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Article by DailyStocks_admin    (08-21-08 06:36 AM)

The Daily Magic Formula Stock for 08/21/2008 is Manpower Inc. According to the Magic Formula Investing Web Site, the ebit yield is 19% and the EBIT ROIC is 25-50 %.

Dailystocks.com only deals with facts, not biased journalism. What is a better way than to go to the SEC Filings? It's not exciting reading, but it makes you money. We cut and paste the important information from SEC filings for you to get started on your research on a specific company.


Dailystocks.com makes NO RECOMMENDATIONS whatsoever, and provides this for informational purpose only.

BUSINESS OVERVIEW

Introduction and History

Manpower Inc. is a world leader in the employment services industry. Our global network of nearly 4,500 offices in 80 countries and territories allows us to meet the needs of our clients in all industry segments, whether they are global, multinational or local companies. By offering a complete range of services, we can help any company – no matter where they are in their business evolution – raise productivity through improved strategy, quality, efficiency and cost reduction across their total workforce.

Manpower Inc.’s five major brands – Manpower, Manpower Professional, Elan, Jefferson Wells and Right Management – provide a comprehensive range of services for the entire employment and business cycle including:


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Permanent, temporary and contract recruitment – We find the best people for all types of jobs and industries at both the staff and professional levels under the Manpower, Manpower Professional and Elan brands.


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Employee assessment and selection – We provide a wide array of assessments to validate candidate skills and ensure a good fit between the client and the employee, which leads to higher employee retention rates.


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Training – We offer an extensive choice of training and development solutions that help our employees, associates, and clients’ workforces to improve their skills and gain qualifications that will help them to succeed in the ever-changing world of work.


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Outplacement – Our Right Management brand is the world’s largest outplacement provider, helping our clients to better manage the human side of change by providing a positive way for employees who no longer fit the organization to transition out and make the right choice for the next step in their career.


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Outsourcing – We are one of the largest providers of recruitment process outsourcing in the employment services industry, enabling our clients to outsource the entire recruitment process for permanent and contingent staff to us, so they can focus on other areas of human resources.


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Consulting – We are a leading global provider of integrated consulting solutions across the employment lifecycle. We help clients maximize the return on their human capital investments while assisting individuals to achieve their full potential. Our Right Management brand helps clients attract and assess top talent; develop and grow leaders; and engage and align people with strategy.


•

Professional Services – Our Jefferson Wells brand is a high-value alternative to public accounting firms and other consulting groups, delivering professional services in the areas of internal controls, tax, technology risk management, and finance and accounting.

This comprehensive business mix allows us to mitigate the cyclical effects of the national economies in which we operate.

Our leadership position also allows us to be a center for quality employment opportunities for people at all points in their career paths. In 2007, we found permanent and temporary jobs for nearly five million people who work to help our more than 400,000 clients meet their business objectives. Seasoned professionals, skilled laborers, mothers returning to work, elderly persons wanting to supplement pensions and disabled individuals – all turn to the Manpower family of companies for employment. Similarly, governments of the nations in which we operate look to us to help reduce unemployment and train the unemployed with skills they need to enter the workforce. In this way, our company is a bridge to permanent employment for those who desire it.

We, and our predecessors, have been in business since 1948, with shares listed on the New York Stock Exchange since 1967.

Our Internet address is www.manpower.com. We make available through our Internet website our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 as soon as reasonably practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. In addition, we also make available through our Internet website:


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our articles of incorporation


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our bylaws


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our Manpower Code of Business Conduct and Ethics


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our Corporate Governance Guidelines


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the charters of the Audit, Executive Compensation and Nominating and Governance Committees of the Board of Directors


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our guidelines for selecting board candidates


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our categorical standards for relationships deemed not to impair independence of non-employee directors, and


•

our policy on services provided by independent auditors.

Documents available on the website are also available in print for any shareholder who requests them. Requests may be made by writing to Mr. Kenneth C. Hunt, Secretary, Manpower Inc., 100 Manpower Place, Milwaukee, Wisconsin 53212. We are not including the information contained on or available through our website as a part of, or incorporating such information by reference into, this Annual Report on Form 10-K.

Our Operations

United States

In the United States, our operations under the Manpower and Manpower Professional brands are carried out through both branch and franchise offices. We had 555 branch and 282 stand-alone franchise offices in the United States as of December 31, 2007, as well as on-site locations at clients with significant permanent, temporary and contract recruitment requirements. We provide a number of central support services to our branches and franchises, which enable us to maintain consistent service quality throughout the United States regardless of whether an office is a branch or franchise. We provide client invoicing and payroll processing of our contingent workers for all branch offices and some of our franchise offices through our Milwaukee headquarters.

Our franchise agreements provide the franchisee with the right to use the Manpower ® or Manpower Professional ® service mark and associated marks in a specifically defined exclusive territory. In the United States, franchise fees range from 2-3% of franchise sales. Our franchise agreements provide that in the event of a proposed sale of a franchise to a third party, we have the right to repurchase the franchise at the same price and on the same terms as proposed by the third party. We frequently exercise this right and intend to continue to do so in the future if opportunities arise with appropriate prices and terms.

In the United States, our Manpower operations provide a variety of employment services, including permanent, temporary and contract recruitment, assessment and selection, training and outsourcing. During 2007, approximately 29% of our United States temporary and contract recruitment revenues were derived from placing office staff, including contact center staff, 52% from placing industrial staff and 19% from placing professional and technical staff.

We also conduct business in the United States under our Jefferson Wells and Right Management brands. These operations are discussed further in the following sections.

France

We are a leading employment service provider in France. We conduct our operations in France and the surrounding region through 1,069 branch offices under the name of Manpower and 89 branch offices under the name Supplay.

The employment services market in France calls for a wide range of our services including permanent, temporary and contract recruitment, assessment and selection, and training. The temporary recruitment market is predominately focused on recruitment for industrial positions. In 2007, we derived approximately 68% of our temporary recruitment revenues in France from the supply of industrial staff, 18% from the supply of construction workers and 14% from the supply of office staff.

We also conduct business in France under our Jefferson Wells, Elan and Right Management brands. These operations are discussed further in the following sections.

Europe, Middle East and Africa (excluding France and Italy), or Other EMEA

We are a leading provider of permanent, temporary and contract recruitment, assessment and selection, training and outsourcing services throughout Europe, the Middle East and Africa. Our largest operations are in Germany, the Netherlands, Norway, Spain, Sweden, and the United Kingdom. Collectively, we operate through 1,192 branch offices and 55 franchise offices in this region. Our franchise offices are primarily located in Switzerland, where we own 49% of the franchise.

Manpower UK, the largest operation in the Other EMEA segment, comprising 16% of Other EMEA revenues, is a leading provider of employment services in the United Kingdom. As of December 31, 2007, Manpower UK conducted operations in the United Kingdom under the Manpower and Manpower Professional brands through a network of 121 branch offices and also provided on-site services to clients who have significant permanent, temporary and contract recruitment requirements. During 2007, approximately 65% of Manpower UK’s temporary recruitment revenues were derived from the supply of office staff, including contact center staff, 22% from the supply of industrial staff and 13% from the supply of technical staff.

We also own Brook Street Bureau PLC, or Brook Street, which operates through a total of 132 branch offices, separate from the Manpower and Manpower Professional brands in the United Kingdom. Its core business is secretarial, office and light industrial recruitment. Brook Street operates as a local network of branches supported by a national head office and competes primarily with local or regional independents. Brook Street’s revenues are comprised of temporary and contract placements as well as permanent recruitment.

Also included in our Other EMEA operations is Elan, which is a leading IT and technical recruitment firm. In addition to IT and technical recruitment, Elan provides managed service solutions to clients, which enable them to recruit personnel efficiently and achieve ongoing cost savings. Elan provides services in 17 countries, with the largest operations in the United Kingdom.

