Welcome to ManpowerGroup's First Quarter Earnings Results Conference Call. [Operator Instructions] This call will be recorded. If you have any objections, please disconnect at this time. And now I will turn the call over to ManpowerGroup Chairman and CEO, Jonas Prising. Sir, you may begin.

Good morning. Welcome to the first quarter conference call for 2019. With me today is our Chief Financial Officer, Jack McGinnis. We'll start our call today by going through some of the highlights of the first quarter, then Jack will go through the operating results in the segments, our balance sheet and cash flow as well as comments on our outlook for the second quarter. I will then follow with some concluding thoughts before we start our Q&A session. But before we proceed, Jack will now cover the safe harbor language.

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. We assume no obligation to update or revise any forward-looking statements. Slide 2 of our earnings release presentation includes important information regarding previous SEC filings and reconciliations of non-GAAP measures.

Thanks, Jack. Our first quarter results reflect the solid start to the year in view of the current global environment. Revenue in the first quarter came in at $5 billion, a decrease of 2% in constant currency. On a same day basis, our underlying organic constant currency revenue decreased was 1%. This reflected an improvement from the fourth quarter, which was driven by the U.S. and France, which more than offset the additional declines in Northern Europe. We have seen recent stabilization in the revenue trends in most of our European markets. In addition to the U.S., the rest of the Americas experienced strong revenue trends in the first quarter, and APME also performed well on an organic basis. I am pleased to announce that we have purchased the remaining interest in our Switzerland Manpower franchise during April, and we will begin managing this business in the second quarter of this year. This is a very strong manpower business and represents approximately $500 million in annual revenues that will now be part of our Southern Europe region. Operating profit for the quarter was $105 million, down 26% in constant currency. During both the first quarter of this year and in the prior year, we had restructuring charges, which Jack will discuss in more detail. Excluding these restructuring charges from both years, operating profit was $145 million for the quarter, a decrease of 12% in constant currency. Operating profit margin came in at 2.1%, down 70 basis points from the prior year. And after excluding the restructuring charges, operating profit margin was down 30 basis points from the prior year, equal to the midpoint of our guidance range. As we mentioned previously, our effective tax rate increased significantly in 2019 upon the end of the tax-exempt CICE subsidy program in France…

Thanks, Jonas. Revenues in the first quarter exceeded our constant currency guidance range. Our gross profit margin was flat year-over-year and came in at the midpoint of our guidance range. Our first quarter performance resulted in operating profit decline, excluding restructuring cost of 18% or 12% on a constant currency basis on a revenue decline of 2% in constant currency. This reflects operational deleveraging as the revenue decline in the current period compares to mid-single digit revenue growth in the prior year. This, combined with strong cost management during the quarter, resulted in an operating profit margin at the midpoint of our guidance of 2.9% before restructuring costs. Breaking our revenue down into a bit more detail, after adjusting for the negative impact of currency of 6.5% in the quarter, our constant currency revenue declined equal 2%. Dispositions contributed to 70 basis points of our revenue decline in the quarter and slightly less billing days contributed to another 40 basis points of decline. This results in organic constant currency days adjusted revenue decline of 1% in the first quarter, which represents an improvement from the fourth quarter decline of 3% on a similar basis. On a reported basis, earnings per share was $0.88, which included restructuring costs, which had a $0.51 negative impact on earnings per share. As I stated last quarter, our guidance excluded restructuring costs. Excluding these costs, earnings per share was $1.39, $0.05 above the midpoint of our guidance range. The drivers of this results include $0.04 attributable to better operational performance than expected, $0.01 on slightly better foreign currency exchange rates than expected, $0.01 on a slightly better effective tax rate and $0.01 due to a lower weighted average share count due to the impact of repurchases during the quarter. This was offset by $0.02 impact…

