- Record results: fastest like-for-like growth (+5.1%(1) )in the
industry, EBITA margin up +40 bps* and free cash flow up >
+15%
- 2024 outlook: further growth and increase in margins on a pro
forma basis(3)
- Majorel integration well on track: a targeted €150 million in
synergies by 2025
- New governance for a robust medium-term outlook
Regulatory News:
The Board of Directors of Teleperformance, a global leader in
digital business services, met today and reviewed the consolidated
and parent company financial statements for the year ended December
31, 2023. The Group also announced its financial results for the
year.
Robust growth and record operating margin and cash flow for
the year
- Revenue: €8,345 million up +5.1% like-for-like(1)
- EBITA before non-recurring items: €1,290 million
- EBITA margin: 15.9%*, up +40 bps vs. 2022
- Net free cash flow: €812 million, up +15.5% vs. 2022
- Cash conversion rate: 45.7% vs. 40.2% in 2022
- Diluted earnings per share: €10.18 and dividend per share:
€3.85,** for a payout ratio of 38%
The Group’s growth and cash flow drivers
- Sustained revenue growth in Europe, in Indian offshore
activities and in Specialized Services, in a highly volatile
economic and currency environment
- A diversified client portfolio served in nearly 100
countries on five continents, with a broad range of high
value-added services in a wide range of verticals
- A sustained AI innovation drive, with more than 250
projects, including projects with Gen AI, for our clients, and
ongoing hiring of top talent, notably in India, to optimize the
Group’s outsourcing solutions.
- An agile, multilingual operating model combining
offshore facilities (57% of revenue(2)) and work-from-home
solutions (more than 40% of employees)
- Tighter cost and cash discipline, with streamlining
action plans and site optimization
Integrating Majorel
- Acquisition of a leading European business services
provider completed on November 8, 2023
- Teleperformance’s positioning significantly enhanced in key
markets, particularly in Europe, in high-potential verticals,
such as banking, insurance and luxury goods, and in high
value-added lines of expertise like end-to-end services.
- Strengthened Group leadership, with more than €10
billion in annual revenue(3) and more than €2 billion in EBITDA
(3)
- Cost synergy plan on track to deliver around €150
million by 2025, of which €50 million expected in 2024 (before
integration costs)
Outlook
- In 2024, taking a conservative approach and adjusting
the Group’s business model in a volatile economic environment:
- Like-for-like, pro forma(3) revenue growth target of +2% to
+4%
- EBITA margin before non-recurring items up between 10bps and
20bps on a pro forma basis (vs. 14.9% in 2023) excl. Majorel
integration costs
- Increase in net free cash flow and ongoing cash return to
shareholders, up to 2/3 of the net free cash flow, resulting from
dividends and share buy-backs
- A robust balance sheet, with leverage of less than 2x
EBITDA(4)
- Over the medium term, sustained industry-outperforming
growth, and further margin improvement
* Teleperformance excluding Majorel and €13 million in
streamlining costs ** Subject to shareholder approval at the next
Annual General Meeting, to be held on May 23, 2024 (1) At constant
scope of consolidation and exchange rates, and excluding the impact
of lower revenue from Covid support contracts and hyperinflation
(2) Percent of revenue from Core Services & D.I.B.S. (3) Pro
forma full-year 2023 figures including 12 months of Majorel revenue
(4) Net debt-to-EBITDA ratio
Governance
- A new governance organization with Daniel Julien, founder,
Chairman and Chief Executive Officer, and Bhupender Singh, Deputy
Chief Executive Officer and Director, acting as co-Chief Executive
Officers until December 31, 2025;
- Preparations for separating the roles of Chairman of the Board
and Chief Executive Officer on January 1, 2026, when Mr. Singh will
be appointed sole Chief Executive Officer.
2023 Financial Highlights
€ millions
2023
2022*
2023
Excl. Majorel
€1=US$1.08
€1=US$1.05
€1=US$ 1,08
Revenue
8,345
8,154
8,001
Reported growth
+2.3%
Like-for-like growth(1)
(1) excluding Covid contracts and
adjustments for hyperinflation
+1.7%
+5.1%
EBITDA before non-recurring
items
1,775
1,750
1,725
% of revenue
21.3%
21.5%
21.6%
EBITA before non-recurring
items
1,290
1,262
1,260
% of revenue
15.5%
15.5%
15.8%**
EBIT
1,011
992
Net profit – Group share
602
643
Diluted earnings per share (€)
10.18
10.77
Dividend per share (€)
3.85***
3.85
Net free cash flow
812
703
Reported growth
+15.5%
* Adjusted following final measurement of the fair value of the
identifiable acquired assets and assumed liabilities of PSG Global
Solutions ** 15,9% excluding €13 million in streamlining costs ***
Subject to shareholder approval at the next Annual General Meeting,
to be held on May 23, 2024
Teleperformance Chairman and Chief Executive Officer Daniel
Julien said: “2023 was a year of profitable growth and
many success that have positioned the group for a solid future. In
a volatile economic and geopolitical environment, Teleperformance
not only continued to grow its business delivering a record €8.4
billion in revenue, but also improved its operating margin by +40
basis points and its cash flow by more than +15%. Our profitability
model has created one of the highest annual EBITA margins in the
industry.
