Teleperformance Se · EURONEXT:TEP
Teleperformance — FY2020 Earnings Presentation
72 slides from Teleperformance's earnings presentation, Feb 25, 2021
Slide 1: 2020 Annual Results Investor Presentation
2020 Annual Results Investor Presentation February 25, 2021
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: Detailed contents
Detailed contents FY 2020 key facts and figures p. 4-12 Teleperformance at a glance p. 5 Awards and recognitions in 2020 p. 9-12 FY 2020 key figures & highlights p. 6-8 Strategy & objectives p. 13-19 Strategy & objectives p. 14-18 2022 objectives p. 19 FY 2020 results p. 20-39 P&L summary p. 21 Oper
Slide 4: Contents
Contents 1. FY 2020 key figures & highlights 2. Strategy and objectives 3. FY 2020 results 4. FY 2021 outlook 5. Appendices 4
Slide 5: FY 2020 key figures & highlights
FY 2020 key figures & highlights A leading global group in digitally integrated business services global leader in outsourced CX(1) management people 250K+ work-at-home employees Providing services in Serving languages and dialects markets Present in Teleperformance has the largest geographic facili
Slide 6: FY 2020 key figures & highlights: record growth despite Covid-19
FY 2020 key figures & highlights Key figures: record growth despite the impact of the Covid-19 crisis Record growth • Another record year in terms of revenue and growth: Revenue at €5,732m and sustained like-for-like* growth for the full year: +11.6% • Sharp acceleration in like-for-like growth in t
Slide 7: FY 2020 key figures & highlights: monthly LFL growth
FY 2020 key figures & highlights Key figures: record growth despite the impact of the Covid-19 crisis Monthly LFL growth vs. last year V-shaped monthly growth 30% • Rapid response to the crisis with 25% successful homework deployment 20% • Return to sustained growth since 15% June, driven by faster
Slide 8: FY 2020 key figures & highlights
FY 2020 key figures & highlights Key highlights: a growing and responsible ww leader in its industry Three priorities met to overcome the health crisis: • Employee health • Client business health • Group financial health Strong commitment to employees and diversity • Net creation of 50,000 jobs duri
Slide 9: Awards and recognitions in 2020
Awards and recognitions in 2020 Client feedback during the COVID-19 crisis “Your team is doing a PHENOMENAL job. TP “Dear amazing TP Heroes -- THANK YOU for clearly stands out as the responsiveness has “I wanted to say thank you on behalf of holding our lines during this challenging time! been off-t
Slide 10: Awards and recognitions in 2020
Awards and recognitions in 2020 Leadership recognized in the industry Teleperformance has received numerous relevant awards from business analysts in 2020, ow: • Leader and Star Performer by Everest Group • Leader in the “Global Omnichannel Customer Service Outsourcers Wave" by Forrester • Company o
Slide 11: Awards and recognitions in 2020
Awards and recognitions in 2020 2020 Everest Group Peak Matrix 11
Slide 12: Awards and recognitions in 2020
Awards and recognitions in 2020 Corporate Social Responsibility A few examples In March 2020, Teleperformance was approved at “GC Advanced” level for the quality of its CSR documentation by the UN Global Compact, to which it Teleperformance is part of has been a signatory since 2011. 2020 ranking of
Slide 13: Contents
Contents 1. FY 2020 key figures & highlights 2. Strategy and objectives 3. FY 2020 results 4. FY 2021 outlook 5. Appendices 13
Slide 14: Strategy and objectives
Strategy and objectives Achieving a successful, accelerated transformation ▪ Becoming a leading global group in digitally integrated business services, with a Vision unique selling proposition for clients: Simpler, Faster, Safer, Better, More cost effective ▪ Being a reference as a growing, sustaina
Slide 15: Health Advocate acquisition
Health Advocate acquisition Teleperformance is significantly strengthening its added-value Specialized Services business by acquiring Health Advocate A complete platform for consumer health management providing comprehensive solutions to meet consumer and employer needs Operational excellence based
Slide 16: Strategy and objectives