During 2007 for our Other EMEA operations, approximately 40% of temporary and contract recruitment revenues were derived from placing office staff, 28% from placing industrial staff and 32% from placing professional and technical staff.

We also conduct business in Other EMEA under our Jefferson Wells and Right Management brands. These operations are discussed further in the following sections.

Italy

In Italy, we are a leading employment services provider and conduct our operations under the Manpower and Manpower Professional brands through a network of 435 branch offices. Our Manpower operations in Italy provide a comprehensive line of employment services including permanent, temporary and contract recruitment, assessment and selection, training and outsourcing. In 2007, approximately 3% of our temporary and contract recruitment revenues in Italy were derived from placing office staff, including contract center staff, 74% from placing industrial staff and 23% from placing professional and technical staff.

We also conduct business in Italy under our Elan, Jefferson Wells and Right Management brands. The latter two operations are discussed further in the following sections.

Jefferson Wells

Jefferson Wells provides highly skilled project professionals along four primary solution areas – internal controls, tax, technology risk management, and finance and accounting. The company serves clients, including more than half of the Fortune 500, through highly experienced, salaried professionals working from offices across North America, Europe and Asia Pacific. Jefferson Wells’ unique business model and flat organizational structure make it a high-value alternative to public accounting firms and other consulting groups. The company employs only seasoned professionals with public accounting and industry experience and fees charged to clients are typically more reasonable than those charged by the public accounting and consulting firms. In most cases, because the professionals sent to clients are local, travel and lodging expenses are nominal or non-existent. Since specialists are located throughout our office network, experts are nearby for clients. Services are currently provided through 56 offices, which include major United States metropolitan markets, as well as international offices in Toronto, London, Amsterdam, Milan, Frankfurt, Paris, Hong Kong and South Africa.

Right Management

Right Management is the world’s leading global provider of integrated consulting solutions across the employment lifecycle, operating from 285 branch offices in 52 countries across the Americas, Europe and Asia Pacific, and 11 franchise offices in the United States.

Transition services offer assistance to individuals or groups of employees displaced from employment. Services range from advising employers on severance packages to assisting displaced employees with resume writing, networking and interviewing skills. Services to displaced employees are provided in individual or group programs. Managerial-level employees generally receive longer-term, individual services, while less-senior employees receive shorter-term, group-based services. Programs frequently begin with the displaced employee receiving counseling immediately after the layoff notification, followed by a combination of classroom training, support services and web-based tools to guide them along the remainder of the outplacement process.

Organizational Consulting services help companies succeed in managing their evolving human capital needs. For most organizations around the globe, the development of current and future leaders is a top priority. Right Management’s world-class and world-wide approach to individual coaching and leadership development focuses on improving the effectiveness of both leaders and teams to achieve real business results for their employer. Right Management assists organizations to evaluate their potential and current talent base through assessment and competency modeling processes that ensure the optimal organizational design and fit of individuals. In addition to assessing and developing talent, Right Management provides regional and global clients with consulting solutions that drive organizational effectiveness, employee engagement, and alignment of the workforce through customized tools, interventions, and workshops. Right Management’s deep expertise helps organizations address the essential issues of assessing, developing, engaging and retaining the talent required to successfully drive their business strategy.

Other Operations

We operate under the Manpower and Manpower Professional brands through 542 branch offices and 23 franchise offices in the other markets of the world. The largest of these operations are located in Australia, Japan, Mexico and Argentina, all of which operate through branch offices, and Canada, which operates through branch and franchise offices. Other operations are located throughout the Americas and Asia and operate through branch and franchise offices. In most of these countries, we primarily supply contingent workers to the office, industrial, and technical markets, which were 55%, 25%, and 20% of temporary and contract recruitment revenues, respectively.

Competition

Introduction

We compete in the employment services industry by offering a complete range of services, including permanent, temporary and contract recruitment, assessment and selection, training, outsourcing, consulting and professional services.

Our industry is large and fragmented, comprised of thousands of firms employing millions of people and generating billions of U.S. Dollars in annual revenues. It is also a highly competitive industry, reflecting several trends in the global marketplace, notably increasing demand for skilled people and consolidation among clients and in the employment services industry itself. We manage these trends by leveraging established strengths, including one of the employment services industry’s best-recognized brands; geographic diversification; size and service scope; an innovative product mix; and a strong client base.

Client demand for employment services is dependent on the overall strength of the labor market and secular trends toward greater workforce flexibility within each of the countries and territories in which we operate. Improving economic growth typically results in increasing demand for labor, resulting in greater demand for our portfolio of recruitment services. Correspondingly, during periods of weak economic growth or economic contraction, the demand for our recruitment services typically declines, while demand for our outplacement services accelerates.

During the last several years, secular trends toward greater workforce flexibility have had a favorable impact on demand for our services in several markets. As companies attempt to increase the variability of their cost base, contemporary work solutions help them to effectively address the fluctuating demand for their products or services.

Our client mix consists of both small/medium size businesses, which are based upon a local or regional relationship with our office network in each market, and large national/multinational client relationships, which comprised approximately 42% of our revenues in 2007. These large national and multinational clients will frequently enter into non-exclusive arrangements with several firms, with the ultimate choice among them being left to the local managers. As a result, firms with a large network of offices compete most effectively for this business which generally has agreed-upon pricing or mark-up on services performed. Client relationships with small and medium size businesses tend to rely less upon longer-term contracts, and the competitors for this business are primarily locally-owned businesses.

Recruitment Services Market

Our portfolio of recruitment services includes permanent, temporary and contract recruitment of professionals, as well as administrative and industrial positions. It also includes our Recruitment Process Outsourcing (RPO) offering, where we take on the management of customized, large-scale recruiting and workforce productivity initiatives for clients in an exclusive outsourcing contract. All of these services are provided under the Manpower, Manpower Professional and Elan brands.

The temporary recruitment market throughout the world is large and highly fragmented with more than 15,000 firms competing throughout the world. The global RPO market was approximately $3 billion in 2007 and is projected to more than double to $7 billion by 2010. RPO accounts for about 4% of the overall Human Resource Outsourcing market. In addition to us, the largest publicly owned companies specializing in recruitment services are Adecco, S.A. (Switzerland), Randstad Holding N.V. (Netherlands) and Kelly Services, Inc. (U.S.).

Historically, in periods of economic prosperity, the number of firms providing recruitment services has increased significantly due to the combination of a favorable economic climate and low barriers to entry. Recessionary periods generally result in a reduction in the number of competitors through consolidation and closures; however, historically this reduction has proven to be for a limited time as the following periods of economic recovery have led to a return in growth in the number of competitors.

In most areas, no single company has a dominant share of the temporary and contract recruitment market.

Recruitment firms act as intermediaries in matching available permanent, temporary and contract workers to employer assignments. As a result, these firms compete both to recruit and retain a supply of permanent, temporary and contract workers and to attract clients to employ these workers. We recruit permanent, temporary and contract workers through a wide variety of means, including personal referrals, online resources and advertisements, and by providing an attractive compensation package in jurisdictions where such benefits are not otherwise required by law, including health insurance, vacation and holiday pay, incentive and pension plans and a recognition program.

Methods used to market recruitment services to clients vary depending on the client’s need for permanent, temporary and RPO services, the local labor supply, the length of assignment and the number of workers required. Our full range of employment services enable us to cross-market to clients in order to leverage our relationships and expand our services provided, from outplacement services at Right to permanent recruitment services at Manpower Professional, to recruitment process outsourcing services, etc. We compete by means of quality of service provided, scope of service offered, ability to source the right talent and price. Success in providing high quality recruitment services is a function of the ability to access a supply of available workers, select suitable individuals for a particular assignment and, in some cases, train available workers in skills required for an assignment. For RPO services, success is defined primarily by the ability to perform the recruitment function more effectively and efficiently than the client could perform it via internal resources.

