Slide 1: 2023 Annual Results and Strategic Update
2023 Annual Results and Strategic Update March 7, 2024 1
Slide 2: Disclaimer
Disclaimer All forward-looking statements reflect Teleperformance management’s present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a detailed de
Slide 3: 2023 Annual Results
2023 Annual Results 3/2 3
Slide 4: Daniel Julien, Chairman and co-CEO
Daniel Julien Chairman and co-CEO TELEPERFORMANCE
Slide 5: FY 2023 key figures & highlights: From tailwinds to headwinds
FY 2023 key figures & highlights From tailwinds to headwinds in 2023 ▪ Back to normal behavior post confinement period ▪ Year of sudden headwinds o Digital commerce slowdown o GenAI release o Year of efficiency, scale back of o FX Volatility product/services o Fintech/crypto regional banks confidenc
Slide 6: A solid performance in 2023
FY 2023 key figures & highlights A solid performance in 2023 Resilient, profitable growth and solid cash generation model in a volatile environment o Record revenue of €8,345 millions up + 5,1% LFL* o EBITA margin up 40bp to 15.9%** o Free cash flow up +15.5% to €812 million o Cash conversion rate u
Slide 7: A strong proforma base in 2023
FY 2023 key figures & highlights A strong proforma base in 2023 Acquisition of Majorel: a springboard to build the next wave of growth and innovation of the Group Teleperformance Majorel The “New Standalone Standalone Teleperformance” 2023 2023 2023 Revenue 8 001 2 131 10 133 EBITDA 1 725 362 2 087
Slide 8: Majorel acquisition: expanded leadership and expertise
Strong basis for Teleperformance’s future Majorel acquisition: expanded leadership and expertise ▪ Geographies o Significantly strengthens positions in German and French speaking markets o Scales up APAC markets presence (x2) o Largest player in Africa ▪ Verticals: increased penetration (most signif
Slide 9: Majorel acquisition: synergy update at €150m
Strong basis for Teleperformance’s future Majorel acquisition: synergy update at €150m Cumulated targeted synergies and implementation costs Breakdown of targeted synergies by type €m % of total targeted synergies 200 Other c.150 19% 150 100 Premises 11% Labour 50 50 70% 0 -50 -50 -50 Breakdown of t
Slide 10: Specialized Services: solid differentiated future
Strong basis for Teleperformance’s future Specialized Services provides Teleperformance a solid differentiated future of double-digit revenue & profit growth ▪ LanguageLine Solutions: Global leader for mission critical interpreting and translation services ▪ TLScontact: Global travel visa processing
Slide 11: LanguageLine Solutions growth engine
Strong basis for Teleperformance’s future LanguageLine Solutions – One of the five Specialized Services growth engines +13% CAGR (2016-2024E) 2016 2017 2018 2019 2020 2021 2022 2023 2024E 11
Slide 12: The AI augmented human
Strong basis for Teleperformance’s future The “AI augmented human"...and it already started ▪ Chief Innovation and Digital Officer, member of the Executive Committee: Joao Cardoso, engineer in computer science, specialization in formal languages and Artificial Intelligence, 23 years of seniority in
Slide 13: AI at Teleperformance
Strong basis for Teleperformance’s future AI at Teleperformance ▪ TP solutions are in their vast majority human augmentation: o Accuracy: instantaneous access to data o Efficiency: productivity, predictability o Personalization o Data security: antifraud ▪ Full automation remains limited to factual
Slide 14: Most used proprietary digital transformation products
Strong basis for Teleperformance’s future AI at Teleperformance Most used Teleperformance proprietary digital transformation products GenAI platform augments employees in their day-to-day task, from summarization, Digital CX, Conversational AI classification, response generation, quality management,
Slide 15: Commercializing expertise to in-house market: TP infinity
Strong basis for Teleperformance’s future Commercializing Group's unique expertise to the in-house market: TP infinity 650 consultants and experts operating in 15 countries across North America, South America, Europe, and Asia who are united by a common purpose: to push the boundaries of CX. C trate
Slide 16: Teleperformance in India: a growth engine
