Teleperformance Ord

Hello, and welcome to TelePerformance 2024 First Half Results. My name is George, and I'll be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be in listen-only mode. However, you will have the opportunity to ask questions towards the end of the presentation, and this can be done by pressing star 1 on your telephone keypad to answer your question. If you request assistance at any point, please press star 0, and you will be connected to an operator. I'd like to turn it over to your host today, Mr. Olivier Rigoudi, Deputy CEO and Group CFO. Please go ahead, sir.

Thank you, George. Hello, everyone. Good morning or good evening, and welcome to our first half results event. We are going to present you the results. I'm going first. Next slide, please. I'm going first to leave the floor to Cuivre to make the disclaimer.

Thank you, Olivier, and hello, everyone. It is my turn to welcome you to the Teleperformance First Half Fiscal 2024 Earnings Call. Financial press release related to the results has been published today at 5.45 p.m. Paris time. Slides of the presentation will be available straight after the call on the group's website in the financial publications room of the investor relations section. The replay of the webcast will be available tonight. Dialing numbers and links to listen to the replay are available in the invitation to the presentation. Today's presentation contains forward-looking statements that address our expected future performance and that by their nature address matters that are uncertain. These expectations 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 description, of these factors and uncertainties please refer to the risk factor section in our 2023 universal registration document available on teleperformance website today olivier will first provide a summary of the key development and the key figures of the publication and second cover teleperformance financial results in detail and full year business outlook then as usual his presentation will be followed by a q a session Now I'll hand the floor to Olivier.