An important aspect in the selection of temporary and contract workers for an assignment is the ability of the recruitment firm to identify the skills, knowledge, abilities, and personal characteristics of a temporary worker and match their competencies or capabilities to an employer’s requirements. We have a variety of proprietary programs for identifying and assessing the skill level of our associates, which are used in selecting a particular individual for a specific assignment. We believe that our assessment systems enable us to offer a higher quality service by increasing productivity, decreasing turnover and reducing absenteeism.

It is also important to be able to access a large network of skilled workers and to be able to “create” certain hard-to-find skills by offering training to available workers. Our competitive position is enhanced by our ability to offer a wide variety of skills, in some of the most important market segments, through the use of training systems. Our Manpower Direct Training SM online university provides over 5,000 hours of online courses that are accessible 24/7 and are free to our employees and associates to help them improve their skills. The courses cover a wide range of subjects in many languages and feature the latest information for a variety of fields, from learning the latest technology in the IT field, to brushing up on business management courses or software programs. This training can also enable students in any profession, including factory workers, to further their skills, thus be better able to be employed and at a higher rate.

Outplacement and Human Resource Consulting Services Market

Our outplacement and HR consulting services are primarily provided under the Right Management brand. The market for outplacement and Human Resource consulting services is highly competitive. In the market for services required by global clients, there are several barriers to entry, such as the global coverage, specialized local knowledge and technology required to provide outstanding services to corporations on a global scale.

Our competitors in the outplacement market include outplacement services firms such as Drake Beam Morin, Lee Hecht Harrison (owned by Adecco); and career service divisions of global employment services firms. Additionally, there are regional firms and numerous smaller boutiques operating in either limited geographic markets or providing limited services. Our competitors in the HR Consulting space include major firms that compete in serving the large employer worldwide, such as Mercer Delta, Towers Perrin, Watson Wyatt, DDI and Hewitt Associates; boutique firms comprised primarily of professionals formerly associated with the firms mentioned above; and newer to this market, some of the human resource IT firms that are starting to compete in the HR space (e.g. Kenexa). While public accounting and consulting firms such as PricewaterhouseCoopers and Deloitte & Touche have been competitors in the past, these firms represent less direct competition due to a reduction in their consulting businesses as a result of the Sarbanes-Oxley Act legislation.

Companies choose to provide outplacement services for several reasons. First, as the competition for attracting and retaining qualified employees increases, companies are increasingly attempting to distinguish themselves in the marketplace as attractive employers. Consequently, more companies are providing outplacement services as part of a comprehensive benefits package that provide for the well being of employees – not only during their period of employment, but also after their employment ceases. Additionally, when companies complete layoffs, many believe that providing outplacement services projects a positive corporate image and improves morale among the remaining employees. Finally, companies may provide outplacement services to reduce costs by preparing and assisting separated employees to find new employment, thereby diminishing employment-related litigation.

Companies choose Right Management for the high-tech, high-touch approach of our outplacement services and the flexibility of our solutions to meet specific organizational and candidate needs. Our technology solutions are integral to our outplacement services. We have made significant investments in technology to augment our core services with online, twenty-four hours a day, seven days a week access and support. In 2007, we introduced Right Navigator and RightChoice TM . Other solutions include: RightTrack SM , Right-from-Home ® , Right Connection ® , Right FasTrack SM , and Right Access SM along with Job Banks and Resume Banks.

Companies augment their internal human resources professional staff with external consultants for many reasons. First, the growing importance and complexity of employee issues is creating an unprecedented theoretical and technical service expectation on human resources departments. Additionally, human resources departments have continued pressure to contain costs without minimizing the resources available to managers. Finally, companies increasingly choose to outsource non-core functions that can be addressed more effectively by outside professionals. These organizations look to Right Management for thought leadership and best practices on attracting and assessing organizational talent, leadership development and engaging and aligning the workforce.

Professional Services

Jefferson Wells competes in the professional services industry as a high-value alternative to public accounting firms and other consulting groups, serving clients through highly experienced professionals working from offices worldwide.

The professional services industry is highly competitive and comprised of public accounting firms, mid-level consulting firms and specialty consulting houses. The “Big Four” public accounting firms are Deloitte & Touche, Ernst & Young, PricewaterhouseCoopers and KPMG. Competitors in the professional services market include Protiviti, Grant Thornton, Parson Consulting, Robert Half International and Resources Global Professionals. Additionally, numerous smaller boutiques either operate in limited geographic markets or provide limited services. While public accounting and consulting firms can be primary competitors, these firms also frequently refer Jefferson Wells to assist clients with engagements where there are conflict-of-interest concerns. Jefferson Wells does not perform attestation work, enabling the firm to provide an objective review of a client’s business processes, and avoiding potential conflicts of interest.

In an evolving global marketplace, a variety of market trends affect the professional services industry, primary among them are: increasing demand for highly experienced people, global business expansion with a need for consistent methodology and service delivery, and the high cost of full-time professionals with specialized skills.

Jefferson Wells has developed a variety of proprietary methodologies and tools, including a firm-wide Service Quality Process used on every engagement. Jefferson Wells identifies and confirms business needs and then employs proven approaches to provide client solutions. The firm’s competitive advantage resides in the combination of Jefferson Wells’ methodologies and highly experienced resources, which enables the firm to offer a higher level of service delivery to clients.

Jefferson Wells serves numerous industries, with the largest concentration in financial services, manufacturing, energy and utilities, and healthcare.

Jefferson Wells has operations in the United States, Canada, England, France, Germany, Italy, The Netherlands, South Africa, and Hong Kong, but has delivered services in more than 30 countries and markets worldwide.

CEO BACKGROUND

J. Thomas Bouchard
67
Retired Senior Vice President, Human Resources of International Business Machines from 1994 to 2000. Senior Vice President and Chief Human Resources Officer of U.S. West Inc. from 1989 to 1994. Also a director of Nordstrom fsb. A director of Manpower for more than five years.

Cari M. Dominguez
58
Chair of the U.S. Equal Employment Opportunity Commission from 2001 to 2006. President, Dominguez & Associates, a consulting firm, from 1999 to 2001. Partner, Heidrick & Struggles, a consulting firm, from 1995 to 1998. Director, Spencer Stuart, a consulting firm, from 1993 to 1995. Assistant Secretary for Employment Standards Administration and Director of the Office of Federal Contract Compliance Programs, U.S. Department of Labor, from 1989 to 1993. Prior thereto, held senior management positions with Bank of America. A director of Manpower since May 2007.

Edward J. Zore
62
President and Chief Executive Officer of The Northwestern Mutual Life Insurance Company (“Northwestern Mutual”) since June 2001. President of Northwestern Mutual from March 2000 to June 2001. Executive Vice President, Life and Disability Income Insurance, of Northwestern Mutual from 1998 to 2000. Executive Vice President, Chief Financial Officer and Chief Investment Officer of Northwestern Mutual from 1995 to 1998. Prior thereto, Chief Investment Officer and Senior Vice President of Northwestern Mutual. Also a Trustee of Northwestern Mutual and a Director of Northwestern Mutual Series Fund, Inc. A director of Manpower for more than five years.


Jeffrey A. Joerres
48
Chairman of Manpower since May 2001, and President and Chief Executive Officer of Manpower since April 1999. Senior Vice President — European Operations and Marketing and Major Account Development of Manpower from July 1998 to April 1999. A director of Artisan Funds, Inc. and Johnson Controls, Inc. A director of Manpower for more than five years. An employee of Manpower since July 1993.


