Teleperformance Ord

Hello, and welcome to the teleperformance first quarter 2025 revenue. My name is George. I'll be a coordinator for today's event. Please note, this conference is being recorded and for the duration of the call, your lines will be in the listen-only mode. However, you will have the opportunity to ask questions towards the end of the presentation, and this will be done by pressing star one on your telephone keypad to register your question. If it requires assistance at any point, please press star zero and you will be connected to an operator. Please also note the disclaimer on page two. The conference will be hosted by Mr. Olivier Rigaudi, Deputy CEO at Group CFO, and Mr. Thomas Mackenbrock, Deputy CEO. I'd like to hand the call over to Mr. Thomas Mackenbrock. Please go ahead, sir.

Thank you, and good evening, everybody, also from my side. It's a pleasure to be with you and share with my dear friend Olivier our Q1 results. Unfortunately, we cannot be in the same room today as I'm traveling in Asia, but we'll manage nevertheless. As you can see, and as you probably have read, we are very pleased with our Q1 results. And I think it's important to start with the four main messages. Number one, as you can see, we reported 2.8 growth for the first quarter and on a like for like basis it's 1.6 respectively 2.6 if you adjust for the visa application contract that was not renewed as we explained in february this is in particular strong if you compare to 2024 which was a leap year i think we referenced to this also in february where we had one working day less What in particular excites me is our very strong momentum across the board for core services. On a global level, we're growing 2.3% like for like. If you look, for instance, at EMEA Asia or Africa, that region, we are growing close to 4%. And there are a lot of, let's say, positive momentum in the business. That's why, as we indicated in February, we also seen an acceleration of that growth throughout the year. Specialized services, we are very pleased that we have completed the acquisition of ZP in February this year. And with ZP together, we are reporting growth of north of 10% on a like-for-like basis. Obviously, as we lost the Visa business, it is smaller. Second point. Majorelle integration as well as the reorganization of TP France is well on track. We will report over 20 to 30 million synergies this year that comes on top to the report in 94 of last year, and we submitted the voluntary plan to the French authorities. Thirdly, as you remember, we announced in February a new AI partnership program. The idea is to build an open ecosystem with leading AI companies around the world, really trying to find the best of breed companies and work with them and collaborate with them when it comes to further enhancing their product and their go-to-market. after Sanas, which was an accent translation tool that we used to enhance our human colleagues around the world. We are very excited to have two agentic AI companies now part of this partnership program. If you remember, we have this notion about human augmented by AI and AI. And as we are the orchestrator and integrator of human AI-led services, We're very pleased to have Emma, that is in a horizontal AI, agentic AI company, and Paloa, who's an agentic AI company, focusing on customer services as part of our group. Fourth point, given all this good news, we're very happy to confirm our financial objectives, and Olivier will share later a few more details. Let's look now at these different elements in a bit more detail. As you can see on the next page, our core servers, as I said, are really in good shape. And just now in India, India remains a key driver for our growth momentum, but also the UK, the Middle East, Egypt, South Africa, Turkey, Latin America, so really across the board. A very strong momentum. As you can see, EMEA APEC, our business segment, 3.8 like for like. Americas, we see in the actual U.S. some degrowth and some deacceleration, but overall still plus 0.8% for that business segment. Specialized services with ZP together close to 11%. If we adjust now on a like-for-like basis without the loss of the visa renewal, we are at close to 4%, and including the visa renewal service, as indicated, if you do the math, minus around 2.4%. In particular, when it comes to language line, as we indicated, we have a very... close eye on this volatile environment in the U.S., and we're managing this quite closely, but do expect, obviously, for the further course of the year, in particular in the second half, some further acceleration of the growth. Let's move, I think, best drawing nearshoring. No surprise there. We see more momentum in particular in multilingual hubs than offshore locations. ZP together, we announced end of February that we got the approvals and completed the acquisition. We're very happy to report that now the integration process is well underway. Synergy's program is launched, obviously, for IT reporting. Cast management, Olivier, was a few weeks ago also on the ground to kick off all the Synergy work streams. So there we are in good shape. And also important to note, as we're now reporting the numbers for the first two months, It's really well in line with our business plan, and we're very happy to have the whole ZP family part of the TP group. Let's move on. Here, as you remember, we are an orchestrator and integrator of four things, managing, emotional intelligence with our colleagues around the world, and we continue to invest in their skills and upskilling to drive know-how on the AI side, as well as the