Thank you, Kouy. Next slide, please. So we are going to start with the first highlights. What are the key developments of this first half? Well, the momentum in the business are simple. The first thing to tell, we have an acceleration in the growth in Q2. It was weighted, but we are able to deliver it. The second stuff is that we are leading the smooth integration of Majorettes. I'll come back to the economic side, but first of all, it's doing well on the client side. We didn't lose any client, and we are having a good, smooth integration with the vehicles that are coming from our colleague from Majura. If we move now to the economic side, what we see is the acceleration of the execution plan in Q2 2024 with main positive impact expected in H2. we confirm the expectation to generate 100 and 150 cost synergy on a run rate basis by 24 and 25 respectively. As we are working more and more with our friends at Majorelle and seeing much more precisely the asset, there might have some upside to the synergy. We are working and we are assessing this potentiality, and we might come back later on that point with all the development. Third point, we continue to implement AI, Gen AI solutions that are accelerating client growth and internal efficiency. As we speak, more than 300 AI projects are in progress in clients based today. I'm sure you have seen in the meantime that we developed new partnership with Digital Platform, of course, Core AI, for which we just delivered a press release some weeks and some days ago. And we got the prize also from the Glooby 2020 for Golden Bridge Awards for our AI-driven solutions that streamline back-office business process for clients, notably in India. What is interesting is that beyond the high tech part, we are all, as you know, moving on the high touch. We have 69 countries, as we speak, that have received Great Place certification, covering 97% of the group employees. And lastly, there are some changes in the governance. Mr. Moulet Afid Al-Alami has been appointed as leading independent director, replacing Mr. Thomas, who decided to step down after nearly seven years on the board of directors. Next slide, please. So what are the results they have submitted? And they are led by accelerating growth and increased free cash flow. We do believe that this is a solid set of results in line with the annual objective. Of course, the growth as reported is 28.2% year-on-year, which is beyond 5 billion euros. The pro-pharma growth in H1 is now year-on-year 1.7% like-for-like, with a significant acceleration in Q2, plus 2.4%. We are on track to achieve our annual financial objective in 2024. As far as margin is concerned, our pro-pharma recurring EBITDA margin is up by 10 basis points versus pro-pharma last year, versus H1 2023, and even 20 basis points at constant exchange rate. Moreover, we have been able to deliver close to 450 million cash flow at 45% versus last year. So we are quite confident that the net debt to EBITDA ratio will be below two times at the end of this year. And lastly, in terms of capital return beyond the EBITDA, we have been able to bought back share for 117 million in H1 2020-2024. Those are the first major points that I wanted to highlight. to point out in this first half. Let's next start from there. What can we tell about the performance that we have achieved in this first half, whether it's growth, profitability, and cash generation? In terms of growth, specialized services continue to expand at a sustained pace. We are going to see that, but we are speaking of double-digit 12% growth in this area. We still continue to benefit from a resilient and diversified client portfolio, whether it's by geography, by vertical, or by product. And we start to see the first sign of volume recovery in tech and retail, notably in the U.S. We have seen ongoing solid dynamic in financial service and in automotive, which is quite brand new for us. And we continue to see a strong demand for offshore service, especially from India to serve the U.S. market. Let's move now on the profitability and cash generation. Of course, we start to see the first effect of cost synergy from the integration of major oil, which are limited in each one, not to surprise, but they are going to be significantly improved in the second part of the year as the months will go by. We have a positive mix effect on marketing coming notably from specialized service, and we continue to invest in operation. We are going to see in much more detail the disciplines that we followed in capex and working capital that helps to deliver the good cash flow figure. On the headwind side, we have been, of course, impacted by the ethics movement in Latin America, notably Mexico and Colombia, where the currency has grown up versus euro and slash dollar. And we continue to have transformation and development costs all along the first half. And finally, we had an impact of implementation costs on net free cash flow of 25 million. I'll come back later on that. Before we move to the figure, I just wanted to show and to have a quick, I would say, to cover two main, among the 300 AI projects, to cover two specific case studies that we thought that was interesting. Next slide, please. This is a successful proof of concept for teleperformance innovations. There are many of them, but we thought that these two were interesting because from one side, and I'll come back in detail, this is driving augmented volume and client penetration. For the other side, it's increasing productivity and client stickiness. Let's come to the first case study where TP-AI solution deployed for a UK-based digital bank has been able to grow volume and client penetration. So the idea was to support