John R. Walter
61
Retired President and Chief Operating Officer of AT&T Corp. from November 1996 to July 1997. Chairman, President and Chief Executive Officer of R.R. Donnelley & Sons Company, a print and digital information management, reproduction and distribution company, from 1989 through 1996. Non-executive Chairman of the Board of InnerWorkings, Inc. and a director of Infinity Bio-Energy, Vasco Data Securities, Inc. and SNP Corporation in Singapore. A director of Manpower for more than five years.


Marc J. Bolland
48
Chief Executive Officer of Wm Morrisons Supermarket Plc since September 2006. Executive Board Member of Heineken N.V., a Dutch beer brewing and bottling company, from 2001 to August 2006. Previously, a Managing Director of Heineken Export Group Worldwide, a subsidiary of Heineken N.V., from 1999 to 2001, and Heineken Slovensko, Slovakia, a subsidiary of Heineken N.V., from 1995 to 1998. A director of Manpower since July 2004.


Ulice Payne, Jr.
52
President of Addison-Clifton, LLC, a provider of global trade compliance advisory services, since May 2004. President and Chief Executive Officer of the Milwaukee Brewers Baseball Club from 2002 to 2003. Partner with Foley & Lardner LLP, a national law firm, from 1998 to 2002. Director of Northwestern Mutual, Wisconsin Energy Corporation and Badger Meter, Inc. A director of Manpower since October 2007.

Gina R. Boswell
45
President, Global Brands for Alberto-Culver Company since February 2008. Senior Vice President and Chief Operating Officer — North America of Avon Products, Inc. from February 2005 to May 2007. Senior Vice President — Corporate Strategy and Business Development of Avon Products, Inc. from 2003 to February 2005. Prior thereto, an executive with Ford Motor Company, serving in various positions from 1999 to 2003. A director of Manpower since February 2007.


Jack M. Greenberg
65
Chairman of The Western Union Company since 2006. Retired Chairman and Chief Executive Officer of McDonald’s Corporation from May 1999 to December 2002, and Chief Executive Officer and President from August 1998 to May 1999. Director of The Allstate Corporation, InnerWorkings, Inc., Hasbro, Inc. and The Western Union Company. A director of Manpower since October 2003.


Terry A. Hueneke
65
Retired Executive Vice President of Manpower from 1996 until February 2002. Senior Vice President — Group Executive of Manpower’s former principal operating subsidiary from 1987 until 1996. A director of Manpower for more than five years.

MANAGEMENT DISCUSSION FOR LATEST QUARTER

Operating Results - Three Months Ended March 31, 2008 and 2007

Revenues from Services increased 18.8% to $5,386.6 million for the first quarter of 2008 from the same period in 2007. Revenues were positively impacted by changes in foreign currency exchange rates during the period due to the weakening of the U.S. Dollar relative to the currencies in most of our non-U.S. markets. In constant currency, revenues increased 7.6%. This growth rate is a result of increased demand for our services in most of our markets, including Other EMEA, Italy, Other Operations and Right Management where revenues increased 14.6%, 15.0%, 11.8% and 4.5%, respectively, on a constant currency basis. We also saw solid growth in our permanent recruitment business which increased 33.9% on a consolidated basis in constant currency.

Gross Profit increased 21.0% to $967.7 million for the first quarter of 2008. In constant currency, Gross Profit increased 9.9%. Gross Profit Margin was 18.0%, an increase of 0.33% from the first quarter of 2007 primarily resulting from an increase in the temporary recruitment business margin (+0.26%) and an increase in our permanent recruitment business (+0.33%). This increase is partially offset by the impact of our specialty businesses (-0.26%), primarily due to a margin decline at Jefferson Wells, due to lower staff utilization, and a change in our mix of business, with a lower amount of revenues coming from Right Management and Jefferson Wells, where the gross profit margin is generally higher than the company average.

Selling and Administrative Expenses increased 19.9% from the first quarter of 2007 to $835.7 million in the first quarter of 2008. These expenses increased 9.7% in constant currency. This increase is primarily in response to the increase in business volumes and reflects investments made in the permanent recruitment business. As a percent of revenues, Selling and Administrative Expenses were 15.5% in the first quarter of 2008 compared to 15.4% in the first quarter of 2007. This increase reflects the continued investments in certain markets, offset by the impact of cost control efforts and productivity gains.

Operating Profit increased 27.8% to $132.0 million for the first quarter of 2008 compared to 2007, with an Operating Profit Margin of 2.5% in 2008 compared to 2.3% in 2007. On a constant currency basis, Operating Profit increased 10.8%, which reflects the increase in Gross Profit Margin, offset by the increase in Selling and Administrative Expenses.

Interest and Other Expenses were $11.3 million in the first quarter of 2008 compared to $9.6 million for the same period in 2007. Net Interest Expense increased $3.5 million in the quarter to $10.5 million due primarily to our Euro-denominated interest expense being translated into U.S. Dollars at a higher rate in 2008 compared to 2007. Translation gains in the first quarter of 2008 were $1.9 million compared to losses of $0.1 million in the first quarter of 2007. Miscellaneous Expenses, net, which consists of bank fees and other non-operating income and expenses, was $2.7 million in the first quarter of 2008 compared to $2.5 million in the first quarter of 2007.

We provided for income taxes during the first quarter of 2008 at a rate of 37.4% based on our current estimate of the annual 2008 effective tax rate. This 37.4% rate is higher than the U.S. Federal statutory rate of 35% due primarily to the impact of U.S. state income taxes, an increase in valuation allowance for certain non-U.S. operations and other permanent items. This 37.4% rate is lower than the annual effective tax rate of 38.7% for 2007 but higher than the 36.5% rate for the first quarter of 2007, due primarily to differences in the amount of cash repatriations of non-U.S. earnings expected during each period.

Net Earnings Per Share – Diluted increased 36.2% to $0.94 in the first quarter of 2008 compared to $0.69 in the first quarter of 2007. The higher foreign currency exchange rates positively impacted Net Earnings Per Share – Diluted by approximately $0.14 in the first quarter of 2008 compared to 2007. Weighted-Average Shares – Diluted were 80.3 million in the first quarter of 2008, a decline of 7.2% from the first quarter of 2007. This decline is primarily a result of share repurchases in 2007 and the first quarter of 2008.

Segment Operating Results

United States

In the United States, revenues decreased 2.5% for the first quarter of 2008 compared to the first quarter of 2007, due primarily to a decrease in staffing volume as demand for our services declined. Excluding acquisitions from 2007, revenues decreased 11.1%, an improvement from the decline of 14.2%, excluding acquisitions, in the fourth quarter of 2007. While we continue to see year-over-year growth in our professional business, we continue to experience declines in demand for our light industrial and industrial workers and skilled office workers.

Gross Profit Margin increased during the first quarter of 2008 compared to the first quarter of 2007 due to improved margins from our temporary recruitment business, due primarily to lower state unemployment tax and other payroll tax expenses. Acquisitions caused a slight decrease to Gross Profit Margin during the first quarter of 2008.

Selling and Administrative Expenses increased during the first quarter of 2008 compared to 2007 primarily due to acquisitions. Excluding acquisitions, Selling and Administrative Expenses decreased during the first quarter of 2008 primarily due to lower personnel costs.

Operating Unit Profit (“OUP”) Margin in the United States was 1.5% and 2.4% for the first quarter of 2008 and 2007, respectively. This decrease is due to the de-leveraging effect of the revenue decline as revenues have declined more than expenses, partially offset by the increase in Gross Profit Margin. Acquisitions had a minimal impact on OUP Margin for the first quarter of 2008.

