investments in consulting and outside services and software maintenance costs related to various transformation initiatives, as well as an increase in office lease costs;

•
a 10 basis point unfavorable impact as personnel costs decreased at a lesser rate than revenues; and

•
a 10 basis point unfavorable impact from changes in currency exchange rates; partially offset by

•
a 10 basis point favorable impact due to the nonrecurrence of acquisition integration costs and the disposition of subsidiaries in the year ended December 31, 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 those associated with noncontrolling interests. Interest expense, net was $45.5 million in 2023 compared to $29.0 million in 2022 primarily due to the higher interest cost on pension obligations and a higher interest rate Euro note following the refinancing mid 2022. Miscellaneous income, net was $17.4 million in 2023 compared to $16.3 million in 2022. Foreign exchange loss, net was $21.8 million in 2023 compared to $11.9 million in 2022 primarily due to non-cash currency translation loss related to our Argentina business. Argentina is required to be treated as a hyperinflationary economy for accounting purposes and the non-cash currency translation losses reflected the devaluation of the Argentine peso in 2023. This is a non-cash accounting charge as our Argentina business operates in their local currency.

We recorded income tax expense at an effective rate of 56.9% for 2023, as compared to an effective rate of 32.9% for 2022. The 2023 rate was higher than the 2022 rate primarily due to a lower level of pre-tax earnings with a less beneficial mix driven by restructuring costs in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances. The 56.9% effective tax rate for 2023 was higher than the United States Federal statutory rate of 21% primarily due to restructuring costs in certain countries for which we did not recognize a corresponding tax benefit due to valuation allowances, the Netherlands non-deductible goodwill impairment charge, the French business tax and the overall mix of earnings.

Net earnings per share - diluted was $1.76 in 2023 compared to $7.08 in 2022. Restructuring costs recorded in 2023 and 2022 negatively impacted net earnings per share - diluted by approximately $2.74 and $0.05 per share, net of tax, in 2023 and 2022, respectively. Foreign currency exchange rates in 2023 unfavorably impacted net earnings per share - diluted by approximately $0.14 per share, net of tax, in 2023. Goodwill and other impairment charges recorded in 2023 and 2022 negatively impacted net earnings per share - diluted by approximately $1.13 and $0.93 per share, net of tax, in 2023 and 2022, respectively. The pension settlement expense recorded in 2023 and 2022 negatively impacted net earnings per share - diluted by approximately $0.12 and $0.05, net of tax, in 2023 and 2022, respectively. Non-cash currency translation losses related to our Argentina business in 2023 unfavorably impacted net earnings per share - diluted by approximately $0.26, net of tax, in 2023. The loss from the disposition of subsidiaries recorded in 2023 and 2022 negatively impacted net earnings per share - diluted by approximately $0.03 and $0.19 per share, net of tax, in 2023 and 2022, respectively. The acquisition transaction and integration costs recorded in 2022 negatively impacted net earnings per share - diluted by approximately $0.22, net of tax, in 2022.

Weighted average shares - diluted decreased to 50.4 million in 2023 from 52.8 million in 2022. This decrease was due to the impact of share repurchases completed in 2023, partially offset by grants of share-based awards.

Segment Results

We evaluate performance based on operating unit profit (“OUP”), which is equal to segment revenues less direct costs and branch and national headquarters operating costs. This profit measure does not include goodwill and intangible asset impairment charges or amortization of intangible assets related to acquisitions, corporate expenses, interest and other income and expense amounts or income taxes.

Americas

In the Americas, revenues from services decreased -10.6% (-6.8% in constant currency) in 2023 compared to 2022. In the United States, revenues from services decreased -15.4% in 2023 compared to 2022, primarily driven by decreased demand of $443.8 million for our Manpower and Experis staffing/interim services, decreased activity of $57.1 million in our RPO permanent recruitment business and a decrease of $18.1 million in our MSP business as we exited lower margin arrangements, partially offset by an increase in demand of $27.7 million for our Talent Solutions outplacement services. In Other Americas, revenues from services increased 1.2% (14.2% in constant currency) in 2023 compared to 2022 primarily due to increased demand of $211.3 million for our Manpower staffing services, partially offset by the $187.3 million unfavorable impact of foreign currency exchange rates and decreased demand of $13.9 million for our Experis interim services. The increase in revenues from services in Other Americas was driven by revenue increases in Mexico and Argentina of $35.3 million, or 17.2%, and $19.4 million, or 11.6%, respectively (3.2% and 139.8%, respectively, in constant currency), partially offset by a revenue decrease in Canada of $61.2 million, or -14.7% (-11.3% in constant currency). The constant currency increase in Other Americas was primarily due to inflation in Argentina.

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Gross profit margin decreased 80 basis points in 2023 compared to 2022 primarily due to decreased activity in our permanent recruitment business, particularly Talent Solutions RPO, which contributed 130 basis points to the decrease and decreased margins in our staffing and interim services, particularly within Experis, which contributed 50 basis points to the decrease. These contributions were partially offset by increased demand in our higher-margin Right Management outplacement business, which had a 60 basis point offsetting impact and the favorable impact of currency exchange rates, which had a 40 basis point offsetting impact.

Selling and administrative expenses decreased -4.7% (-3.2% in constant currency) in 2023 compared to 2022, primarily due to a $32.4 million decrease in bonuses and sales commissions as a result of decreased profitability in certain key markets, a $14.6 million decrease in salaries from a reduction in headcount and zero acquisition integration costs in 2023 compared to acquisition integration costs of $14.7 million in 2022. The decreases were partially offset by $11.5 million in restructuring costs incurred in 2023 compared to $1.7 million in 2022. The restructuring charges in the 2023 were primarily related to headcount reductions in the United States, Mexico and Canada.

Operating Unit Profit (“OUP”) decreased -41.4% (-37.5% in constant currency). This decrease was primarily due to decreased profitability in the United States business of $118.8 million, which includes the decreased demand for our Manpower and Experis staffing/interim services and decreased activity in our RPO permanent recruitment business, as noted above. The decreased profitability in the United States was partially offset by decreased selling and administrative expenses, particularly bonuses and sales commissions and salaries, as noted above. OUP margin in the Americas decreased to 3.8% in 2023 from 5.7% in 2022, respectively. In the United States, OUP margin decreased to 3.4% in 2023 from 6.3% in 2022 primarily due to a decrease in gross profit margin as we saw decreased demand for our Manpower and Experis staffing/interim services and decreased activity in our RPO permanent recruitment business. The decrease was also due to an increase in our selling and administrative expenses as a percent of revenue as we reduced costs slower than the decline in gross profit and incurred higher levels of restructuring charges as compared to the previous year. Other Americas OUP margin increased to 4.5% in 2023 from 4.4% in 2022 primarily due to an increase in our gross profit margin, specifically in our Manpower staffing services, partially offset by an increase in our selling and administrative expenses as a percent of revenue as we saw restructuring in both Canada and Mexico.