Strategy and objectives High-touch, high-tech strategy : Teleperformance DNA Lean Six Sigma Ensures Operational Excellence High-tech: Empowered by Technology High-touch: People Helping People • A redundant architecture ensures service reliability • Human-centric customer experiences delivered by emp
Slide 17: Strategy and objectives
Strategy and objectives A responsible strategy with three main CSR commitments for one objective One objective: Becoming a global reference Employee engagement and well-being as a sustainable and performing value Professional development creating model for all Group’s stakeholders Health & safety Hu
Slide 18: Strategy and objectives
Strategy and objectives An international, tight and aligned team Executive committee Daniel Julien Chairman and CEO Bhupender Singh Eric Dupuy Miranda Collard Agustin Grisanti Scott Klein Olivier Rigaudy Leigh Ryan Chief Chief Business Chief ClientOfficer Chief Operating Presidentof DeputyCEO andCFO
Slide 19: 2022 objectives
2022 objectives Full-year targets ▪ Revenue of around €7.0 billion, including acquisitions in high-value services ▪ EBITA margin before non-recurring items of around 14.5% 19
Slide 20: Contents
Contents 1. FY 2020 key figures & highlights 2. Strategy and objectives 3. FY 2020 results 4. FY 2021 outlook 5. Appendices 20
Slide 21: P&L summary
2020 annual results P&L summary €m FY 2020 FY 2019 €/$ exchange rate (12-month average) €1 = US$1.14 €1 = US$1.12 Revenue 5,732 5,355 Highly resilient financial results Reported growth +7.0% +20.6% • Sustained like-for-like (LFL) growth for the Like-for-like growth* (LFL) +11.6% +10.6% full year: +1
Slide 22: Revenue growth analysis
2020 annual results Revenue growth analysis +11.6% LFL 5,732 5,355 +594 • Revenue growth: +11.6% LFL (217) 5,138 (+7.0% as reported) • Unfavorable currency effect: decline against the euro in the main Latin American currencies, the Indian rupee, and in H2 the US dollar FY 2019 Currency effect FY 201
Slide 23: Monthly LFL growth vs. last year
2020 annual results Monthly LFL growth vs. last year 30% V-shaped monthly growth confirmed: 25% • January-February: LFL growth above 20% +7% guidance • March 15-May 30: site shutdowns 15% and travel bans 10% • Upturn in growth in June: very strong LFL growth 5% • Sharp acceleration in Q4, notably le
Slide 24: Growth supported by ongoing diversification
2020 annual results Growth supported by ongoing diversification Expertise in many industries Strong proximity with loyal, global, digital clients % Revenue by vertical – details 2020 vs. 2013 2020 data 47% • 1,000 clients* • Average tenure of client relationship: 12 years (Top 50) 15% 15% 13% 14% 13
Slide 25: Recurring EBITA analysis
2020 annual results Recurring EBITA analysis • FY 20 recurring EBITA margin down by 150bp at 12.8% Recurring EBITA (€m) • Negative direct Covid-19 impacts on recurring EBITA, % of revenue evenly spread between H1 20 and H2 20: 764 735 • Expenses to protect employees and deploy WAHA during the crisis
Slide 26: Revenue by activity
2020 annual results Revenue by activity 2020 2019 Change (%) Revenue (€m) Like-for-like* (LFL) Reported Core Services & D.I.B.S.: FY Q4 FY Q4 FY Q4 FY Q4 +14.2% LFL growth despite the depths of the Covid-19 crisis Core Services & D.I.B.S. 5,080 1,471 4,650 1,258 +14.2% +26.3% +9.2% +16.9% from March
Slide 27: Margin by activity
2020 annual results Margin by activity 2020 2019 Recurring EBITA (€m) FY H2 FY H2 Core Services & D.I.B.S. 561 390 539 324 • Recurring EBITA margin of 12.8% vs. % of revenue 11.0% 11.6% 14.3% 13.3% 14.3% in 2019 - EWAP 128 84 154 96 % of revenue 7.2% 9.0% 9.0% 10.5% - Ibero-LATAM 179 117 156 87 • Co
Slide 28: Core Services & D.I.B.S. – EWAP
2020 annual results Core Services & D.I.B.S. – English-speaking market & Asia-Pacific (EWAP) • Very tight restrictions on movement in the Philippines • In the UK, faster deployment of Covid-19 support services in Q4 20 and strong sales momentum • Solid growth in China and Malaysia • Profitability im
Slide 29: Core Services & D.I.B.S. – Ibero-LATAM
2020 annual results Core Services & D.I.B.S. – Ibero-LATAM • Longstanding and strong performance confirmed in FY 20: +24.8% LFL • Rapid deployment of work-from-home model to serve numerous new contracts with e-clients • Main drivers: Colombia, Mexico’s nearshore operations, Portugal and Spain • Shar
Slide 30: Core Services & D.I.B.S. – CEMEA