France

In France, revenues increased 16.1% (1.5% in constant currency) during the first quarter of 2008 compared to 2007. This constant currency growth rate is lower than that experienced during the fourth quarter of 2007 due to a decline in the demand for our services as a result of a softening of the manufacturing and construction industry, which is a large portion of our staffing business in France. This decline was partially offset by an increase in revenue from our permanent recruitment business, which more than doubled during the first quarter of 2008.

Gross Profit Margin increased in the first quarter of 2008 compared to 2007 as a result of the increased permanent recruitment business.

Selling and Administrative Expenses increased during the first quarter of 2008 compared to the first quarter of 2007 primarily due to investments in the permanent recruitment business. Expenses were well controlled and increased only slightly as a percentage of revenue in the quarter, as we were able to leverage the existing cost base to support the increased revenues.

During the first quarter of 2008 and 2007, OUP Margin in France was 3.1% and 2.9%, respectively. This improvement reflects the improved Gross Profit Margin.

Other EMEA

In Other EMEA, which represents operations throughout Europe, the Middle East and Africa (excluding France and Italy), revenues increased 25.6% (14.6% in constant currency) in the first quarter of 2008 compared to the first quarter of 2007. Local currency revenue growth was experienced in most major markets with the highest growth rates reported in Elan, Germany and Belgium. Permanent recruitment revenues increased 25.9% in constant currency during the quarter as a result of our investments in this business. This growth rate in the quarter reflects a decline from the 32.8% growth (20.2% in constant currency) in the fourth quarter of 2007, due to declining trends in certain markets as well as the impact of Easter on first quarter revenue growth.

Gross Profit Margin increased in the first quarter of 2008 compared to the first quarter of 2007 primarily due to the increase in permanent recruitment revenues, and our continued focus on improved pricing in certain markets.

Selling and Administrative Expenses increased during the first quarter of 2008 compared to the first quarter of 2007 due to the need to support the increased business volumes. Expenses as a percent of revenues increased slightly in the quarter compared to the first quarter of 2007.

OUP Margin for Other EMEA was 2.6% and 2.5% for the first quarter of 2008 and 2007, respectively. This margin improvement was primarily a result of the increased Gross Profit Margin level.

Italy

In Italy, revenues increased 31.6% (15.0% in constant currency) in the first quarter of 2008 compared to the first quarter of 2007, an improvement from the revenue growth rate in the fourth quarter of 2007. This improvement resulted as demand for our services in Italy remained strong and we had a positive favorable seasonal impact from training revenues in the quarter. Permanent recruitment revenues increased 42.3% in constant currency during the first quarter of 2008 compared to the first quarter of 2007.

Gross Profit Margin in the first quarter of 2008 increased compared to the first quarter of 2007 due to the increase in permanent recruitment revenues and improved pricing discipline in the market.

Selling and Administrative Expenses increased during the first quarter of 2008 compared to the first quarter of 2007 primarily due to an increase in personnel costs. However, expenses as a percent of revenue decreased in the quarter compared to the first quarter of 2007 as we were able to leverage the existing cost base to support the increased revenues without a similar increase in expenses.

OUP Margin for Italy was 7.2% and 5.4% for the first quarter of 2008 and 2007, respectively. This margin improvement was primarily the result of leveraging our expense base with increased revenue and gross profit levels.

Jefferson Wells

Revenues for Jefferson Wells in the first quarter of 2008 were in line with the fourth quarter of 2007, but decreased 4.7% compared to the first quarter of 2007 due primarily to the decline in Sarbanes-Oxley related control services and the delay of some large engagements.

The Gross Profit Margin in the first quarter of 2008 declined compared to the first quarter of 2007 due to lower utilization of our professional staff given the decrease in revenues.

Selling and Administrative Expenses decreased 1.5% during the first quarter of 2008 compared to the first quarter of 2007 due to lower office costs. As a percentage of revenue, expenses have increased compared to the first quarter of 2007.

The OUP Margin for Jefferson Wells in the first quarter of 2008 was -3.3% compared to 1.2% in the first quarter of 2007. This decreased margin is primarily the result of the lower utilization of professional staff.

Right Management

Revenues for Right Management in the first quarter of 2008 increased 10.1% (4.5% in constant currency) compared to the first quarter of 2007. Excluding acquisitions that occurred in the second quarter of 2007, revenues increased 7.6%, or 2.0% in constant currency. This increase in constant currency is the result of improving demand for Right’s organizational consulting services, which increased 17.0% (9.5% in constant currency) in the quarter.

Gross Profit Margin increased in the first quarter of 2008 compared to the first quarter of 2007 primarily due to the change in the mix of business between outplacement and organizational consulting services.

Selling and Administrative Expenses increased in the first quarter of 2008 compared to the first quarter of 2007 to support the increased revenue levels. As a percentage of revenue, expenses have increased compared to the first quarter of 2007.

OUP Margin for Right Management was 6.5% in the first quarter of 2008 and 2007 as the increase in Gross Profit Margin was offset by the higher expense levels.

Other Operations

Revenues for Other Operations increased 23.7% (11.8% in constant currency) during the first quarter of 2008 compared to 2007, an improvement from the growth of 16.7% (10.0% in constant currency) in the fourth quarter of 2007. Revenue increases for the first quarter, in constant currency, were experienced in virtually all markets in this segment, including Argentina, Mexico and Japan which experienced revenue growth rates of 57.6%, 10.2% and 7.6%, respectively. Permanent recruitment revenues increased 36.4% in constant currency as a result of the previous investments in this business.

The Gross Profit Margin increased in the first quarter of 2008 compared to 2007 due to the higher permanent recruitment business, a shift in the mix of business toward those countries and services with higher gross profit margins. This increase was partially offset by a decrease in Gross Profit Margin in Japan.

Selling and Administrative Expenses increased in the first quarter of 2008 compared to the first quarter of 2007 to support increased revenue levels and investments in office openings and the permanent recruitment business in certain markets. Expenses as a percent of revenue decreased slightly for the quarter as expenses in the first quarter of 2007 included the cost of a large advertising campaign in Japan.

The OUP Margin for Other Operations in the first quarter of 2008 was 2.9% compared to 2.1% for the same period in 2007. This increase is a result of the lower advertising costs, coupled with the increase in Gross Profit Margin.

Financial Measures

Constant Currency and Organic Constant Currency Reconciliation

Changes in our financial results include the impact of changes in foreign currency exchange rates. We provide “constant currency” and “organic constant currency” calculations in this quarterly 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 U.S. 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 only reported earnings and not our actual cash flow or economic condition.

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 pre-existing business.

Liquidity and Capital Resources

Cash provided by operating activities was $105.8 million in the first quarter of 2008 compared to $102.8 million for the first quarter of 2007. This increase is primarily due to the increased operating earnings, offset by increased working capital needs. Cash provided by operating activities before changes in working capital requirements was $114.2 million in the first quarter of 2008 compared to $105.2 million in the first quarter of 2007.

Accounts receivable increased to $4,724.6 million as of March 31, 2008 from $4,478.8 million as of December 31, 2007. This increase is due to changes in foreign currency exchange rates. At December 31, 2007 exchange rates, the March 31, 2008 balance would have been approximately $281.8 million lower than reported.

Capital expenditures were $23.8 million in the first quarter of 2008 compared to $16.8 million during the first quarter of 2007. These expenditures are primarily comprised of purchases of computer equipment, office furniture and other costs related to office openings and refurbishments.

From time to time, we acquire and invest in companies throughout the world, including franchises. The total cash consideration for acquisitions in the first quarter of 2008 was $0.8 million compared to $5.0 million in the first quarter of 2007.

Borrowings increased $10.9 million in the first quarter of 2008 compared to $3.8 million in the first quarter of 2007. As of March 31, 2008, we had borrowings of $157.9 million and letters of credit of $3.7 million outstanding under our $625.0 million revolving credit agreement. There were no borrowings outstanding under our Receivables Facility or our commercial paper program as of March 31, 2008 or December 31, 2007.

