ManpowerGroup Inc. (MAN) on Q1 2021 Results - Earnings Call Transcript
Operator: Welcome to ManpowerGroup First Quarter Earnings Results Conference Call. At this time, all participants are in a listen-only mode until the Q&A session of today's conference. This call will be recorded. If you have any objections, please disconnect at this time. And now, I will turn the call over to ManpowerGroup, Chairman and CEO, Jonas Prising. Sir, you may begin.
Jonas Prising: Thanks for joining us today for the first quarter conference call for 2021. On the call with me today is our Chief Financial Officer, Jack McGinnis. For your convenience, we have included our prepared remarks within the Investor Relations section of our website at manpowergroup.com.
Jack McGinnis: Good morning, everyone. This conference call includes forward-looking statements, including statements regarding the impact of the COVID-19 pandemic, which are subject to known and unknown risks and uncertainties. These statements are based on management's current expectations or beliefs. Actual results might differ materially from those projected in the forward-looking statements. We assume no obligation to update or revise any forward-looking statements. Slide 2 of our earnings release presentation further identifies forward-looking statements made in this call and factors that may cause our actual results to differ materially and information regarding reconciliation of non-GAAP measures.
Jonas Prising: Thanks, Jack. It has been one year since we first referred to the unfolding, uncertainty of COVID-19 and the resulting lockdowns in many of our markets. At that time, we all had a little idea of the magnitude of what lay ahead or what the road to recovery in the most challenging operating environment in our history would look like. From that moment on we were determined to mitigate the impact on our financial results with early and strong actions and continue our investments in strategic initiatives so we merge stronger when the pandemic ends. Those priorities have enabled us to start 2021 in a good position as we see that the signs of recovery continue to play out in many markets. That said, the recovery is uneven and although many markets are steadily strengthening other markets particularly in Europe continue to experience COVID-19 related difficulties which are resulting in the need for more restrictions and which is impacting the rate of recovery. Overall, we believe are heading in the right direction and expect continued improvements. Turning to our financial results. In the first quarter, revenue was $4.9 billion up 1% year-over-year in constant currency. We saw increased demand in many of our key markets and this resulted in a better than expected financial performance. On a reported basis, we recorded an operating profit for the quarter of $98 million. Excluding restructuring charges in the prior year, operating profit was up 8% in constant currency, marking a significant sequential improvement from the operating profit decline of 24% in the fourth quarter.
Jack McGinnis: Thanks Jonas. Revenues in the first quarter came in above our constant currency guidance range. Our gross profit margin came in at the midpoint of our guidance range. Our operating profit was $98 million representing an increase of 161% or 146% on a constant currency basis. Excluding restructuring charges in the prior year, operating profit increased 14% or 8% on a constant currency basis. This resulted in an operating profit margin of 2%, which was 50 basis points above the high end of our guidance.
Jonas Prising: Thank you, Jack. The challenging operating environment has not slowed our investments and plans to accelerate our diversification, digitization and innovation initiatives. Our plans to simplify and prioritize are helping us realize improved efficiencies. Amidst all the disruption but we knew all along has been confirmed. And it is the combination of technology and PeopleFirst approach of our teams that allows us to confidently manage global uncertainty, deliver locally and collaborate both personally and remotely as necessary. A good example of this is the recent recognition by industry analyst ALM for our digitally enabled data driven Workforce Solutions in ManpowerGroup Talent Solutions. We are the only company in our industry to have received the pacesetter designation, and it serves as a good example of the strength of our power suite technology platforms. ESG is a very important component of our strategy. And we're also proud to have been recognized around the globe for our commitment to driving positive change for people and societies and for our responsible business practices. We have been awarded the highest recognition by EcoVadis, a provider, a trusted business sustainability ratings. Our France and Norway businesses achieved the global platinum award level, placing us in the top 1% of all companies assessed. We now have Platinum, Gold and Silver EcoVadis ratings in more than 20 countries. For the 12th year, ManpowerGroup has also been recognized by Ethisphere as a world's most ethical company. Again, we are the only company in the industry to earn this award. These recognitions are testament to the dedication and commitment of our people to keep the world of work turning in a sustainable and ethical way, placing millions of people into jobs during a global pandemic, living our purpose that meaningful and sustainable employment has the power to change the world. I’d now like to open the call for Q&A. Operator?
Operator: Thank you. We will now begin the question-and-answer session. Our first question is coming from the line of Andrew Steinerman from JPMorgan. Your line is now open.
