Welcome to the ManpowerGroup Third Quarter Earnings Results Conference Call. [Operator Instructions] And today’s call is being recorded. If anyone has any objections, you may disconnect at this time. I would now like to introduce your host, Jonas Prising, Chairman and CEO. Thank you. Please go ahead.

Good morning. Welcome to the third quarter 2016 conference call. With me today is our Chief Financial Officer, Jack McGinnis along with our Senior Executive Vice President in charge of Investor Relations, Mike Van Handel. I will start our call by going through some of the highlights for the third quarter, then Jack will go through the operational results of the segment for the quarter and will also cover our balance sheet, cash flow and the outlook for the fourth quarter. I will then come back for some final thoughts before we start our Q&A session. But before we go any further into our call, Mike will now read the Safe Harbor language.

Thanks, Jonas. Good morning, everyone. This conference call includes forward-looking statements, 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. Additional information concerning factors that could cause actual results materially differ from those in the forward-looking statements can be found in the company’s annual report on Form 10-K and in the other Securities and Exchange Commission filings of the company, which information is incorporated herein by reference. Any forward-looking statement in today’s call speaks only as of the date at which it is made. We assume no obligation to update or revise any forward-looking statements. During our call today, we will reference certain non-GAAP financial measures, which we believe provide useful information for investors. We include a reconciliation of those measures, where appropriate, to GAAP on the Investor Relations section of our website at manpowergroup.com.

Thanks Mike. We had a good performance in the third quarter exceeding both our revenue and earnings per share forecast. Earnings per share on the quarter, was $1.87, up 16% from the prior year or an increase of 18% in constant currency. Revenue in the quarter was $5.1 billion, an increase of 2% or 4% in constant currency. And this exceeded the high end of our forecasted revenue growth at Southern Europe, Northern Europe and Asia-Pacific, Middle East all exceeded the high end of our growth forecast. Our operating profit in the quarter was $211 million, an increase of 2% or 4% in constant currency. Our operating profit margin came in at 4.1%, which was in line with the prior year and at the high end of our expectations. We have witnessed the continued slow growth environment with stable year-over-year growth trends during the quarter in many markets, such as the U.S. and France, with modestly improved growth rates in some of our European businesses. In this lower growth environment, we continued to maintain intense focus on price discipline, while at the same time, improving processes enabled by technology to aggressively manage cost and drive productivity across our branch network. As discussed on the last quarter call, the UK Brexit decision has added some uncertainty, economic and employment growth prospects in the UK. And while this decision will play out over the next 2 years, it is safe to say that we have not yet seen a significant impact on UK growth or client behavior through the third quarter. Only time will tell what the effect will be for the UK as the final terms of the exit will not be known for number of years. The decline in the value of the pound against the dollar is primarily translation effect for us as revenues and costs are matched within the same currency. While the market conditions remain mixed, I am encouraged to see a slightly better revenue performance than what we expected across a number of markets around the world. We remain in a slow growth environment one in which we are very well positioned to take advantage of the many opportunities our clients are presenting to us. In these uncertain times, workforce agility continues to be a top priority for our clients and our sophisticated workforce solutions are a perfect match to our client needs. And this is well reflected in our continued strong growth in Manpower Group Solutions, which had a good gross profit growth with RPO growing by 19% and MSP TAPFIN growing by 17% in constant currency for the quarter. Jack and I will provide further details and comments on the quarterly results concurrent to operating environment during the rest of this call. With that, I will turn it over to Jack for his review of the segment operating results in the quarter.