Our $625.0 million revolving credit agreement requires, among other things, that we comply with a Debt-to-EBITDA ratio of less than 3.25 to 1 and a fixed charge ratio of greater than 2.00 to 1. As defined in the agreement, we had a Debt-to-EBITDA ratio of 1.04 to 1 and a fixed charge ratio of 4.26 to 1 as of March 31, 2008. Based on current forecasts, we expect to be in compliance with these covenants throughout 2008.

In addition to the previously mentioned facilities, we maintain separate bank credit lines with financial institutions to meet working capital needs of our subsidiary operations. As of March 31, 2008, such credit lines totaled $420.5 million, of which $368.7 million was unused. Due to limitations on subsidiary borrowings in our revolving credit agreement, additional borrowings of $246.7 million could have been made under these lines as of March 31, 2008. Under the $625.0 million revolving 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.

In August 2007, the Board of Directors authorized the repurchase of 5.0 million shares of our common stock, not to exceed a total price of $400.0 million. Share repurchases may be made from time to time and may be implemented through a variety of methods, including open market purchases, block transactions, privately negotiated transactions, accelerated share repurchase programs, forward repurchase agreements or similar facilities. During the first quarter of 2008, we repurchased 752,300 shares at a total cost of $41.2 million. In the first quarter of 2008, we paid $11.5 million related to share repurchases in 2007. There are 2.5 million shares remaining available for repurchase under this authorization, at a total price not to exceed $253.1 million. During the first quarter of 2007, we repurchased 991,900 shares at a total cost of $72.7 million under the 2006 authorization.

On April 29, 2008, the Board of Directors declared a cash dividend of $0.37 per share, which is payable on June 16, 2008 to shareholders of record on June 3, 2008.

We have aggregate commitments related to debt repayments, operating leases, severances and office closure costs, and certain other commitments of $2,103.3 million as of March 31, 2008 compared to $2,088.6 million as of December 31, 2007.

In the fourth quarter of 2007, we established reserves totaling $4.4 million in France for office closure costs and $4.0 million at Jefferson Wells for severances and other office closure costs related to reorganizations at these entities. Payments against the $4.4 million reserve in France started in 2008, and we have paid $0.6 million as of March 31, 2008. We expect a majority of the remaining $3.8 million will be paid in 2008. Of the $4.0 million recorded at Jefferson Wells, $2.2 million has been paid as of March 31, 2008, of which $2.1 million was paid during the three months ended March 31, 2008. We expect a majority of the remaining $1.8 million will be paid in 2008.

In 2006, we recorded expenses totaling $9.5 million related to reorganizations in the U.K. for severance and other office closure costs. As of March 31, 2008, $7.7 million has been paid, of which $0.4 million was paid during the three months ended March 31, 2008. We expect a majority of the remaining $1.8 million will be paid by the end of 2009. In 2006, we also recorded expenses totaling $6.9 million at Right Management for severance costs of which $1.6 was reversed in 2007 as fewer than expected former employees had claimed the severance. As of March 31, 2008, $4.9 million has been paid, of which $0.1 million was paid during the three months ended March 31, 2008. We expect the remaining $0.4 million will be paid in 2008.

We also have entered into guarantee contracts and stand-by letters of credit that total approximately $129.2 million and $129.3 million as of March 31, 2008 and December 31, 2007, respectively, $74.2 million and $78.2 million for guarantees, respectively, and $52.5 million and $51.1 million for stand-by letters of credit, respectively. Guarantees primarily relate to bank accounts, operating leases, and indebtedness. The stand-by letters of credit relate to workers’ compensation, operating leases and indebtedness. 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.

Recently Issued Accounting Standards

In December 2007, the FASB issued Statement No. 141 (revised 2007), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R) changes the requirements for an acquirer’s recognition and measurement of the assets acquired and the liabilities assumed in a business combination. SFAS 141(R) is effective for us in 2009. We are currently assessing the impact of the adoption of this statement.

In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement No. 157, “Fair Value Measurements” (“SFAS 157”). SFAS 157 defines fair value, establishes a framework for measuring fair value in accordance with generally accepted accounting principles, and expands disclosures about fair value measurements. Subsequently in February 2008, the FASB issued FASB Staff Position 157-1, “Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13” (“FSP 157-1”) and FASB Staff Position 157-2, “Partial Deferral of the Effective Date of Statement 157” (“FSP 157-2”). FSP 157-1 removed leasing transactions accounted for under Statement No. 13 and related guidance from the scope of SFAS 157. FSP 157-2 deferred the effective date of SFAS 157 for all nonfinancial assets and nonfinancial liabilities to fiscal years beginning after November 15, 2008. The implementation of SFAS 157 for financial assets and financial liabilities, effective January 1, 2008, did not have a material impact on our consolidated financial statements. We are currently assessing the impact of SFAS 157 for nonfinancial assets and nonfinancial liabilities on our financial statements. See Note 7 for further information about our fair value measurements as of March 31, 2008.

In December 2006, we adopted Statement No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)” (“SFAS 158”). Under its Measurement Date Provisions, SFAS 158 requires us to measure the funded status of our defined benefit and retiree medical plans as of the balance sheet date, rather than as of an earlier measurement date, in 2008. We plan to adopt the Measurement Date Provisions as of December 31, 2008. We do not expect the adoption of the provisions to have a material impact on our consolidated financial statements.

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial assets and financial liabilities at fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings. We adopted SFAS 159 as of January 1, 2008. As of the initial adoption, we did not elect the fair value option for any existing eligible items under SFAS 159.

In December 2007, the FASB issued Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 requires (a) that noncontrolling (minority) interests be reported as a component of shareholders’ equity, (b) that net income attributable to the parent and to the noncontrolling interest be separately identified in the consolidated statement of operations, (c) that changes in a parent’s ownership interest while the parent retains its controlling interest be accounted for as equity transactions, (d) that any retained noncontrolling equity investment upon the deconsolidation of a subsidiary be initially measured at fair value, and (e) that sufficient disclosures are provided that clearly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. SFAS 160 is effective for us in 2009 and should be applied prospectively. However, the presentation and disclosure requirements of the statement shall be applied retrospectively for all periods presented. We are currently assessing the impact of the adoption of this statement.

In March 2008, the FASB issued Statement No. 161, “Disclosures about Derivative Instruments and Hedging Activities” (“SFAS 161”). SFAS 161 requires enhanced disclosures about derivative instruments and hedging activities to enable investors to better understand their effects on an entity’s financial position, financial performance, and cash flows. SFAS 161 is effective for us in 2009.

CONF CALL

Jeffrey A. Joerres

Good morning and welcome to the second quarter conference call for 2008. With me this morning is our Chief Financial Officer, Mike Van Handel. Together we'll go through the second quarter results. I'll discuss the overall results of the [quarter], and then get into some segment detail. Mike will then discuss the items affecting the balance sheet and cash flow and Mike will also spend some time covering how the outlook for the third quarter of 2008.

Mike, before I move into that could you go through the Safe Harbor language?

Michael J. Van Handel

This conference call includes forward-looking statements which are subject to risks and uncertainties. Actual results might differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in the forward-looking statements can be found in the company's annual report on Form 10K and in the other Securities and Exchange Commission filings of the company, which information is incorporated herein by reference.

Jeffrey A. Joerres

The second quarter of 2008 was a good quarter for Manpower. I will spend some time talking about some of the weakening that occurred in the second quarter, but even with the inter-quarter weakening, we achieved solid performance. Our largest segment, Other EMEA, was up 30% in U.S. dollars and 18% in constant currency. Right Management and Italy both did well and overall our financial results were as we anticipated.