As you just heard from Jack, we anticipate our second quarter revenue trends being very similar to what we experienced in the first quarter. We saw stabilization in the slowdown in some European markets during the first quarter, which is good to see and a positive evolution. We know unemployment levels are low across most of Europe and at historic lows in the U.S. And overall, demand for temporary and permanent positions remains strong in many markets. Companies looking for more operational and strategic flexibility in a more uneven and uncertain environment will be looking for skills that our businesses provide. Demand for extensive portfolio workforce solutions and services across our global footprint provides us with good opportunities for profitable growth going forward. We're continuing to prioritize investments in technology. These investments are core to our strategy of maintaining our leadership in workforce solutions and enabling our people to create even more value for our clients and our candidates. We are accelerating our implementation of world-class front-office systems, cloud-based and mobile applications. We are leveraging AI-powered chat box for candidate and associate interactions and other enhancements to our global technology infrastructure, digitizing our workforce solutions offerings to achieve a better user experience and lowering transaction costs. We are also using technology as part of our innovation initiatives. A great example of this is our Global Assessment Center of Excellence where our Chief Talent Scientist and his team is leading our investments in B2B and B2B and B2C tech-enabled assessment solutions. Another example is IntelliReach within our MSP business. IntelliReach is a platform which offers organizations the transparent analytics and compared the benchmarks they need to execute an effective workforce strategy. The platform leverages our data and provides the management tools and analytics to assess our clients needs, their spend, calculate…

Thank you. [Operator Instructions] Our first question is from the line of Andrew Steinerman of JPMorgan. Your line is now open.

Hi. Jonas, I know your observation of stabilization in a number of European markets in the first quarter and going into the second. I think when you sort of look at the balance, it seems that starting Europe, particularly France, got better and Northern Europe actually got worse. Why do you think that dynamic is happening at this juncture?

Good morning, Andrew. We saw a stabilization in a number of countries. And as you correctly say, Southern Europe had some good and improving trends as did the U.S. actually and then we had a number of countries in Northern Europe. And the main two countries in Northern Europe that are causing the headwinds are Germany and the Netherlands. And really, if you set those aside, the rest of the countries are performing at a reasonable level, given the economic backdrop, both of those have different reasons behind it. Last time we spoke, we talked about the Germany and the issues with a much softer market, and we saw that market softening further in the first quarter. So we're having a tougher market condition, and then we also have our own issues that we're working through. From a Netherlands perspective, the reasons are different. It's to do with pricing discipline. And as we mentioned on our call last time, we had a number of enterprise clients, we elected not to continue to service. So those are the two countries that primarily are driving the tougher environment and the numbers in Northern Europe, Andrew.

And if I could just add, in France, in the monthly prism numbers, I didn't see an improvement in first quarter. And so do you feel like the improvement in first quarter from Manpower France is company-specific or market?

I would say that the French team is doing a great job managing the environment in France, and we have a number of initiatives that have worked out very well for us. The French team has been able to ensure that we are managing our margins and our pricing in a way that is reflective of the quality of the services that we provide, and we've been very pleased with some of our client engagements. So at this point, I would say that the team is managing it very well.

Yes. I would just add to that, Andrew. In the fourth quarter, we actually had a significant headwind in the months of November and December as we were closing the quarter. And that led to that heavier decrease in the fourth quarter. In the first quarter, we actually saw improvement on an overall basis versus that. I think we had much higher growth in the year ago period in the fourth quarter versus the first quarter. I think that helped a bit specific to us in terms of the year-over-year comparisons. So with that being said, I think if you look at the first quarter for us, we saw improvement in the month of February. And then what we saw in March was a step down much consistent with what we were seeing in January. And I'd say, what we're seeing here in early April is pretty consistent with what we saw in the month of March.

Okay. Thank you.

Thank you. Our next question is from the line of Jeff Silber of BMO Capital Markets. Your line is now open.

Thank you so much. You called out some of the pricing issues you were having in the Netherlands. Can we talk about the general pricing environment in some of your other major markets in Europe?