Southern Europe

In Southern Europe, revenues from services decreased -0.2% (-2.4% in constant currency and -2.6% in organic constant currency) in 2023 compared to 2022. In France, revenues from services increased 1.7% (-1.0% in constant currency and -1.5% in organic constant currency) in 2023 compared 2022. In Italy, revenues from services increased 0.1% (-2.5% in constant currency) in 2023 compared to 2022. The increase in France is primarily due to the $129.7 million favorable impact of foreign currency exchange rates and an increase in demand of $31.0 million for our Talent Solutions outplacement services, partially offset by decreased demand of $83.8 million for our Manpower staffing services. The increase in Italy was primarily due to the $43.8 million favorable impact of foreign currency exchange rates, increased demand of $5.5 million for our consulting services, primarily driven by Experis, and increased demand of $2.6 million for our Manpower permanent recruitment services. The increase in Italy was partially offset by the decrease in demand of $51.8 million for our Manpower and Experis staffing/interim services. In Other Southern Europe, revenues from services decreased -5.1% (-5.7% in constant currency) in 2023 compared to 2022, primarily due to decreased demand of $105.1 million for our Manpower and Experis staffing/interim services. The decrease in Other Southern Europe was driven by revenue decreases in Spain and Switzerland of $42.6 million, or -7.9% and $14.9 million, or -3.0%, respectively (-10.4% and -8.7%, respectively, in constant currency).

Gross profit margin increased 20 basis points in 2023 compared to 2022. The increases were primarily due to increased demand in our higher-margin Right Management outplacement business, which contributed 20 basis points to the increase and increased demand in our permanent recruitment business, particularly within Manpower, which contributed 5 basis points to the increase. These contributions were partially offset by decreased activity in our higher margin Manpower staffing services, which had a 5 basis point offsetting impact.

Selling and administrative expenses increased 8.5% (6.3% in constant currency and 5.5% in organic constant currency) during 2023 compared to 2022 primarily due to the $19.2 million unfavorable impact of currency exchange rates, an $18.6 million increase in salary-related costs and $13.6 million in restructuring costs incurred in 2023 compared to $0.9 million in 2022, partially offset by a $1.0 million decrease in bad debt expense and a $0.9 million decrease in bonuses and sales commissions as a result of decreased profitability in certain key markets. The restructuring charges in 2023 were primarily related to headcount reductions in Spain of $6.2 million, as well as $3.2 million in the regional head office, $2.5 million in France and $1.6 million in Italy.

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OUP in Southern Europe decreased -13.4% (-15.2% in constant currency). This decrease was primarily due to decreased profitability in the France reporting unit of $38.4 million and increased selling and administrative expense, as noted above. OUP margin in Southern Europe decreased to 4.2% in 2023 from 4.8% in 2022. In France, the OUP margin was 3.9% in 2023 compared to 4.7% in 2022. The decrease in France was primarily due to an increase in salary related costs and restructuring charges, as noted above, which had a significant impact on the overall increase in selling and administrative expenses as a percent of revenue. In Italy, the OUP margin increased to 7.3% in 2023 from 7.2% in 2022 primarily due to an increase in the gross profit margin, partially offset by restructuring charges, as noted above, which had a significant impact on the overall increase in selling and administrative expenses as a percent of revenue. In Other Southern Europe, the OUP margin decreased to 2.3% in 2023 from 3.1% in 2022 primarily due to an increase in our selling and administrative expenses as a percent of revenue as we incurred restructuring charges related to Spain and the regional head office, as noted above.

Northern Europe

In Northern Europe, the largest country operations include the United Kingdom, the Nordics, Germany, the Netherlands and Belgium (comprising 35%, 21%, 15%, 10% and 9%, respectively, of Northern Europe’s revenues). In the Northern Europe region, revenues from services decreased -7.4% (-7.3% in constant currency and -7.2% in organic constant currency) in 2023 compared to 2022. We experienced revenue decreases in the United Kingdom of $190.1 million, the Nordics of $150.4 million, and the Netherlands of $20.2 million, which represented revenue decreases of -12.7%, -15.8% and -5.0%, respectively (-13.0%, -9.8% and -7.4%, respectively, in constant currency). These decreases were partially offset by revenue increases in Germany of $28.2 million and Belgium of $18.8 million, which represented revenue increases of 5.3% and 6.2%, respectively (2.6% and 3.1%, respectively, in constant currency). The revenue decrease in Northern Europe was primarily due to decreased demand of $295.6 million for our Manpower and Experis staffing/interim services and decreased demand of $25.8 million for our permanent recruitment services, partially offset by the increased demand of $6.7 million for our Talent Solutions outplacement services and increased demand of $4.8 million within our MSP business.

Gross profit margin decreased by 10 basis points in 2023 compared to 2022 primarily due to decreases in our staffing/interim margins, which contributed 30 basis points to the decrease and decreased demand in our permanent recruitment business, particularly in Manpower and Experis, which contributed 30 basis points to the decrease. These contributions were partially offset by a shift in business mix towards our higher-margin Talent Solutions outplacement and MSP services, which had a 20 basis point offsetting impact and improvements in our consulting solutions margins, which had a 30 basis point offsetting impact.

Selling and administrative expenses increased 15.8% (15.1% in constant currency and 15.2% in organic constant currency) in 2023 compared to 2022. The increase is primarily due to $120.4 million in restructuring costs incurred in 2023 compared to $0.8 million in 2022 and the $4.5 million unfavorable impact of currency exchange rates, partially offset by the $15.6 million decrease in bonuses and sales commissions as a result of decreased profitability in certain markets and the disposition of our Russia business of $9.7 million incurred in 2022. The restructuring charges in 2023 were primarily related to headcount reductions and professional and other fees in Germany of $91.7 million as we wind down our Proservia operations in the country and headcount reductions in the Nordics of $14.3 million, as well as $5.2 million in the Netherlands, $5.0 million in the United Kingdom and $3.9 million in Belgium.

OUP in Northern Europe decreased -375.0% (-363.8% in constant currency), which represents a -3.1% OUP margin, a decrease from 1.0% in 2022. This OUP decrease was primarily driven by a decrease in profitability of our bench model countries, notably Germany, the Nordics and the Netherlands, which experienced decreases of $88.2 million, $39.7 million and $9.1 million, respectively, and the $120.4 million in restructuring costs, as noted above, which had a significant impact on the overall increase in selling and administrative expenses as a percent of revenue.

APME

Revenues from services decreased -2.7% (increase of 1.9% in constant currency and 2.3% in organic constant currency) in 2023 compared to 2022. In Japan, revenues from services increased 3.9% (11.4% in constant currency) due to increased demand of $117.1 million for our Manpower and Experis staffing/interim services and increased demand of $4.0 million for our Talent Solutions outplacement services, partially offset by the $81.8 million unfavorable impact of foreign currency exchange rates. In Australia, revenues from services decreased -25.0% (-21.3% in constant currency), primarily due to decreased demand of $46.4 million for our Experis interim services, decreased activity of $30.4 million in our RPO permanent recruitment business driven by the non-recurrence of a government contract mid-year and the $10.7 million unfavorable impact of currency exchange rates, partially offset by increased demand of $20.0 million for our Manpower staffing services and increased demand of $3.3 million for our Talent Solutions outplacement services.

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Gross profit margin decreased 20 basis points in 2023 compared to 2022 primarily due to decreased activity in our permanent recruitment business, particularly Talent Solutions RPO, which contributed 120 basis points to the decrease. This contribution was partially offset by improvement in our staffing/interim margins, which had a 60 basis point offsetting impact, and increased demand in our higher-margin Right Management outplacement services, which had a 40 basis point offsetting impact.

Selling and administrative expenses decreased -6.9% (-2.4% in constant currency and -2.1% in organic constant currency) in 2023 compared 2022. The decrease is primarily due to the $14.2 million favorable impact of currency exchange rates, a $6.0 million decrease in office lease related costs and a $5.8 million decrease in salary related costs from a reduction in headcount, partially offset by $3.3 million in restructuring costs incurred in 2023 compared to $0.1 million in 2022. The restructuring charges in 2023 were related to headcount reductions in Australia.

