Slide 1: Teleperformance Group Overview
Teleperformance Group Overview Including Q1 2018 Quarterly Information
Slide 2: Disclaimer
DISCLAIMER ▪ The consolidated financial statements have been audited and certified. ▪ 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 materiall
Slide 3: Agenda
AGENDA TELEPERFORMANCE AT A GLANCE MARKET ENVIRONMENT STRATEGY AND GOVERNANCE Q1 2018 REVENUE AND OUTLOOK APPENDICES
Slide 4: Detailed Agenda
DETAILED AGENDA 1. TELEPERFORMANCE AT A GLANCE p. 5-10 Teleperformance at a glance 5-10 2. MARKET ENVIRONMENT p. 11-15 Market environment in Core Services 11-14 Market environment in Specialized Services 15 3. STRATEGY AND GOVERNANCE p. 16-21 Strategy 16-19 Governance 20-21 4. Q1 2018 REVENUE AND FY
Slide 5: Teleperformance at a Glance
TELEPERFORMANCE AT A GLANCE
Slide 6: Key milestones of a growth story
TELEPERFORMANCE AT A GLANCE KEY MILESTONES OF A GROWTH STORY… ▪ Starting 40 years ago, ongoing growth story, either organically and through high profile acquisitions First listed on the Started Acquisitions in Founded in 1978 Acquisition in Paris stock operations in the Argentina and in France Mexic
Slide 7: Worldwide market leader leveraging a unique global network
TELEPERFORMANCE AT A GLANCE …TO BECOME THE WORLDWIDE MARKET LEADER LEVERAGING A UNIQUE GLOBAL NETWORK Teleperformance in 2017 Founded in 1978 Operations in 76 countries 223,000 Employees Countries where TP operates 171,000/350 Workstations Contact centers Worldwide leader with 2017 revenue of New si
Slide 8: A full range of services in constant evolution
TELEPERFORMANCE AT A GLANCE …TO PROVIDE A FULL RANGE OF SERVICES IN CONSTANT EVOLUTION ▪ Mission: Teleperformance people, “all over the world, all around the clock”, helping people address their day-to-day issues, in an even more changing and complex environment ▪ A global service provider focused o
Slide 9: A global leadership recognized in the industry
TELEPERFORMANCE AT A GLANCE A GLOBAL LEADERSHIP RECOGNIZED IN THE INDUSTRY ▪ Over the last 5 years, Teleperformance has been recognized: 26 times by Frost 5 times as a leader 5 times as the Best Place To Work Best Employer & Sullivan in Gartner Magic leader by Everest certified 26 times certified 26
Slide 10: Teleperformance financial track record
TELEPERFORMANCE FINANCIAL TRACK RECORD …WITH A PROVEN FINANCIAL TRACK RECORD (2011-2017) ▪ Profitable growth story Average €M 2011 2012 2013 2014 2015 2016 2017* 2011-2017 Revenue 2,126 2,347 2,433 2,758 3,398 3,649 4,180 Group LfL growth + 3.5% + 6.9% + 7.9% + 9.9% + 7.5% + 7.4% + 9.0% + 7.4% EWAP
Slide 11: Market Environment
MARKET ENVIRONMENT
Slide 12: Market environment in Core Services: customer experience market
MARKET ENVIRONMENT IN CORE SERVICES A SIZEABLE CUSTOMER EXPERIENCE (CX) MARKET WITH OUTSOURCING PENETRATION REMAINING LOW Contact center sourcing mix* (2010-2016) $bn ▪ Growth market outlook 100% = 280-300 310-335 • Total market up ~+ 2-3 % p.a. (in $) More interactions driven by mobility revolution
Slide 13: Market with compelling mid-term growth
MARKET ENVIRONMENT IN CORE SERVICES A SIZEABLE MARKET WITH COMPELLING MID-TERM MARKET GROWTH ▪ Global outsourced customer experience (CX) market size in 2017: 72bn US dollars* ▪ North America is the largest market, with 42% of the volumes ▪ The fastest growing markets are LATAM nearshore for North A
Slide 14: Competitive environment
MARKET ENVIRONMENT IN CORE SERVICES COMPETITIVE ENVIRONMENT ▪ Worldwide leader in its core services market with a unique global positioning, as more diversified than competitors ▪ A still fragmented market, with Teleperformance market share at 6%, being consolidated by its leaders ▪ Enlarged competi