Good morning, Jeff. yes. The overall, I would say that the pricing environment remains stable and rational. We have, however, seen abilities in a number of countries to ensure that we can apply pricing discipline, and you can see that in how our GP margin has evolved. And we've seen some good evolution and better pay-bill gaps in a number of countries. You could see that we've been able to expand or we've seen expansion in our GP margins in the U.S. Experis business, for instance. So we are just very mindful of the very tight labor market where clients have difficulties finding talent, where we have to put in a lot of effort and expertise in identifying the best match for our clients and the best careers for those candidates and ensuring that our pricing reflects that effort and the quality of our service.

Great. And for my follow-up, I wanted to focus on the acquisition of the remaining interest in the Switzerland Manpower franchise. Why now? And are there any other large franchises out there that you might be looking to repurchase? Thanks.

We've had a great partnership with the family that was running the franchise in Switzerland. And of course, we've also had an ownership participation of 49% for decades there. And it was mostly a question of the time coming for the family to exit the business, and of course, we've been working very closely with them overall of these decades, and this was a good opportunity for us to continue running – or to run this business now going forward. Switzerland is the last big international franchise that we have. We have a number of franchises also in the U.S. that are not as big as Switzerland. And from time to time, we see opportunities together with those great franchise owners to take over their franchise and run it ourselves. But those are much smaller in dimension than the one that we just concluded in Switzerland.

Okay. Thank you so much for the color.

Thank you. And our next question is from the line of Tim McHugh of William Blair. Your line is now open.

Hi. Just maybe stepping back a little from the quarter. You talked about a number, the initiatives as part of both the restructuring and changing the business. And I guess what – can you maybe talk a little bit more of what you view in terms of – how much of that is, I guess, necessary or reactive to the marketplace kind of table stakes? And are there specific ones where you really feel like it's an advantage in kind of a step above what others in the space are doing right now?

Tim, it's Jack. So I guess what I'd say is, when we look at this, and we've been talking for several quarters about our prioritization of technology spend. And we think that's critical for us to continue to deliver at a very high quality level into our clients and have optimized delivery channels within the organization, and that's helping us both on the front office side of things as well as the back office in terms of our productivity and our finance accounting shared services, our technology management solutions, our centralized recruiting centers. So for us that is just core to our overall business in continuing to automate those processes, and we're continuing to do well on that ongoing initiative. I guess to get to your restructuring question, if I step back from the level of restructuring actions we took in the first quarter, I'd say little over one-third of that is related to optimization activities and transformation-related activities that we've talked about in terms of those back office processes and front office processes. About 25% of it is related to office consolidation, about 25% it's related to organizational simplification and about 50% are other business changes that we've talked about in terms of Australia and a bit in Germany. So on an overall basis, we think these are all good changes for our business that are making our business stronger and will make it more cost-effective moving forward as well.

Okay. And then on Germany, can – a follow-up, obviously, there is market weakness, but there's also an element of your own internal performance, I guess, and you've talked about that before. But where are you at in terms of, I guess, reconciling or fixing any of the internal issues? Do you feel like you've put in place the changes that are necessary? Or is that still something we're kind of working on?

Yes. I'd say we've made very good progress. We gave an update on that last quarter where we've continued to take actions to continue to improve underlying processes in Germany. And we've made – we continue to make good progress in the first quarter. I'd say we talked about the system conversion. That's all moving forward nicely at this stage. There hasn't been any ongoing issues related to that. At this point, if I step back and look at what happened in the first quarter, we basically declined a further 2% from where we were in the previous quarter and that's primarily market-driven. So we're not experiencing any further disruption from the changes that we made. And actually since then in the fourth quarter and the first quarter, we're making good progress in continuing to improve our underlying processes. And our goal is to continue to close that gap as we move forward. So at this stage, it's primarily market-driven, and that's what we're seeing in Germany at this time.

Okay. Thank you.