Thanks, Jonas. As Jonas mentioned, we had a good third quarter performance with earnings per share up 18% in constant currency on 4% constant currency revenue growth. Revenue growth exceeded our guidance range and operating profit and earnings per share also exceeded our expectations. The operating profit margin was 4.1%, flat to the prior year and 10 basis points above the midpoint of our guidance. Although our gross profit margin declined 20 basis points compared to the prior year, our SG&A cost improved as a percentage of revenue providing for a stable operating profit margin year-over-year. Breaking our revenue growth down into a bit more detail, on a reported basis, currency negatively impacted revenues by 2% and acquisitions contributed about 2% to our growth rate in the quarter. Therefore, our organic constant currency revenue growth in the quarter was 2%, which represents a 2% acceleration compared to the second quarter flat growth rate after adjusting for second quarter billing days. I mentioned our revenue growth exceeded our guidance range. This was largely driven by better than expected revenue growth in Northern and Southern Europe. Earnings per share of $1.87 exceeded the midpoint of our guidance range by $0.17. Earnings per share incorporate a negative currency impact of $0.03 as expected. The outperformance is mostly attributed to stronger performance of our operations with $0.11 coming from operations. The stronger performance from operations was a result of the higher revenue growth and slightly lower corporate expenses than expected. Also benefiting the operational result was a gain related to pensions and properties in Northern Europe totaling $8 million, which tax affected represented about $0.08. I will also mention this again in my segment review. A slightly lower effective tax added $0.02. We also picked up $0.04 on lower weighted average share count due…

Thanks, Jack. We delivered solid third quarter results from the top and bottom line despite continued slow growth in many markets globally. Our geographic diversification, in combination with our diversified business mix, is helping us offset weakness in some markets with strength in others. We are optimistic that we can continue to improve our performance, focusing on profitable growth and strong execution in managing our cost and driving productivity. As we mentioned earlier in the call, this is the kind of environment where companies are looking for more flexibility and access to talent to execute their business plan and that gives us good opportunities to growth in a number of markets. Earlier this week, we released our annual global talent shortage survey. The results show that employers are struggling to find the talent they need and that the level of difficulty is the highest as it has been since 2007. We have been beneficiaries of this trend as more companies see us as their work for solutions partner, increasingly engaging us for permanent recruitment assignment as well as for flexibility through Manpower, Experis and our Solutions business. We will continue to invest in markets and offerings where we see opportunities for growth and make any adjustments necessary in markets that seem to be facing more adverse trading condition. So in summary, our view of the market conditions are similar to what we have discussed in our recent calls, a slow growth environment that requires great focus on execution and operational discipline. We are fortunate to have an experienced management team running the business, leading and supporting our talented and passionate team members in all our operations globally. And it’s thanks to all their efforts that we have made good progress just through the first nine months of the year and we are looking forward to a good finish to the year. And with that, we come to the end of our prepared remarks and I would ask the operator to start our Q&A session.

Thank you. We will now begin the question-and-answer session. And our first question comes from Jeff Silber from BMO Capital Markets. Sir, your line is now open.

In terms of the OUP margin being down because of some of shift in business, I was just wondering if I can get a little bit more color on that and is that something you expect to continue going forward? Thanks.

Sorry, Jeff, this is Jonas. Could you repeat your question, you are on mute, I think at the beginning, so we didn’t hear your full question. Sorry about that.

No worries. French operating margins were down because of the business shift mix, do you expect that to continue and if you can provide a little bit more color on that?

In terms of the French business, as you could see, we saw some nice improvements in terms of the revenue growth and some of that came from the increased growth in our big accounts. And it’s really hard to tell how the business mix will move because it’s also a little bit dependent on the skills mix, but I would expect that we can continue to see some nice growth also in the – into the fourth quarter. Jack?

Yes. I would just add to that. That’s absolutely right in terms of top line revenue growth. I think as we saw when we looked at the GP bridge, the staffing interim margin deteriorated during the quarter and the part of that as we called out was France. And I do expect that will continue, that trend will continue into the fourth quarter as we have a full quarter impact of some of those larger accounts we took on during the quarter at that lower margin rate. So I would expect that to continue into the fourth quarter, Jeff.

That’s okay. Thanks. And then shifting back to the U.S., you talked about some of the weakness you saw in Experis, I am just curious, do trends tend to leave from one country to another, you mentioned the UK was strong there or are they really regional and if so would U.S. be a leader or a lagger, any color would be great? Thanks.

It really depends on the kind of client relationships that we have. Some are global, some are very local. You could probably see some correlation more according to the industry. So if we have a lot of technology companies and financial services companies that are global, they can transcend geographies. But in this case, I wouldn’t say that they are related or that Experis, the U.S. would be a leading indicator for the rest of it. I think we have – we are working hard. We are making some good progress in the U.S., but still not enough and we have more work to do in the U.S. to make sure that we close the gap to market there.