farming and business development with AI. So what we did? We did, of course, consulting to understand what was the need and the specificity of this client first to understand what was behind. And we have been able to develop AI solution. Mainly, we call it GP Gen AI, which is a tool that helps to summarize the story of the question of the client, the classification of the organization of the demand that Also, bring some response generation, automatic response generation, and improve quality management. This is a knowledge-based solution that we are developing in a lot of our clients, the GP GNI. What are the impacts, finally? We start with the first TP solution, which was called TP Simulation in 2022, and we implement TP GNI in 2024. And at the end of the day, for TP, for teleperformance, we move from 230 people in 2022 to more than 1,000 in 2024. So it means that GNI is helping to get market share. If we move to the second case study, which is a little different, which is appealing to an American Internet domain registrar and web hosting, the idea was to increase productivity and client stickiness. All of that was just to automate all the quality auditing process with what we call TP-Interact. The idea was to automate 100% of the interaction, to build scorecard for each people and to generate reports globally for this company. And at the end of the day, the idea was to build a predictive model to see what's happening in this case. But what has been the result? The result has been an increase in first call resolution. We had 26 lower repetitions. We had an eight-point improvement in net promoter score. And for CP, at the end of the day, we have been able to grow by 50% in 2024 versus 2023. So as a whole, what we see today is that Gen AI and AI is not absolutely an enemy. For CP, absolutely not. It's all absolutely the opposite. It helps to generate business, to increase stickiness, to increase productivity, and increase volume. Next slide, please. So let's move now to the first half result to get a much more precise figure. So when you look first, the results are the sales figure are beyond 5 billion for the first time, and we have been able to grow by 28.2%, and the pro forma growth is 1.7%, as I told you. Just to be very precise, this 1.7% is including 10 basis points for positive inflation this time, which is limited but was not totally forecasted. The EBITDA is approaching the 1 billion. But more interestingly, EBITDA figure is $703 million, growing by 10 basis points versus last year, and even 20 on a pro forma basis. Just to be clear, this $703 million is not including the $36 million that have been spent to generate synergies that will occur much more in the second part of the year. The operating profit is growing by 13%, at $503. The net profit by 7.3%. And we just, for the first time, We thought it was interesting just to unlock and to show what is the adjusted net profit without amortization of goodwill and without the cost of synergy that has been implemented. Here you see that the growth is 26%. Next slide, please. What happened in H1? Of course, we start with the figure of last year, 3.9. We had Majorelle. And for this 5.28 billion, there is a currency effect, which is roughly limited, 35 million net. In fact, it's made of positive figure, Colombian pesos, Mexican pesos, and sterling, which has been reduced by the Egyptian lira, the Turkish Lira, and also the Nigerian Corona and the Indian Rupee. So at the end of the day, the currency effect is limited to 35 million. And we have been able on this base to generate 83 million, the 1.7% pro-pharma growth that I just mentioned a minute ago. Let's move to the next slide to show how looks the year. You remember that last year we had a decelerating growth from 11% in Q1, 6% in Q2, 4% in Q3, and 1% in Q4. We are now able to start to see the rebound, and the momentum should accelerate in H2 2024. Of course, this 2% growth in Q2 gives a lot of credibility to our guidance to 2% to 4% that is announced for the third year. Of course, we have to continue to deliver the growth, and it's not going to be exploding, but we are absolutely confirming the growth that we have announced for 2% to 4%, meaning high growth in H2. Next slide, please. Where does it come from, this growth in hyperstyle? Not surprisingly, it's coming from specialized service, mostly 80 million, and mostly long-edge line solution. I'll come back in a minute to that. And the core service is roughly flat. In fact, it's made of two different evolutions. We have the India layer pack growing at 2%, 41 million, while the Americas, including Philippines and India, which are reducing by 37 million, mostly due to the impact of the offshore. Next slide, please. What makes a difference for TP? What makes a difference for TP is this slide. As you can see, there is not a big change, but again, I wanted to stress that again. TP is by far the most diversified company in this business. This is true geographically between Americas, EMEA, and Specialized Services across the globe. This is true by vertical. Here is a distribution of the different verticals that have been addressed, that are addressed by the by the group across the geography and across everywhere. And it's also true by product. Of course, there is a care that is 54% of the business, but they are still specialized. They are trust and safety. They are back office. They are sales. They are technical support. So when you balance all these different aspects, whether geography, vertical, and product, and product you see that tp is probably the most diversified company of the of the sector and he is able to swallow any uh headwinds next slide please so let's move now to the data by activity