OUP in APME increased 5.6% (11.6% in constant currency) which represents a 4.0% OUP margin, an increase from 3.7% in 2022. This OUP increase was primarily driven by increased profitability in the Japan reporting unit of $7.3 million, partially offset by decreased profitability in the Australia reporting unit of $2.3 million primarily due to the non-recurrence of a government contract mid-year.

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Financial Measures

Constant Currency And Organic Constant Currency Reconciliation

Certain constant currency and organic constant currency percent variances are discussed throughout this report. A reconciliation of these Non-GAAP percent variances to the percent variances calculated based on our annual GAAP financial results is provided below. (See Constant Currency and Organic Constant Currency on page 34 for information.)

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Cash Sources and Uses

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 lending, and some local credit lines to meet funding needs and allocate our capital resources among our various entities. As of December 31, 2023, we had $503.5 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 corporate activities. As of December 31, 2023, deferred taxes related to non-United States withholding and other taxes were provided on $1,519.8 million of accumulated unremitted earnings of non-United States subsidiaries that may be remitted to the United States. As of December 31, 2023 and 2022, we have recorded a deferred tax liability of $23.1 million and $18.4 million, respectively, related to these non-United States earnings that may be remitted. As of December 31, 2023, we had an additional $391.5 million of accumulated unremitted earnings of non-United States subsidiaries for which we have not provided deferred taxes as amounts are deemed indefinitely reinvested. We have not estimated the deferred tax liability on these earnings as such estimation is not practicable to determine or immaterial to the financial statements.

Our principal ongoing cash needs are to finance working capital, capital expenditures, debt payments, interest expense, dividends, share repurchases and acquisitions. Working capital is primarily in the form of trade receivables, which generally increase as revenues increase. The amount of financing necessary to support revenue growth depends on receivables turnover, which differs in each market where we operate.

Cash provided by operating activities was $348.2 million, $423.3 million and $644.8 million for 2023, 2022 and 2021, respectively. Changes in operating assets and liabilities generated $98.7 million, compared to $139.7 million utilized and $135.6 million of cash generated in 2023, 2022 and 2021, respectively. The change in 2023 from 2022 was primarily attributable to a decrease in accounts receivable due to the slowdown in the demand for our services. The change in 2022 from 2021 was primarily attributable to a decrease in accounts payable due to timing.

Accounts receivable decreased to $4,830.0 million as of December 31, 2023 from $5,137.4 million as of December 31, 2022. The decrease was partly offset by the impact of changes in currency exchange rates. DSO decreased by two days from December 31, 2022 to 54 days as of December 31, 2023 due to favorable mix changes, with lower growth in countries with a higher average DSO.

Capital expenditures were $78.2 million, $75.6 million and $64.2 million during 2023, 2022 and 2021, respectively. These expenditures were comprised of purchases of computer equipment, office furniture and other costs related to office openings and refurbishments, as well as capitalized software costs of $12.0 million, $34.2 million and $26.9 million in 2023, 2022 and 2021, respectively. The higher expenditures in 2022 and 2021 were primarily due to additional technology investments and the timing of capital expenditures.

Net debt repayments were $16.2 million in 2023 as compared to net debt repayments of $58.7 million in 2022 and net borrowings of $70.3 million in 2021. The decrease in 2023 from 2022 is mainly due to the $75.0 million repayment we made into our revolving credit facility during 2022 to clear the outstanding borrowings as of December 31, 2022 related to the Experis acquisition. The acquisition was funded through cash on hand and a $150.0 million draw on our revolving credit facility on October 1, 2021 which was paid in 2022.

The Board of Directors authorized the repurchase of 5.0 million, 4.0 million and 6.0 million shares of our common stock in August 2023, August 2021 and August 2019. 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. In 2023, we repurchased a total of 2.4 million shares comprised of 2.0 million shares under the 2021 authorization and 0.4 million shares under the 2023 authorization, at a total cost of $179.8 million excluding excise tax on share repurchases of $1.7 million. In 2022, we repurchased a total of 3.2 million shares comprised of 1.2 million shares under the 2019 authorization and 2.0 million shares under the 2021 authorization, at a total cost of $270.0 million. In 2021, we repurchased 2.1 million shares under the 2019 authorization at a total cost of $210.0 million. As of December 31, 2023, there were 4.6 million shares remaining authorized for repurchase under the 2023 authorization and no shares remaining authorized for repurchase under the 2021 or 2019 authorization.

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During 2023, 2022 and 2021, the Board of Directors declared total cash dividends of $2.94, $2.72 and $2.52 per share, respectively, resulting in total dividend payments of $144.3 million, $139.9 million and $136.6 million, respectively.

We have aggregate commitments of $2,303.4 million related to debt, operating leases, purchase obligations for global technology and financial shared services, restructuring costs, transition tax resulting from the Tax Act and certain other commitments, as follows:

(1) Includes local information technology contracts and other vendor commitments.

Our liability for unrecognized tax benefits, including related interest and penalties, of $17.1 million is excluded from the commitments above as we cannot determine the years in which these positions might ultimately be settled.

We recorded net restructuring costs of $149.2 million, $3.6 million and $15.2 million during 2023, 2022 and 2021, respectively, in selling and administrative expenses, primarily related to severances and office closures and consolidations in multiple countries and territories. The costs paid out of our restructuring reserve were $72.4 million during 2023.

We have entered into guarantee contracts and stand-by letters of credit that total $745.7 million as of December 31, 2023 ($696.9 million for guarantees and $48.8 million for stand-by letters of credit). 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 obligation in cash. Due to the nature of these arrangements and our historical experience, we do not expect to make any significant payments under these arrangements. Therefore, they have been excluded from our aggregate commitments identified above. The cost of these guarantees and letters of credit was $1.6 million for 2023.

Total capitalization as of December 31, 2023 was $3,236.7 million, comprised of $1,002.6 million in debt and $2,234.1 million in equity. Debt as a percentage of total capitalization was 31%, 29% and 31% as of December 31, 2023, 2022 and 2021, respectively.

Acquisitions

On October 1, 2021, we acquired ettain group, one of the largest privately held IT resourcing and services providers in North America. Effective that date, ettain group became part of our Experis business in the Americas segment. The acquisition is intended to accelerate our strategy of diversifying our business mix into higher growth and higher value services. The aggregate cash consideration paid was $930.9 million. Of the total consideration paid, $925.0 million was for the acquired interests and the remaining $5.9 million was for excess working capital and cash. The transaction was funded through cash on hand and a $150.0 million draw on our revolving debt facility on October 1, 2021. We finalized the purchase accounting during the third quarter of 2022 and recognized post-closing working capital adjustments of $3.4 million and income tax adjustments of $3.1 million with a corresponding offset to goodwill.

From time to time, we acquire and invest in companies throughout the world, including franchises. The total cash consideration paid for acquisitions excluding ettain group, net of cash acquired, for the years ended December 31, 2023, 2022, and 2021 was $0.0 million, $20.2 million and $8.1 million, respectively. The 2022 payments primarily represent a consideration payment for the acquisition of Tingari, a talent solutions company in France. The 2022 and 2021 balances include consideration payments for franchises in the United States and contingent consideration payments related to previous acquisitions, of which $3.8 million and $6.3 million, respectively, had been recognized as a liability at the acquisition date.

As of December 31, 2022, goodwill and intangible assets resulting from the 2022 acquisitions were $8.8 million and $5.3 million, respectively. We did not make any acquisitions in 2023.