In addition to our successes, there are challenges that we
are overcoming. The global slowdown in volumes, the impact of
regional crises on client decision-making processes, and the shift
in consumer behavior after several years of pandemic lockdowns all
slowed the Group's traditional revenue growth. In this environment,
our relentless focus on maximizing operational efficiency with
flawless execution enabled us to drive much faster development of
our offshore solutions. Witnessing a tougher environment throughout
the year, we deployed highly disciplined cost and cash management
policies while adjusting our growth model. Our shareholders were
rewarded as well since we returned a significant portion of the
year's cash flow to them.
2023 also saw the successful acquisition of Majorel, which
was completed in record time and was recently honored with the
“French Deal of The Year” prize awarded by Global Capital, a
renowned institution in the financial sector in Europe which has
been rewarding the best financial transactions for over 20 years.
As a result of this acquisition, Teleperformance has given birth to
a new, more diverse company, in terms of markets, client verticals
and expertise. It strengthens Teleperformance’s #1 global
leadership position and provides a new springboard for our future.
The “new Teleperformance” represents nearly 500,000 employees, more
than €10 billion in revenue and more than €2 billion in EBITDA.
Innovation is at the heart of Teleperformance’s “High
Touch-High Tech” strategy, including the development of AI
solutions designed to increase productivity and accuracy. Today,
many clients are depending on us to manage more than 250
AI-projects including projects that incorporate Gen-AI components,
to help accelerate their own business results. In this highly
mobile, increasingly complex world, we launched TP Infinity, whose
client consulting solutions are expected to sustain and support the
Group’s transformation into more high value-added business
segments.
People are still an important ingredient to our value
proposition. In 2023, Teleperformance confirmed that it is the
industry’s preeminent employer by creating many new jobs around
the world in a workplace environment of excellence and employee
well-being. For the first time, the Group was named one of the top
five World’s Best Workplaces™ 2023 by Fortune and Great Place to
Work®. For the third year in a row, Teleperformance was honored to
once again be among the 25 Best Workplaces among global leaders.
Teleperformance is now certified as a Great Place to Work® in 72
countries, covering more than 99% of its workforce, demonstrating
the trust and engagement of our employees.
In 2024, Teleperformance’s priority will be to pursue its
profitable, cash-generating growth model despite the uncertain
environment we are operating in today. With agility and
flexibility, the Group will continue to tightly manage its costs
and harvest the synergies expected to be created by the Majorel
integration. We will increase the promotion of our offshore and
digital solutions to meet clients’ growing demand for optimized
efficiency. As a result, and taking a conservative approach,
particularly for the first half, the Group is targeting pro forma*
like-for-like revenue growth of +2% to +4% in 2024, pro forma*
recurring EBITA margin up between +10bps and +20bps and increased
cash flow.
Looking beyond 2024, Teleperformance’s business fundamentals
are solid in both our core business and specialized services.
Over the medium term, we aim to deliver like-for-like growth
outpacing the market, while continuing to improve our margins. We
will also continue to pursue targeted acquisitions, particularly in
specialized services.
The Group recently made some important decisions concerning
its governance, to prepare the future of the “new
Teleperformance”. Following unanimous approval by the Board of
Directors, Bhupender Singh and I will be acting as co-CEOs of the
Group until the end of 2025. This decision has been taken in order
to ensure a smooth leadership transition, with the objective of
separating the responsibilities of Chairman and CEO after this
date."
* on a pro forma 2023 basis including Majorel over 12 months
2023 REVENUE
Consolidated revenue
Revenue amounted to €8,345 million for the year ended
December 31, 2023, representing a year-on-year increase of
+1.7% like-for-like (at constant exchange rates and scope of
consolidation).
On a reported basis, revenue was up +2.3% on the prior year. The
difference between like-for-like and reported growth rates stems
from the net impact of:
(i) the -€346 million highly negative currency effect,
particularly in the second half, due to the decline against the
euro in the US dollar, the Egyptian pound, the Argentine peso, the
Indian rupee, the Turkish lira, the Colombian peso and the
Philippine peso. (ii) the +€404 million positive impact from
changes in the scope of consolidation, led by the inclusion of
Majorel since November 1, 2023. These changes also reflected the
contributions from PSG Global Solutions since November 1, 2022 and
from Capita Translation & Interpreting since January 1,
2023.