Strong basis for Teleperformance’s future Teleperformance in India: a growth engine NEW BUSINESS FOCUS Growth Target Met | Substantial Logos Added | Increased Conversion OPERATIONAL EXCELLENCE Optimal combination Key positions in 14 large cities|Hybrid delivery model| 22 countries served | Benchmark
Slide 17: Teleperformance in India: revenue by 2027
Strong basis for Teleperformance’s future Teleperformance in India: €1 n+ of revenue y 2027 Revenue (€m) 1,150 +17% CAGR 589 499 411 374 2020 2021 2022 2023 … 2027E 17
Slide 18: Teleperformance corporate leadership
Strong basis for Teleperformance’s future Teleperformance corporate leadership Daniel Julien and Bhupender New Executive Committee Singh acting as co-CEOs Focused on: o Until 31/12/2025 o Business transformation Daniel Julien Bhupender o Preparing the split of the CEO Chairman Singh o Excellence in
Slide 19: Olivier Rigaudy, Deputy CEO and Group CFO
Olivier Rigaudy Deputy CEO and Group CFO TELEPERFORMANCE
Slide 20: Weathering the Storm
2023 Annual Results Weathering the Storm ▪ Challenging environment • Uncertain macro economic context • Exceptional FX volatility ▪ Teleperformance’s answer to continue to grow and create value • Scalability, diversification and credibility to secure growth • Tightening the belt on: o Cost : streaml
Slide 21: P&L summary
2023 Annual Results P&L summary €m FY 2023 FY 2022(1) Change FY 2023(2) €/$ exchange rate (12-month average) €1 = US$1.08 €1 = US$1.05 TP stand alone Revenue 8,345 8,154 +2.3% 8,001 Like-for-like growth* (LFL) +1.7% LFL excl. Covid contracts and hyperinflation impact +5.1% EBITDA before non-recurrin
Slide 22: +€388m of LFL growth through 2023
+€388m of LFL growth through 2023 Against ~€600m of negative e ternal effects (€m) +404 8,345 +5.1% LFL 8,154 growth (601) Currency effect +388 (346) (32) Hyperinflation (223) Covid 7,553 contracts FY 2022 External effects FY 2022 pro forma Like-for-like growth (LFL) Change in scope* FY 2023 * Inclu
Slide 23: 2023 growth analysis by activity and region
Source of growth 2023 growth analysis by activity and region (€m) +404 8,345 +181 +204 7,553 (36) +39 +16.1% LFL Core services & D.I.B.S. = +207, or +3.2% LFL** 2022 at constant North America & LATAM EMEA Specialized Change in scope 2023 exchange rates, APAC Services excl. external effects* * Exclud
Slide 24: Revenue well-balanced by vertical and region
Revenue well-balanced by vertical and region 2023 revenue mix by vertical* 2023 revenue split by activity and region* Automotive, Specialized Media, Entertainment & Services, North America & Governments, Gaming, APAC, Healthcare, Majorel, Financial services & insurance, LATAM, Retail & e-commerce, T
Slide 25: EBITA by activity
EBITA by activity FY 2023 FY 2022 Recurring EBITA (€ m) €m Margin €m Margin - North America & APAC 311 12,3% 330 12,3% - LATAM 195 12,4% 219 13,3% - EMEA 255 10,1% 271 10,2% - Holdings* 91 N/A 70 N/A - Majorel 29 8,5% 0 N/A Core Services & D.I.B.S. 881 12,6% 890 12,7% Core Services & D.I.B.S. excl.
Slide 26: Operating profitability
Operating profitability €m FY 2023 FY 2022 Revenue 8,345 8,154 EBITA before non-recurring items 1,290 1,262 % of revenue 15.5% 15,5% Amortization of intangible assets* (141) (143) Non-recurring items (138) (127) - Performance share plan* (105) (113) - Others** (33) (14) Operating profit 1,011 992 *
Slide 27: Earnings performance
Earnings performance €m FY 2023 FY 2022 Operating profit 1,011 992 Financial result (178) (93) Income tax (231) (256) Effective tax rate 27.7% 28.5% Net profit - Group share 602 643 Diluted earnings per share (€) 10.18 10.77 Weighted average number of shares* (m) 59.1 59.7 * Used to calculate dilute
Slide 28: High cash flow generation
High cash flow generation €m FY 2023 FY 2022 Cash flow* 1,000 1,172 Change in working capital 24 (172) Net capital expenditure (212) (297) % of revenue 2.5% 3.6% Net free cash flow* 812 703 Cash conversion rate** 46% 40% * After lease payments, interest paid and taxes ** Net free cash flow/recurring
Slide 29: Strong cashflow track record
Strong cashflow track record Net free cashflow (2012-2023) 812 Cash conversion rate (2019-2023)* 703 661 50% 45.7% 486 40% 34.5% 30% 324 321 281 20% 236 202 10% 95 93 0% 64 2019 2023 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 * Net free cashflow / recurring EBITDA Net Free cash flow
Slide 30: Solid financial structure