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Dispositions

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 September 29, 2023, we disposed of our Philippines business in our APME segment for total consideration of $6.5 million. In connection with the disposition, we recognized a one-time net loss on disposition of $1.3 million, which was included in interest and other expenses in the Consolidated Statements of Operations in the year ended December 31, 2023.

On January 17, 2022, we disposed of our Russia business in our Northern Europe segment for cash proceeds of $3.2 million. In connection with the disposition, we recognized a one-time net loss on disposition of $8.0 million, of which $9.7 million was included in selling and administrative expenses and a gain of $1.7 million was included in interest and other expenses in the Consolidated Statements of Operations in the year ended December 31, 2022. On September 30, 2022, our Belgium business disposed of its Service Voucher Division and recognized a one-time gain of $4.1 million, which was included in selling and administrative expenses in the Consolidated Statements of Operations in the year ended December 31, 2022. On December 15, 2022, we disposed of our Hungary business in our Southern Europe segment and recognized a one-time loss of $2.1 million, of which $0.9 million was included in selling and administrative expenses and $1.2 million was included in interest and other expenses in the Consolidated Statements of Operations in the year ended December 31, 2022.

In November 2021, we disposed of our Tunisia business in our Southern Europe segment and recognized a one-time loss of $1.2 million, which was included in selling and administrative expenses in the Consolidated Statements of Operations in the year ended December 31, 2021.

Euro Notes

On June 30, 2022, we offered and sold €400.0 million aggregate principal amount of the Company’s 3.50% notes due June 30, 2027 (the “€400.0 million notes”). The proceeds from the €400.0 million notes were used in July 2022 to repay our €400.0 million 1.875% notes due September 11, 2022. The €400.0 million notes were issued at a price of 99.465% to yield an effective interest rate of 3.514%, net of a favorable impact of a forward starting interest rate swap. Interest on the €400.0 million notes is payable in arrears on June 30 of each year. The Notes are unsecured senior obligations and rank equally with all of the Company’s existing and future senior unsecured debt and other liabilities.

On June 22, 2018, we offered and sold €500.0 million aggregate principal amount of the Company’s 1.750% notes due June 2026 (the “€500.0 million notes”). The net proceeds from the €500.0 million notes of €495.7 million were used to repay our €350.0 million notes due June 22, 2018, with the remaining balance used for general corporate purposes, which included share repurchases. The €500.0 million notes were issued at a price of 99.564% to yield an effective interest rate of 1.809%. Interest on the €500.0 million notes is payable in arrears on June 22 of each year. The €500.0 million notes are unsecured senior obligations and rank equally with all of the Company’s existing and future senior unsecured debt and other liabilities.

Both the €500.0 million notes and €400.0 million notes contain certain customary non-financial restrictive covenants and events of default and are unsecured senior obligations and rank equally with all of our existing and future senior unsecured debt and other liabilities. These notes have been designated as a hedge of our net investment in subsidiaries with a Euro-functional currency as of December 31, 2023. Since our net investment in these subsidiaries exceeds the respective amount of the designated borrowings, the related translation gains or losses are included as a component of accumulated other comprehensive loss. (See the Significant Matters Affecting Results of Operations section and Notes 8 and 12 to the Consolidated Financial Statements found in Item 8. "Financial Statements and Supplementary Data" for further information.)

Revolving Credit Agreement

On May 27, 2022, we entered into a new Credit Agreement (the “Credit Agreement”) with a syndicate of commercial banks with a termination date of May 27, 2027 to replace our previous $600.0 million revolving credit facility. The Credit Agreement includes terms generally consistent with our previous 5-year credit facility, except the Credit Agreement uses the Secured Overnight Financing Rate (SOFR) as the base rate index instead of London Interbank Offered Rate (LIBOR). The Credit Agreement allows for borrowing of $600.0 million in various currencies, and up to $150.0 million may be used for the issuance of stand-by letters of credit. We had no borrowings under this facility as of December 31, 2023 and 2022. Outstanding letters of credit issued totaled $0.4 million, hence additional borrowings of $599.6 million were available to us under the facility as of both December 31, 2023 and 2022.

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Under the Credit Agreement, a credit ratings-based pricing grid determines the facility fee and the credit spread that we add to the applicable interbank borrowing rate on all borrowings. At our current credit rating, the annual facility fee is 10 basis points paid on the entire facility and the credit spread is 102.5 basis points on any borrowings. A downgrade from both credit agencies would unfavorably impact our interest and facility fees and result in additional costs ranging from approximately $0.2 million to $0.5 million annually.

The Credit Agreement contains customary restrictive covenants pertaining to our management and operations, including limitations on the amount of subsidiary debt that we may incur and limitations on our ability to pledge assets, as well as financial covenants requiring, among other things, 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. In the Credit Agreement, Net Debt is defined as total debt less cash in excess of $400.0 million. The Credit Agreement also contains customary events of default, including, among others, payment defaults, material inaccuracy of representations and warranties, covenant defaults, bankruptcy or involuntary proceedings, certain monetary and non-monetary judgements, change of control and customary ERISA defaults.

As defined in the Credit Agreement, we had a net Debt-to-EBITDA ratio of 1.92 to 1 (compared to the maximum allowable ratio of 3.5 to 1) and a Fixed Charge Coverage ratio of 3.45 to 1 (compared to the minimum required ratio of 1.5 to 1) as of December 31, 2023.

Other

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 December 31, 2023, such uncommitted credit lines totaled $308.6 million, of which $294.2 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 $285.6 million could have been made under these lines as of December 31, 2023.

Our long-term debt has a rating of Baa1 from Moody's Investor Services and BBB from Standard and Poor's, both with a stable outlook. Both of the credit ratings are investment grade. Rating agencies use proprietary methodology in determining their ratings and outlook which includes, among other things, financial ratios based upon debt levels and earnings performance.

Assessment of the Liquidity Position

We have assessed our liquidity position as of December 31, 2023 and for the near future. As of December 31, 2023, our cash and cash equivalents balance was $581.3 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, less any outstanding borrowings and letters of credit, and we have an option to request an increase to the total availability under the revolving credit facility by an additional $300.0 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 $285.6 million was available to use as of December 31, 2023. Our €500.0 ($550.0) million notes mature in June 2026, and our €400.0 ($438.2) million notes mature in June 2027. 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.

Application of Critical Accounting Policies

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts. A discussion of the more significant estimates follows. Management has discussed the development, selection and disclosure of these estimates and assumptions with the Audit Committee of our Board of Directors.

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Business Combinations

Assets acquired and liabilities assumed as part of a business acquisition are generally recorded at their fair value at the date of acquisition. The excess of purchase price over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, requires management to make estimates, which are based on all available information and in some cases assumptions with respect to the timing and amount of future revenues and expenses associated with an asset. On October 1, 2021, we acquired ettain group (see Note 4 to the Consolidated Financial Statements for further information). As part of the accounting for the acquisition, we identified and recorded a customer relationship intangible asset of $360.0 million which is amortized over a 15 year useful life. We utilized the discounted cash flow method to estimate the fair value of the customer relationship asset, which required management to make significant assumptions in the model, but was calculated based on the historical customer sales of the acquired company. A change in the customer attrition rate of 250 basis points would result in a decrease of $66.0 million or an increase of $87.0 million in intangible assets, respectively.

Defined Benefit Pension Plans

We sponsor several qualified and nonqualified pension plans covering permanent employees. The most significant plans are located in Switzerland, the United Kingdom, the Netherlands, Germany and France. Annual expense relating to these plans was $21.7 million, $18.6 million and $22.2 million in 2023, 2022 and 2021, respectively. Pension expense is estimated to be approximately $16.0 million in 2024.