And what I – I would just add to that Jeff, from the Experis standpoint to your point, the U.S. was down, which we called out. But the UK did have high, good growth, high single-digits in terms of percentage. And Nordics was up, Germany was up and Australia, China, India were also all up. So I think there were some good offsets to what we saw in the U.S. for that overall GP increase of 8% that we called out for Experis.

Alright, great. Thanks so much.

Our next question comes from Tobey Sommer from SunTrust. Your line is now open.

Hi. This is Kwan Kim on for Tobey. Thank you for taking my question. Could you talk about how the election cycle in the U.S. and Brexit is impacting the perm business versus your prior expectation and your assessment on the sustainability on the Manpower for perm? Thank you.

So overall, we were very pleased with our perm performance in the third quarter. And we expect a similar performance also into the fourth quarter. As you can see, from our UK numbers, we didn’t see much of an impact from Brexit. In fact, in the UK, our perm went up by about 5%. So as we mentioned in our prepared remarks, we are not seeing an impact in terms of client behavior or shifts that appear to be related to Brexit at this point, at least. From a U.S. perspective, we continued to see good growth also in perm and we really expect to see the same also into the fourth quarter.

Yes. I would just add to that Jonas, in the UK, specifically to your point, perm is relatively stable in the third quarter from where we were in the second quarter. And that is a positive because as we talked about in the last call, we were a bit cautious on perm in UK, so it was good to see it at the stable level into the third quarter. And U.S. was actually up third quarter from the second quarter, so up 8% growth in the third quarter compared to 3% in the second quarter.

Thank you. And could you give us more color on the IT business in the U.S. in terms of what you are seeing in the market demand in perm today and if you could give us some color on the growth drivers of the RPO and MSP businesses? Thank you.

So starting with Experis in the U.S., we saw the performance weakened slightly quarter-over-quarter, but we think that the overall demand in the U.S. is still reasonable, although we have seen it come down through the course of 2016. So we know that the Experis U.S. business still has some ground to make up to close the gap to market, but the market has also softened during the course of this year. As it relates to our great progress on solutions and this is really the third year of strong double-digit growth, both for RPO and MSP, it’s really a reflection of what I talked about earlier in the earnings call that companies are increasingly seeing us as a workforce solutions partner. They need strategic and operational flexibility and they are going above and beyond the temporary staffing side as well as the contractors or consultants to Experis. They want us to take over parts of the management of their flexibility and that’s really what’s driving this good growth, very strong growth, on the RPO side as well as the MSP side.

Thank you very much.

Our next question comes from Gary Bisbee from RBC Capital Markets. Your line is now open.

Hi guys. Good morning. Both perm and obviously, solutions had several years of really good growth, how do you think about what the opportunity is remaining there and what your penetration within the central customer base is, is there are still sort of substantial to grow over the next few years, do you feel like you are absorbing a lot of the obvious opportunities for those businesses?

Well, starting on the perm side, we are at now for the year at record levels of perm as a percentage of GP, so 16% of our GP now is perm. And we think that there is still some good room to grow because in many markets, the ability or the knowledge that we provide great perm solutions is still reasonably undeveloped, so we have some great growth opportunities. And in particular in markets with that offering is recently new, if you just look at the growth that we have, for instance in Southern Europe, you can see that, that’s a very strong other parts of Europe and Asia and Latin America still – it’s a really recent offering. So I still think that we have some very good growth opportunities on the perm side. And of course, on the solutions side, it’s exactly the same. If you look at some of the external analysts around the RPO market, they will tell you that by 2020, they expect the RPO market to have doubled. So of course, we still feel very good about our ability to grow the RPO business as well as the MSP business on a global basis, because the market maturity in the U.S. is reasonably developed, but the market maturity in Europe is probably less than half of what we see in the U.S and of course, our very strong presence in emerging markets gives us the opportunity to leapfrog those solutions, along with our global relationships and really establish a leadership positions, because both for RPO and for MSP, we are the global leaders in these offerings. So, we feel very good about our opportunities continue to see some growth there.