so just to be clear i just wanted to precise the figure there so again when i'm putting the proforma in front of 2024 is a proforma in terms of accounting standard is a proforma in terms of I would say scope and ethics. It's not a pro forma of the organization. That explains mostly the reason why the holdings are moving differently because Majorelle had a different allocation of profit between region and holding, so it limits, of course, the comparison, but this is a way you cannot avoid it. So when you look, the figure of specialized service for which there is no impact of major oil is growing dramatically and coming back to a level of profit that was what we lived in the past, more than 30%. And the core service has decreased a little, mainly due to the effects in that time. To a lesser extent, to the cost of integration, which are different from the cost of synergy, cost of integration of measure oil is mainly the license that you're obliged to make sure that everybody is going to be on the same process while having other costs and some reinforcing of central structures that was needed given the size of the group. So, as a whole, there is very few positive impact of the synergy. We are speaking of roughly 10 million that have been incurred, that have been realized in the first half. Next slide, please. If we move to the operating profitability, of course, the amortization of intangible assets are growing. Not a surprise following the acquisition of Majorelle and the amortization of the intangible assets arising from the acquisition. On the non-ranking item, you see that the performance share plans start to decline. It's not also a surprise. It will be more in the coming quarter and coming half year because of the decrease of the stock price and the impact on the allocation on the performance share plans that have been allocated to people. while the others are climbing from 9 million to 42, of which 36 million are the synergy generation costs linked to the acquisition of Major Amsoil. So at the end of the day, the operating profit is growing by closely 13%. Let's move to the next slide, please. Financial results, so earning performance, financial results, of course, is degrading, so it's not a surprise, which I believe is a good result, because when you think a minute that we have had $2 billion of debt for the full year, for the full first half, sorry, at this level, so we had some costs that has increased, but we have been able to significantly for ethics gain, notably on some specific currency that reduce the cost of the interest rate that have been incurred all along the year, all along the first half, sorry. Income tax, of course, there is an increase Two points to notice here. First of all, you have the impact of the PR2 impact, which is linked to the new regulations that are going to be applied for 2024 and paid in 2026. And of course, we are incurring some costs to reorganize the legal and tax structure of Majorelle to make sure that we will have the most efficient network on circuit to repatriate dividend from elsewhere to the central company, holding company. Net profit, as I told you, 7.4% on published term and 25.9% on adjusted net profit wise. Next slide, please. Just a word about cash flow. As you see, the cash flow is growing by 29%. I just wanted to remind you that this 29% are after 25 million of cost of cash I would link to the synergy link measure, and so without this amount, we would have reached 600 million. The change in working capital is roughly flat. While the net capital expenditure is decreasing, either in volume, either in rate versus sales, it's not by chance again. You have two main impacts already. The first one being the use of the site of Majorelle. So the site optimization that we have used to, we have tried to use as maximum as we can. And secondly, we start to invest the decisions that we took three years ago in increasing cloudification of the infrastructure of TP or virtual desktop that has changed, I would say, CapEx to OpEx and reduced the level of CapEx. We do believe that on the long run, the level of capex will be around 2% for the full year. Next slide, please. When you look at the financial structure, the story is simple. You have roughly free cash flow after, I would say, costing to Majorelle, including synergy of 450, of which 350 has been given back to shareholders, either through dividends or either through share buyback. So, at the end of the day, the net debt is decreased by $100 million, and we are absolutely convinced that we will be below two times net debt to EBITDA on a full year basis, and we will get or maintain our credit rating at BBB as we have today with no change. Next slide. I'm not going to comment very much the balance sheet because there are few things to tell versus the end of last time. And next slide. And I'm going to be much more precise. Next slide, please. On 2024 outlook, we confirm that we will be between 2% and 4% growth for this life or life growth in 2024. We see an accelerated momentum in H2 2024, of course, with easier basis comparison and increased new business. We see, again, margin growing by 10 to 20 basis points on the pro forma basis. Why? Because you have the seasonality effects that you know as always, and the acceleration of the synergy in H2 2024. We do believe that we are going to have a sustained increase in net free cash flow. We will continue to complete our 2023 share buy program, for which there are still 80 million remaining, and focus on returning capital while leveraging, and we confirm our net debt-to-revenue ratio at the end of the year of two times. That is the end of my presentation, and I am ready for taking other questions in my time.