The calculations of annual pension expense and the pension liability required at year-end include various actuarial assumptions such as discount rates, expected rate of return on plan assets, compensation increases and employee turnover rates. We review the actuarial assumptions on an annual basis and make modifications to the assumptions as necessary. We review market data and historical rates, on a country-by-country basis, to check for reasonableness in setting both the discount rate and the expected return on plan assets. We determine the discount rate based on an index of high-quality corporate bond yields and matched-funding yield curve analysis as of the end of each fiscal year. The expected return on plan assets is determined based on the expected returns of the various investment asset classes held in the plans. We estimate compensation increases and employee turnover rates for each plan based on the historical rates and the expected future rates for each respective country. Changes to any of these assumptions will impact annual expense recorded related to the plans.

In determining the estimated 2024 pension expense for non-United States plans, we used a weighted-average discount rate of 2.7% compared to 3.2% for 2023, reflecting the current interest rate environment. We have selected a weighted-average expected return on plan assets of 3.4% for the non-United States plans in determining the 2024 estimated pension expense, compared to 3.5% used for the calculation of the 2023 pension expense. Absent any other changes, a 25 basis point increase in the weighted-average discount rate would decrease our 2024 consolidated pension expense by $1.5 million, and a 25 basis point decrease in the weighted-average discount rate would increase our 2024 consolidated pension expense by $5.3 million. Absent any other changes, a 25 basis point increase or decrease in the weighted-average expected return on plan assets would decrease or increase our 2024 consolidated pension expense by $1.4 million. (See Note 9 to the Consolidated Financial Statements found in Item 8. "Financial Statements and Supplementary Data" for further information.)

Income Taxes

The accounting guidance related to uncertain tax positions requires an evaluation process for all tax positions taken that involves a review of probability for sustaining a tax position. If the probability for sustaining a tax position is more likely than not, which is a 50% threshold, then the tax position is warranted and the largest amount, based on cumulative probability, that is greater than 50% likely of being realized upon settlement is recognized. An uncertain tax position, one which does not exceed the 50% threshold, will not be recognized in the financial statements.

We provide for income taxes on a quarterly basis based on an estimated annual tax rate. In determining this rate, we make estimates about taxable income for each of our largest locations worldwide, as well as the tax rate that will be in effect for each location. To the extent these estimates change during the year, or actual results differ from these estimates, our estimated annual tax rate may change between quarterly periods and may differ from the actual effective tax rate for the year.

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Goodwill Impairment

In accordance with the accounting guidance on goodwill, we perform an annual impairment test of goodwill at our reporting unit level during the third quarter, or more frequently if events or circumstances change that would more likely than not reduce the fair value of our reporting units below their carrying value.

We evaluate the recoverability of goodwill utilizing an income approach that estimates the fair value of the future discounted cash flows to which the goodwill relates. This approach reflects management’s internal outlook of the reporting units, which is believed to be the best determination of value because of management’s insight and experience with the reporting units. Significant assumptions used in our goodwill impairment tests include: expected future revenue growth rates, operating unit profit margins, working capital levels and discount rates.

During the third quarter of 2023, we performed our annual impairment test of our goodwill and determined that there was no impairment.

The fair value of each reporting unit at the time of our annual impairment test was at least 20% in excess of the respective reporting unit’s carrying value with the exception of the Netherlands reporting unit. The Netherlands reporting unit, which is part of the Northern Europe segment, had a fair value that approximated its carrying value. Key assumptions included in the Netherlands discounted cash flow valuation performed at our 2023 annual impairment test included a discount rate of 12.5%, working capital of 0.5% of revenue, revenue growth for the next 10 years ranging from -1.2% to 6.4%, a terminal value revenue growth rate of 2.0%, and a terminal value OUP margin of 3.2%.

During the fourth quarter of 2023, in connection with the preparation of our annual financial statements, we assessed the changes in circumstances that occurred during the quarter to determine if it was more likely than not that the fair value of any reporting unit was below its carrying amount. We identified several factors related to our Netherlands reporting unit that led us to conclude that it was more likely than not that the fair value of the reporting unit was below its carrying amount which triggered us to perform an interim impairment assessment. These factors included further deterioration of the macroeconomic and local market conditions subsequent to July 1, 2023, financial performance that came in significantly below management's planned revenue and OUP expectations for the fourth quarter of 2023, and revisions downward for full year 2024 planned revenue and OUP projections. As a result of the interim test, we recognized a non-cash impairment loss of $55.1 million to bring the carrying value of the Netherlands reporting unit down to its estimated fair value, which led to full impairment of the remaining goodwill in the Netherlands reporting unit.

Key assumptions included in the Netherlands discounted cash flow valuation performed during the fourth quarter of 2023 included a discount rate of 13.2%, working capital of 0.5% of revenue, revenue growth for the next 10 years ranging from -6.3% to 3.0%, a terminal value revenue growth rate of 2.0%, and a terminal value OUP margin of 3.0%.

Management closely monitors the results of all the reporting units and comparisons to the key assumptions used in our fair value estimate at the time of our annual impairment test, in addition to operational initiatives and macroeconomic conditions, which may impact the results of the reporting units. While our other reporting units' fair values exceeded their respective carrying values by 20% or more, there could be significant further decreases in the operating results of our reporting units for a sustained period, which may result in a recognition of goodwill impairment that could be material to the Consolidated Financial Statements.

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Financial Measures — Constant Currency And Organic Constant Currency

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 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 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 included in the Financial Measures section found in Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Results of Operations - For Years of Operation Ending December 31, 2022 and 2021

The financial discussion that follows focuses on 2022 results compared to 2021. For a discussion of 2021 results compared to 2020, see the company’s Annual Report on Form 10-K for the year ended December 31, 2021.

During 2022, revenues decreased -4.3% in 2022 compared to 2021. Our 2022 results reflected the negative impact of foreign currency translation, partially offset by increased demand for our services in most of our key markets. However, we also believe that downside risks to the global economic outlook have increased significantly in Europe and North America. This economic risk is particularly high in Europe, driven by elevated inflation, rising energy prices, the Russia-Ukraine war and higher interest rates. Within Europe, Germany's industrial economy is especially sensitive to increases in energy costs, which could impact other countries given the importance of the German economy. Our France operation has an outsized exposure to the Russia-Ukraine war due to the impact of supply chain constraints on demand for our services in certain sectors, primarily automotive and construction, and to a lesser degree, logistics. As Europe represents a significant portion of our operations, we continue to monitor economic conditions in our Southern Europe and Northern Europe regions.

During 2022, the United States dollar was stronger, on average, relative to the currencies in our European markets, which therefore had an unfavorable impact on our reported results. The changes in the foreign currency exchange rates had a -9.2% unfavorable impact on revenues from services and an approximately $0.88 per share unfavorable impact on net earnings per share – diluted in 2022. Substantially all of our subsidiaries derive revenues from services and incur expenses within the same local 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.

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During 2022, we experienced the following quarterly changes to our consolidated revenues compared to 2021: a 4.4% increase in revenue in the first quarter due to the impact of acquisitions and increased demand, partially offset by the unfavorable impact of currency exchange rates; a revenue decrease of -3.8% in the second quarter due to the significant strengthening of the dollar causing an unfavorable impact of currency exchange rates, partially offset by the impact of acquisitions and slightly more billing days; -6.6% decrease in revenues in the third quarter due to the continued unfavorable impact of currency exchange rates, partially offset by increased demand for our staffing/interim services in key markets and the impact of acquisitions; and ending the year with a -10.6% revenue decrease in the fourth quarter of 2022 reflecting a deteriorating economic environment during the quarter, particularly across Europe and North America, and the unfavorable impact of currency exchange rates.