Great, thanks. And then just one question on operating margins, I guess if you back out that pension gain in Northern Europe. The margins were down a bit in the fourth quarter called for flat to down a bit. Historically, the company had talked about 3% to 4% organic constant currency revenue being sort of a minimum needed to have stable or growing margins. Is that still a good rule of thumb or with all the moving parts here, is it not quite that simple anymore? I guess just any comments as on how you are thinking about what you need to do in the next few quarters or what it would take to start to see stable arising margins the other way around? Thank you.

Yes. So I would say that we have said mid single-digits organic growth is what it is going to be to get good operating leverage. So, as you have seen this year with lower growth earlier in the year organically and we still have been able to do some good cost management on the SG&A line seeing some good benefit and continue to do that. But as we look forward, we really are – we really do need some good mid single-digit organic growth to continue to get more operating leverage out. So, I would say that, that rage is still holds true for us. If you think about the fourth quarter, when we talk about the operating profit margin guidance really what we are highlighting is the gross profit margin is really the driver for where we are falling out in terms of the midpoint of that operating profit margin and that is the key driver. With that being said, we are going to continue to do everything we can to continue to optimize our cost base and continue all the actions that are just part of our normal BAU activities to see what we might be able to do even considering the 3% organic growth that we have in the fourth quarter.

Great, thank you.

Our next question comes from Andrew Steinerman from JPMorgan. Your line is now open.

Hi. I wanted to dive into the acceleration in the guide in terms of organic constant currency same day basis. It really does feel like you have passed the bottom relative to kind of a flattish second quarter. My question is with the acceleration implied in the guide and the growth that you saw in the third quarter better than the second, is that due to demand? Is that due to year-over-year comparisons? Is that due to execution? What’s driving that?

Thanks, Andrew. Yes. No, we are pleased to see that moving up from about flat in the second quarter to 2% in the third and then up to 3% organic. I think it’s really a mix of different things. We have seen some pickup in Europe. And of course, Europe, as you think about this recovery is still early on in the economic cycle on average. And although growth, overall economic growth is low in Europe, the slow growth environment really talks to our ability to offer services to companies that need the operational and strategic agility. So, we think a lot of this is coming from continued need for that despite the slow growth environment. So in particular, we are seeing the pickup coming from Europe, which for us is of course very encouraging. Jack, maybe you have some additional points?

Yes. To add some perspective to that, Andrew, I would say when you think about that growth rate, if you look at the Americas in the U.S., we are really seeing relatively stable performance into the fourth quarter. So, on the basis of that stable performance, what we are seeing in Europe is actually an improvement. And we have talked about France, so we do – the stability we saw in the third quarter was great. We are anticipating that stability continuing into the fourth quarter, maybe a slight, very slight increase. And then in terms of Italy, we talked about Italy. So, Italy will – we are projecting that Italy will turn to overall growth in the fourth quarter and that’s part of what’s happening as well. And then to the point on Northern Europe, we are seeing continued strong performance in the Netherlands and Belgium. Germany is posting good organic growth as well and we see that continuing into the fourth quarter. So, I would say that combination of those items with Europe accelerating and the U.S. basically continuing at a stable level. That’s really, I’d say, what’s driving that overall trend.

That’s great. Thank you.

Our next question comes from Kevin McVeigh from Deutsche Bank. Your line is now open.

Just to follow-up on Andrew’s question. Jonas, your – what is the current environment feel like? Does it feel like its back in ‘13 where there was some concern around sovereign debt and then things reaccelerated? We should expect environment like that or just any thoughts based on conversations you are having with clients as they think about the planning process into ‘17? And then ultimately any thoughts as we kind of think about modeling into Q1 just the seasonality, should we expect anything different than years past?

Well, I would say that you have seen this year really being very consistent and that we have had slow growth and that slow growth has given – has been somewhat uneven as we have talked about in prior calls during this year and that’s really what we are thinking, what we are seeing into the fourth quarter as well. So, we have managed to take advantage of that by ensuring that we have the right offerings and that we are having the right pricing strategies and we are very disciplined in our operational execution, so that we have managed to turn that into a bit of a good growth trajectory now into the third and the fourth quarter. It’s always hard to predict, of course, what’s going to be happening into the first quarter and that’s not really something that we do. But you will have to look at the external environment and ask yourself, are there any reasons to believe that it will be materially different than what you are seeing in the fourth quarter.