Second quarter results were solid. However, we did see softening, which impacts our outlook for the balance of the year. The softer outlook is based on several different factors. One is our largest single unit, France, has been experiencing softening in the second quarter. That softening will clearly affect our third quarter. The second is we are not seeing the U.S. getting any strength in the near future.

Also, a few of the countries in Europe, German and Italy for example, are beginning to show some slower growth. At the same time, we have a large number of high performing units. Unfortunately, the units are not sizeable enough to contribute in any scale, but they are contributing in a healthy blend. Countries like China, India, Argentina, and Poland, just to name a few, are really growing at rapid rates.

As you review our second quarter earnings, it is important to consider two non-recurring items impacting results. The first item is a change in the French payroll tax calculation, which favorably impacted operating profit by $53.7 million in 2008 and $99.3 million in 2007. The second item is a $54.1 million legal provision for the exposure related to the French competition case that we recorded in the second quarter of 2008. The net of these two items reduced our 2008 earnings by $0.18. The payroll tax item favorably impacted our 2007 earnings by $0.66. Mike will discuss both of these matters in a little bit more detail once we get further into the call.

Our revenue in the second quarter was $5.9 billion, up 17% in U.S. dollars and 5% in constant currency. This was achieved from solid growth from Other EMEA, Italy, and our Other Operation segment.

Our gross margin, excluding the non-recurring items, increased 49 basis points. Our expenses were well managed though we are, in some geographies, experiencing some de-leveraging. Even in an environment like that, our operating profit was up 17%, excluding non-recurring items, or 2% in constant currency. We were able to maintain our operating profit margin of 3.5% resulting in a total earnings per share, excluding the impact of the non-recurring items, of $1.52. This represents an increase of 27% in U.S. dollars and 9% in constant currency.

While we had a solid second quarter we did experience some intra-quarter softening, particularly in the French market. We believe that our balanced business, both in service lines as well as geography, will help minimize some of the softening but based on the trends that we are seeing we anticipate the third quarter earnings per share to be between $1.45-$1.49, which includes $0.17 from currency.

The gross margin was down 80 basis points. The truer picture is to eliminate the impact of the payroll tax change from both years. Excluding the payroll tax change, our gross margin improved 55 basis points. Part of that is the mix of the business, the other is through disciplined pricing.

We were able to improve our temporary recruitment gross profit margin, resulting in a positive 47 basis points impact to the overall gross margin. We are still seeing the impact of a healthy permanent recruitment environment with an increase in permanent recruitment fees of 26%. This favorably impacted our gross margin 28 basis points.

The staffing business outpaced the growth at Jefferson Wells, yielding a reduction based on mix in our gross margin of 20 basis points.

I would like now to spend some time in the U.S. segment. The U.S. segment had revenue growth of 1%. Excluding acquisitions revenue growth was down 9%. Revenue overall came in at $492 million, and OUP of $15 million was down 43%, including acquisitions, yielding a 3% operating unit profit margin.

The U.S. market continues to languish with mixed news. We are not seeing, however, any further declines. And in fact, one could look at it as some slight improvements. Excluding acquisitions, revenue was up 3.7% sequentially from the first quarter and the rate of year-over-year contraction moderated from 11% in the first quarter to 9% in the second quarter.

The clients continue to be cautious. But other than specific industries they seem not to be making any real dramatic moves. Our Manpower Professional business continued solid growth in the second quarter, up 17% with franchise acquisitions, and 5% on an organic basis.

Our Permanent Recruitment business was up 12% from prior year. Based on what we’re seeing in our RPO business and some of our large-scale recruitment, we are getting very good productivity and, therefore, solid contribution to the bottom line.

The U.S. revenues, as I spoke about earlier, were relatively stable during the quarter and we believe that as we look into the third quarter we would not see any further deterioration in our U.S. business.

The French operation had revenues of $2 billion, up 10% in U.S. dollars, down 5% in constant currency, which is at the lower end of our expectations. Our French team did a superb job of managing expenses and, therefore, they were able to maintain their 3.6% operating unit profit margin, despite the top-line decline. Excluding the non-recurring items, our OUP increased 9% in U.S. dollars, down 6% in constant currency. We have seen further softening in the demand in the French market, which began in May and continues through today.

Currently our French revenues are running about 8% below the prior year, which has been the case for the last several weeks. So at least we have seen some stabilization in the rate of contraction. We believe that we are running slight below the market, which can be attributed to our disciplined pricing and our mix of business being skewed more toward the industrial side. That segment is hit more severely in the French market place right now than others.

We are also still working through some of the separation of our business that we did last quarter regarding our small/medium-size business focus and our strategic client focus and how we split those two parts of the business. This has affected the organization but we are confident that this will be a very positive move for us as we get through some of these changes that are now occurring in the organization.

Our Permanent Recruitment business in the French market place continues to grow well. In fact, extremely well. Our Permanent Recruitment revenue was up 73% over 2007 and up 12% on a sequential basis, both very good signs as to what this market can do for us and how we are performing in a new service like permanent recruitment.

We completed the acquisition of Spirit, a firm focused on IT and financial permanent recruitment. The acquisition was quite small but it really intended to give us the management from that company and a jump start into Manpower Professional. We did the name change from Spirit to Manpower Professional and we are now working aggressively in the market and confident you will see gains over this in the next 12 months.

Other EMEA did quite well in the second quarter with revenue of $2.1 billion, up 30% in U.S. dollars and 18% in constant currency. We are experiencing very good leverage with group growth margin expansion yielding an operating unit profit of $85 million, up 53% in U.S. dollars, 36% in constant currency, giving us an operating unit profit of 4.2%, an outstanding performance.

The Nordics revenue growth was up 7% in constant currency. Elan had a great performance, which is a continuation of several quarters growing in excess of 30%, with revenue growth up 42%.

At Manpower UK we continue to see a stable market at an increase of 10%, Germany 19%, Netherlands 31% taking out the Vitae acquisition of 5%, and the Vitae acquisition, by the way, is yielding some very good results for us.

Spain, clearly our challenges that we saw in the first quarter persisting into the second quarter. The Spanish market looks very similar to the U.S. market in that between housing and oil prices, it has really put a damper on the economic conditions in Spain.

We are getting good growth out of several of the smaller units in our other EMEA. Belgium up 17%, Israel up 14%, Austria up 30%.

So while we have seen some softening, and we do believe we will see further softening in Europe in the third quarter, there are still some very strong performance, therefore giving us a much better glide path as we go into a potentially slower period.

Once again, Manpower Italy put up some very strong numbers. Revenue up 25% in U.S. dollars, 8% in constant currency. A great bottom of OUP of $38 million, up 12% in constant currency, a very strong operating unit profit margin of 8.5%. The Italian market continues to do well, though, like we are seeing in other parts of EMEA, there is a bit of slowing that is occurring and therefore it does give us some reason for pause and for some caution. However, at the same time, there continues to be some good secular trends that are in our favor and therefore we would continue to see, and plan on seeing, a good performance out of Italy in the third quarter.

Jefferson Wells revenue up $76 million, down 10%, weaker than what we had anticipated. We were anticipating Jefferson Wells would be down 3% to 5% as we expected to see our sequential growth out of the first quarter. As in the first quarter, we continued to see clients delaying several projects. At the same time, we are seeing a persistent, if not nagging, softening in organizations moving forward with financial projects. The reason we say that is our backlog is strong, our pipeline is healthy, but it just continues to be strung out.

We will be continuing to be vigilant about costs and pricing but at the same time we want to ensure that we are positioning ourselves for growth, as we believe this is a very good market for us in the U.S. as well as abroad. However, the timing, of course, is not good for these types of services that we are currently selling.