During 2022 compared to 2021, most of our markets experienced revenue decreases due to the strengthening of the dollar, partially offset by strong labor markets and continued solid demand. We experienced a -8.7% revenue decrease in Southern Europe, mainly driven by the unfavorable impact of currency exchange rates, offset by increased demand in France and Italy. We experienced a -13.3% revenue decrease in Northern Europe primarily due to the unfavorable impact of currency exchange rates, partially offset by increased demand in our permanent recruitment business. Revenues increased 15.8% 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, increased demand for our staffing/interim services and increased demand for our permanent recruitment business. We refer to the ettain group acquisition as the "Experis acquisition". We experienced a -3.8% revenue decrease in APME primarily due to the unfavorable impact of changes in currency exchange rates.

From a brand perspective, we experienced a revenue decrease in Manpower, and revenue increases in Experis and Talent Solutions during 2022 compared to 2021. The revenue decrease in our Manpower brand was due to the unfavorable currency exchange rate impact, partially offset by increased demand for staffing services and solid demand 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 increased demand in our permanent recruitment business, partially offset by unfavorable exchange rates. 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 services as the permanent recruitment environment was strong during the year.

Our gross profit margin improved in 2022 compared to 2021 primarily due to a favorable change in business mix as our higher-margin permanent recruitment business, which experienced a 22.5% increase (32.3% in constant currency and 31.0% in organic constant currency) during 2022 as a result of stronger hiring activity, represented a higher percentage of the revenue mix in our largest markets. The increase was also due to the improvement in our staffing/interim margin in all of our major markets, margin improvement in our Experis managed services business in Europe, 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 $50.0 million goodwill impairment charge related to our Netherlands reporting unit in the fourth quarter of 2022. We recorded restructuring costs of $3.6 million in 2022, compared to $15.2 million in 2021. We recorded integration costs of $14.7 million in 2022 relating to our Experis acquisition in the fourth quarter of 2021, compared to Experis acquisition and integration costs of $18.8 million in 2021. 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 representing a cumulative translation adjustment. We recorded a net loss on the sale of our Hungary business of $2.0 million, which was comprised of a $0.8 million loss in selling and administrative expenses and a $1.2 million loss in interest and other expenses representing cumulative translation adjustments. We also recognized a one-time gain of $10.0 million related to a long-term obligation in Northern Europe in 2021.

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Our operating profit decreased -0.6% in 2022 while our operating profit margin increased 10 basis points compared to 2021. Excluding the effects of currency exchange rates, a goodwill impairment charge incurred in 2022 related to our Netherlands reporting unit, a loss from the disposition of subsidiaries incurred in 2022, the one-time gain related to a Northern Europe long-term obligation in 2021, restructuring costs incurred in 2022 and 2021, and acquisition integration costs incurred in 2022 and 2021, our operating profit was up 20.8%. Excluding the impact of the items previously listed, our operating profit margin increased 50 basis points compared to 2021. The operating profit margin increased mostly due to the improvement in our gross profit margin and our ability to support an increase in revenues without a similar increase in selling and administrative expenses.

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.

Consolidated Results - 2022 compared to 2021

The following table presents selected consolidated financial data for 2022 as compared to 2021.

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The year-over-year decrease in revenues from services of -4.3% (increase of 4.9% in constant currency and 2.6% in organic constant currency) was attributed to:

•
a revenue decrease in Southern Europe of -8.7% (increase of 2.0% in constant currency and 1.7% in organic constant currency). France, the largest market in Southern Europe, experienced a revenue decrease of -7.5% (increase of 4.0% in constant currency and 3.6% in organic constant currency), which was primarily due to the unfavorable impact of currency exchange rates, partially offset by increased demand for our Manpower staffing services and a 8.2% increase (21.7% in constant currency) in the permanent recruitment business. Italy, also part of Southern Europe, experienced a revenue decrease of -4.9% (increase of 6.8% in constant currency), which was primarily due to the unfavorable impact of changes in currency exchange rates, partially offset by increased demand for our Manpower staffing services and Experis interim services and a 12.4% increase (26.4% in constant currency) in the permanent recruitment business;

•
a revenue decrease in Northern Europe of -13.3% (-2.5% in constant currency and 0.0% in organic constant currency) primarily due to the unfavorable impact of changes in currency exchange rates and the decreased demand for our staffing/interim services, partially offset by the 22.0% increase (37.9% in constant currency) in the permanent recruitment business. We experienced revenue decreases in the United Kingdom, the Nordics, Germany, the Netherlands and Belgium of -13.9%, -5.1%, -18.0%, -15.7% and -8.8%, respectively (-4.3%, +8.6%, -8.0%, -5.5% and +2.6%, respectively, in constant currency);

•
a revenue decrease in APME of -3.8% (increase of 9.0% in constant currency) primarily due to the decrease in our Experis business, and the unfavorable impact of changes in currency exchange rates; partially offset by the 4.7% increase (15.7% in constant currency) in the permanent recruitment business; and

•
a revenue increase in the United States of 27.6% (6.5% on an organic basis) primarily driven by increased demand for our Experis staffing/interim services including the significant contribution to revenues from our Experis acquisition and increased demand in our permanent recruitment business of 41.6% (34.3% on an organic basis).

The year-over-year 160 basis point increase in gross profit margin was primarily attributed to:

•
a 60 basis point favorable change in business mix as the higher-margin permanent recruitment and Talent Solutions businesses saw increased hiring activity contribute to an increase in gross profit;

•
a 40 basis point favorable impact from the improvement in the staffing/interim margins driven by our Manpower businesses;

•
a 40 basis point favorable impact from the Experis acquisition and the margin improvement and other solutions related services within Experis managed services; and

•
a 20 basis point favorable impact from changes in currency exchange rates.

The 6.0% increase in selling and administrative expenses in the year ended December 31, 2022 (14.3% in constant currency; 10.9% in organic constant currency) was primarily attributed to:

•
a goodwill impairment charge of $50.0 million incurred in the year ended December 31, 2022 which was related to our Netherlands reporting unit;

•
a 5.9% increase (14.2% in constant currency and 11.1% 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. The increase in salary costs was also due to an increase in variable incentive costs as a result of increased profitability in most markets;

•
the $10.5 million loss on the disposition of subsidiaries in the year ended December 31, 2022;

•
the anniversary of a gain of $10.0 million related to a long-term obligation in Northern Europe in 2021; partially offset by

•
the $14.7 million of acquisition transaction and integration costs incurred in the year ended December 31, 2022 compared to $18.8 million in the year ended December 31, 2021;

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•
a -1.0% decrease (increase of 7.0% in constant currency and 5.0% in organic constant currency) in non-personnel related costs, excluding acquisition transaction and integration costs, restructuring costs, goodwill and other impairment charges, loss on disposition of subsidiaries and gain related to a long-term obligation in Northern Europe, primarily to support the increase in revenues;

•
a decrease in restructuring costs to $3.6 million incurred in the year ended December 31, 2022 from $15.2 million in the year ended December 31, 2021; and

•
a -8.3% decrease due to the impact of changes in currency exchange rates in markets.