Slide 15: Fast growing niche markets in Specialized Services
MARKET ENVIRONMENT IN SPECIALIZED SERVICES FAST GROWING NICHE MARKETS ▪ LanguageLine Solutions is the leader of over-the-phone and video interpreting solutions in North America with a market share of 60% ▪ TLSContact is a major player in the global outsourced visa application management market (40 m
Slide 16: Strategy and Governance
STRATEGY AND GOVERNANCE
Slide 17: Confirmation of the 2022 financial objectives
STRATEGY AND GOVERNANCE CONFIRMATION OF THE 2022 FINANCIAL OBJECTIVES AND NOMINATION AT THE BOARD OF DIRECTORS ▪ Confirmation of the 5 year strategic plan and 2022 financial objectives • Revenue > 6 bn euros • Like for like growth > + 6% CAGR • EBITA + 850 million euros • > 20% of revenue from Speci
Slide 18: The key differentiating factors
STRATEGY AND GOVERNANCE THE KEY DIFFERENTIATING FACTORS Worldwide leader in outsourced customer ▪ Guarantying strong delivery and sustainability for experience management for the last 10 years multinational companies Unique geographic footprint ▪ 350 sites in 76 countries ▪ Supported by world class,
Slide 19: 2018-2022 strategic development plan: five main strategies
STRATEGY AND GOVERNANCE 2018-2022 STRATEGIC DEVELOPMENT PLAN: THE FIVE MAIN STRATEGIES ▪ Continued expansion into: Geography • BRICS ( Brazil, Russia, India, China and South Africa) • MIST (Mexico, Indonesia, South Korea and Turkey) ▪ Strengthen sector expertise in high potential verticals, includin
Slide 20: Recent change in the governance of Teleperformance
STRATEGY AND GOVERNANCE RECENT CHANGE IN THE GOVERNANCE OF TELEPERFORMANCE ▪ Back to a leaner organization with single leadership • Decided by the Board of Directors following the reassessment of the Group’s governance structure during summer 2017 • Daniel Julien unanimously appointed by the board a
Slide 21: Leaner and more agile organization chart: the new Comex
STARTEGY AND GOVERNANCE LEANER AND MORE AGILE ORGANIZATION CHART: THE NEW COMEX ▪ “Melting pot” of origins and cultures: United States / Continental Europe / Asia / South America ▪ Average age: 53.5 ▪ Average seniority with the Group: 15 years Daniel Julien Chairman and CEO Leigh Ryan Olivier Rigaud
Slide 22: Q1 2018 Revenue and FY 2018 Outlook
Q1 2018 REVENUE AND FY 2018 OUTLOOK
Slide 23: Q1 2018 revenue: sustained growth
Q1 2018 REVENUE SUSTAINED GROWTH ▪ The Group continued to enjoy a strong growth dynamic, despite the high basis of comparison in first-quarter 2017 ▪ Revenue was up + 6.7% like-for-like % change € millions Q1 2018 Q1 2017 As reported Like-for-like* €1 = US$1.24 €1 = US$1.06 Revenue 1,026 1,066 - 3.8
Slide 24: Revenue growth analysis
Q1 2018 REVENUE REVENUE GROWTH ANALYSIS ▪ The negative currency effect (translation) mainly reflects the decline in the US dollar and, to a lesser extent, in the Brazilian real and the Colombian peso, against the euro €m 1,066 + 64 1,026 961 - 105 + 6.7% like-for-like Q1 2017 Currency effect Q1 2017
Slide 25: Sustained like-for-like revenue growth
Q1 2018 REVENUE SUSTAINED LIKE-FOR-LIKE REVENUE GROWTH, CONFIRMING TELEPERFORMANCE’S STATUS AS A GROWTH COMPANY ▪ 24th straight quarter of like-for-like growth of at least + 5% Quarterly like-for-like growth (vs same period of prior year) since January 2012 14% + 13% + 13% 12% + 12% + 12% + 12% Aver
Slide 26: Q1 2018 revenue by activity and region
Q1 2018 REVENUE ▪ Core Services Q1 revenue growth by activity and linguistic region (€m) • English-speaking market & Asia-Pacific 901 874 – Strong business momentum in the e-tailing, consumer electronics, fast-moving CEMEA consumer goods, automotive and utilities segments CEMEA 206 – Weaker performa