Andrew Steinerman: Hi, Jonas and Jack. Jack, let me ask you a question of how you set up the second quarter revenue guide. I did really like how you referenced both year-over-year and a reference to 2019. So when I think about the second quarter 2021 revenue to be 4% below second quarter 2019 revenues, I get that context. What I'm a little puzzled by is when I think about operating margins, the operating margin guide for second quarter, which is 2.4 to the midpoint is like 130 basis points below the second quarter 2019 level, which was I think 3.7. And so my question is why the big operating margin different versus second quarter 2019 if revenues are only down 4% from those levels?
Jack McGinnis: Thank you Andrew; I would say I think the thing to keep in mind is we're still going through the deleveraging process. And so we see that in Q1 with the higher revenues we were. And we're very pleased with the fact that our higher GP dollars basically fell down to the bottom line in Q1, we held our costs relatively in line with what we estimated. So that was a very good result. But it does reflect that, we are starting to see the de-leveraging. And effectively that's playing out in the Q2 forecast. So although revenues and GP dollars are improving, which is great and part of our overall forecast, on the cost side, we're still going through that process. And I'd say that's, that's the biggest reason we would expect, as we continue to see increased demand going forward, you would see improvement in that operating profit margin going forward. So sequentially, and I think that's what I would really focus on is sequentially, we've seen very, very good on-going improvement in the operating profit margin over the last three quarters. Now here in the first quarter, very good improvement, and in the in the second quarter up 180 basis points year-over-year, as we continue to see the benefits of the revenues coming back and getting more and more operational leverage with that. So I think that that will continue to strengthen as we continue to see the increase in demand.
Andrew Steinerman: Okay, thank you very much.
Operator: Thank you. Our next question is from the line of Jeff Silber of BMO Capital Markets. Your line is open.
Jeffrey Silber: Thank you so much. You had a really strong beat from really better than expected operating performance in the quarter. Can we get a little bit more color compared to your expectations where that beat came from?
Jack McGinnis: Yes, Jeff, this is Jack, I'd be happy to give you a little color. So I'd say if you look at our biggest operations, you can see the very strong growth in Italy. So Italy definitely performed above our expectations in the first quarter. And that's great. We did note that there are above 2019 levels currently. And we see that obviously continuing into the next quarter, so continued very strong performance from our Italy operations. I would say the U.S. was very, very strong. And what's great about the U.S. and we've talked about this in the past, the U.S. has our best mix of businesses, we saw Talent Solutions coming back very, very strong. In the first quarter we talked about the RPO double-digit growth in the U.S. MSP continues to be very strong. So U.S. was a big contributor to the outperformance. And I would say France even though France has been in a more difficult environment with the restrictions in place, they did a very good job managing their costs based on the fact that they did not have the progress during the course of the quarter that some of the other markets did. They did not have as strict of restrictions. But despite that, they've done a very, very good job managing their profitability. So of our biggest businesses, they all contributed very nicely to better than expected performance. And I think lastly, I would call out the great performance of the U.K. So we saw the U.K. crossover to growth. The U.K. is performing very well. We highlighted the fact that the U.K. is actually brought on some new clients and that takes us into the second quarter forecast for their improved performance going forward as well. So, our four largest businesses were the big drivers, Jeff.
Jeffrey Silber: Okay. That's really helpful. If I could focus on the U.S. we're seeing a lot of headlines of companies scrambling for talent, specifically in blue-collar jobs. I'm wondering if you're seeing that? And if so, what you're doing about that? Thanks.
Jonas Prising: Good morning, Jeff. And yes, this is something that we're seeing in the U.S. as well. So there has been a tightening of supply of workers. Now, some of that we think is related to the Easter Holiday, some of that is related to the extra unemployment payments, as well as the stimulus payments. So people are taking advantage of those. But whatever the effect is that we are seeing, we expect that to be temporary. And we think that the supply will continue to adjust to a more normalized environment. But overall, it's great to see that the U.S. market is coming back so strong. And as you might have seen on the latest Labor Market Report, the penetration rate is already past where it was. so it's moving up higher. And that's a really good sign as well.
Jeffrey Silber: Okay, great. Thanks so much.
Jonas Prising: Thanks, Jeff.
Operator: Thank you. Our next question is from the line of Manav Patnaik of Barclays. Your line is open.