Reported growth was dampened by the non-recurring impact of the
year-on-year decline in the contribution from Covid support
contracts (-€223 million over the full year), and the adjustment
for the impact of high volatility of exchange rates in countries
with hyperinflationary (-€32 million), notably in Argentina.
Adjusted for these impacts, like-for-like growth stood at +5.1%
for the year.
Over the period, like-for-like growth* was particularly robust,
given the volatile economic environment and uncertain geopolitical
situation. The performance reflected the diversity of
Teleperformance’s client and service lines portfolio, as well as
its unrivaled global geographic footprint in nearly 100
countries.
In Core Services & Digital Integrated Business
Services like-for-like growth* was strong in the EMEA region
but remained sluggish in the LATAM-based offshore activities and in
the North America & Asia-Pacific regions.
Growth was particularly varied by industry vertical. Financial
services, social media, entertainment and government agencies
(excluding Covid support contracts) saw the fastest growth, while
retail, technology and telecoms were flat.
The sustained strong momentum in offshore solutions,
particularly in India, exerted downward pressure on the Group’s
revenue growth over the year but had a positive impact on Group
margin.
Specialized Services continued to expand at a sustained
pace, led by the still very fast rebound in TLSContact's visa
application management business post-Covid and the steady growth in
LanguageLine Solutions' interpretation business throughout the
year.
Fourth-quarter 2023 revenue amounted to €2,396 million,
down -0.6% at constant exchange rates and scope of consolidation
(like-for-like). Adjusted for the year-on-year decline in revenue
from Covid support contracts and the impact of high volatility of
exchange rates in countries with hyperinflation, like-for-like
growth stood at +2.4%.
On a reported basis, revenue was up by +11.3%, reflecting the
net impact of:
(i) a significant +€351 million increase from changes in the
scope of consolidation, with the inclusion of Majorel, PSG Global
Solutions and Capita Translation & Interpreting (ii) the highly
negative -€96 million currency effect due to the decline against
the euro in the US dollar, the Argentine peso, the Egyptian pound,
the Turkish lira and the Philippine peso.
- Analysis of 2023 revenue growth
[Graphic omitted]
* At constant scope of consolidation and exchange rates,
excluding the impact of lower revenue from Covid support contracts
and the adjustment for the impact of high volatility of exchange
rates in countries with hyperinflationary
Revenue by activity
2023
2022
% change
€ millions
Like-for-like excluding Covid
support contracts
Like-for-like
Reported
CORE SERVICES & D.I.B.S.*
6,982
6,989
+2.6%**
-0.7%
-0.1%
North America & Asia-Pacific
2,534
2,679
-1.4%
-1.4%
-5.4%
LATAM
1,569
1,653
+0.5%
+0.5%
-5.1%
Europe & MEA (EMEA)
2,536
2,657
+8.0%
-0.8%
-4.6%
MAJOREL
343
0
N/A
N/A
N/A
SPECIALIZED SERVICES
1,363
1,165
+16.1%
+16.1%
+17.0%
TOTAL
8,345
8,154
+4.6%**
+1.7%
+2.3%
* Digital Integrated Business Services ** +3.2% for Core
Services and D.I.B.S. and +5.1% for the Group total on a
like-for-like basis, excluding Covid support contracts and the
adjustment for the impact of high volatility of exchange rates in
countries with hyperinflation
- Core Services & Digital Integrated
Business Services (D.I.B.S.)
Revenue from Core Services and D.I.B.S. amounted to €6,982
million in 2023, almost stable (-0,7%) at constant exchange
rates and scope of consolidation (like-for-like). Adjusted for the
year-on-year decline in revenue from Covid support contracts and
the impact of high volatility of exchange rates in countries with
hyperinflationary (Argentina and Turkey), like-for-like growth
stood at +3.2%.
Reported revenue was stable for the year (-0.1%),
reflecting:
(i) the positive impact of consolidating Majorel since November
1, 2023 (ii) the unfavorable currency effect stemming from the
decline against the euro in the Egyptian pound, the US dollar, the
Colombian peso, the Indian rupee, the Turkish lira, the Philippine
peso and most other operating currencies.
Over the year as a whole, like-for-like growth* was relatively
satisfactory given the volatile economic environment and uncertain
geopolitical situation. This resilience was underpinned in
particular by the diversity of both the Group's client portfolio
and the geographic footprint of its activities.