Thank you very much, sir. Ladies and gentlemen, as a reminder, if you have any questions, please press star 1 on your tablet keypad. Please also ensure that your mute function is not activated in order to let your signal reach your equipment. So once again, please press star 1. Our first question today is coming from Suhasini Varanasi, calling from Goldman Sachs. Please go ahead.

Hi, good evening. Thank you for taking my questions. Two, please. Can you maybe talk about the ramp-up of new contract wins that you expect will benefit the growth in second half of the year? Should we expect the benefit to accelerate evenly through 3Q and 4Q, or is it going to be more 4Q-weighted? The second question is on the synergy generation costs, I think about $35-36 million that you booked in 1H. Is it right that you booked it in the holding company costs and And how should we think about that number for second half of this year and for 2025, please? Thank you.

About the growth, it's difficult to tell. Of course, it depends a lot of the volumes that people are going to give us because it's always something that we don't know. What we see is, of course, we understood that there is a base of comparison which is easy. Of course, we are waiting for the results. specifically for also healthcare in Q4, but this is not written today in terms of... We are seeing Q3, to be honest. Today, we are seeing growth in Q3. We still need to see what's going to happen in Q4, but this is equally between Q3 and Q4, and there are still things that we don't know. As far as... As far as synergy is concerned, we do believe that at the end of the day, you remember that we have announced last March a cost of synergy around $50 million for the full year. This is based on what we know. Clearly, this figure is going to be confirmed. And, of course, there will be synergy that will be significantly beyond this figure. This is without taking account any additional thinking or reviews that we might make on different topics. But roughly, we do believe that the cost of Synergy will be around $50 million this year. And this is not always, I would say, booked in a holding company. It's at a different level. So this is not in holding only. So, again, 50 million roughly of cost of synergy. Synergy will be above this, significantly above this amount, and we'll see whether we can make additional decisions in the second part of the year we are looking for.

Thank you very much.

And thank you very much, ma'am. Our next question will come from Rémi Grenou, coming from Oregon Stanley.

Please go ahead. Yes, good evening, gentlemen. The first question is on the guidance itself. So you're guiding for 2% to 4%. You said the base is easing. You expect some ramp-up in contracts. So the first question is on why you've not decided to slightly increase the lower end of the guidance. What concerns you that you don't have the visibility to do that? That would be the first question. The second one is on the profitability of the core business. I understand the currency irrational, the currency evolution irrational, but can you maybe try to quantify its impact and elaborate whether there is any other negative factors to highlight there on why the profitability of the core business is down? And also on that, given the current FX rate, what would you expect the impact from currencies to be on the profitability of that division in the second half? And the third point is on the quite significant improvement in the profitability of specialized services. If you could elaborate on the drivers of that, whether it's been operating leverage, positive net pricing seems to be the case from what you're saying in the press release and all positive mix effect within.

So coming to your first question of guidance, you know, I'm going to be very clear. We have been hit once in the last 15 years in guidance. We are very careful, but I'm convinced that we will be between two and four. So I don't want to take any risk, to make any chance of changing. So there is no reason to change that. We'll see whether we will do that and if we do that in Q3, but there is no reason to increase the guidance and people will understand. As far as profitability on core services is concerned, two or three things. First of all, there is a significant hit coming from the FX in Latin, and we have been able to secure significantly more the second part of the year following the the blip that happened in Mexican pesos following the election of the new president last May, and that was welcome, and we hope that we will be able to be in a better situation for the second part of the year. So I'm not going to give you a precise figure, but this is helping dramatically the story. On top of that, there are some costs associated to integration. As I told you, I took this example of the when you want that everybody wants to have the same systems that you have across the groups, you have to pay some license for a group like Majorelle that was significantly more important than was expected. For specialized service, You remember that part of the story came from last year, that the first half, notably in language line, was not at the level that we were used to, even if it was significantly at a good level. So language line came back on the level that it is used to be delivering. And I strongly believe that in the second part of the year, we will continue to, to deliver roughly the same figures that what we have delivered the last year in the second part of the year. So globally, specialized service is going to have a good year, whether it's growth or whether it's in margin. Of course, the leverage, the operational leverage has an impact. If you add the business on the same level of cost, it helps. So as a whole, we are seeing a reasonable increase in specialized service. That's what I can tell you today.

Thank you. Thank you very much, sir. We now move to Laurent Gillibard calling from BNP Exxon. Please go ahead.

Good evening, Olivier. Two questions on my side. Good evening. Hello? Can you hear me?

Yeah, good evening.

Good evening. Sorry. Yes, two questions on my side. The first one relates to your cap extending in H1. It was very limited at 1.7% of sales. Do you expect it to be in the same corridor in H2? This is the first question. And for the second one, in your core services a bit margin, is there some stuff that are non-recurring? Because you were mentioning license, for instance, for the guy of my role.

No, no, no. uh no today what i'm telling that when you move from a company from uh uh when you add two billion dollar two billion euro in term in term of um in terms of business of course you're obliged to reinforce some some stuff including the license but there are other costs that are going to be recurring so that's that's clear that this is something that is clear and i just want it to be to be safe as far as capex is concerned Traditionally, we have always a little more capex in the second part of the year. But I do believe that at the end of the day, we should be around 2% on the full year basis. But clearly, we are benefiting on what we have done over the last three or four years that are significantly improving each year what we call the cloudification of our system. And, of course, you are moving – the hardware is less important. You have less stuff, but you are paying some license on top of that, but you are avoiding to buy hardware. And in the meantime, we are less using – we are needing less hardware. because we have sites with Majorelle. And the growth in site is coming from Asia, India, and to the sextant Philippines. So it's where we are going to put new site if needed or new extension of site. Of course, they are still refurbishing, but the 2% seems to me reasonable as we speak today.

Thank you, Olivier.

Thank you, sir. The next call or question is from Carl Rainsford of Barenburg. Please go ahead.

Excuse me, Olivier, can you hear me okay? Yeah, but I can't hear you. Okay, perfect. I'll speak loudly if that helps. Yeah, please. Perfect. Three from me, please. Number one, could you perhaps quantify how many new contracts you've won in the second quarter? Because I remember you had two in the first quarter in financial services, so it just sounds like an increase, especially in the autos division. Number two, could you talk about the sustainability of the growth in language line services, please? I mean, you know, some of those impacts seem fairly new in terms of video translation and, you know, that eventually gets more mature. So how... important are harder comparables going to become each year? And thirdly, on the Americas region, could you talk about the pricing and volume on the subdued growth rate, please? You know, still slightly negative. So would it be fair to assume volumes are increasing, but at a far cheaper price point given the shift to India? Thank you.

Coming to your question that finally I heard, I agree with you. Volume are roughly moving to India. So, of course, it has a deflationary impact, even if it's positive on the margin. But this is classical. And we continue to see what we have seen in the past. It was true last year, whether in first half or second half. This is accelerating and this is continuing. New businesses are moving also to India or to Philippines, despite whatever In terms of new contracts, it's difficult to quantify what we are seeing, what we are seeing that we have been able to grab business in automotive industry, as I told you. We have been able to grab business in some bank and finance industry, and also we start to see picking up in retail. and in Internet. But this is too early. Clearly, we are not seeing a huge growth on new contracts, but we have signed new contracts, and this is happening in the right way. So I'm not going to quantify. It's difficult to quantify what we are going to have. Of course, there is a balance between things that are moving up and things that are flat or sometimes decreasing. But as a whole, we do believe that we are going to be able to go with this new contract. Growth in LLS is clearly sustainable. You know, over the last six years in a row for LLS, we have been able to continue to grow, of course, sometimes a little more, sometimes a little less, depending on the year. But from what I know, from what I remember, and those who know us, when we bought this company in 2016, Since today, since this date, sorry, the company has doubled in size, whether it's video or over-the-phone interpretation. We have been surprised by the vigorous growth even on what we call OPI. They are growing a double digit at the same pace than video. So this is not dramatically different whether it's OPI or video. So we do believe that this growth is sustainable, and that's what we have lived and what we have seen over the last six years in a row, sometimes a little more, sometimes a little less. So we are fairly confident that the language line and the specialist will continue to deliver a significant growth, yes. Very helpful, Olivier. Thank you.

Thank you very much, sir. We'll now move to Antoine Baudry, Chronicum HSBC. Please go ahead.