Thank you. And our next question is from the line of Kevin McVeigh of Credit Suisse. Your line is now open.

Great. Thank you. Jonas or Jack, If I heard you right, it sounded like you were able to offset a lot of the CICE margin headwind to internal initiatives. As you start to anniversary that, does that potentially boat for some improvement in the margin as we work our way through the CICE headwind? And if so, is that kind of a Q3 or Q4, how should we think about that?

Yes, Kevin. I'd say we feel very good about the gross profit margin trends in France, specifically. And to my earlier comments, we actually had very good first quarter in our ability to offset that headwind. And when we talked about that headwind in the first three quarters of that 50 basis points, the first quarter was particularly strong in that regard. I did mention in my notes, there's a little bit of direct cost favorability playing into that in the first quarter. But I'd say looking out, we feel very good. We've been having very good discussions with the business regarding the opportunity to continue to implement initiatives that will increase our gross profit margin going forward, and we see that continuing into the second quarter. So our goal will be to try and offset as much as we can of that pressure. We feel good about the ability to offset a big piece of that again in the second quarter. And I think as we get to the fourth quarter when that headwind is only 50 basis points based on the trends we're seeing now, there could be an opportunity for us to improve GP margin overall.

That's super helpful. And then just the tone of client conversations and given the pricing discipline, is there any way to frame out how much revenue you kind of called out of the business just given, it just wasn't at kind of the rates that were acceptable to where you are?

Well, Kevin, we're very disciplined on our pricing. I don't know that we have a specific number that we can cite. But if you look at the actions we've taken, for instance, in the Netherlands, you know, we've taken similar actions in the U.S. and you heard Jack mentioned earlier that we're taking some actions similar to that also in Australia. We're very mindful of where we want to be in terms of our margin targets, and where we think that the market is in terms of how we should think of the value of our services and our solutions. And from time to time, we come upon situations where either existing client relationships or even new client relationships don't really reflect that value. And we are then very disciplined in terms of making sure that we reflect that into our decisions in terms of engaging with those clients and providing those services. And this is the kind of environment where we have opportunities to offset those, maybe not at the top line, but certainly at the GP line, which can then translate into better operating margins as well. Jack maybe adding some detail to that?

Yes. I would say to your point, it's always a balance for us. We're very focused on overall growth in our key markets, but with that being said, the right type of growth. And another example of that is in Australia, as I called out in my prepared comments. So we are going to be exiting some low-margin business in Australia that's going to improve our profitability, and we're going to do that carefully. And we're going to manage the overall equation but that will cause some temporary adjustments in the trends in certain key markets, and we'll call that out in advance. But I think on an overall basis, we continue to be very focused at market rate of growth in those markets.

Thank you.

Thank you. The next question is from the line of Tobey Sommer of SunTrust. Your line is now open.

Thanks. As you closed out your prepared remarks, you talked a lot about analytics and comp data kind of a full offering that you've got in your higher value services. To what extent is that comprised of proprietary IT resident within the firm versus assembling licensed things that allow you to put together packages that you think are most attractive in the market?

Well, as – thank you, Tobey, great question. So the items we were referring to, for instance, are IntelliReach, and that's our own platform. And that's a platform that we offer transparent analytics and compared to benchmarks, leveraging our own data. So whilst we're not a technology company in terms of having to own the technology, we are very careful in ensuring that we have ownership of the data so we can derive value for our clients and our candidates, based on insights, forecast and analytics of that data. And we've really seen a demand from our clients to be able to provide that kind of insight as human capital and workforce strategies are a core to executing on business strategies. And we're predicting that this trend is just going to continue. And as you heard Jack say earlier and myself as well in our prepared remarks, technology is going to be core to our ability to evolve our workforce solutions and services. And the insight that we derive from our proprietary data and play back to insights and support to our clients and candidates is going to be a crucial part of that strategy.

Thank you. With respect to the IT staffing business in the U.S., how long you think it takes for you to close the gap to industry growth? And where would you – how would you describe that growth in the market today?