2020 annual results Core Services & D.I.B.S. – Continental Europe & MEA (CEMEA) • Sharp acceleration in growth throughout the year, reaching +50.2% LFL in Q4 20 • Ramp-up of major contracts signed before the crisis and brisk sales operations • Deployment of Covid-19 support services for governments,
Slide 31: Core Services & D.I.B.S. – India & Middle East
2020 annual results Core Services & D.I.B.S. – India & Middle East • Return to growth in Q3 notably driven by the deployment of work-from-home model and offshore operations • Termination of low-margin contracts in domestic operations in India completed by the end of the year • As a result, profitabi
Slide 32: Specialized Services
2020 annual results Specialized Services • TLScontact: revenue down sharply due to travel restrictions and border closures and negative impact of -€78 million vs. 2019 on recurring EBITA for the full year • LanguageLine Solutions: solid and profitable growth since June Revenue (€m) -5.4% LFL Recurri
Slide 33: Operating profitability
2020 annual results Operating profitability €m 2020 2019 Change Revenue 5,732 5,355 +7.0% • Recurring EBITA of €735 million down 3.8% EBITA before non-recurring items 735 764 -3.8% % revenue 12.8% 14.3% • Operating profit of €555 million down Amortization of intangible assets (104) (109) 10.6%, refl
Slide 34: Earnings performance
2020 annual results Earnings performance €m 2020 2019 Change Operating profit 555 621 -10.6% • Higher effective tax rate owing to Financial result (88) (90) impairment charges on goodwill and mix effect Income tax (143) (131) Effective tax rate 30.6% 24.7% • Decrease in net financing costs related M
Slide 35: Cash flow
2020 annual results Cash flow €m 2020 2019 • Net free cash flow: €487 million, up +51.7% Cash flow* 727 721 Change in working capital 14 (148) • Capex ratio at 4.4% of revenue, down from Net capital expenditure (254) (252) 4.7% in 2019 % revenue 4.4% 4.7% • Excluding capex related to WAHA deployment
Slide 36: Balance sheet summary
2020 annual results Balance sheet summary €m 12/31/2020 12/31/2019 €1 = US$1.23 €1 = US$1.12 Non-current assets 4,344 4,836 o/w intangible assets 3,057 3,479 Working capital* 668 731 Total net assets 5,012 5,567 Equity 2,408 2,569 Provisions and deferred tax liabilities 329 333 Net debt 2,274 2,665
Slide 37: Financial position
2020 annual results Financial position 2,665 (486) • Solid financial structure +141 (45) • Decrease in net debt of 2,274 €391 million compared with (1) end of 2019 • S&P credit rating confirmed BBB- Investment Grade in April Net debt as of Net free cash Financial Dividend Other* Net debt as of 12/31
Slide 38: Strong and diversified financing
2020 annual results Strong and diversified financing Diversification sources as of December 31, 2020 Commercial USPPs* papers 18% 10% • Average cost of gross debt: 1.40%, vs 1.70% in 2019 EUR • Average maturity of gross debt: 4.2 years bonds 72% • Diversified sources * Of which 10% denominated in eu
Slide 39: Dividend
2020 annual results Dividend 2.50 2.40 2.40* 100% 90% 2.00 1.85 1.90 80% 70% 1.50 60% • Dividend per share of €2.40*, 1.20 1.30 stable vs. 2019 50% 0.92 43% 1.00 0.68 0.80 40% 26% 28% 35% 30% 30% 35% 35% 35% 35% 35% 36% 0.50 0.33 0.46 20% • Increase in pay-out ratio to 43% 10% 0.00 0% 2010 2011 2012
Slide 40: Contents
Contents 1. FY 2020 key facts & figures 2. Strategy and objectives 3. FY 2020 results 4. FY 2021 outlook 5. Appendices 40
Slide 41: 2021 outlook
2021 outlook Full-year targets ▪ Like-for-like revenue growth of at least +9.0% ▪ EBITA margin before non-recurring items of more than 14.0% ▪ Integration of Health Advocate during Q2 2021 41
Slide 42: Contents
Contents 1. FY 2020 key facts & figures 2. Strategy and objectives 3. FY 2020 results 4. FY 2021 outlook 5. Appendices 42
Slide 43: Appendices: Group overview – Additional information
APPENDICES Group overview – Additional information 43
Slide 44: Creating value: a proven financial track record (2012-2020)
Group overview – Additional information Creating value: a proven financial track record (2012-2020) c. 14.5% in 2022 800 14.3% 8 000 +10.6% +11.6% 13.3% 13.6% 15% +9.9% c. 7,000 700 7 000 +7.5% +9.0% +9.0% 600 +7.9% 5,732 10% 11.2% 13% 6 000 +6.9% +7.4% 5,355 500 10.3% 12.8% 8% 400 9.1% 9.3% 9.7% 11
Slide 45: Creating value: a proven financial track record (2012-2020)
