Teleperformance Ord

Welcome to TP First Quarter 2026 Revenue Conference Call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to Jorge Amar, CEO. Please go ahead.

Excellent. Good morning, good afternoon, good evening from wherever you are joining us, and thank you for being with us in the TPE Q1 2026 Revenue Update Call. My name is Jorge Amar, and as of March 16th, I have the honor of being the CEO of the TPE Group. Today, I'm joined by Benoit Gavelle, our Interim Chief Financial Officer, and he will walk us in a bit through the more detailed numbers for today. Before we begin, I just want to say that I look forward to these communications with the investor community. I've had the pleasure of talking to many of you over my first few weeks in the role, and your conversations are always very energizing. They keep us very honest. They help us sharpen our perspectives. So thank you for your engagement. Thank you for your perspectives. And thank you for the questions that I'm sure will be very vigorous, as always. So with that... We have a very structured agenda for today. I will walk us quickly through some of the key highlights of the Q1. I will then hand it over to Benoit for a more detailed update on the walkthrough through the revenue numbers. And then I will just share with you some of the interesting things that I've been hearing by talking to our clients, our partners, our employees, the investor community, and just go through that in a little bit more detail. So you can know what to expect for the rest of 2026. After that, I will open it up for questions, as always, and I am sure we already know that you have a few and we are ready to take them. So with that, let me get us into the quick highlights of Q1. So we start with, as we had anticipated in our last series of conversations, mostly after our annual results, that we were expecting a softer Q1, which is exactly what has played out. So the overall revenue of the group came down at 2.433 billion euros. That is a minus 2.2 in a like-for-like basis, minus 6.9 as reported. What you see there from a core services perspective is that indeed the revenue came down at minus 1.7 like-for-like, reported minus 6.4. What we are seeing on the core services on one side is the number of our vertical, both from a back office perspective, data labeling, data services perspective, that continues with tremendous double-digit growth. And you will see it a little bit more in detail in a few minutes. On the other side, the headwinds that we are experiencing are mostly three. So let me describe them a little bit more in detail for you. The first one is we see and we experience increased offshoring, which in many ways translates in good growth for some of our delivery locations, but of course with the corresponding pressure on the top line at an overall level. We also continue to see the trend that we had started experiencing a few quarters ago on the automation of trust and safety. And we continuously monitor this space as we have seen some developments, mostly in the U.S., for this particular line of business. And last but not least, we have seen that the current geopolitical environment has delayed the ramp-up of some of the contracts that we were expecting in Q1. So, the combination of those three things are driving the results that we report today. We know them. We don't minimize them, but we know exactly what they are, and we are working for each of them in more detail. When it comes to specialized services, revenue for Q1 is down minus 5.5. Reported is minus 9.9. It's around €332 million. And on this case in particular, what we see is two effects. The first one is we continue to operate against a very high basis of comparison for LLS, considering that some of the elements that have impacted this particular company of the group started developing at the end of Q1 2025 in the U.S. On the other side, this is the last quarter that we will see the high basis of comparison for TLS Contact, our visa processing business, due to the loss of a contract that we experienced around Q1 last year. So those are the two elements that are explaining the softness in specialized services. I will get into a little bit more detail later on what we are seeing also, not only on the numbers from a revenue perspective, but the momentum that we're getting in the acceleration of our 2026 plan for the future forward transformation. We're having a lot of very interesting conversations with clients that are looking for a reliable, transformative partner into their operations, and I will elaborate a little bit more into that. We continue to see great traction of our tp.ai FAB solutions, mostly in some of the new deals that we are getting. Pretty much every deal that we are winning today has a component of these, and I'll expand that in a little bit more detail later. We have also made some changes in our AI leadership, so we are very happy to announce that we have a new chief AI officer for the group. His name is Andreas Brown, and I will describe his profile later on. And we're also reporting that our efficiencies program that we had already reported and highlighted to the investor community continues to be very well on track which leads us to confirming our 2026 targets this is just a quick summary we will get into more details now so i'll pass it on to benoit so he can walk us through the revenue breakdown in in the next few slides thank you and good morning good afternoon and good evening to everyone we'll now look into more detail on the q126 revenue