I would say that the demand for IT services and solutions in the U.S. is still solid, and we've been working on closing the gaps through various actions, very pleased to see that those actions are now starting to come to fruition. We know we still have more work to do. We do want to get there in the right way. You've heard us talk about an improved margin profile and better bill rates in the U.S. So this gives us the opportunity to get there in the right way, but it's going to take some time, but we're pleased with the progress so far, just not the speed, and we're working on continuing to improve that business in the U.S. because we think there's still good opportunities for us to see GP margin expansion as well as revenue growth in this market.

Thank you. Our next question is from the line of Manav Patnaik of Barclays. Your line is now open.

This is Ryan on for Manav. Just a question in terms of the restructuring initiatives. Obviously, you've been doing this against the backdrop of declining growth. If things were to rebound and revenue growth kind of comes back, do you need to add back resources? Or do you think this is a structurally leaner organization?

So Ryan, I'd say that's always part of the balance in looking at the current environment. What I would say is we're – we have tremendous history in managing these movements in markets and that gives us confidence that we would be able to take the actions needed if we decide that we needed to ramp up. When we look at the overall environment, and I think Jonas talked about the stability that we're starting to see in some of these key markets in Europe, that's taken into consideration when we make the adjustments that we make. So stability positions us for further growth if conditions improve. And we're poised to move quickly to be able to take advantage of that. So at this stage, we feel we've made the right level of adjustments. We haven't cut too deep, but we've made appropriate adjustments based on the current market. And I think we feel very good about the ability to move quickly if market conditions improve and that means up or down going forward.

Got it. Thanks. And then I guess, it's been a while since you provided the long-term targets, but obviously, a lot has changed since then. I mean any update on thinking there whether it'd be timing or even just the level of long-term margins since a lot has changed over that time?

Ryan, I'd say not a lot has changed in the environment since we talked about our new financial targets. But one of the reasons we didn't specifically talk about a time line was just due to the market uncertainty of what could be happening in the very near term. But what I would say considering that is in terms of the targets themselves, nothing has changed. We still feel very, very good about our ability to hit those targets over time. Certainly, the revenue environment that we're experiencing in the last few quarters has not been helpful. Certainly, we've been in a deleveraging perspective from – in terms of operating profit margin. But on an overall basis, that's not stopping us from doing the initiatives that we've talked about, about continuing to improve the efficiency of our business overall. I think the first quarter actions show you examples of where we're continuing to do that. And we're going to continue to execute on what we can control and that will improve our efficiency and increase our ability to hit those operating profit margins over time.

Got it. Thanks.

Thank you. The next question is from the line of Dan Dolev of Nomura. Your line is now open.

Hey, thank you for taking my question guys. From the U.S. perspective, it's nice to see the improvement. Can you maybe just give us a sense of how much of that is – those measures that you were talking about versus the actual macro getting better? Thank you.

I'd say, Dan, that most of that improvement comes on the back of the initiatives that we have taken. We've talked about this in the past that we were very confident in the changes that we've made in the U.S., very confident in the initiatives that we were pleased with the progress, not pleased about the speed. And the speed of course relates to the fact that we want to get there in the right way and in a sustainable way. So the market, if anything has maybe, if you look at industry stats, softened a little bit, although we still think there's good opportunities in the U.S., the growth rate clearly has come down. But I think that our actions are showing that they are producing the results that we're looking for. We know we still have more work to do to get back to market, especially on the Experis side. I think from a Manpower perspective, we're closing the gap very nicely. But we're focused on ensuring that we keep on making progress on both – in both of those brands and also take advantage of all the opportunities we see on the solutions side in the U.S.

Got it, I appreciate it. And really quick question on France, I think – sorry, if I missed it. I think you said that you're expecting kind of similar levels of growth now in the second quarter versus that flat growth, but you are facing a much easier compare, I think, over 700 basis points. So I just want to make sure I didn't miss like if you kind of specify the actual growth rate in France that you're anticipating in the second quarter on an ADR basis. Thank you.