Moving on to Right Management, Right Management had a good and strong second quarter. The second quarter is seasonally one of our stronger quarters. Revenue was up 4% in constant currency to $116 million. We had good operating unit profit margin at 11.5%, yielding an operating unit profit of $13 million. As strong as the second quarter was for Right management, we still have yet to see any massive downsizing. Clearly there is some industry-specific downsizing, as we are starting to hear more hallway chatter, if you will, regarding downsizing, but we have yet to see it any large numbers.

This, I guess, bodes well in many ways. There are views about how companies have dealt with their employment situations and how bloated or not bloated some of these companies may be.

We continue to expand rapidly in our organizational consulting practice with Enright, which our primary focus is assessment, and then training and coaching. That is now 305 of Right’s business and as you can see and as you imagine by reading the newspapers and trade publications, this will continue to be strong and a more important driver for us in business as we become more involved with our clients regarding their strategic direction of talent.

Our Other Operations segment had a nice quarter, up 21% in U.S. dollars, 10% in constant currency, to $772 million. Operating profit was $17 million. We are still seeing the effects of our investments in emerging markets, yielding an operating unit profit margin of 2.1%.

As last quarter, we continue to see good growth in Japan, up 21% in U.S. dollars and 5% in constant currency. China, Taiwan, Hong Kong, all over 20% and India in excess of 50% in revenue.

Also stand-outs in the Other Operations segment is Argentina, up 47%, and Mexico up 10%, all in constant currency showing that there are areas, as I mentioned before, that are growing nicely and continue to grow nicely within our global operations.

We have been notified by the Australian government that they will not be renewing our contract for the Australian Defense Force recruitment. There will be a wind-down period in this contract, therefore it will affect us mostly in 2009. Overall company impact will not be material, however, for the region, and particularly Australia, it will have an impact.

In many ways I feel uncomfortable saying that we had a solid quarter because of the backdrop of sour news that we’re all hearing. But in fact, we did have a solid second quarter. We did see some softening intra-quarter, which mirrors what is happening in the global economy, and we continue to make appropriate investments while being cautious not to invest too far ahead of the market. All geographies, all units, have done a very nice job of managing sluggish markets and taking advantage of strong markets. No doubt we will be in choppy waters but we have a team that knows how to manage expenses and equally important, knows how to invest cleverly during this time so that we can rocket out the other side.

Although we face softer economic conditions in many of our markets, others are still experiencing good growth and solid secular trends. Given all of that, we are anticipating the third quarter to be in the range of $1.45 to $1.49 with favorable impact of $0.17 in currency.

With that as the segment detail, what I would like to do now is to turn it over to Mike for some financial details.

Michael J. Van Handel

I would like to start today by discussing the non-recurring items that Jeff mentioned earlier in the call. The first item relates to a change in the French payroll tax calculation that many of you will recall from last year. In April of last year we were notified by the French Social Security Office that the calculation for payroll taxes was modified, resulting in a reduction of payroll taxes owed for 2006 and 2007.

Through discussions with the Staffing Industry Association in France in the second quarter of 2008 it became apparent that we could also file a claim for a portion of payroll taxes paid in 2005. As a result, we recorded an estimate of the recoverable 2005 payroll taxes of $53.7 million, which favorably impacted the gross margin and operating unit profit margin in France.

On an after-tax basis the net earnings impact was $35.2 million, or $0.44 per share. As we disclosed a year ago, this favorably impacted the net earnings in the second quarter of 2007 by $57.2 million, or $0.66 per share.

The second item relates to French competition investigation that was announced in November of 2004. During the second quarter we received a report from the case handler of the French Competition Council who rejected our defense arguments. The report alleges that the damage to the economy could be up to EU $76 million, or $120 million. We continue to reject the accusations contained in the report and to defend our position.

While we are unable to predict the outcome of these proceedings or the ultimate exposure, we understand that any fine levied by the Council will be based on its assessment of damage to the economy. In view of their report and our assessment of the circumstances, we recorded a charge of $54.1 million in the quarter. This brings our total reserve related to this matter up to EU $45 million, or $70 million. The net impact of this charge was $50 million, or $0.62 per share. As you can see there is not a full income tax fund to report on this charge as any ultimate fine payable will not be deductible for French income tax purposes.

While the first item is recorded on the gross profit line and the second item upon the S&L line, the net impact on operating profit is only a charge of $400,000. On an after-tax basis, however, the net charge is $14.8 million, or $0.18 per share, as a result of the tax treatment I mentioned earlier.

Turning to the balance sheet, our balance sheet remains strong at quarter end with total debt just over $1 billion and net debt of $453 million. Our total debt to total capitalization remains stable during the quarter at 26%. Net debt increased $95 million during the quarter as available cash was used to fund acquisitions. In the quarter we used $194 million of cash to acquire U.S. franchises and specialty staffing businesses, which included Vitae in Holland and CRI in the U.S.

Accounts receivables were $4.9 billion at the end of the quarter, an increase of $133 million during the quarter. Our accounts receivable activity was strong during the quarter, resulting in a one-day improvement in DSO.

Free cash flow, defined as cash from operations less capital expenditures, was $213 million in the first half of the year compared to $100 million in the prior year. This stronger free cash flow represents effective working capital management as well as less working capital required due to the lower growth rates this year.

Capital expenditures were up $51 million in the first half of the year compared to $42 million in the prior year. This increase is partially impacted by the change in currency rates but also reflects our continued investments in growing and maintaining our branch network.

Cash used for share repurchases for the first half of the year was $53 million and relates to purchases in the first quarter. In the second quarter of the year our free cash was directed towards the acquisitions previously discussed.

Lastly, I would like to discuss our outlook for the third quarter. As Jeff discussed earlier, we have seen softening demand in a number of markets as we have made our way through the second quarter. Therefore we are assuming slower growth in the third quarter, similar to where we exited the second quarter. Our guidance does not contemplate for the significant slowing from where we are today. With that in mind, we expect revenue growth between 2%-4% in constant currency, which compares to the 5% achieved in the second quarter.

In the U.S. we are looking for revenue growth ranging between 7%-9%, which includes the impact of acquisitions. Excluding acquisitions we expect a detraction revenue growth albeit at a slightly lower rate than we experienced in the second quarter.

In France we are expecting a revenue contraction of 7%-9% in constant currency. This contraction is representative of what we have seen over the last several weeks. While we are hopeful we might see some improvements, we don’t see any signs of improving economic environment at this point.

We expect to see good growth in other EMEA ranging from 11%-13% in constant currency. While this growth rate is lower than what we had experienced in the second quarter, it is important to note that the second quarter growth includes an estimated 3% favorable impact due to the timing of the Easter holidays. Additionally, [inaudible] large customer contract in [inaudible].

In Italy, we expect continued growth in the 6%-8% range. While the continued growth rates are a slight moderation from what we experienced in the second quarter, at this point we do not see dramatic downturns in [inaudible].

Jackson Wells is expected to contract as it had in the second quarter and Right Management is shifting growth from the second quarter. I should also point out that the third quarter as the seasonality [soft for this segment] and therefore we expect a sequential dip in the operating unit profit margin similar to last year.

We expect growth to moderate slightly in our Other Operation segment ranging from 5%-7% in constant currency. Our gross profit margin should range between 18.3%-18.5%, an increase of about 50 basis points over the prior year after excluding prior year non-recurring items. This report continues strong growth in Permanent Recruitment and strong price discipline. Our operating profit margins are expected to contract slightly compared to the prior year and range between 3.2%-3.4% reflecting expensing leveraging primarily on declining markets.

Our tax rate is expected to be in a range of 36% resulting in earnings per share of $1.45-$1.49, which includes a favorable currency impact of $0.17.

Now I will turn it back to Jeff.

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