Slide 27: 2018 guidance confirmed
2018 GUIDANCE CONFIRMED FURTHER PROFITABLE GROWTH AND POSITIVE CASH GENERATION ▪ Annual revenue growth objective • more than + 6%, like-for-like ▪ Annual recurring EBITA margin objective • at least 13.5% ▪ Continued strong net free cash flow Note: The Group’s alternative performance measures are def
Slide 28: Appendix 1
APPENDIX 1 Key Differentiating Factors Governance Structure Teleperformance Shareholding
Slide 29: Strong diversified and more digitized verticals
KEY DIFFERENTIATING FACTORS STRONG DIVERSIFIED AND MORE DIGITIZED VERTICALS TELECOMMUNICATION IT & IoT RETAIL & FINANCIAL INSURANCE UTILITIES TRAVEL & AUTOMOTIVE GOVERNMENT E-RETAIL SERVICES ACCOMODATION Change in the revenue breakdown by vertical New Economy contribution* to total revenue (2017 vs
Slide 30: A strong and diversified client base
KEY DIFFERENTIATING FACTORS A STRONG AND DIVERSIFIED CLIENT BASE ▪ Multi-year trend of lower revenue concentration ▪ Increased contribution from global accounts Client portfolio concentration* % of revenue (2007-2017) • Increasingly diverse client base, now more than 850 clients* • Average tenure of
Slide 31: Core Services geographical and sourcing mix
KEY DIFFERENTIATING FACTORS CORE SERVICES: STRONG GROUP GEOGRAPHICAL AND SOURCING MIX ▪ A geographical mix reflecting Teleperformance worldwide footprint ▪ Continued increase in offshore revenue contribution, now representing 40 % vs 35 % in 2015 Core Services revenue by region (2017) Core services
Slide 32: Worldwide domestic/nearshore/offshore solutions
KEY DIFFERENTIATING FACTORS CORE SERVICES: A UNIQUE OFFERING OF WORLDWIDE DOMESTIC/NEARSHORE/OFFSHORE SOLUTIONS Employees Country 2017 1 Philippines 36,086 2 United States 32,924 3 Mexico 17,658 4 Brazil 16,638 5 Colombia 15,171 6 India 12,893 7 Portugal 9,022 8 United Kingdom 8,558 9 Tunisia 6,068
Slide 33: Reference in security and data privacy
KEY DIFFERENTIATING FACTORS BECOMING A REFERENCE IN SECURITY AND DATA PRIVACY IN THE INDUSTRY ▪ IAPP (International Association of Privacy Professionnals) • Teleperformance won the prestigious global HPE-IAPP Privacy Innovation Award for the Privacy Operations category in November 2017 • This award
Slide 34: Added-value analytics and operational consulting: Praxidia
KEY DIFFERENTIATING FACTORS TELEPERFORMANCE ADDED-VALUE ANALYTICS & OPERATIONAL CONSULTING SOLUTIONS ▪ Launch of a “Field to Board Room” analytics and operational consulting company in 2018: PRAXIDIA ▪ Strengthening Teleperformance’s CX solutions offering and stickiness to the client, as a Global Cu
Slide 35: Acquisition of Wibilong
KEY DIFFERENTIATING FACTORS ACQUISITION OF A FRENCH STARTUP, WIBILONG, THE 1ST COLLABORATIVE CUSTOMER SERVICE PLATFORM ▪ Wibilong’s mission is to organize brand and customer collaboration at every stage of the sales and after-sales process ▪ Thanks to its solution, customers become true brand collab
Slide 36: The multilingual hubs
KEY DIFFERENTIATING FACTORS THE MULTILINGUAL HUBS: SERVING THE EUROPEAN AND ASIAN MARKETS ON BEHALF OF MULTINATIONAL CLIENTS ▪ What is a multilingual hub? • A solution that gathers native speakers from different locations in one hub to deliver the best service for Pan-European and Asian mid-size pro
Slide 37: Case study: multilingual hub in Portugal (1)
KEY DIFFERENTIATING FACTORS CASE STUDY: MULTILINGUAL HUB IN PORTUGAL (1) FOUNDED IN 29 7,500 6,915 8 CONTACT 85+ 1994 LANGUAGES EMPLOYEES WORKSTATIONS CENTERS CLIENTS SECTORS CHANNELS SERVICES Consumer CITY CENTER Electronics Retail Customer Customer Inbound Outbound Service Acquisition Insurance Te
