Moody's Upgrades ManpowerGroup (MAN) to 'Baa1'; Notes Modest Debt-to-EBITDA Ratio

Rating Action:

....Senior Unsecured Bond due 2018, Upgraded to Baa1 from Baa2

Outlook Change:

....Outlook, Revised to Stable from Rating Under Review

RATINGS RATIONALE

ManpowerGroup's Baa1 long term rating reflects modest debt to EBITDA Moody's anticipates will remain at about 2 times, as well as the company's leading position in the global temporary staffing market. Moody's expects that steady, albeit slow, improvements in many of its key markets will lead to 3% to 5% growth in revenue on a constant-currency basis in 2015, although the strengthening U.S. dollar may result in revenue declines on an as-reported basis. Financial metrics are solid for the rating category, driven by the historically low amount of outstanding debt. As Moody's considers the temporary staffing market competitive and cyclical, maintenance of solid financial metrics and good liquidity are important rating considerations.

All financial metrics reflect Moody's standard adjustments.

The stable rating outlook reflects Moody's expectations for debt to EBITDA to remain at about 2 times and EBITA margins of over 4% over the next 12 to 18 months. The stable outlook also reflects Moody's anticipation that ManpowerGroup may incur additional debt to finance acquisitions or to fund shareholder returns. A rating upgrade is possible if Moody's expects ManpowerGroup will sustain debt to EBITDA below 2 times throughout a business cycle, retained cash flow to debt of about 45% and robust and diverse liquidity, while it maintains conservative financial policies. The ratings could be downgraded if competition increases, driving profitability rate declines, or if Moody's expects financial policies to become aggressive, such that retained cash flow to debt is expected to remain below 35% or debt to EBITDA is expected to be sustained above 2.5 times.

The principal methodology used in this rating was Business and Consumer Service Industry published in December 2014. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.