Solid financial structure (€m) +147*** 4,553 • Increase in net debt due to the acquisition of +593** Majorel (€2,016bn) and the share buy back Lease 832 program (€366m) +2,016* • Net debt to EBITDA ratio of x2.18 pro forma* 2,609 (812) • Strong Investment Grade S&P credit rating: Lease BBB 688 € mil
Slide 31: Balance sheet summary
Balance sheet summary Impact of Majorel acquisition €m 12/31/2023 12/31/2022 €1 = US$1.11 €1 = US$1.07 Non-current assets 8,148 5,966 o/w intangible assets 6,444 4,521 Working capital* 1,126 783 Total net assets 9,274 6,749 Equity 4,237 3,670 Provisions and deferred tax liabilities 484 470 Net debt
Slide 32: Strong and diversified financing
Strong and diversified financing Diversification sources as of December 31, 2023 Commercial papers Revolving Credit Facility 7% 5% Bank term loans 16% EUR bonds USPPs • Net debt excluding lease: €3,721m 3% 69% • Average cost of gross debt: 3.27% • Average maturity of gross debt: 3.75 years • % fixed
Slide 33: Dividend and share buyback
Dividend and share buyback 4.50 100% 3.85 3.85* 90% Dividend per 4.00 80% share: €3.85*, stable 3.50 3.30 vs. 2022 70% 3.00 60% Pay-out ratio: 38% 2.50 2.40 2.40 50% 1.90 2.00 35% 35% 1.85 38% €593m returned to 35% 35% 40% 28% 30% 43% shareholders in 2023 1.50 1.30 35% 26% 1.20 35% 36% 35% 36% 30% 0
Slide 34: Capital allocation strategy
Capital allocation strategy Strong cash return model To finance the development Maintaining investment To return to shareholders • Capex discipline: ≤ 3% of revenue grade rating • Dividend: • M&A : next potential targets • Objective of debt 35%/40% pay-out ratio o Specialized services in priority le
Slide 35: Bhupender Singh, Co-CEO
Bhupender Singh Co-CEO TELEPERFORMANCE
Slide 36: Holistic AI approach at Teleperformance
Holistic AI approach at Teleperformance Embed in our products, embed in our processes, embed in our daily life AI to improve • 10% - 25% improvement in outcomes operational outcomes • 15% - 30% increase in efficiency AI for • 15% - 30% reduction in operational support costs operational support • 10%
Slide 37: AI powered transformation initiatives
AI powered transformation initiatives Over 400 experts working on AI projects AI Initiatives at Teleperformace Creating AI Value for Clients & TP US entertainment streaming AI Taskforce 250+ Projects European national airline platform 150+ in pipeline GenAI powered knowledge GenAI powered agent assi
Slide 38: Transformation products of Teleperformance
Transformation products of Teleperformance 228 669 78 59 157 Clients Clients Clients Clients Clients CX Automation Productivity Enhancement 144 60 Clients Clients Over 60 AI enabled products and solutions deployed in 600+ clients' operations 38
Slide 39: Key factors driving growth-profitability dynamics in our industry
Key factors driving growth-profitability dynamics in our industry GROWTH IMPACT PROFITABILITY IMPACT 1. Macro-economic environment 2. Offshoring / Nearshoring (Short term) (Medium term) 3. Technology/ Automation (Short term) 4. New services (Medium term) (Industry level, company level) 39
Slide 40: Teleperformance Financials: 2008 - 2023
Teleperformance Financials: 2008 - 2023 Revenue and LFL growth* 9 000 € • Digital and Social 8,345 48.0% Platforms growth - 8,154 8 000 € Interactions Explosion • AI adoption 7,115 7 000 € • Covid boost 38.0% • Steady Macro Environment with 5,732 6 000 € Low Cost of Capital 5,355 • RPA hype and stea
Slide 41: Mid-term macro-economic forecast is not strong
Mid-term macro-economic forecast is not strong Real GDP Growth Forecast: 2022 to 2028 5% 4.1% 4% 4% 4.1% 4.1% 4% 3.9% 4% 3.5% 3.2% 3.2% 3.1% 3.1% 3% 2.9% 3% 2.6% 1.8% 1.9% 1.8% 2% 1.7% 1.5% 1.4% 1% 0% 2022 2023 2024 2025 2026 2027 2028 World (total) Advanced economies Emerging and developing economi
Slide 42: 2024 Priorities
2024 Priorities ▪ Continue to build a “New Teleperformance" organization ▪ Further accelerate AI deployment ▪ Additional focus on alternate lines of business • Specialized services • Sales: Advertisements, Cloud, Consumer goods supply-chain management • Back office o F&A, HR, technology o Claims man
Slide 43: 2024 Financial guidance
2024 Financial guidance ▪ Like-for-like revenue growth* of +2% to +4% ▪ EBITA margin before non-recurring items up between 10bps and 20bps on a pro forma basis (vs. 14.9% in 2023), excluding Majorel integration costs ▪ Increase in net free cash flow and ongoing cash return to shareholders up to 2/3
Slide 44: Teleperformance
Inspired to be The bes | 7 Teleperformance