Yes. And I would just add to that, in terms of the first quarter, in terms of your question about the seasonality or any other thing we’d like to call out at this time, generally, not really. I think there is a day count issue in the first quarter as well with basically 64 days in 2017 versus almost 63 in the prior year period. Regarding any fourth quarter developments that impact from a regulatory perspective, it may impact us in any of our countries. We will certainly give an update on that in the fourth quarter when we do our year end release.

Great. And then just, Jack, a quick thought if you could. Obviously, the U.S. temp dated really started to reaccelerate, particularly the BLS and ASA. Any thoughts on trends into October in the U.S. or obviously the guidance looks really, really good, but just anything U.S. specific that we could expect?

Well, you saw a big jump in September and you saw weaker numbers in August and in July. So, I don’t know that this will play out that our estimate was maybe – you have to look at averages here over 3 months to really feel the market, because I think that BLS number was a big jump. As you can tell, it’s not really reflected in our numbers. We have seen slightly improving numbers on the Manpower side and slightly worsening numbers on the Experis side. So, we think it’s about where it was before.

Yes. I would say it’s too early October in the U.S. We are not seeing anything, particularly noteworthy we would like we think we should callout.

Great. Thanks so much.

Our next question comes from Hamzah Mazari from Macquarie Capital. Your line is now open.

Good morning. Thank you. You referenced the IT market being a little more competitive. I was wondering if you could comment on just the evolution of your delivery model within Experis U.S. and whether that’s where it needs to be given what you are seeing in the demand environment?

We have talked earlier about our evolution and we have actually made some very nice progress, I think here in the U.S. with our recruitment centers and that’s really something that we are continuing to hone. But as you can clearly see based on our performance, we still think we have a gap to close. So while I am pleased with the progress that we are making in terms of the recruitment centers here in the U.S. as well as in the couple of other parts of the world, they are not having the impact yet that we need and we still have more work to do. So directionally pleased, but not – and clearly not satisfied with either the speed and/or the results yet.

And just last question for me, on the French staffing market, could you just remind us of how your mix differs relatively to the Prism data, it feels like you have left instruction and logistics exposure than that data set, any color around your performance versus the Prism data? Thank you.

Yes. We tend to be slightly more involved in the manufacturing side than our competitors. We are as you correctly pointed out, not very involved on the construction side. So we tend to skew a little bit more industrial than what the market is and what our major competitors are.

Great. Thank you.

Our next question comes from Anj Singh from Credit Suisse. Your line is now open.

Thanks for taking my questions. First off, I was hoping you could speak a little bit more in detail as the factors that drove the upside in Northern Europe growth versus where you had guided initially and perhaps what colors your outlook for the segment to decelerate from the 3Q trends, I realized there are slightly tougher comps, they are lapping some M&A, I was just hoping for some additional color on that front?

So in terms of Northern Europe, I guess what I would say is the UK came in. We were a bit cautious on the UK and I would say the UK kind of came in close to as we expected. As I mentioned earlier, when we look at the Nordics that came in slightly better than we would have expected and Holland and Belgium continued to outperform. So we saw very strong growth there. And Germany had very good results as well and you saw the organic growth of 7% in Germany and that was driven by an increase in our Proservia business during the third quarter as well. So I would say those were the main drivers of the Northern Europe performance. And remember there that we have the anniversary of the 7S acquisition in Germany at the beginning of September. So we will have that drop off and that will be part of our organic growth in the fourth quarter.

Okay.

So Anj, just to be clear, Jack made a point, which I think is an important one. So in Northern Europe, there is some slight acceleration on an organic constant currency basis into the fourth quarter. It’s just you have this acquisition overlapping that makes it look like maybe the growth rate comes down, but in fact at the midpoint of our guidance, we are anticipating underlying growth to pickup [indiscernible].