Yes, Dan. I'd say just to clarify that we did say we expect the second quarter trend equal to the first quarter trend. What that means on the days adjusted basis is basically flat. Flat in the second quarter year-over-year days adjusted. In France, the days actually don't have a big impact on the overall constant currency like they did in the first quarter, but that basically takes us to a level similar to the first quarter. And that incorporates what I was speaking to when I talked about the trend during the quarter. We did see March come down a bit from February, and early April is in line with what we saw in March. So it hasn't stepped up since March, and that's why we're forecasting that flat level. It's what we're seeing at the moment, and that's what we're using for guidance. Thanks.

Very helpful. Thank you so much. Happy Easter.

Thank you. Happy Easter to you, Dan.

Thank you. And the next question is from Hamzah Mazari of Macquarie Capital. Your line is now open.

Good morning. My question is on just long-term gross margins. So specifically, how much room do you have to increase mix towards more midsize customers versus sort of larger enterprises? Does the go-to-market strategy have to change for that? Or are you in a position to be able to increase that mix? Any color there.

Thanks, Hamzah. Yes. No, we think we have some good opportunities in a number of areas to ensure that we move our mix. So first of all, Experis and our Solutions business are higher margin than the Manpower business itself, and of course, also Right Management. So to the extent that we managed to grow those businesses faster, which was the case in the first quarter, then we are able to shift the mix favorably in the margin. But both within Experis and within Manpower, in particular, we think we have great opportunities to continue to drive permanent placement as our clients see us as providing not only a temporary or contract talent but also for permanent recruitment needs. And we have good opportunities to do that. We've made some excellent progress, and our percentage of GP in terms of perm was at 17.3%, so one of the highest we've seen. So very strong perm presence already with more room to grow there, which will help us diversify the GP mix. And the midsize segment in terms of our client base is something that we're actively focusing on, and we think we have some good opportunities also to continue to grow that part of the client segments in especially our Manpower brand and that's what we're focused on.

I would just add briefly to that, that we actually – I talk about the improvement in the underlying staffing margin trends. Part of that improvement is due to the fact we have been successful in increasing our – we refer to this convenience, but convenience in SMB-related buyers activity. We've been very successful in growing that in certain markets at a faster pace than our enterprise growth in recent quarters, and that clearly will have a positive impact. That's one of our key initiatives that we're working on in all of our key markets going forward. And that's part of the reason we're starting to see some of that improvement as well.

Great. And just a follow-up question. We – you talked about the European employment cycle and the improvement in France and Northern Europe, you touched on weakness in Germany, et cetera. But could you just comment on your view on EU tariffs, whether that will impact your business. It feels like the China tariffs didn't have a massive impact on you. But given your EU exposure, are you concerned there? Or should investors be worried there? Or is it just a known event? Thank you.

I think all of Europe has been subject to the forces of unilateralism, protectionism and populism to varying degrees. And at a macro level, it appears that the soft patch that Europe is in now and has been for a number of quarters, and frankly also the global growth has been slower, appears to at least in part to be affected by uncertainty around trade. And we don't have any anecdotal client-specific examples where client would tells us, look, we're not expanding because we're worried about trade barriers and the increase in tariffs. But I think at a macro level that certainly has added a significant amount of uncertainty. Now today, it appears in terms of Europe that the Brexit concerns, although still very uncertain, the worst solutions or the hard Brexit options appear to be slightly more off the table, which could be positive, resolving China, U.S. as well as Europe, China and Europe, U.S. trade concerns at those ease. That would certainly also be a positive in terms of removing that overhang of uncertainty. So whilst we can't directly point to any clients that have cited an impact on the trade, I'm sure that, that is part of the overhang in terms of the slower patch that we've seen from a growth perspective at a global level and certainly also in a number of countries in Europe.