Manav Patnaik: Thank you. Good morning, gentlemen. The comparison versus 2019, obviously, was helpful. And clearly, it's still down because things haven't fully reopened. But I was just curious to how you guys think about whether once things open, if this cycle has been reset. Like, are we, at the starting point of a multi-year growth period, and I was just hoping if you give us some of your thoughts there?
Jonas Prising: We think that the trends that we are seeing now are really the traditional dynamics of the beginning of the new cycle and the beginning of a recovery that we're seeing play out now. And we look at this from two perspectives. First of all, as we're very pleased to see that despite the continued lockdowns in a lot of our major markets, we saw a cyclical recovery. So companies started to ramp-up their workforces in the face of increasing demand for their products and services. And at the same time, we also saw increased demand for some of our more strategic products in terms of structural flexibility, such as ManpowerGroup Talent Solutions. And that would also indicate that we're in a phase where companies are really appreciating the services and solutions we provide to enable them to have more strategic and operational flexibility. So we're really seeing both of these trends start to take shape. And we see this is being very positive for the business.
Jack McGinnis: And then, I would just add to that. Manav, based on the question at the opening of the queue regarding the operating profit margin for the second quarter. I think the thing to -- there is -- we still have some pretty good upside opportunity as markets like France loosen their restrictions in the future, and see the recovery really take hold. So, as we mentioned in our prepared remarks, those restrictions really prevented them from seeing the improvement that some of our other countries saw and they operated close to down 10% for the first two months of the quarter, until they anniversaried the pandemic. But when we look at the second quarter, France is still down 11% versus 2019 levels. And as they continue to recover, that's really going to help our operating leverage as we go forward. So I think that's the one item I would ask people to remember our biggest operation, 25% of our revenues is still 11% under 2019 levels. And as we saw in the fourth quarter, when those restrictions are lifted, we would expect to see similar dynamics that we saw in December, where there will be pent-up demand that will come through once those restrictions are lifted.
Manav Patnaik: Okay. Got it. That's very helpful. And just one other question I had was, could you just comment a bit on the competitive environment like are the competitors being rational here? Or is there kind of this drive to just get all the recovery here?
Jonas Prising: We are in a very competitive industry. But overall, if I look at pricing, it is rational still. So that's a good sign. I think the competitive environment is strong in a number of countries. But we've been able to drive our business with a very good pricing discipline. So we've seen some good expansion of margins, good the bill rate expansion as well in a number of countries, notably in the U.S. So we expect that to continue also going forward.
Manav Patnaik: Right. Thank you very much.
Operator: Thank you. Our next question is from the line of Mark Marcon from Baird. Your line is open.
Mark Marcon: Hey, congratulations on the strong results here in the first quarter and the upbeat nature of the comments going into the second quarter. I'm wondering if you can talk a little bit about a couple of different things. One, Jonas, you talk about the digitization efforts that you have underway. Could you provide some granular sense for how that's improved the efficiency? Whether its recruiters, account managers, speed of placements. Is that just keeping you even with the competition? Or do you feel like you're getting ahead of the competition? Which countries are the most advanced? And what are some of the implications longer term?
Jonas Prising: Thanks Mark. We have a comprehensive technology transformation roadmap. And as we've discussed in past earning calls, it's really all the way from the back to the middle to the front. And I would say from a recruiter productivity perspective, we're really starting to see some great impact of the tools we started to implement a number of years ago, most notably, they've helped us navigate this pandemic, and we're able to connect with candidates and recruit individuals remotely, to a much greater degree than we were able to do before we have those tools. But I would say, to give you a little bit of color on what the difference would be for a recruiter. In the number of our markets we're leveraging AI and data to serve up the most likely candidates for placement, alongside the ranking of the most viable orders that any recruiter has received. So we rank both orders as well as the candidates to fill those orders. And that served up to the recruiter when he or she starts their work. And that means, they can immediately get down to connecting with the candidates and finding the perfect match. So we save a lot of time in terms of creating the match and sending them on the assignments. And we previously talked a lot about our mobile apps for associates and candidates, for instance, in France. And what that helps us do is, of course, they have a lot of self-service capabilities that they are availing themselves to. And that frees up a lot of time for our people as they are able to both find new assignments, change their current assignments, find out when they got paid. So all of those transactional activities that take up a lot of time or used to take up a lot of time for our recruiters, they are the ones that we're seeing increasingly move away and either be done and controlled more by the associate himself or herself directly, or our ability to fill orders faster with a better match enabled by technology. But I would say and you heard us say that as well in the prepared remarks, Mark, that it's the combination of the human talent with the enabling technology that's creating the magic. So it's not just technology on a standalone basis. It is the experience of our recruiters and talent agents for those that are also been trained to conduct the MyPath assignments that really is showing the difference. And we think we're still at the very early stages of this. So we still have a long way to go to gain some further opportunities, both from a growth perspective, so growing our business, as well as gaining further efficiencies.