Business rose steadily in Europe over the period, while the
North American market slowed sharply year-on-year on the back of
reduced volumes post-Covid, impacting the Group’s activities in the
North America & Asia-Pacific and LATAM regions. The best
results were reported in the social media (content moderation),
financial services and government agency verticals (excluding Covid
support contracts). On the other hand, business in technologies,
retail and telecoms was flat over the year.
The fast momentum in offshore solutions continued apace,
particularly in India, where the Group is deploying high
value-added, technology-intensive global solutions on behalf of
large global industry-leading corporations in the North American
market. The expansion in offshore activities exerted downward
pressure on the Group’s revenue growth over the year but had a
positive impact on Group margin.
In the fourth quarter alone, Core Services & D.I.B.S.
revenue amounted to €2,042 million, representing a decline of
-1.7% like-for-like excluding the Covid support contracts. In
addition to the impact of slowing volumes in an uncertain economic
environment, growth was held back by the highly volatile exchange
rates in countries in hyperinflation.
Reported growth stood at +11.6%, reflecting:
(i) the positive impact from changes in the scope of
consolidation, led by the inclusion of Majorel since November 1,
2023; (ii) the unfavorable currency effect stemming from the
decline against the euro in the US dollar, the Egyptian pound, the
Colombian peso, the Indian rupee and most other operating
currencies.
* At constant scope of consolidation and exchange rates,
excluding the impact of lower revenue from Covid support contracts
and the adjustment for the impact of high volatility of exchange
rates in countries with hyperinflation
- North America & Asia-Pacific
Regional revenue came to €2,534 million in 2023, down a
slight -1.4% from the year before on a like-for-like basis.
Reported revenue declined by -5.4% over the year, reflecting the
unfavorable currency effect from the decline against the euro in
the Indian rupee and, in the second half, the US dollar. In the
final quarter, revenue amounted to €661 million, down -4.6%
like-for-like and -9.7% as reported.
The slight contraction in revenue over the year was attributable
to corporate budget cuts in the United States and the post-Covid
slowdown in volumes in the North American market, in such
industries as telecommunications, technology, and retail. Growth
was also dampened by the client project cancellations, as well as
by program scale-backs and postponements.
In this challenging environment, highly competitive offshore
solutions enjoyed fast growth, particularly in India, although the
resulting deflationary impact detracted from regional revenue.
In the Asia-Pacific region, revenue growth was robust throughout
the year, supported in particular by the ramp-up of new contracts
in China in the financial services and travel verticals.
Across the region as a whole, the content moderation (Trust
& Safety), back-office services and customer acquisition
activities expanded at a steady pace over the year.
In 2023, revenue in the LATAM region amounted to €1,569
million, a year-on-year increase of +0.5% like-for-like. Growth
was damped by the adjustment for the impact of high volatility of
exchange rates in countries with hyperinflationary (Argentina). On
a reported basis, growth was down -5.1%, primarily reflecting the
decline in the Colombian and Argentine pesos against the euro.
Fourth-quarter revenue stood at €390 million, a year-on-year
decrease of -3.2% like-for-like and of -6.4% as reported. Adjusting
for the impact of hyperinflation on activities in Argentina,
following the change of government, weighed heavily on
like-for-like growth at year-end.
Over the full year, regional growth was supported by the robust
momentum in the social media content moderation, financial services
and healthcare verticals, attenuated by softer business in
transportation services and retail.
The LATAM region’s offshore activities were confronted with a
slowdown in North American demand, particularly in the second
half.
Regional growth was also pulled down by the diminished appeal of
Mexico, and more recently Colombia, compared with other offshoring
locales following the strengthening of their currencies against the
US dollar. Demand from North America & Asia-Pacific clients
shifted favorably to the India-based offshore activities, but with
a deflationary effect on consolidated revenue growth.
Regional revenue came to €2,536 million in 2023,
representing a like-for-like increase of +8.0%, excluding the Covid
support contracts. Growth was damped by the adjustment for the
impact of high volatility of exchange rates in Turkey, which is a
country with hyperinflation. In the fourth quarter alone,
like-for-like growth excluding the impact of Covid support
contracts came to +2.3%, with a slight dampening from adjustments
for the impact of hyperinflation on activities in Turkey.
Multilingual activities, which are the primary contributors to
the region’s revenue stream and mainly serve large global
industry-leading corporations, especially in the digital economy,
reported sustained growth for the year. While particularly buoyant
in Greece, Egypt and Turkey over the year, growth in multilingual
hub activities slowed in the final quarter in Portugal,
particularly in the social media vertical.
Business in the United Kingdom rose sharply over the period,
driven by the ramp-up of new contracts in financial services, with
government agencies (excluding Covid support contracts) and in
retail.