AI and the emotional intelligence side to create deeper human connections. We continue to focus on process excellence because that's the core of really of the DNA of TP now for over 40 years to best in class of managing processes at scale and how to implement now all the new possibilities with AI in our process excellence. So there we are also full on track with the global rollout. Thirdly, technology. We continue our internal transformation. We just did a review the last three days in India on all the tools and AI microservices that are implemented on a continuous basis in our client operation. How do we use our tools to augment for more efficiency, more quality our day-to-day operations? And we will continue to drive this internal transformation. And secondly, on the partnership side, I will say a few months later, we are very happy to have these two new companies board. And fourthly, domain expertise. We will move into more and more verticalized VPU operations. We see sustained growth in our non-voice activities, whether this is back office, BPO, analytics, trust and safety, consulting services. So that's really great to see. And we want to build on this. So we're investing in people, know-how solutions on the verticals we really see promising, like BFSI or, for instance, finance and accounting services that we want to expand further. If we now turn the page and see on TPAI as presented in February, we have these three growth factors. One, AI data services. This is one area where I particularly pay attention. We want three new client contracts, so that's great to see on AI data services. And we're also investing here in data services capabilities to really hone our know-how for how to train and to be a good operator and partner for the AI companies when it comes to data quality. tp infinity our more consulting technology led arm we see wins across analytics technology consulting i'm personally quite excited about the wins in analytics we really have a great know-how to implement analytics in our existing operations and we want to drive that capability that exists that's part of tp also for broader use cases outside of our existing operation Second comment here, we continue to invest on technology capabilities. So how to integrate IT as a service, technology as a service. We have done this successfully in particular in the Middle East, and we're expanding this know-how also now to the U.S. market. And for TPAI solution, you remember it's our own solution that we use for microservice in our operations is working with our partner ecosystem. And we continue to do so in building a more targeted ecosystem with AI companies that we want to create win-win solution in orchestrating human and AI. Sanos was February. We continue to invest. Now we have Emma and Paloa, and you will have some more in the pipeline, and hopefully we can share with you over the following month. Let's take a look at Emma first. So Emma is a company that was founded by Surojit and Suvik a few years ago in San Francisco. I can tell you when I met first Sir Richard in Silicon Valley, I was amazed. I cannot say differently. I feel very privileged to work with him together. He really built an absolutely amazing horizontal agentic AI platform. You have to see this, that he's building libraries and know-how to drive universal AI employees that can automate enterprise workflows in an agentic manner. I mean, Surajit has worked very successfully as Coinbase at Google. I think he has more than 40 patents on his own, U.S. patents for this. So it's an absolute pleasure to work with him. We're super excited to drive these partnerships where we are an exclusive go-to-market partner and integrator for more than 400 clients globally for EMMA. We also have the right to invest in EMMA in the next financing round, and we want to collaborate very closely with them to really orchestrate our know-how on processes in humans for back offices with this digital transformation agentic AI approach. I think it's an area for us that's really strategically important. Back office, where we have grown – I shared this in November and February – double digit last year, and we want to drive this transformational change on back office EPO with Emma together. So more to share at our Capital Markets Day in two months, but I'm very, very happy to have the whole Emma team part of our extended family on board, and we'll be excited what we can do together. Let's move on. So that's Emma. Paloa is a different story. It's also an agentic AI company, a little bit older. It's also now more than 300 people. It was founded by Malte and Stefan in Berlin. They further expanded, so it's a very strong European footprint. And they focused on agentic AI solution for the customer services part, so for the front office part. We really see, of course, given TP's positioning in the worldwide market, a lot of opportunities also, again, blending agentic AI solution and our BPO front office expertise together, packages, and go jointly to market with them. We also have the right to invest in their next financing round. And I do believe this will be a quite winning combination, giving our scale and footprint and distribution now how to implement it in coupling with our core services and their agentic tools and capabilities. So that's, I think, both great examples in addition to the family. And I'm very, very happy to share with you as we move forward more success stories, hopefully, on this partnership that makes me quite excited. So this highlights strategy. Now let's take a closer look at our financial numbers. Olivier, over to you.