Understood, that’s helpful. And then I was hoping you could touch on your cap allocation priorities, you made a string of acquisitions in the past 1.5 years and you guys recently upped your repurchase authorization as well, are you guys still seeing good opportunity on the M&A front or should we view some of the higher M&A activity recently in the renewed authorization as perhaps your focus turning more share repo in the foreseeable future?

Yes. So I would be happy to talk about that. So I guess, I would start by saying in terms of capital allocation strategy, our strategy has not changed. So we continued to look at share repurchases as a good mechanism to return cash to our shareholders. You certainly saw that in the third quarter. Now with that being said, as we have talked about in the past, we continue to do that opportunistically. So we don’t have a set amounts, we do have the authorization. And when we think there is opportunity, we will continue to do that in terms of share repurchases. On the acquisition side, in line with our previous strategy, which is unchanged, is we will continue to look at good bolt-on acquisitions in the solutions and the professional, the Experis side, the IT focus side of our business. And that’s really what you have seen this year in terms of the ones that you referenced. And I would say that will continue to be our focus is on those good bolt-on acquisitions that are good cultural fit for the organization overall. And from that perspective, we will continue with that strategy.

Okay, got it. That’s helpful. Thanks a lot.

Our next question comes from Sara Gubins from Bank of America/Merrill Lynch. Your line is now open.

Could you give us an update on the pricing dynamics in France and in other key markets?

Yes. Overall, Sarah, I would say that pricing remains rational. And as we have talked about in previous quarters, of course you know that in France we took share almost 2 years in a row. And then over the last two quarters or three quarters, we were slightly behind the market. So really, what you can see us doing in France is carefully and slowly adjust two new market pricing and that’s to get a little bit closer to market and I think that’s exactly what we have seen. Although we are still probably slightly behind, we are comfortable that we are making some progress there that is looking – showing up in the numbers. But overall, I would say that pricing is rational and that of course means that it’s competitive in many places. The slow growth environment that we are having gives us the upside in terms of companies wanting to have more agility and flexibility and that drives the demand for our services and solutions. Now, it also means that companies are doing what we are doing, which is making sure they are very careful with our costs. And clearly, that it’s why our market is and always has been very competitive. So we are always balancing volume versus price decisions and we are very committed to a disciplined pricing approach where we really look at the profitability on a client by client basis when we make a decision to engage with our services.

Great. Thank you. And then definitely Jonas, I was hoping that you could give us an update on your digital initiative, we are seeing a range of approaches across the industry, I am wondering how much of a priority that is internally and how you are approaching it?

Well, we think digitization is of course a very important part of our strategy. And the new world of technology however, gives us a great opportunity to participate in the technology in a very different way from what we have had to do in the past, which is essentially develop and/or own significant technology initiatives ourselves. We feel that we can get the best of breed technology solutions into our operations by partnering with technology partners all across the world and really benefit from those technologies. And clearly, we are also looking at new areas where we can evolve our service offerings and create more value as we go on and as the value creation in our value chain evolves over time. But we primarily believe that leveraging the technology evolution that is out there in the market is a preferable strategy to trying to be a technology company and keep pace with the investments that you would have to do to stay at market. And that would be our view. Our value comes from analyzing and gathering insights from all of the data that we have. And that of course is a tremendous asset that we do have and that we own. But in terms of the tools, that give us that insight. We are just interested in getting the best that’s out there in the market.

Thank you.

Our next question comes from Mark Marcon from Baird. Your line is now open.

Good morning. A couple of questions, one, really great job on the corporate expenses, is that something that we could expect to be maintained on a go-forward basis or was there anything unusual there?

Yes. No, I think the corporate expense level Mark, in the third quarter will generally trend in line towards the fourth quarter. We did have some adjustments to incentives and other items that we are part on the third quarter and we anticipate that there will be some part of that activity into the fourth quarter as well, in terms of the other items impacting that line. I think that will generally trend into the fourth quarter as well.

Great. And then with regards to the underlying strength in Belgium, the Netherlands and Proservia in Germany, what are you – do you attribute that to, is it just a pickup in the environment or are you gaining share or is that some of the changes that you have made internally that are driving that growth?