Selling and administrative expenses as a percent of revenues increased 150 basis points in the year ended December 31, 2022 compared to the year ended December 31, 2021 due primarily to:

•
a 100 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. 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 30 basis point unfavorable impact as a result of the increase in goodwill;

•
a 30 basis point unfavorable impact from changes in currency exchange rates; partially offset by

•
a 10 basis point favorable impact as a result of the decrease in restructuring costs in the year ended December 31, 2022 compared to the year ended December 31, 2021.

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 $24.6 million in 2022 compared to $17.3 million in 2021. Net interest expense increased $8.1 million in 2022 to $46.9 million from $38.8 million in 2021 primarily due to the higher interest rate on our €400.0 million notes offered and sold in June 2022 compared to the interest rate on the €400.0 million notes due September 2022 that were repaid in July 2022. Miscellaneous income was $16.3 million in 2022 compared to miscellaneous expense of $14.7 million in 2021.

We recorded income tax expense at an effective rate of 32.9% for 2022, as compared to an effective rate of 32.7% for 2021. The 2022 rate was higher than the 2021 rate due to the non-deductible goodwill impairment charge in the Netherlands. This was partially offset by the scheduled reduction in the French corporate tax rate to 25%. The 32.9% effective tax rate for 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, the Netherlands non-deductible goodwill impairment charge and the overall mix of earnings.

Net earnings per share - diluted was $7.08 in 2022 compared to $6.91 in 2021. Foreign currency exchange rates unfavorably impacted net earnings per share - diluted by approximately $0.88 per share in 2022. Goodwill and other impairment charges recorded in 2022 negatively impacted net loss per share - diluted by approximately $0.93. The acquisition transaction and integration costs recorded in 2022 and 2021 negatively impacted net earnings per share - diluted by approximately $0.22 and $0.27, net of tax, in 2022 and 2021, respectively. The loss from the disposition of subsidiaries recorded in 2022 negatively impacted net earnings per share - diluted by approximately $0.19 per share, net of tax, in 2022 . Restructuring costs recorded in 2022 and 2021 negatively impacted net earnings per share - diluted by approximately $0.05 and $0.07 per share, net of tax, in 2022 and 2021, respectively. The pension settlement expense recorded in 2022 negatively impacted net loss per share - diluted by approximately $0.05, net of tax, in 2022.

Weighted average shares - diluted decreased to 52.8 million in 2022 from 55.4 million in 2021. This decrease was due to the impact of share repurchases completed in 2021 and 2022 and the full year weighting of the repurchases completed in 2021, partially offset by shares issued as a result of exercises and vesting of share-based awards since 2021.

Segment Results

We evaluate performance based on operating unit profit (“OUP”), which is equal to segment revenues less direct costs and branch and national headquarters operating costs. This profit measure does not include goodwill and intangible asset impairment charges or amortization of intangible assets related to acquisitions, corporate expenses, interest and other income and expense amounts or income taxes.

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Americas

In the Americas, revenues from services increased 15.8% (18.1% in constant currency and 4.5% in organic constant currency) in 2022 compared to 2021. In the United States, revenues from services increased 27.6% (6.5% on an organic basis) in 2022 compared to 2021, primarily driven by increased demand for our Experis staffing/interim services including the significant contribution to revenues from our Experis acquisition and increased demand in our permanent recruitment business of 41.6% (34.3% on an organic basis). In Other Americas, revenues from services decreased -5.5% (increase of 0.9% in constant currency) in 2022 compared to 2021 primarily due to decreased demand for our staffing/interim services and the unfavorable impact of currency exchange rates, partially offset by increased demand in our permanent recruitment business of 41.5% (47.3% in constant currency). This decline was driven by a decrease in Mexico of -46.9% (-47.4% in constant currency) primarily due to labor legislation implemented in the third quarter of 2021.The decline was partially offset by increases in Canada, Argentina, Colombia, Peru and Brazil of 3.4%, 21.9%, 3.9%, 5.2% and 8.1%, respectively (7.2%, 64.5%, 17.5%, 4.0% and 3.3%, respectively, in constant currency), with the increase in Argentina being primarily due to inflation.

Gross profit margin increased in 2022 compared to 2021 primarily due to the increased demand in our permanent recruitment business, improvement in the staffing/interim margin, the Experis acquisition and increases in revenues from our higher-margin professional staffing and Talent Solutions offerings in the United States.

In 2022, selling and administrative expenses increased 20.3% (21.4% in constant currency and 11.5% in organic constant currency) primarily due to the Experis acquisition and an increase in salary-related costs due to higher headcount as we invested in incremental recruiters and sales talent based on increased market activity. The increases were partially offset by the decrease in restructuring costs to $1.0 million in 2022 compared to $5.2 million in 2021, and a decrease in Experis acquisition and integration costs of $14.7 million in 2022 compared to Experis acquisition and integration costs of $18.8 million in 2021.

Operating Unit Profit (“OUP”) margin in the Americas was 5.7% and 4.6% for 2022 and 2021, respectively. In the United States, OUP margin increased to 6.3% in 2022 from 5.0% in 2021 primarily due to increased demand in our permanent recruitment business, the Experis acquisition, increased operating leverage, an increase in the gross profit margin due to a favorable business mix and a decrease in Experis acquisition and integration costs incurred in 2022 compared to 2021, partially offset by an increase in salary-related costs due to higher headcount. Other Americas OUP margin increased to 4.4% in 2022 from 3.9% in 2021 primarily due to the gross profit margin improvement and a decrease in restructuring costs.

Southern Europe

In Southern Europe, which includes operations in France and Italy, revenues from services decreased -8.7% (increase of 2.0% in constant currency and 1.7% in organic constant currency) in 2022 compared to 2021. In 2022, revenues from services decreased -7.5% (increase of 4.0% in constant currency and 3.6% in organic constant currency) in France and decreased -4.9% (increase of 6.8% in constant currency) in Italy. The decrease in France is primarily due to the unfavorable impact of changes in currency exchange rates, partially offset by the increased demand for our Manpower staffing services, although supply chain constraints have negatively impacted the demand for our services in certain sectors, primarily automotive and construction, and to a lesser degree, logistics. The decrease was also offset by an 8.2% increase (21.7% in constant currency) in the permanent recruitment business. The decrease in Italy was primarily due to the unfavorable impact of changes in currency exchange rates, partially offset by the increased demand for our Manpower staffing services and Experis interim services and a 12.4% increase (26.4% in constant currency) in the permanent recruitment business. In Other Southern Europe, revenues from services decreased -14.1% (-6.2% in constant currency and -6.2% in organic constant currency) during 2022 compared to 2021, due to the unfavorable impact of changes in currency exchange rates and decreased demand for our Manpower staffing services, partially offset by increased demand for our Experis business services and increased demand in our permanent recruitment business of 19.4% (33.4% in constant currency and 33.4% in organic constant currency).

Gross profit margin increased in 2022 compared to 2021. The increases were primarily due to the increased demand in our permanent recruitment business and increases in our staffing/interim margin across our key markets.

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Selling and administrative expenses decreased -4.0% (increase of 7.1% in constant currency) during 2022 compared to 2021 primarily due to the favorable impact of changes in currency exchange rates, partially offset by an increase in salary-related costs due to higher headcount to support an increase in revenues in the period and an increase in variable incentive costs as a result of increased profitability in certain markets. The decreases were also partially offset by the increase in restructuring costs to $0.9 million in 2022 from zero in 2021.

OUP margin in Southern Europe was 4.8% for 2022 compared to 4.5% for 2021. In France, the OUP margin increased to 4.7% for 2022 from 4.5% in 2021 primarily due to the increase in the gross profit margin. In Italy, the OUP margin increased to 7.2% for 2022 from 6.4% for 2021 primarily due to the increase in the gross profit margin. Other Southern Europe’s OUP margin increased to 3.1% in 2022 from 2.8% in 2021 primarily due to an increase in the gross profit margin.