Slide 38: Case study: multilingual hub in Portugal (2)
KEY DIFFERENTIATING FACTORS CASE STUDY: MULTILINGUAL HUB IN PORTUGAL (2) ▪ What makes Lisbon the perfect location? • Well educated population • Flexible labor market • High fluency in foreign languages and high number of foreign families • Exotic tourist destination • Current and sustainable competi
Slide 39: CX Lab: a unique innovative research center
KEY DIFFERENTIATING FACTORS CX LAB: A UNIQUE INNOVATIVE RESEARCH CENTER ▪ Strong Research & Development resources Teleperformance’s award-winning Customer Experience Lab (CX Lab) is a ground-breaking center devoted to research global trends in how companies interact with customers as well as consume
Slide 40: CX Lab output: understanding the customer
KEY DIFFERENTIATING FACTORS CX LAB OUTPUT: UNDERSTANDING THE CUSTOMER ▪ Preferred channel to interact with customer service: “the Voice” preferred at 56% Traditionalists Baby Boomers Generation X Millennials Generation Z Sector Avg. 56% 58% 58% 58% 55% 38% 42% 40% 38% 38% 38% 36% 15% 11% 9% 7% 7% 6%
Slide 41: Teleperformance Client CRM (TP Client)
KEY DIFFERENTIATING FACTORS TELEPERFORMANCE CLIENT CRM (“TP CLIENT”) ▪ Proprietary technology solution enabling an omnichannel experience TP Client is an internally developed CRM tool that can help improve the efficiency and effectiveness of a client program to create, resolve, and track customer is
Slide 42: TP Client new generation: cognitive omnichannel
KEY DIFFERENTIATING FACTORS COGNITIVE OMNICHANNEL AGENT BOT INTEGRATION Plugin architecture to integrate with Chatbots TRANSFER TO REAL AGENTS We can program Teleperformance Client to transfer to a real agent if the bot does not solve customer inquiries TP Client new SUPERVISOR BOT generation The ag
Slide 43: LanguageLine Solutions: comprehensive set of solutions
KEY DIFFERENTIATING FACTORS LANGUAGELINE SOLUTIONS: PROVIDING A COMPREHENSIVE SET OF SOLUTIONS ACROSS ALL CHANNELS AND SECTORS Breakdown of LanguageLine Solutions revenue by language service Over-the-phone interpretation (“OPI”) provides type (2017) on-demand, quick access to highly qualified Others
Slide 44: LanguageLine Solutions: global distributed workforce of interpreters
KEY DIFFERENTIATING FACTORS LANGUAGELINE SOLUTIONS: A GLOBAL DISTRIBUTED WORKFORCE OF INTERPRETERS Language capabilities (2017) 8,400 interpreters, o.w. 70% are Homeworkers Others 13% Russian 3% 3% Canada Arabic 3% Dominican Asian Republic languages European 53% USA 13% languages <1% 68% 24% Mexico
Slide 45: TLScontact: a successful growth story
KEY DIFFERENTIATING FACTORS TLSCONTACT: A SUCCESSFUL GROWTH STORY YESTERDAY TODAY TOMORROW Business started in a niche market: European leader in visa application From niche market to global offering the visa application centers outsourcing ▪ Citizen services (transfer from ▪ Strong footprint: 140 l
Slide 46: Governance structure
GOVERNANCE STRUCTURE AN INTERNATIONAL AND SEASONNED MANAGEMENT AND BOARD SUPPORTING A STRONG LEADERSHIP CORPORATE MANAGEMENT BOARD OF DIRECTORS Leadership: Teleperformance SE Board has 14 directors, Daniel Julien – Chairman and CEO 9 of whom are independent Daniel Julien - Chairman Executive Committ
Slide 47: Shareholding structure
TELEPERFORMANCE SHAREHOLDING SHAREHOLDING STRUCTURE*: AN INTERNATIONAL CAPITAL OWNERSHIP ▪ Listed on the NYSE Euronext Paris market – floating ~100% ▪ An international shareholding structure reflecting the Group’s global footprint United Kingdom 16% **Others include % Capital North America 30% • Dan