Group overview – Additional information Creating value: a proven financial track record (2012-2020) • H2 2020 is the 17th straight half-year of like-for-like growth of at least +5% 18% 18% Half-year like-for-like growth (vs. same period of prior year) since H2 2012 16% Average quarterly 14% like-for
Slide 46: Over years at the forefront of customer experience outsourcing
Group overview – Additional information Over 40 years at the forefront of customer experience and business services outsourcing 380K+ employees 2020 2012 Full control 2020 2008 of Transition of over Acquisition of TLSContact 1998-2002 200k active The Answer (UK) 2018 Started operations employees to
Slide 47: Geographic diversification
Group overview – Additional information Geographic diversification Core Services & D.I.B.S.* Group revenue breakdown (2020) revenue breakdown (2020) India & Middle East Specialized 9% Services 11% EWAP 35% Core Services & CEMEA D.I.B.S.* 26% 89% Ibero-LATAM 30% * Core Services & D.I.B.S. split by li
Slide 48: A One-Office solution
Group overview – Additional information A One-Office solution Customer Experience Customer Care Techincal Support Sales Accounts Receivable Knowledge Back/midle-office services solutions CX Consulting Industry services Advanced Analytics Finance and Accounting OMNICHANNEL Intelligent Automation Cont
Slide 49: Smart shoring: a unique offering of worldwide broad sourcing mix
Group overview – Additional information Smart shoring: a unique offering of worldwide broad sourcing mix • Network of 36 offshore/nearshore locations around the world Increasing share of • The only industry player able to offer worldwide integrated domestic, nearshore & offshore* nearshore & offshor
Slide 50: R&D innovation and agility to develop WAHA delivery model
Group overview – Additional information Teleperformance R&D innovation and agility to develop WAHA* delivery model • TP CLOUD CAMPUS: a comprehensive virtual ecosystem to ensure sustainability of work through remote management (https://www.youtube.com/watch?v=D38-xVUuS5I) A new work-from-home model
Slide 51: TP Cloud Campus advantages vs. traditional work-at-home
Group overview – Additional information TP Cloud Campus advantages vs. traditional work-at-home (WAH) Topic Traditional WAH Teleperformance Cloud Campus Expanded Sourcing In country Multiples countries New Hire Interview Phone Video Footprint & Talent Pool Contract signature In paper Digital Trainin
Slide 52: Worldwide TP Cloud Campus network
Group overview – Additional information Worldwide TP Cloud Campus (TPCC) network as of 31 Dec 2020 Countries with WAHA GREECE using TPCC solution PORTUGAL (Athens) (Lisbon) INDIA (Mohali,Gurgaon, Kolkata, Mumbai) USA PHILIPPINES (Manila) Countries with 13 TPCC hubs MEXICO (PSL) (Guadalajara) Remote
Slide 53: Continually reinforcing security
Group overview – Additional information Continually reinforcing security People: extensive cyber security training across TP • Extensive cybersecurity training • Dedicated security organization • C-level Security Governance Process: security by design, audits, and white hacking • Security by design,
Slide 54: Data security: standards, recognitions & alignments
Group overview – Additional information Data security: standards, recognitions & alignments Teleperformance was the first company in the industry to comply with the Binding Corporate Rules (BCRs) in the European Union* STANDARDS RECOGNITIONS ALIGNMENTS The General Data Protection Regulation Frost &
Slide 55: Appendices: Digital Integrated Business Services
APPENDICES Digital Integrated Business Services 55
Slide 56: Leveraging technical, process and industry know-how and expertise
Digital Integrated Business Services Leveraging technical, process and industry know-how and expertise A Technology, Analytics and Process (T.A.P™) team of experts to quickly identify transformation opportunities based on: • A knowledge services team1 o 400+ digital transformation experts Diagnostic
Slide 57: Leveraging technical, process and industry know-how and expertise
Digital Integrated Business Services Leveraging technical, process and industry know-how and expertise Global Digital Cloud Intelligent sourcing channels Campus automation Different solutions from goods, Cloud solutions have gained A robust and feature-rich, Teleperformance Digital knowledge and ski