Operations in Germany expanded at a satisfactory pace, thanks in
particular to the fast growth in nearshore services in the Balkans
and robust business development in the social media, travel and
consumer electronics verticals.
Revenue from Specialized Services stood at €1,363 million in
2023, a year-on-year increase of +16.1% like-for-like and of +17.0%
as reported. The difference between like-for-like and reported
growth rates reflected:
(i) the positive impact of consolidating PSG Global Solutions
from November 1, 2022, and of Capita Translation & Interpreting
from January 1, 2023. (ii) the negative currency effect stemming
from the decline in the US dollar against the euro.
In the fourth quarter, revenue rose by +13.3% like-for-like,
extending the robust gains reported in the first two quarters of
the year.
LanguageLine Solutions, the main contributor to Specialized
Services revenue, continued to enjoy significant growth throughout
the year. Its performance was led by market share gains in a
fast-expanding industry, supported in particular by the ongoing
development of video and telephone interpreting solutions and the
growth in digital platforms.
TLScontact’s activities continued to grow very rapidly over the
year, driven by the still highly robust post-Covid rebound in the
visa application management business, which is leveraging the
favorable environment created by increased passenger traffic and
the strong growth in premium ancillary services. As a result,
revenue from these activities rose to a record high in 2023, well
above pre-Covid levels.
2023 RESULTS
EBITDA before non-recurring items ended 2023 at €1,775 million,
up +1.4% from the prior year and representing a margin of 21.3%,
versus 21.5% in 2022.
EBITA before non-recurring items was €1,290 million, vs. €1,262
million in 2022, for a margin of 15.5%, unchanged from the year
before. It was shaped by:
(i) two months of EBITA from Majorel, consolidated since
November 1, 2023, which corresponded to a EBITA margin before
non-recurring items of 8.5% (ii) €13 million in streamlining costs
already recognized in the first half to offset the impact of
slowing volumes in an uncertain environment.
Excluding the impact of consolidating Majorel over two months
and adjusting for streamlining costs, Teleperformance’s underlying
EBITA margin before non-recurring items would have been 15.9%, up
+40 basis points compared with 2022.
The improvement was primarily led by:
(i) a positive mix effect from the fast growth in high-margin
Specialized Services activities; (ii) the rapid expansion in
offshoring activities in India; (iii) dedicated action plans and
tight cost control.
Operating earnings by activity
EBITA before non-recurring items by activity
€ millions
2023
2022
North America & Asia-Pacific
311
330
% of revenue
12.3%
12.3%
LATAM
195
219
% of revenue
12.4%
13.3%
Europe & MEA (EMEA)
255
271
% of revenue
10.1%
10.2%
MAJOREL
29
0
% of revenue
8.5%
N/A
Holding company
91
70
CORE SERVICES & D.I.B.S.
881
890
% of revenue
12.6%
12.7%
CORE SERVICES & D.I.B.S. (excluding
Majorel in 2023)
852
890
% of revenue
12.8%
12.7%
SPECIALIZED SERVICES
409
372
% of revenue
30.0%
31.9%
TOTAL
1,290
1,262
% of revenue
15.5%
15.5%
TOTAL (excluding Majorel in
2023)
1,261
1,262
% of revenue
15.8%*
15.5%
*15.9% excluding cost of streamlinng for
€13m
Core Services & D.I.B.S delivered EBITA before non-recurring
items of €881 million and a margin of 12.6% in 2023, compared with
€890 million and 12.7% in 2022. Excluding Majorel, EBITA margin
before non-recurring items widened by 10 bps year-on-year, to
12.8%.
- North America & Asia-Pacific
EBITA before non-recurring items in the North America &
Asia-Pacific region declined to €311 million from €330 million in
2022, while margin held firm at 12.3%.
However, the India-based offshore activities serving the North
American market continued to expand at a very good pace and
generated high margins. This solution is ideally suited to clients
seeking to optimize their cost structures as their volume growth
slows.
EBITA before non-recurring items in the LATAM region came to
€195 million in 2023, versus €219 million the year before, while
margin contracted to 12.4% from 13.3% in 2022. The erosion was
caused by the slowdown in business growth in the region throughout
the year, and more particularly in the second half. Unfavorable
movements in the Colombian peso weighed on margins at year-end.
Softer volumes in the North American market had a negative
impact on the Group’s nearshore activities. Regional growth and
margins were also impacted by the diminished appeal of Mexico-based
nearshore activities after the Mexican peso strengthened against
the US dollar.