Slide 48: Appendix 2
APPENDIX 2 2017 Annual Results Alternative Performance Measures
Slide 49: 2017 annual results: P&L summary
2017 ANNUAL RESULTS P&L SUMMARY ▪ Sustained growth in results and margins € millions 2017 2016 Change €1 = US$1.13 €1 = US$1.11 Revenue 4,180 3,649 + 14.6% Like-for-like growth* + 9.0% + 7.4% EBITDA before non-recurring items* 720 558 + 29.0% % of revenue 17.2% 15.3% EBITA before non-recurring items
Slide 50: Revenue growth analysis in 2017
2017 ANNUAL RESULTS REVENUE GROWTH ANALYSIS IN 2017 Revenue growth analysis (€ M) ▪ Revenue growth: + 14.6% as reported and + 9.0% like-for- (2016-2017) like + 282 4,180 + 321 3,649 3,577 (72) ▪ Change in scope: consolidation of LanguageLine Solutions + 9.0% lfl since September 19, 2016 + 14.6% as r
Slide 51: Revenue and EBITA margin by activity
2017 ANNUAL RESULTS REVENUE AND EBITA MARGIN BY ACTIVITY 2017 2016 Change Revenue (€ M) As reported Like-for-like FY Q4 FY Q4 FY Q4 FY Q4 Core Services 3,542 929 3,314 900 + 6.9% + 3.1% + 8.8% + 8.8% - English-speaking market & Asia-Pacific 1,607 412 1,628 432 (1.3)% (4.8)% + 1.6% + 0.3% - Ibero-LAT
Slide 52: Operating profitability
2017 ANNUAL RESULTS OPERATING PROFITABILITY ▪ Sustained increase in recurring EBITA margin of 210 bps ▪ Impact of the acquisition of LanguageLine Solutions on the amortization of intangible assets €M 2017 2016 Change Revenue 4,180 3,649 + 14.6% EBITA before non-recurring items 556 408 + 35.9% % reve
Slide 53: Earnings performance
2017 ANNUAL RESULTS EARNINGS PERFORMANCE ▪ Net profit - Group share: €312M, + 46.0% ▪ Diluted earnings per share: €5.31, + 44.7% ▪ Positive impact of the US tax reform €M 2017 2016 Change Operating profit 355 339 +4.6% Financial result (50) (39) Income tax 9 (83) ▪ Current tax (122) (83) ▪ US tax re
Slide 54: Cash flow
2017 ANNUAL RESULTS CASH FLOW ▪ Strong increase in net free cash flow: + 37.3% ▪ Controlled expansion and optimized allocation of financial resources • Capex ratio down to 3.5% vs 5.2% in 2016 • Cash conversion ratio**: 45% vs 42% in 2016 € millions 2017 2016 Cash flow* 529 409 Change in working cap
Slide 55: Balance sheet summary
2017 ANNUAL RESULTS BALANCE SHEET SUMMARY ▪ Decrease in net debt ▪ Net debt/EBITDA restated ratio = 1.88x ▪ S&P long-term credit rating: BBB- investment grade Working Capital* (2014-2017) €M 12/31/2017 12/31/2016 (€ M) €1 = US$1.20 €1 = US$1.05 500 20,0% 433 Non-current assets 3,116 3,672 416 412 40
Slide 56: Strong and diversified financing
2017 ANNUAL RESULTS STRONG AND DIVERSIFIED FINANCING ▪ Average cost: 2.44% ▪ Average maturity: 4.8 years ▪ Diversified financing sources ▪ Well protected against rising rates Diversification sources Rate type 6% 29% 40% 37% 60% 29% Bank loans USPPs EUR Bond NEU CPs Fixed Floating * New European Comm
Slide 57: Dividend
2017 ANNUAL RESULTS DIVIDEND ▪ Dividend at €1.85, up + 42.3% ▪ Stable pay-out ratio at 35% € €1.85 1,80 1,50 €1.30 €1.20 1,20 €0.92 0,90 €0.80 €0.68 0,60 €0.46 €0.33 0,30 0,00 2010 2011 2012 2013 2014 2015 2016 2017 57
Slide 58: Alternative performance measures
ALTERNATIVE PERFORMANCE MEASURES EBITDA before non-recurring items (Earnings before Interest, Taxes, Depreciation and Amortizations): Operating profit before depreciation & amortization, amortization of intangible assets acquired as part of a business combination, goodwill impairment charges and non
Slide 59: Investor relations contact
FOR MORE INFORMATION: www.teleperformance.com FOLLOW US /teleperformanceglobal INVESTOR RELATIONS CONTACT @teleperformance investor@teleperformance.com /teleperformance +33 1 53 83 59 87 blog.teleperformance.com /company/teleperformance