Slide 58: Digital proprietary solutions available to clients
Digital Integrated Business Services Digital proprietary solutions available to clients Not exhaustive Omnichannel contact center tools Analytics and AI tools Omnichannel Real-time floor Real-time Simulator for Platform for TP’s Voice to Analytics for Speech Recommends next and workflow management d
Slide 59: Leveraging an ecosystem of technology players and partners
Digital Integrated Business Services Leveraging an ecosystem of technology players and partners Not exhaustive Automation Omnichannel Contact Center Analytics and AI 59
Slide 60: Appendices: Market and competitive environment
APPENDICES Market and competitive environment 60
Slide 61: #1 WW in a growing CX core market still poorly outsourced
Market and competitive environment #1 WW in a growing CX core market still poorly outsourced CX outsourcing rate in 2019 vs. 2010 (%) CX outsourced market breakdown by region in 2020E (% of total market) 2010 2019 26% Asia-Pacific 22% North 25% America 41% 78% 74% Europe, Midle- Latin In-house Ourts
Slide 62: #1 WW in a growing CX core market highly disrupted
Market and competitive environment #1 WW in a growing CX core market highly disrupted CX outsourced market breakdown by 30% verticals in 2020E (% of total market) Helping disrupted companies to navigate the digital transformation 14% 10% 10% 7% 7% 6% 5% 5% 6% 1% Being the natural partner of disrupte
Slide 63: Broader competitive environment (1/2)
Market and competitive environment Teleperformance’s transformation is leading to a broader competitive environment (1/2) • Worldwide leader in the outsourced CX market ($74-84B in 2020E*) with a unique global diversified positioning • Group’s transformation leads to: • Significant outperformance vs
Slide 64: Broader competitive environment (2/2)
Market and competitive environment Teleperformance’s transformation is leading to a broader competitive environment (2/2) • Enlarged competitive environment reflects growing complexity and increasingly integrated demand from the clients Direct competitors (CCO)* ITO/BPO companies** Consulting Firms
Slide 65: Appendices: Health Advocate acquisition overview
APPENDICES Health Advocate acquisition overview – Additional information 65
Slide 66: A complete platform for consumer health management
Health Advocate acquisition – Additional information A complete platform for consumer health management • Health Advocate is a leading consumer-focused health platform for the employer market, utilizing human-touch, data-driven health insights, and technology to simplify and personalize the healthca
Slide 67: Health Advocate key figures
Health Advocate acquisition – Additional information Key figures • 700 health advocates that are specialists in the complex US healthcare system • 8,400 clients, including many Fortune 100 companies • 27m+ consumers covered • Annual revenue of US$140m, EBITDA margin of 36% and EBITA margin of 27%, w
Slide 68: A large, attractive and growing market
Health Advocate acquisition – Additional information A large, attractive and growing market Healthcare environment is growing increasingly complex and the consumer is bearing the burden => large addressable market expected to grow by +7-10% p.a. over 2019-2024 Addressable market size (US$ billions)
Slide 69: Appendices: Others
APPENDICES Others each interaction matters
Slide 70: Shareholding structure
Shareholding structure International capital ownership* • Listed on Euronext Paris market – free float ~100% • An international shareholding structure reflecting the Group’s global footprint United Kingdom 14% ** Other includes % capital North America 38% • Daniel Julien 2% Institutional Continental
Slide 71: Alternative performance measures
Alternative performance measures Change in like-for-like revenue: Change in revenue at constant exchange rates and scope of consolidation = (current-year revenue – last-year revenue at current-year rates - revenue from acquisitions at current-year rates) / last-year revenue at current-year rates. EB
Slide 72: Thanks!
Follow us /company/teleperformance /teleperformanceglobal @teleperformance Thanks! @Teleperformance_group /teleperformance Teleperformanceblog.com teleperformance.com