EBITA before non-recurring items in the EMEA region came to €255
million in 2023, versus €271 million in 2022, yielding a margin of
10.1% versus 10.2% a year earlier. The firm margin performance
reflects the solid upturn in the second half that, while primarily
due to the favorable comparison with the prior-year period,
effectively offset the margin decline in the first-half. In 2022,
Covid support contracts in the Netherlands, the United Kingdom,
France and Germany had substantially boosted the region’s margin
until essentially the end of the first half.
Majorel reported EBITA before non-recurring items of €29 million
and a margin of 8.5% in the last two months of 2023. EBITA was
reduced by the €10 million or so cost of the company’s efficiency
measures.
Specialized Services reported EBITA before non-recurring items
of €409 million in 2023, compared with €372 million in 2022, while
the margin came to 30.0% versus 31.9% the year before.
TLScontact sharply improved its operating margin year-on-year,
which ended 2023 higher than before the emergence of the health
crisis. This very good performance was led by the sustained strong
recovery in the company's business volumes (especially in the first
half), the satisfactory growth in premium ancillary services and
the implementation of cost-cutting measures during the crisis.
LanguageLine Solutions' operating margin contracted year-on-year
at a time of strong client demand and a shortage of interpreters in
the United States, but conditions improved in the second half. The
company’s business model remains robust and based on the sustained,
structural growth in demand, primarily home-based interpreters,
unrivaled technological capabilities and an industry leading sales
and support processes.
Other income statement items
EBIT amounted to €1,011 million, versus €992 million in 2022. It
included:
(i) amortization of acquisition-related intangible assets in an
amount of €141 million, versus €143 million in 2022; (ii) €105
million in accounting expenses relating to performance share plans,
versus €113 million the year before.
The financial result represented a net expense of €178 million,
up from the €93 million net expense reported in 2022. The steep
increase in finance costs was driven mainly by the new debt
contracted to acquire Majorel in November 2023 and by the impact of
rising interest rates on the variable portion of debt. Given the
current environment, the 3.3% cost of debt is favorable for the
Group.
Income tax expense amounted to €231 million, down from €256
million the year before, and corresponded to a lower effective
average tax rate of 27.7%, versus 28.5% in 2022.
Net profit – Group share totaled €602 million, versus €643
million in 2022, while diluted earnings per share came to €10.18,
compared with €10.77 a year earlier.
The Board of Directors will recommend that shareholders at the
Annual General Meeting on May 23, 2024 approve a 2023 dividend of
€3.85 per share, unchanged from the amount paid in respect of 2022.
This would correspond to a payout ratio of 38%.
Cash flows and financial structure
Net free cash flow after lease expenses, interest and tax paid
amounted to €812 million, versus €703 million the year before,
representing an increase of +15.5%. The cash conversion ratio, as
measured by net free cash flow divided by EBITDA before
non-recurring items, rose to 45.7% from 39.7% in 2022.
The change in consolidated working capital requirement over the
year was an inflow of €24 million, marking a significant
improvement on last year’s €172 million outflow thanks to the
implementation of a stepped-up plan to track receivables.
Net capital expenditure amounted to €212 million, or 2.5% of
revenue, down from €297 million and 3.6% in 2022 due to more
disciplined capital allocation in an uncertain market environment
and the development of a worldwide hybrid model combining on-site
services and work-from-home solutions (used by more than 40% of the
workforce as of December 31, 2023).
Net debt stood at €4,553 million at December 31, 2023, up
sharply from €2,609 million a year earlier. The increase primarily
reflected the new debt taken on to finance the Majorel acquisition
and shareholder payments over the year, in the form of dividends
(€227 million) and share buybacks (€366 million). As a result, the
net debt-to-EBITDA ratio came to 2.56x, or to a pro forma 2.18x
with Majorel consolidated over 12 months.
The Group's liquidity improved during year following the
refinancing transactions carried out in June 2023.
2023 HIGHLIGHTS
- Acquisition of Majorel in November
2023: a new springboard to drive sustained growth in the years
ahead
Teleperformance announced the completion of the Majorel
acquisition on November 8, 2023, one month ahead of the initial
schedule set when the acquisition was announced on April 26.
The acquisition will enable Teleperformance to broaden its
presence in Europe, such as in France and Germany, where the Group
has a relatively small presence, and in a number of high-growth
potential verticals, such as social media, luxury goods, automotive
and travel, and in areas of high-value expertise, such as claim
management and end-to-end documents processing.
It is also strengthening Teleperformance's exposure to European
clients, whereas its current client portfolio is mainly
American.
The combination will create a wide range of synergies, in terms
of both revenue and costs. The cost synergy plan announced on April
26 is on track to deliver around €150 million in savings.
Also as announced last April, the acquisition will be accretive
to earnings per share before synergies from 2024.