Northern Europe

In Northern Europe, which includes operations in the United Kingdom, the Nordics, Germany, the Netherlands and Belgium (comprising 37%, 24%, 13%, 10%, and 7%, respectively, of Northern Europe’s revenues), revenues from services decreased -13.3% (-2.5% in constant currency and 0.0% in organic constant currency) in 2022 compared to 2021. We experienced revenue decreases in the United Kingdom, the Nordics, Germany, the Netherlands and Belgium of -13.9%, -5.1%, -18.0%, -15.7% and -8.8%, respectively (-4.3%, +8.6%, -8.0%, -5.5% and +2.6%, respectively, in constant currency). The revenue decreases in Northern Europe were primarily due to the unfavorable impact of changes in currency exchange rates and the decreased demand for our staffing/interim services, partially offset by the 22.0% increase (37.9% in constant currency) in the permanent recruitment business.

Gross profit margin increased in 2022 compared to 2021 due to the increases in staffing/interim margin, the increased demand in our permanent recruitment business and the underlying business mix.

Selling and administrative expenses decreased -1.1% (increase of 11.3% in constant currency) in 2022 compared to 2021. The decreases are primarily due to the favorable impact of changes in currency exchange rates, partially offset by an increase in salary-related costs due to higher headcount.

OUP margin for Northern Europe decreased to 1.0% in 2022 from 1.5% in 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 -3.8% (increase 9.0% in constant currency) in 2022 compared to 2021. In Japan (which represents 46% of APME's revenues), revenues from services decreased -6.1% (increase of 12.0% in constant currency) primarily due to the unfavorable impact of the change in currency exchange rates, partially offset by an increase in our Experis business and an increased demand for our Manpower staffing services. In Australia (which represents 12% of APME's revenues), revenues from services decreased -13.7% (-6.7% in constant currency) primarily due to the exit of a low margin client arrangement in 2021 and the unfavorable impact of the change in currency exchange rates, partially offset by increased demand for our staffing/interim business. The revenue increase in the remaining markets in APME is due to the increase in demand for our staffing/interim business and our Experis business, partially offset by the unfavorable impact of changes in currency exchange rates.

Gross profit margin increased in 2022 compared to 2021 due to the increases in our staffing/interim margin and the increased demand in our permanent recruitment business.

Selling and administrative expenses decreased -2.7% (increase of 9.6% in constant currency) in 2022 compared to 2021. The decreases are primarily due to the favorable impact of the change in currency exchange rates, partially offset by higher salary-related costs due to higher headcount to support increases in revenues, increases in variable incentive costs as a result of increases in profitability in certain markets, and the increases in non-personnel related costs to support the increases in revenues.

OUP margin increased to 3.7% in 2022 from 3.4% in 2021 primarily due to the improvements in the gross profit margin.

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Financial Measures

Constant Currency And Organic Constant Currency Reconciliation

Certain constant currency and organic constant currency percent variances are discussed throughout this report. A reconciliation of these Non-GAAP percent variances to the percent variances calculated based on our annual GAAP financial results is provided below. (See Constant Currency and Organic Constant Currency on page 30 for information.)

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Cash Sources and Uses

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 lending, and some local credit lines to meet funding needs and allocate our capital resources among our various entities. As of December 31, 2022, we had $554.3 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 corporate activities. As of December 31, 2022, deferred taxes related to non-United States withholding and other taxes were provided on $1,277.8 million of accumulated unremitted earnings of non-United States subsidiaries that may be remitted to the United States. As of December 31, 2022 and 2021, we have recorded a deferred tax liability of $18.4 million and $16.1 million, respectively, related to these non-United States earnings that may be remitted. As of December 31, 2022, we had an additional $339.9 million of accumulated unremitted earnings of non-United States subsidiaries for which we have not currently provided deferred taxes as amounts are deemed indefinitely reinvested. We have not estimated the deferred tax liability on these earnings as such estimation is not practicable to determine or immaterial to the financial statements.

Our principal ongoing cash needs are to finance working capital, capital expenditures, debt payments, interest expense, dividends, share repurchases and acquisitions. Working capital is primarily in the form of trade receivables, which generally increase as revenues increase. The amount of financing necessary to support revenue growth depends on receivables turnover, which differs in each market where we operate.

Cash provided by operating activities was $423.3 million, $644.8 million and $936.4 million for 2022, 2021 and 2020, respectively. Changes in operating assets and liabilities utilized $139.7 million, compared to $135.6 million and $703.6 million of cash generated in 2022, 2021 and 2020, respectively. The change in 2022 from 2021 was primarily attributable to a decrease in accounts payable due to timing. The change in 2021 from 2020 was primarily attributable to an increase in accounts receivable due to the stronger market environment as the impact of the COVID-19 crisis had stabilized in many parts of the world by 2021, offset by an increase in accounts payable due to timing. In 2021, these improvements in our cash flows were partially offset by the decrease in our payroll-related liabilities due to lower activity.

Accounts receivable decreased to $5,137.4 million as of December 31, 2022 from $5,448.2 million as of December 31, 2021. This decrease was primarily due to the impact of changes in currency exchange rates. DSO increased by one day from December 31, 2021 to 56 days as of December 31, 2022 due to unfavorable mix changes, with higher growth in countries with a higher average DSO.

Capital expenditures were $75.6 million, $64.2 million and $50.7 million during 2022, 2021 and 2020, respectively. These expenditures were comprised of purchases of computer equipment, office furniture and other costs related to office openings and refurbishments, as well as capitalized software costs of $34.2 million, $26.9 million and $14.0 million in 2022, 2021 and 2020, respectively. The year-over-year increases in expenditures were primarily due to additional technology investments and the timing of capital expenditures.

Net debt repayments were $58.7 million in 2022 as compared to net borrowings of $70.3 million in 2021 and net debt payments of $38.5 million in 2020. The change in 2022 from 2021 is mainly due to the $75.0 million repayment we made into our revolving credit facility during 2022 to clear the outstanding borrowings as of December 31, 2021 related to the Experis acquisition. The acquisition was funded through cash on hand and a $150.0 million draw on our revolving credit facility on October 1, 2021.

The Board of Directors authorized the repurchase of 4.0 million, 6.0 million and 6.0 million shares of our common stock in August 2021, August 2019 and August 2018. 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. In 2022, we repurchased a total of 3.2 million shares comprised of 1.2 million shares under the 2019 authorization and 2.0 million shares under the 2021 authorization, at a total cost of $270.0 million. In 2021, we repurchased 2.1 million shares under the 2019 authorization at a total cost of $210.0 million. In 2020, we repurchased a total of 3.4 million shares comprised of 0.8 million shares under the 2018 authorization and 2.6 million shares under the 2019 authorization, at a total cost of $264.7 million. As of December 31, 2022, there were 2.0 million shares remaining authorized for repurchase under the 2021 authorization and no shares remaining authorized for repurchase under the 2019 or 2018 authorization.

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During 2022, 2021 and 2020, the Board of Directors declared total cash dividends of $2.72, $2.52 and $2.26 per share, respectively, resulting in total dividend payments of $139.9 million, $136.6 million and $129.1 million, respectively.

We have aggregate commitments of $1,961.2 million related to debt, operating leases, restructuring costs, transition tax resulting from the Tax Act and certain other commitments, as follows: