Teleperformance Ord

Let's get started.

Good morning. Let's get started. Thomas, you start.

Good morning, everyone, and a warm welcome from Olivier and myself to our annual press conference for the year 2024. In usual manner, we will talk about the key highlights. We will deep dive into the financial results of last year in Q4. We will provide an outlook for 2025. We will also provide you some updates and first glimpses in our new strategy with regard to AI, because that has been a constant topic of questions from our investors. And, of course, we are open to Q&A from your side. So what are the highlights? As you have seen, 2024 was a year for us where we have achieved all our financial results. TP has, for the first time, delivered more than $10 billion revenue. which means a statutory increase of 23%, on a like-for-like basis, 2.6%. With these over 10 billion revenue, we generated more than a billion euros in free cash flow, actually more than 1.08 billion free cash flow, and you will see later the sources of that, so a very highly resilient and strong business model. And what's also nice to see that we have accelerated the growth momentum last year quarter over quarter, which I think shows the dynamic and the resiliency of the business. We have also increased the margin a bit, and I think there has been some question around what is up and what is blindness, but there is a margin expansion last year. And what is very good to us to see, obviously, The core business, our BPO business, which is around 85%, 86% of the business, saw a very strong second half of last year. We have delivered, that you have an idea, in Q4 almost 4% in that area. And one big part of that business, the EMEA region and the APEC region, have delivered more than 7% in Q4 last year. So very healthy growth, and the teams did a great job. Specialized services also proved to be a strong and resilient business with double-digit growth last year. We had a special effect as one of our visa services business, a long-standing visa service business, was not renewed, unfortunately. So from that perspective, there was a little bit dip in Q4, and you will see later the detailed numbers. And the third big element for last year, that the integration with Majorelle is really well on plan. We are right on track to deliver the $150 million as indicated from the beginning, and last year we recorded over $90 million in synergies generated out of that plan. So that's 24. You also have seen, obviously, we are a company that's tried to drive shareholder value. And from that perspective, we drive a capital allocation that tried to enhance it. We have executed a share buyback program of 500 million, as you know, of which 184 were delivered last year. We did announce in November last year, and we just got the regulatory approvals at the beginning of February of ZP. This was a $490 million acquisition to further strengthen specialized services. And starting February 1st, we are consolidating this business. We are also proposing to the AGM that will be held at the end of May an increase in the dividend to €4.20 per share, which is a relevant increase, and the payout ratio will go up to 48%. And we continue to be that with our strong market position, having also a strong balance sheet is critical, and we are reducing our debt exposure. And end of last year, we were at 1.9 debt EBITDA ratio. As you also know, that's why the two of us are sitting here. We also made some advancements in the governance. Moulay Afid took over as a chairman of the board of directors, separating the role with Daniel. And I must say, the last five months working with Olivier, Moulay Afid, Daniel, has been really tremendously productive, I would say. It's been a lot of not just pleasure but also hard work. So it really works quite harmoniously from that perspective. Thank you. What is also interesting to note, the board meeting yesterday nominated two new board members to the Board of Teleperformance, Mehdi and Vera, who will be, I think, great assets from an AI perspective and from an international finance in Africa perspective to the board. Mehdi is the chief product officer of AI71. This is one of the prominent AI companies in Abu Dhabi, and you know Abu Dhabi has very ambitious plans when it comes to AI, and we are very lucky to win him to this role, obviously subject to the AGM approval. And Vera has been a very prominent director of the World Bank and IFC, and it's also great if she can strengthen our exposure there. So that's in a snapshot. and maybe a few words why we believe that these current times of change are good times for TP. So obviously, in these times of change, we have to grip at these opportunities, and we believe we can do this from a position of strength. TP today is present in the digital business services market, and you see many new developments when it comes to data annotation, data labeling, AI consulting, back office processes, F&A. We do believe this allows us to tap into these markets and to drive mid-single-digit, medium-term growth for the company as a whole. We also see packets of growth, and I will talk about this later, where we see that this new disruption, this integration of human intelligence and AI offers us new opportunities. Second comment. It's interesting to see after two years of generative AI, and we're now entering almost the phase of agentive AI, that the notion that the world becomes AI or ubiquitous AI, I think, is well understood. But the value of the human connection, I think, is seen and seen more in this conversation. And we believe ATP... with almost 500,000 people as well positioned to drive this integration of AI and EI because it's not a contrary relationship, but a complementary relationship. We also see these days a lot of opportunities of driving the business beyond the classical front office business. When you look at our numbers, we've seen double-digit growth in our back office services. And we believe the opportunity to become more verticalized, to move front-end and back-end, will be one of the key strategic imperatives for us going forward. And we will continue to invest, and we have done investments last year in that respect. The trend of best-shoring is not a new trend. Many of you have seen it. We believe it will continue despite these technological changes. For us, the last years, India was a big driver of growth. We have now there 90,000 people. And we believe having India, the Philippines, Latin America, but also Africa, will be a key component and a relevant component for us going forward. That you have an idea, we have now 50,000 people in Africa in 11 countries, which puts us really in a very prominent position. And we will spend some time also later this year to strengthen Africa further. And obviously, in an era of uncertainty and change, being the market leader allows us to operate from a position to strength. We believe that quality, the ability to invest in innovation, and the financial strength of the group gives us a good value proposition, not just for us, but in particular for our clients and employees. Obviously, we are a company that combines four critical dimensions. people, process, technology, and expertise. And we have done and will do so in the future, continuing to invest in these areas. We have launched last year a company-wide AI and EI upskilling program. We have now trained more than 60,000 people, sort of supervisors and above, and we have rolled out for more than 100,000 people EI, so emotional intelligence training. We also have done significant investment to strengthen our business development and sales teams, particularly in the U.S., but also EMEA and APAC, as we see this as an investment in future growth for the company. processes. TP has been for decades one of the leaders when it comes to process excellence, and we have updated, as I indicated in our Q3 numbers, our tops and bests. These are the programs, how it's called internally, including AI and EL elements. The teams are on full charge rolling this out, and we will be expecting by the end of March to have 20% of our operations onboarded on these new tops and best programs. We continue to launch AI projects, so that's something that hasn't stopped. We have sort of implemented more than 200 new AI projects for our teams. You see later also the statistics that around or more than 700 clients have now implemented AI applications inside the operations, and we will continue to do this. Most of our AI applications and solutions are based on TP's microservices platforms. which simply means that it's like a cloud-based solution that can seamlessly be integrated in the workflows. And we believe being more open to AI partnerships is something that is valuable not just for us and the AI companies, but also for our clients. So you saw the announcement that we have done last week, I guess, with Sanas AI, and there's more in the pipeline. So we will open up a partnership ecosystem when it comes to technology. And expertise, as I said, I really do believe in this extension of the value chain. We saw really healthy growth and continue to see healthy growth on the back office side. We saw new wins on data labeling, and we believe this is an area we will focus on in the future. And we have done further investments hiring new teams when it comes to BFSI healthcare, IT as a service, as well as F&A. Here you have the statistics. I think you will see later more details from Olivier. What's important to note, I think, is really this acceleration in the second half of the last year and really the very strong performance of the business when it comes to EMEA and APEC. So 7.3% of the teams have done a fantastic job. Specialized services sustained their growth with 10%. Obviously, we have this special effect that had led to some reduction of the growth momentum in Q4, and you might have seen it has obviously also an impact for our guidance for this year. We believe that this is a non-recurring event as all the other contracts of TLS contract are not up for renewal until 2028. Shoring, I think the statistics critically is pretty much the trend what we have seen the last years. The verticals, I think many of you when I entered talked about that DP strength, its resiliency, and I think this is part of it being broadly diversified across many verticals. We continue to see very good momentum when it comes to, as I said, the banking space, travel, hospitality, tech, and healthcare. When I say very good momentum, in particular when I think about health care, yes, it's growing, but we can grow much more. It's an interesting opportunity for us, so we will continue to invest in this area. On the other hand, even so, I still believe there are many opportunities. We saw some reduction, for instance, in the telecom vertical. What also sends out our strength in government services, this is particularly true for EMEA and the UK, so we have won there some relevant contracts, and we believe having this broad diversified portfolio, but with a clear focus on how to integrate and expand the value chains, as I said, on the back office side, when it comes to tech, healthcare, and banking will be a crucial focus for the future. Talking about this, you know this chart by business line. Roughly half of the business is customer experience, customer care. Four percent, but still over 400 million, is back office, growing double digit. And also B2B sales, trust and safety, which includes the data annotation business, is something that we want to grow further. ZP, I said it before, we are happy to have received the regulatory's approval from the relevant bodies in the U.S. We are now consolidating the business, and already the first integrations team are underway. It will be part of our language line business in the U.S. ZP is headquartered in Austin, and the teams are now working together not just to deliver the synergy program, but also to have a more forceful go-to-market on that space. I do really believe having with LanguageLine and OZP together one of the prominent player in language solutions and interpreting services is a key asset for us. I think there we really have a jewel that we want to expand in the future. The other one that might be interesting for you as we talked about expanding our AI partnerships with a 100 million Euro program this year is Sanas, which is a first example of that approach. Sanas is a company based out of Palo Alto that have provided a fantastic solutions. We have been working with them for quite some time with some client implementations. That is a non-latency, real-time accent translation. What does it mean? It's a technology that allows to neutralize accents in real time without any data storage. You have obviously the issue we talked about, human connection, human empathy. We have first implemented Sanas with clients in India, and sometimes there's a difficulty for people in India talking and vice versa with clients from the US. What SANAS allows is to neutralize typically old background noise, but also allows an accent translation that enriches understandability between both parties, which leads obviously to lower average handling time, higher customer satisfaction, and an example with you now. They have now expanded to the Philippines, and the idea is that we do three things. First, roll this out to other territories, so we will jointly train the model. Obviously, you have Latin American dialects, dialects not just in English but in Spanish and French and all kinds of languages. So this is one growth area. The second thing is that we will become – or we became – the exclusive reseller for the Sanas technology for many of the world's leading brands. So that's another revenue stream for us. And thirdly, we are continuing to expand and roll Sanas out in our own operations with many of our clients. To give you a sense that you have an idea, So we brought here two examples and that at least because sometimes what does accent translation actually mean? But it is a great example how AI coupled with our human empathy drives better outcomes. And this technology is essentially a way to create more closer and intimate relationships. So first an example without Sanas. I hope it works.