Mark Marcon: Great. And then, obviously that would have some implications with regards to the margin profiles longer term, correct?
Jonas Prising: As we will be able to optimize the match to the best talent available to the orders that we can fill the fastest that should have a very positive impact on our client satisfaction, our candidate satisfaction, and yes, also on our margin profile.
Jack McGinnis: Yes. And I would just add to that, Mark. I think to your point about what specific markets so the U.S.? I think, we're saying, our RPO business as part of talent solutions is been part of the power suite technology implementation. We're seeing very good GP margins, strong, very strong GP margins in that business. The Experis business in the U.S. is been part of our power suite front office implementation. We're starting to see the benefits of that in efficiency. We will be even more as the recovery take -- continues to take hold, and we see convenience come back. And I think the other example that we would point to is our associate, our market leading associate app in France, which we've talked about in the past. That's really provided significant efficiencies for us as we think about the processing of all of our associate data when it comes to time and expenses and those types of things. So, some really good examples where those have definitely driven more efficiencies in those countries. And we see, as volume start to come back and revenues start to come back and we get more operating leverage, we'll see that come through in a stronger way in both the GP margin line and the operating profit margin.
Mark Marcon: Great. And then, I was wondering, just a quick follow up with regards to President, López Obrador’s initial proposal in Mexico. I know, the Senate is still considering it. But how has the -- what is being considered now changed relative to the initial proposal? What's your general sense?
Jonas Prising: At this point, it's actually quite hard to know, because the devil will be in the detail in how the legislation is drafted, Mark. So we are really not very much further away than from -- or rather, we're not much further along from our discussion at our last earnings call. It's still being debated. Because how it gets applied and how it's written in the fine detail is ultimately what's going to be determining the impact on employers at large in Mexico, and of course, also our industry in Mexico. So that's still being debated. And we hope to be able to provide a more detailed update on our next earnings call in July.
Mark Marcon: Okay. I appreciate that. And then you may have made a leadership change in Northern Europe. Can you talk a little bit about that?
Jonas Prising: We from time to time, we do move our people around, and we have a very talented global executive that's going to take over the Northern Europe region. Riccardo Barberis comes from our most profitable country operation. But he's had prior Pan European and Latin American assignments as well. So very experienced operational executive that's going to continue to drive the profitable growth in Northern Europe. And as you'd seen, Northern Europe is the one region that's lagging in the growth rates. And it's of course, also where we have most of the bench countries in our business. So we would expect it to lag and we look forward to his impact in helping us drive that business forward.
Mark Marcon: Thank you,
Jonas Prising: Thanks, Mark.
Operator: Thank you. Our next question is from the line of Kevin McVeigh of Credit Suisse. Your line is open.
Kevin McVeigh: Great. Thanks so much. Jack, any thoughts as to how the stimulus you factored into a guidance, if at all? Is it was kind of the Q1? Or any thoughts on that around client discussions?
Jonas Prising: So Kevin, I'm assuming you're referring to the U.S. stimulus. And I answered that question just a while ago. We believe, we're seeing some of the supply shortages that we believe also are temporary, being impacted by those stimulus payments as people are staying on the sidelines and not engaging in the workforce. But we do believe that this is a temporary effect, and that it will stabilize once those funds run out, and we come back to a more normalized environment.
Kevin McVeigh: Helpful. And then, Jack, can you give any specific numbers as to how the bill rate shaped up in the quarter. If you did I apologize, I missed that. If you could repeat that?
Jack McGinnis: Kevin, we don't we don't necessarily give details on bill rates. But what I would say to kind of get to your question is we see good positive momentum. I'd say, Jonas talked about where we're seeing some good opportunity. I would put the U.S. and Japan at the top of the list in terms of our ability to improve pricing in those markets. That's going really well. Generally speaking, I think we have further opportunity in our European businesses as we start to see the recovery take hold. But I'd say generally speaking, positive momentum on bill rates across most of our businesses.
Kevin McVeigh: Thank you.
Operator: Thank you. Our next question is from the line of Gary Bisbee of Bank of America Securities. Your line is open.