It has also strengthened Teleperformance’s global leadership,
with the new combination representing nearly 500,000 employees
around the world, €10.1 billion in revenue, and €2.1 billion in
EBITDA (pro forma 2023 figures).
Generative artificial intelligence (or GenAI) represents a
major opportunity to continue developing new, more effective hybrid
solutions for clients, combining automation and employee
expertise. In customer experience management, the deployment of
this technology is still in its infancy and needs to be secured in
terms of data confidentiality and response reliability. Long
proficient in IVR, OCR, chatbot and other automation technologies,
Teleperformance is also leveraging GenAI technology to accelerate
the transformation of its own operations, particularly in hiring
and training.
The Group is currently working in close partnership with its
clients on more than 250 AI-projects including projects with
Gen-AI, in various stages of development.
In 2023, Teleperformance was especially active in expanding its
portfolio of high-performance hybrid solutions, through
partnerships with global artificial intelligence leaders:
- Using the ServiceNow cloud platform to deploy AI solutions.
The platform’s single simplified knowledge management system and
ability to automate certain tasks is enabling Teleperformance to
enhance the employee experience, increase productivity and
transform its operations.
- Expanding its partnership with Microsoft with the launch of TP
GenAI, a generative artificial intelligence platform.
Teleperformance will leverage the Microsoft Azure suite of
artificial intelligence tools to deliver an enhanced customer
experience.
Following the acquisition of Majorel, Teleperformance
announced the launch of TP Infinity, its new global
digital consulting arm designed to offer clients a holistic
approach to building stronger brands through an enhanced customer
experience. TP Infinity is comprised of a diverse team of more than
650 data lovers, tech enthusiasts, creative masterminds and
operations gurus operating in 15 countries across North America,
South America, Europe, and Asia who are united by a common purpose:
to push the boundaries of the customer experience.
Joao Cardoso is joining Teleperformance’s executive committee
as Chief innovation and digital officer. This tenured
Teleperformance’s leader is an engineer in computer sciences
specialized in formal language and AI. He has been the main
architect of “TP Cloud Campus”, the remote management platform that
enabled the Group to successfully address the Covid confinement
challenges.
- Sustainable long-term
growth
In 2023, Teleperformance pursued its sustainable long-term
growth by creating new jobs around the world in a workplace
environment of excellence and employee well-being. This growth has
also been gentle on the environment, with the achievement of
demanding targets. In this way, the Group has continued to
successfully implement its corporate social responsibility roadmap,
which is based on robust commitments, such as:
Employee well-being, safety and diversity
In 2023, Teleperformance was named one of the top five World’s
Best Workplaces™ 2023 by Fortune and Great Place to Work®. For the
third year in a row, Teleperformance was ranked among the 25 global
leaders, moving up from 25th place in 2021. Teleperformance is
certified as a Great Place to Work® in 72 countries, covering more
than 99% of its workforce, in a compelling demonstration of the
very strong trust and engagement felt by employees towards their
company.
Teleperformance’s commitment to diversity, equity and inclusion
is deeply embedded in its DNA. The Group maintained gender parity
in 2023, when women accounted for 53.7% of the workforce. It also
significantly increased the proportion of women in management
positions, to 51.9% in 2023 from 47.8% in 2022. During the year,
Teleperformance implemented the global agreement signed in December
2022 with the UNI Global Union, which now covers five new countries
– Colombia, Romania, Poland, Jamaica and El Salvador. The agreement
is designed to strengthen workers’ rights to form trade unions and
engage in collective bargaining, while improving workplace health
and safety.
Acting as an engaged corporate citizen and environmental
steward, contributing to job creation and the local
economy:
Teleperformance is committed to deepening its positive impact on
local economies, by providing stable jobs, a living wage, training
and career opportunities, as well as an inclusive working
environment aligned with the highest market standards. In
particular, the Group is helping to broaden young people’s access
to jobs, increase women's employment and expand the middle class in
developing nations, where 70% of its employees work. In 2023,
Teleperformance hired 96,500 new employees for their first job
experience, enabling a wide variety of talented people around the
world to enter the workplace.
As a concerned environmental steward, in 2023 the Group reduced
its carbon emissions by -34% in absolute terms and by -47% per
employee compared with the 2019 baseline. Energy from renewable
sources rose to 34.7% of total energy used during the year from 11%
in 2019. To move to the next level, the Group is developing its
2030 targets with a pathway consistent with a less than 1.5°C
warming scenario.
- €500 million share buyback
program
On August 2, 2023, Teleperformance launched a share buyback
program for a total amount of up to €500 million. Most of the
acquired shares will be canceled. The opportunity to initiate the
buyback program arose from the Group’s strong cash flow generation,
its unrivaled, industry-leading performance in a challenging
macroeconomic environment, and its future growth prospects, all of
which were not properly reflected in its current stock price.