Yes, good evening, Olivier. Thank you for taking my questions. Three quick questions. Will it be possible to have more color on the visibility you have on your environment? You described it as volatile at the beginning of the year, so do you see a kind of back to normal on the client side in terms of volatility? The second question is about the number of headcounts that you have at the end of H1. on what you should expect in the future. So with artificial intelligence solutions penetrating the mix, will it be fair to expect now a growth of the headcount lower than the growth of the revenues? And my third question is about the cloudification on the cost, the additional cost you have in your P&L related to that. Will it be possible to quantify this cost and does it change at the end the profile of margin of the core business going forward? Thank you.

On the cloudification, there is nothing new. This is something that happened for the last four years. So, you know, when you look at IT, we are spending more than 400 million euros on IT each year. So this is growing for the last two or three years, for even four years. So it's not changing dramatically the margin profile. What I'm telling you is that, of course, we moved some – we are now making much more CapEx – Of course, there is some refurbishment, there are some sites that are happening, but also in IT, we are putting much more money in research, development, and new product, notably for AI. So it's not dramatically changing versus the past. If I'm coming back to your question about headcount, it's hard to tell, hard to see today a switch, a move, a significant move. There are some some new people, some less people that have been visited. But what we see is that instead of moving people offshore just to have headcounts, now we are moving, we are climbing the ladder, even in India or in the Philippines. We are seeing people more and more agile, more and more educated. So we might have less people because you remember that last year we had less people following the COVID guidelines. reduction if i may say so i'm not seeing a dramatic decrease this year depending of course of the peak season of the q4 because there is always a part of uh of um of uncertainty into the world with the peak season but it starts to move but i'm not sure it's going to move dramatically the ladder this this year it starts to move but it's just the beginning as far as the environment one month is volatile because people start you have you understood from my from my message that they are i don't know if it's the start of the beginning of the beginning of the start just to just to make it clear in terms of a new new business coming from bfsi from retail from some uh new business, but we see something just starting to move. Of course, there are still people who are very, very careful and not having a huge growth, but we are seeing improvement in travel, in BFSI, in retail too. So that's what we wanted to tell by saying that the environment is volatile because you have positive and you have negative. So it's difficult to draw a line between both. But what we see, we see a global environment that seems to be a little better without being too arrogant and to be sure of what's going to be at the end of the year. That's the way we are seeing it. Thank you, Olivier.

Thank you, Mr. Boulay. We'll now move to Nicole Mannion of UBS. Please go ahead.

Thank you. Good afternoon. Three questions, please. The first one, on the new contract wins that you've seen coming through in H1, are you seeing anything different in terms of the structure or pricing of those contracts or even the services maybe clients are asking for as a result of AI? Secondly, what does the potential upside to Magirel synergies depend on? Just wondering if, based on what you've seen so far, Are there particular areas you've identified for this synergy realisation or is that very much? And then lastly, you've gone obviously from three to two regions in core services. Apologies if I've missed it somewhere, but as far as I can see, no kind of details, disclosures or restatements, for instance, for the second half of 2023 or full year 2023 for those reporting regions. Just wondering, first of all, if that has been missed or if that will be provided and, yeah, maybe why it hasn't been already. Thank you.

On your contract in terms of pricing, of course, we have not seen dramatically change. So maybe much more than pricing, the ability to grab market share and to get volume from the others makes – makes the thing more efficient. Of course, there is a pie that is probably growing less at market levels than before. Being one of the major players helps to grab this market share. I'm not saying that we are not seeing a dramatic decrease, not dramatic increase. Of course, people are looking to price. They are looking to value for that. What people are looking is much more value. So, I wouldn't mention that there is a dramatic change in terms of price, whether it's positive or negative. Of course, there are exceptions on that, but frankly, I'm not seeing a dramatic change. On the potential side of synergy, of course, this is assessed as we speak. There are other additional stuff that might arrive. We need to work on it. It's too early to tell, but we believe that in having a much more precise view on the assets, we could probably deliver much more. This has to be assessed. This has to be worked on. We might come back later on that topic, but clearly we're happy with that. About the reporting region, we said to the market very clearly from the very beginning that we will cut the Tell the world in two. This is exactly what we are doing and reporting a purpose to. We have somebody taking care of the Americas, including India and Philippines, and somebody, a team, you know, somebody. There is, of course, plenty of teams. It's true for management. It's true for finance. It's true for marketing. It's true for sales and BD. So, of course, people are speaking together, but they are linked. They are connected. in two big worlds that are now not autonomous because they are speaking together, and we are going to stick to this reporting approach for the year to come. Because we thought that it was not interesting to cut the group in 10 or 5 or 6 or different regions to come. So we are going to stick to that, and we do not intend to go beyond that.