You will see in the press release the detail of the numbers that we are showing now. Jorge, you mentioned the reported decrease of minus 6.9% overall for the group and a like-for-like negative growth of 2.2%. I just want to give some details about the impact of the acceleration of our TP future forward plan, where we have decided to combine all our collection business activities from core plus Alliance One into one single management to accelerate on synergies and business efficiencies. So that leads us to transferring the Allianz One revenues from specialized services to America's region starting this year. Smaller impact, TMP Infinity was mostly present in Europe in the past, so was reported in EMEA APAC. And we have seen a growth in the U.S. in the past year. We expect still a good growth for this year. And so we have taken a stance to report the America's part of TP Infinity into America's region. Now, moving more on the detail of the absolute numbers, so we had a revenue of 2.6 billion in Q1 2025. As you mentioned, Jorge, the biggest part of the decrease that we have observed in Q1 is linked with the effects, with an impact of 141 million on our top line. Now talking more about the like-for-like comparison, 55 million less of revenues, minus 2.2%, which includes almost non-material hyperinflation impact of plus 0.1%, linked with our operations in Argentina and in Turkey. And we have a perimeter effect linked with the entry into the consolidation, of ZP, which was reported only for two months in Q1 2025 and is reported three months this year, and Agents Only, a business that we acquired in June 2025 and which has reported revenues this quarter, whereas it was not present in the Group in Q1 2025. Now, moving on to the detail of the revenue by activities, you see that the balance in terms of revenues between Americas, EMEA region and specialized services have not moved very significantly compared to last year. We have 2% less for Americas. balancing with specialized services in EMEA and APAC. This is also linked with the impact of DFX because Americas is mostly reported in USD. The revenue for core services, minus 1.7% like for like. This is hiding, unfortunately, the good news that you mentioned, Jorge, an acceleration of our back office and AI-powered solutions offering with good growth. And this was effectively hidden because of the soft start of the year linked with, like you said, offshore delivery. Big increase of our activity in India, in Egypt, in South Africa, which are already very large operations but still growing very fast. We also see the impact of trust and safety, which is automated as we expected or as we anticipated, which is being automated and which we are closely monitoring. rebalanced, like you said, with our AI offering, but not completely offset yet. And a slower than expected ramp up for some of the large contracts linked with the geopolitical turmoil and some clients taking more time for decisions. Specialized services, minus 5.5% like for like. Jorge, you mentioned that Q1 2025 was the last time when the TLS contract that was lost was still in effect. Reinstated for that impact, we would be at minus 1% like for like. Still, this is not in line with what we would like to see. And the big difference is linked with the high comparison basis for LLS in Q1 2025. But we have seen, and that was good news, especially in March, a good sequential improvement of the revenue growth throughout the quarter. which is giving good hopes for the coming month, depending on how the policy in the U.S. will evolve. Now, if we look more at the breakdown by business line, We still see a good growth in care, which is most of our core services business. We have seen, like I said earlier, very strong traction on AI-powered solutions, on back office, and also to some extent on sales, which we know is a good business in terms of margin and reliance over time. I will not repeat again the impact of the trust and safety, which has moved from 8 percent of the group revenue last year in Q1 to 6 percent this year. Moving on to the view by vertical, what we like and I think is a key differentiator of TP compared to some smaller competitors is the very diversified portfolio that we have with clients operating from almost all major verticals. This was particularly true in terms of benefits. to be present notably in financial services and insurance as well as FMCG for Q1 2026 where we have experienced double digit growth and that we see continuing during the year. This helps offsetting the lower activity in the automotive industry, energy and utilities, and the media and entertainment, media and entertainment being the vertical where you would find most of the trust and safety business. With that, Jorge, hand over to you for an outlook on the months to come.