Gary Bisbee: Hey, guys, good morning. Appreciate the color on long term efficiency potential from technology and other things you're doing. If I were to think a little shorter term over the next several quarters, how should we think about sort of headcount investments back into the business? Obviously, you cut a ton of SG&A last year, but revenues coming back -- and SG&A is starting to come back. And I think the Q2 guidance certainly implies that. But are you adequately staffed for the pace of the next few quarters? Do you think you can bring that cost back sort of in line with revenue? Or are there any step functions or areas where you're going to have to more quickly bring back costs given all you took out last year? Thank you.
Jack McGinnis: Thanks, Gary. Now, I would say our goal is always to bring the cost back to be prepared for the increase in demand. And that's what we've been doing. I'd say, just to give you a bit of a data point. At the end of March, our FTEs, were still down 3% year-over-year. But if we go back that was closer to 9% at the end of end of 2020. So we've been progressively increasing our FTEs. And we're investing in the business in those markets that are seeing the great growth opportunity. So we've been steadily investing in perm consultants in Italy, that is paying off with positive perm in the first quarter, perm recruitment, gross profit dollars year-over-year. And we see that market continuing to strengthen. We're doing the same thing in the U.S. in our Experis business. We're certainly increasing into the demand on the U.S. side. But I'd say, we're doing it carefully. I did talk earlier about France, that hasn't seen the same level of growth. We expect that to kick in once the restrictions are loosened in France. And then we'll start to ramp-up headcount. And we're doing that currently in very specialized roles as well when we talk about perm recruitment. So that is something we're watching carefully. When we looked at 2020, the name of the game was recovery ratio. So, how much SG&A we can cut to offset the GP declines? Now the name of the game is GP flow-through. So how much of that increase in GP can we bring down to the bottom line? And we're very happy with what we did in the first quarter. And that's how we're going to continue to manage this going forward.
Gary Bisbee: Great. And then the follow-up. Just on the solutions, businesses, obviously strong performance there. What's the key to further adoption of these businesses? And even what's happened? Are there any opportunities, as businesses rethink, a whole host of different things about their workforces, but to try to drive further penetration of these businesses? And, I guess upcycle that's starting now?
Jonas Prising: We think we're starting to see exactly that, Gary. So, we talked about not losing any of our clients in the talent solutions space during the pandemic, and how we won some big logos and opportunities over the last six months. Our pipeline looks very strong. And in conversations with clients, they are really thinking about how to bring on their workforces, be they contingent or perm in new ways post pandemic. So we think this will be the next leg and not only in the cyclical growth, but also in the structural secular growth, certainly also here in the U.S., which is the most mature market, but especially in Europe. And that's where the penetration rates of these offerings is much lower than what it is in the U.S. And that's where we'll think -- where we think we will see a very, very good opportunities to catch up to the U.S. penetration rates, and then ultimately, both of them moving higher, as those strategic solutions are becoming more attractive post pandemic for many of our client companies.
Gary Bisbee: Thanks. Appreciate the color.
Operator: Thank you. Our next question is from the line of Tobey Sommer of Truist Securities. Your line is open.
Tobey Sommer: Thanks. Could you talk to us about what you see your GP mix being over the medium to long term between the core manpower brand in your other higher margin services? And when we may see some capital deployment in that direction to kind of further shape the business?
Jack McGinnis: Tobey, this is Jack. Yes, I'd be happy to talk to that. So I'd say, as you've seen, our goal is to continue to grow the Experis and Talent Solutions businesses to become a bigger part of the overall GP dollar pie. And we typically give an update on that mix. I would say, that's going well. We've been able to do that -- you know, if I look back at the last year, certainly Experis, particularly in the first quarter coming back very strong in terms of the ongoing improvement. So that mix, we would expect to see that that part of the business grow and become a bigger part over the medium term. I think organic growth is our number one priority in those businesses and that's going well. But I think we've been pretty open from a capital allocation side. When it comes to M&A, the one area that we do keep an eye out for is on the professional staffing side, the Experis side as well as Talent Solutions. And that would be an opportunity. And if you look at what we've done in the past, that's where we've had an area of focus as well. So, from a capital allocation, our strategy is the same. We look at our excess cash. The dividend is number one priority. Beyond that, if there is an acquisition that will get priority for the excess cash. If there isn't, we'll continue to look at share repurchases as a vehicle to return cash to our shareholders but doing that opportunistically.
Tobey Sommer: Thanks. And as my follow-up, absent further regulatory and legislative changes to different tax jurisdictions in which the company operates. Should the normalization of profitability have an effect on the tax rate in the out years?