Great. Thank you.

Thank you. And the next question is from the line of Mark Marcon of R.W. Baird. Your line is now open.

Good morning, Jonas and Jack. I was wondering, can we talk a little bit about just the expected timeframe in terms of the payback with regards to the restructuring or how investors should think about that in terms of if we stay at a relatively constant revenue level? And obviously that's not going to be the case, but just for – from a supposition or hypothetical perspective, how the restructuring would play out in terms of savings?

Sure, Mark. What I'd say is the restructuring – when we see the full run rate savings of that restructuring happening in Q3, when you think about Q2, think of about 75% of that run rate savings coming in. So we talked about payback over the next 12 months. Think of that is roughly $10 million a quarter and 75% in Q2 and pretty much full run rate savings coming from Q3 on. And I'd say that looking forward, that's what our expectation would be going forward on an annualized basis based on the actions we've taken.

Great. And then when you think about Germany and the Netherlands, there've been some regulatory changes as well as certainly trade-related concerns and then there is submissions in auto manufacturing sector. How are you thinking about like when the overall environment should end up stabilizing over there and potentially turning back up. I know it's hard to say, but just how are you thinking about it?

The estimate of when the manufacturing sector turns around, of course, Mark, is really hard to provide. But you can see on the PMI that Germany has actually been one of the weakest countries across Europe. But we were pleased to see this morning that the PMI although still weak, is – appears to have been stabilizing also in Germany, although it was a little bit below expectations. So stabilization is of course the front runner to going in the opposite direction. Earlier we talked about the uncertainties around trade and the impact that, that has had as well as the automotive changes in terms of legislation that you referred to as those inventories in Germany worked their way through. We can be hopeful that, that industry is going to start to turn around a bit and that's of course a big driver of manufacturing-related activities in Germany. Hard to tell when that's going to happen, but looking at the estimated growth rates for Germany, one would hope that this would happen sometime in the second half of the year. In terms of the impact of some of the legislative changes in Germany, it happens against the backdrop of some industries that are doing very well in terms of the services, part of the economy in Germany, it's positive. And that means demand for labor is high and unemployment is low. So finding skill talent is difficult. And we have clearly seen an increase in conversions in our business over the last couple of quarters, so hard to tell when that trend is going to reverse. If some of that was driven by the legislative changes, but we're hopeful that the stabilization that we saw in the quarter is going to be a good starting point for us to start to make our way back to market level performance also in Germany. Although we have a lot of work to do and it's going to take time. We're confident that the actions we've taken are going to give us that opportunity to get back to market.

Great. And then one last one, Jonas if I may. With regards to France, obviously, there's been a lot of discussion with regards to some of the social changes. Is it your sense that as it relates to the current understanding in terms of the way that the CICE makeups or in terms of that structure, do you think that remains in place? Or is that under any sort of flux?

As it relates to the CICE changes and it now changed to the taxable subsidy that then would – that has replaced it. Our understanding is that there are no plans at this point to change any of those plans. As you – as I'm sure you could see Macron was going to give a big policy speech on Monday, which got canceled due to the unfortunate events at the Notre Dame Cathedral in Paris some of that has leaked out the speech that he was supposed to give, and none of that indicated any changes to the areas that would concern our business at this point. So we'll stay tuned to that, and we look at various changes as you correctly described market dynamic environment in France. But overall, the French government is intent on making France more competitive as a place to invest and as the place to grow. And I don't see that changing with any of the legislations that are planned, proposed or change. They are still very focused on that, and big part of that is to make an encouraged labor market flexibility in a sustainable way and ensure that the cost of labor goes down. And I don't see any the changes coming to that intent.

Perfect. Thank you.

Thank you. And with that, we have come to the end of our Q1 earnings call. We look forward to speaking with you again on our second quarter earnings call. Thank you very much.

Thank you. And this does conclude today's call. Thank you all for joining. You may disconnect now.