Thank you, Tamara. Good evening, everyone. I'm happy to share the good figure with you. I'm just going to start with the first slide just to show that growth is on track. I just wanted to stay a minute on this slide. The growth reported is 2.8%, as you can see. The life-long growth is 1.6%. I just wanted to highlight the fact that In this first quarter, we benefited from a dollar which was stronger than it is today, which is 105 versus 109 last year. And it's clearly not exactly at this level today because we are at 1.13 to make it simple. But I just wanted to highlight that the figure in Q1 benefited from a higher dollar than what we are going to have all along the year probably. And this 1.6% likely growth is, of course, higher than the consensus, which was 1.1. Let's move to the next slide to see what happened precisely in the growth. As mentioned earlier on, the currency effect is negative by 6 million. In fact, it's a mix of a positive one coming from the U.S. dollar, roughly 25 million, that is offset by the Egyptian lira, Brazilian real, and Colombian pesos and others. But just to show that finally, on the first quarter, there is a limited impact, but it will be probably different in the second part of the year. Being on that, we have a change in scope of consolidation of 36 million, which is, as you mentioned by Thomas a minute ago, is a consolidation of ZP activity over two months, which have been consolidated early February. And you have this growth, like-for-like growth of 42 million, which is mostly coming from the core service. I'm going to give you much more detail in a minute. That's where we are. Next slide, please. Here is the revenue by activity split across core service and specialized service. As mentioned, you have a core service that is growth of core service, which is 2.3%, significantly ahead of the forecast, mostly driven by, mentioned by Thomas of Intego, by Europe, Middle East, specifically Africa, and Asia-Pacific. The specialized service – oh, no, please stay on the previous slide. Please, thank you. The specialized service is growing by 10.7%, including the two months of ZP that I mentioned, which is 2.4% if you avoid – if you take out this impact, knowing that beyond that, if you take out the famous non-renewable of the contract in UK, the growth would have been close to 4%. Next slide, please. I just wanted to come back to the performance by vertical, and what you can see is that there is a significant growth in government, travel, hospitality, and media, entertainment, and gaming. It has been also effectively happening in the multilingual hub, including Egypt, but also in Asia Pacific. And as you can see, the diversified client portfolio help us to swallow any bump that we might have. Next slide, please. Performance by business line. This is very interesting to see that care is still 54% of the business and growing in line with overall growth. But what we are seeing is that The growth is also happening significantly in BPO, other non-voice services across the region, whether it's trust and safety, whether it's back-office BPO, or in other stuff. So, obviously, the part that is not care is growing faster than care that is online. That's what I just wanted to let you know. So overall, good performance. And if we move to the outlook, please, next slide. We continue to see a volatile economic environment. I'm not there to comment that on what you read on the paper every day. But we have a positive market dynamic supported by ongoing offshore and automation trends that we are benefiting from. We also benefit from the continued founder consolidation, And we continue to deliver to an ounce of accelerated growth between 2 and 4 like-for-like growth and 3 and 5 if you exclude this famous contract in UK. Margin will grow by 0 to 10 basis points all along the year. And we will continue to generate a strong free cash flow around 1 billion before non-recurring item and continue to decrease our ratio on net debt to recurring EBITDA. That is the figure, and I'm leaving the speech hand over to Thomas to much more in detail. Just for the follow-up.