Well, we are definitely gaining share in the Belgium, Netherlands and in Germany. If you recall, we were slightly behind market in the Netherlands after applying some strong price discipline in 2015. So the team in the Netherlands have really done a good job in getting back to markets and now executing extremely well, which is really also the explanation to our out-performance in Germany as well as in Belgium. In Germany, of course comes on the heels of a good growth also in the third quarter of 2015. So, our comps were quite tough in a market that isn’t growing that much. So, we are pleased with our progress there and a lot of it has to do with our positioning in the market. And as you know, with the 7S acquisitions, we now have Germany being a very big operation in the company. It will be north of $1 billion. And it’s a very good operation and we think we still have further upside, because it’s one of those markets where other margins are better. So, we are pleased both with our improved positioning in Germany as well as of course with the excellent execution by the German team.

Great. And then just in broad strokes, you have done a great job in terms of kind of outlining goals and objectives by year. As we start thinking about next year in terms of the things that you can control, it sounds like we have got terrific opportunities in terms of MSP, RPO, in terms of some of the emerging markets. It sounds like there is opportunities for continued growth in Northern Europe based on those share gains. Also, opportunity for improvement relative to an easy comp on the Experis IT side here in the U.S. What would you say are the things that you are really focused on, Jonas, in terms of helping to drive the growth further for next year in terms of the things that you can control?

Well, we feel really good about where we are in Europe and the improved performance in Northern Europe, but also the opportunity that we still believe is there in Southern Europe, because if you look at the penetration rates across Europe, on average, they are probably still 15% to 20% below prior cycle. So, we still have some upside opportunity there. Emerging markets with the growing populations are still good. So, I would say overall, based on our footprint, we are optimistic within the context of a slow growth environment. So, that means it can be uneven. It will, as I mentioned in my prepared remarks, required very disciplined execution, great price discipline and really running the business well. And that’s what we are looking forward to do into the fourth quarter, then of course, really carrying on into next year as well building on the foundation we have laid.

Terrific. Thank you.

This is the last question.

We still have three questions in queue. Our next question comes from George Tong from Piper Jaffray. Your line is now open.

Thanks. Good morning. In Italy, can you talk about the progress you have made in improving market share performance, specifically with small and medium-sized businesses?

Yes, sure. We saw some good progress in Italy during the third quarter. And as Jack mentioned in his prepared remarks, we actually, in September, looked positive as far as our growth, which has really been slightly more faster recovery than we would have anticipated and we hope that we continue and believe that we will continue to see that also in the fourth quarter. So, we knew we were behind market. We knew the gap that we had and the team is executing very well. And as you can see from our results, not only executing well on making up the gap, but also managing at the same time despite a top line that dropped improving our profitability in margin terms, of course, but also in absolute terms. So, the team is doing a great job addressing that gap and we are, of course, looking forward to seeing that continue into the fourth quarter and beyond. So, we get to market.

Got it. And then as a quick follow-up, looking in the margins more closely, do you feel comfortable with achieving on a longer term basis, efficient operating leverage to offset mix headwinds you are seeing from larger accounts? And related to that, can you help frame the potential cost savings you expect from your recent initiatives around sales force productivity and recruiting Centers of Excellence in terms of also that impact to margin?

Well, I would say we are very confident that our operating margins are something that we have – that we are going to achieve. As we have talked about in the past and as Jack mentioned earlier during our call, what we need to do that is, of course, getting our revenue and our growth trajectory up to mid single-digits, so that we get some good leverage and we continue to improve our operating margins. As it relates to specific targets on cost efficiency and productivity, I would say it’s really something that we are going to have worked on very hard in the past as you had seen from our results and we will continue to work on very hard. Because we know that this is something that will keep needing to make progress on, getting better productivity, leveraging technology, improving our processes, developing our recruitment centers. So, it’s really a whole host of activities that we are engaged in that are going to continue to improve our efficiency.

Got it. Thank you.

So with that, I would like to thank all of you for participating in our third quarter earnings call and we look forward to speaking with you again at our fourth quarter earnings call. Thanks, everyone.

That concludes today’s conference. Thank you for your participation. You may now disconnect.