Jack McGinnis: Yes. It definitely will, Tobey. I think even this year; we're seeing a positive development. So, three months ago, with what we were thinking at that time in terms of the earnings mix for the year, we forecasted a 35% effective tax rate for the full year with the increased earnings in the first quarter. And what we're projecting for the second quarter that improved mix and increase pretax profits has lowered that effective rate to 34% for the full year. So I wanted to make sure everyone caught that in the prepared remarks. And as I said before, the positive changes in France will continue to be a tailwind for us as pre tax profits continue to increase to pre pandemic levels. So, we will over time see that. Now 34% gradually improved to 30% as we get back to pre tax levels of profits. And so that's a positive tailwind for us as we go forward. And as you said, that ignores any other changes. We do know that France already has part of their tax reform is going to step down again next year from 27.5% to 25% corporate tax rate. We already have the great benefit of the CVAE reduction. And we'll see what happens in terms of other geographies with any tax changes. But we'll manage those as they come through.
Tobey Sommer: Thank you.
Operator: Thank you. Our last question is from the line of George Tong of Goldman Sachs. Your line is open.
George Tong: Hi, thanks. Good morning. Do you noticed that restrictions in France are continuing to have an impact on the rate of revenue recovery there? Can you discuss how revenues in France performed on a month over month sequential basis moving through 1Q and into early April?
Jack McGinnis: Yes, George. This is jack. I guess what I would say is if you look at our biggest operation in France, I think as part of the prepared remarks, we gave an indication. That's really where the restrictions have been quite strict with the curfews and the weekend restrictions. And they were running at about 10% down for January and February, generally speaking, and really, that kind of continued through the first half of March and then they anniversary the big drop. But I think the important thing is the associates on assignment which gives you an indication of what's happening on an underlying basis. And that was relatively steady. And as we look into April. An April is a bit of a funny month, because we have the Easter holidays and so forth. But it continues to hold fairly well, and most recent week just ticked up a little bit. So I would say, generally performing in the countries where there are restrictions, the business has actually been performing fairly well, considering those restrictions. I think, if I turn to another country like Italy, Italy was very strong, over the course of the quarter overall, continued to strengthen. So on a days adjusted basis, 6% growth in January went to 13% growth in February, went to above 20%. So, again, restrictions in place in Italy, but those restrictions haven't really impacted ability to work and to travel for work purposes. And the Italy business, as I mentioned, is already even with those restrictions in place already above 2019 levels. And I think the third one is the U.K., which has seen very, very strong progress. So the U.K. had very strong results in the first quarter. And we saw them leaving March with a 10% days adjusted growth rate. So, I'd say, that gives a bit of a flavor for our three biggest businesses. And generally speaking, they're managing the restrictions well. We would as we look into Q2, we would expect over time some of those restrictions start to ease, and we would see further improvement.
George Tong : Got it. Makes sense. And I guess that's a follow-up beside from France, where do you see most potential impact from ongoing or renewed restrictions that could impact the pace of revenue recovery?
Jonas Prising: I'd say that most companies at this point, George, are looking past the pandemic, and thinking about where they need to be when the restrictions are lifted. We've seen the evolution of what happens with the vaccination rates and anywhere from in Israel, where the vaccination rates is up to 80%. Ourselves here in the U.S., the U.K., countries in Latin America like Chile at about 40%. And then Europe being at about 20%. In some countries in Asia, notably Japan significantly behind vac rate, vaccination rate. And what we have observed as the vaccination rates are rising, confidence in the economy is rising. And even with existing lockdowns, or additional lockdowns, companies are preparing their workforces for what they will believe there's going to be a robust and strong economic recovery and growth environment coming out on the other side. And that's why they are hiring to the best of their ability despite the restrictions. So unless there is some big reversal in virus infections, that would necessitate a significant lockdown, which is difficult to imagine at this point. I think we will continue to see companies looking past the pandemic and preparing their workforce for the global recovery. And you can see that in a lot of the external PMI data, you can see it in the services data as well, that the outlooks are strengthening and companies are responding accordingly.
George Tong: Very helpful. Thank you.
Jonas Prising: Thank you, George. And with that, we come to the end of our first quarter earnings call. And we look forward to speaking with all of you again for our second quarter earnings call in July. Thanks, everyone. Have a good rest of the week.
Operator: Thank you for participating in today's conference. You may now disconnect.
