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On Friday, ManpowerGroup (NYSE:MAN) reported its second quarter earnings and discussed the following topics in its earnings conference call. Take a look.
Loss of One Billing Day
Kevin McVeigh – Macquarie: Mike, I apologize, could you just go through the $0.10 kind of nonrecurring impact as we think about that into Q4. You explained it but I didn’t pick it up conceptually?
Mike Van Handel – EVP and CFO: You’re talking about the loss of one billing day?
Kevin McVeigh – Macquarie: Yes, the $0.10 that kind of flows through to the bottom line and the loss of the one billing day, yes.
Mike Van Handel – EVP and CFO: So as we look at the third quarter this year, we have one less billing day than we did last year. So if you think about one less billing day, that’s about a 1.5% impact on our revenue, so say 1.5% less revenue. And so the GPR for that revenue basically drops down to the bottom line, and if you look at it on a comparative to prior year drops down to the bottom line, because one less billing day really doesn’t impact our SG&A cost in a month. A lot of those are monthly type costs. So effectively less revenue as a result of one less billing day plus GP, that GP makes its way down to the bottom line and as a result it impacts the year-on-year comparative as a result. I did make the comment as we look to the fourth quarter we don’t have that issue. We have a few markets that have one more billing day, have an extra billing day in the fourth quarter, but with the holidays, I’m not sure how to handicap that. Perhaps there might be a little bit of an uptick in the fourth quarter from that, but I’m not sure that I would count on that just given the timing of the rest of the holidays.
Kevin McVeigh – Macquarie: And I know it’s tough given the visibility, but any thought on kind of how Q4 trends more just to kind of around Right Management, in particular are we going to expect a nice pickup in that just given kind of the environment we’re in right now.
Jeffrey A. Joerres – Chairman, CEO and President: I’m told I should sit a little closer to the speaker. The answer is on the margin, we’ve actually done a research. We’re seeing that most companies are looking at trying to hold on to their staff. You are seeing some things particularly in the financial industry where they were announcing some layoffs and some downsizing. So what we’ve done from a restructuring perspective in Right Management gives us some really good hope and confidence when it comes into the profitability. When you look at that top line popping up in any kind of dramatic way, we’re not actually forecasting that. Now in today’s world things happen pretty quickly, but I would say other than the finance industry right now, which we have a pretty good presence in, we’re not really hearing from our clients that they’re really getting their list together and are looking for any large downsizings coming up in the fourth quarter.
Paul Ginocchio – Deutsche Bank: (indiscernible) housekeepings and one bigger picture. Just on Experis top five clients, how many of those are financial services? And then I think you won a relatively large contract in France. When do you cycle that contract? And could you remind us what percent of France is auto? And then finally Jeff for you, can you just talk about the impact of the Equal Pay in the Netherlands and the recent supplemental wage agreement in Germany where that’s going to compress the cost of the temp (indiscernible)?
Jeffrey A. Joerres – Chairman, CEO and President: So Paul, as usual, you packed in a whole bunch of those and you said them very quickly. So we’ll try to cover those. Mike, do you have a couple of the first ones?
Mike Van Handel – EVP and CFO: I was copying so feverishly I missed the first one. Paul, say again, I’m sorry.
Paul Ginocchio – Deutsche Bank: Experis, the top five customers, what percent – how many are financial services?
Mike Van Handel – EVP and CFO: We do have some larger clients in the financial services on the Experis side, and we have been doing a lot of work with a lot of the integration as they’ve been through their acquisitions and migrating, and some of that business is now falling off, so the business we’re not losing it to competitors per se, but it’s just business that’s winding down and that’s what we’re seeing. So in terms of overall mix, if you look at the U.S. business, it’s maybe a quarter of the mix, something like that – overall right now, something in that neighborhood. I don’t have the exact number right in front of me from a mix perspective, but it would be in that neighborhood. I think the second question you had was around France and France auto, we don’t have a big contract per se that we’re anniversarying there, but we do business with the major French automakers overall. Our overall mix of business there would be less than 3% of the overall business in France and it has been declining. I’m sure you’ve read the headlines on PSA and the French automotives altogether have been declining. So I would expect – so it’s about 3% of the mix. I would expect the second half of the year we will do less businesses as they cut back on staff. Could it be half of what we did in the first half? I suppose it could be something of that magnitude, but certainly less for sure in terms of the overall mix from that perspective. I think the next had to do with the Netherlands and…
Jeffrey A. Joerres – Chairman, CEO and President: So I’ll take a little. So you’re right Paul. There has been some movement on CLAs, primarily in Germany and then most recently announced in the Netherlands where the Netherlands have had some of those agreements in the CLAs. When you get into the kind of detail that we’re talking about here there’s kinds of what I would call puts and calls. Overall to be very transparent we think that this isn’t better for us, but it could be somewhat neutral. So in Germany too the largest unions which now make up about 35% of the workforce, the IG Metall and the IG BCE came out with some parity pay when in fact as we know the Convention 181 and some of the other things that have been done with Agency Worker Directive have already talked about parity pay. This basically moves you into from a group one salary all the way to a nine-month and you get these raises throughout to increase the minimum wage. Having said that many of our people are already at or above that minimum wage, so that changes the calculation or at least lessens the effectiveness of the calculation. We’ve seen parity pay in a fair amount of spots, and there has been little blips. The biggest one, of course, was in the UK, but we don’t see a major impact. What could happen out of this, we do expect in Germany that many of the other unions will follow suit, but most likely mathematically what happens out of this is our revenue possibly goes up and our gross margin percent goes down, but the dollars being yielded is actually slightly higher. So then when you get into usage in the case of Germany, when you get past nine-months, you can go all the way up to 24. When you get past nine months you could say that there is a little bit of a disincentive at that point to possibly use a temporary contract within German, but we’re not quite sure. Our clients are still a little bit confused and a little bit concerned about which way they’ll go on that. Netherlands changed it a little more rapidly. They already had something like this in place, and again we will see the Netherlands really being something that will affect us but it will be more on the margin. Anything to add to that Mike?
Mike Van Handel – EVP and CFO: Yeah, I think just in terms of the Netherlands, I think what they are talking about there is that there would be a parity pay effective week one versus now it’s week 26, so I think it’s a little bit further out, and that would be effective in 2015. I think the important thing to remember is why were used. It’s not really for the pay arbitrage, it’s really for flexibility. That’s what clients are looking for, that’s what they are using us for. So might there be some clients as pay rates go up on temporaries that use this, I think that is certainly possible, but it really is the flexibility is the primary reason that we find our clients are using us just given the uncertainty and the changing workforce dynamic out there. So I guess it’s those elements that are driving a lot of this. So we’ll see how it plays out, but as Jeff said, our view would be gross profit margin percent may go down, but as we pass it through the gross profit dollars should be the same, but some risk on the revenue line if some clients drop-off as a result of the pay rate increase.
Jeffrey A. Joerres – Chairman, CEO and President: And in Germany, most recent I think was yesterday, the day before, labor minister Ursula von der Leyen had stated that we’re going to just calm down here for a second. She didn’t use those words, but we suspect back in November some of these other unions will probably pick up and mimic some of the things that have been occurred in the other two unions that have already struck their CLA agreements.
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