Got it. But will you provide the comparative, basically, is what I meant.

Of course, we will give you, of course, the comparison basis of ProPharma last year. But, you know, of course, we will give you the information. I must confess that the ProPharma is complex to do because, as you understood, the ProPharma that we deliver is a ProPharma – accounting, scope, and ethics method. It's not exactly the same allocation of profit between TP and Majorelle because this was a group. It was not a pure, unique company, so we are obliged to stick to what they did without really, I would say, making again their accountancy under our allocation rules, which was very, very difficult to do with a different organization.

That's it. That's very helpful. Thank you.

Thank you, Richard. Maybe the last one or two questions, please.

Yes, sir. I understand. Ladies and gentlemen, we have time for only one more question. We're just going to take the next question from Simone Assardi coming from Bank of America. Please go ahead.

Yes, good evening, and thanks for taking my questions. Hi, I just have a couple of them left. So first of all, you mentioned the new generative artificial intelligence bots that you are starting to implement. So is there any color that you can give in terms of percentage of your contracts that include those new bots versus the more traditional ones? and also how that is impacting your pricing discussion with clients. And the second question is more related on the contribution from offshoring solution. How does it compare in Q2 versus Q1 and Q4? Because if I'm not mistaken, you have mentioned that that was still a headwind, in particular in North America. Thank you.

Okay. On GNI, it's too early to give you a precise figure. we are climbing the ladder we are still the small amounts probably in the range of 15 but what we have to do to add in our proposal in each of our proposal that we have for clients whether it's for farming or warranty a transformation uh transformation approach uh this is uh this is absolutely key so we are not uh selling seeds and vats but also transformation stuff of course the volume may increase a little. I just wanted to take the example of what I just tried to show in the two examples. We have been able to grow with that, or to increase eakiness, or to get market share on the other. So this is key. And today, this is still progressing. Of course, it depends on the client. But all of our clients have asked about that. But when it comes to reality, when it comes to precise stuff, They are very basic, and they want to make sure that this is working before moving on. So we start with some proof of concept that are sometimes small, sometimes limited, and growing dramatically on a full year basis. So now it's still not majority, but it's improving dramatically. We have plenty of AFP on doing that. And, of course, of pricing, it helps dramatically, as we can imagine, much more than before. In terms of contribution of offshore, we were at 55% of offshore last year. last full year, sorry. I do believe we are going to move family to 57, maybe 58 at the end of this year. It's too early to tell, but what I'm seeing is that moving more and more business from the U.S. to India to Philippine. And, of course, the contribution is higher, either in volume and either in percentage. That's what I can tell you.

Thank you.

Thank you, Ms. Hardy.

Maybe a last question.

We do not appear to have any further questions at this time, Mr. Rigaudige. I would like to turn it back over to you for any additional closing remarks.

Thank you to all. Thank you. You have understood that we deliver a strong H1. not only in growth but in cash flow and also in integration of major oil. We are there where we should be. We are there, and we are going to continue to develop our project across the countries, across the product, and across the vertical. And being the leader in such a market makes a difference, I can tell you, even in a volatile and a complex environment. I thank you for you to be there and for your question and for your attention. And I'm happy to develop this relation with investor relations that are, of course, available for any questions, additional questions that you might have. Thank you so much. Thank you. Have a great day. Bye-bye.