The buyback program will be rewarding for Teleperformance’s
long-term shareholders, without impacting the Group’s BBB credit
rating from S&P or its ability to seize acquisition
opportunities.
A total of €366 million in shares have been bought back in 2023.
The Group does not rule out launching new programs in the future
should the stock price continue to undervalue the strength of the
Group’s business model.
Following the acquisition of Majorel and completion of the €500
million share buyback program, Teleperformance’s financial
flexibility remains fully intact, with an investment capacity of
around €1 billion.
- New governance structure and
preparation for the separation of the roles of Chairman of the
Board and Chief Executive Officer on January 1,
2026
On February 15, 2024, the Board of Directors unanimously
approved the new Group governance structure for the period ending
December 31, 2025, with Daniel Julien, founder and Chairman and
Chief Executive Officer, and Bhupender Singh, Deputy Chief
Executive Officer and Director, acting as co-Chief Executive
Officers. They will jointly make strategic decisions while sharing
operational responsibilities, following an agile and coordinated
management strategy.
The Board believes the new governance to be particularly
well-aligned with the Group’s current challenges, notably the
successful integration of Majorel and the optimization of
opportunities offered by artificial intelligence. It also
represents a step towards the separation of the roles of Chairman
of the Board and Chief Executive Officer on January 1, 2026, when
Mr. Singh will be appointed as sole Chief Executive Officer.
OUTLOOK
In 2024, Teleperformance is taking a conservative approach and
adapting its growth model to the volatile economic environment.
This process is reflected in its full-year financial targets:
- Like-for-like revenue growth* of +2% to +4%
- EBITA margin before non-recurring items up between 10bps and
20bps on a pro forma basis (vs. 14.9% in 2023) excl. Majorel
integration costs
- Increase in net free cash flow and ongoing cash return to
shareholders, up to 2/3 of the net free cash flow, resulting from
dividends and share buy-backs
- A robust balance sheet, with leverage of less than 2x
EBITDA(4)
Revenue growth is likely to remain limited in the first quarter
of 2024, given the highly unfavorable comparatives and the
persistently volatile environment.
Over the medium term, Teleperformance intends to drive
consistently industry-outperforming growth and further margin
improvement*.
* On a pro forma 2023 basis including Majorel over 12 months
---------------------------
Disclaimer
All forward-looking statements are based on 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 description of these
factors and uncertainties, please refer to the “Risk Factors”
section of our Universal Registration Document, available at
www.teleperformance.com. Teleperformance undertakes no obligation
to publicly update or revise any of these forward-looking
statements.
Analyst and Investor Information Meeting
Thursday, March 7, 2024 at 10:30 am UK time
2023 Annual results and a strategic update will be presented at
a physical meeting in London on Thursday, March 7, 2024 at 10:30
a.m UK time.
The proceedings will be available live or for delayed viewing
at:
https://channel.royalcast.com/landingpage/teleperformance/20240307_1/
All the documentation related to 2023 Annual Results is
available on http://www.teleperformance.com at:
https://www.teleperformance.com/en-us/investors/publications-and-events/financial-publications/
Indicative investor calendar
First-quarter 2024 revenue: April 30, 2024
Annual shareholders’ meeting: May 23, 2024
Ex-dividend date: May 28, 2024
Dividend payment: May 30, 2024
About Teleperformance Group
Teleperformance (TEP – ISIN: FR0000051807 – Reuters: TEPRF.PA
- Bloomberg: TEP FP), is a global leader in digital business
services which consistently seeks to blend the best of advanced
technology with human empathy to deliver enhanced customer care
that is simpler, faster, and safer for the world’s biggest brands
and their customers. The Group’s comprehensive, AI-powered service
portfolio ranges from front-office customer care to back-office
functions, including operations consulting and high-value digital
transformation services. It also offers a range of specialized
services such as collections, interpreting and localization, visa
and consular services, and recruitment process outsourcing
services. The teams of multilingual, inspired, and passionate
experts and advisors, spread in close to 100 countries, as well as
the Group’s local presence allows it to be a force of good in
supporting communities, clients, and the environment. In 2023,
Teleperformance reported consolidated revenue of €8,345 million
(US$9 billion) and net profit of €602 million.
Teleperformance shares are traded on the Euronext Paris market,
Compartment A, and are eligible for the deferred settlement
service. They are included in the following indices: CAC 40, STOXX
600, S&P Europe 350, MSCI Global Standard and Euronext Tech
Leaders. In the area of corporate social responsibility,
Teleperformance shares are included in the CAC 40 ESG since
September 2022, the Euronext Vigeo Euro 120 index since 2015, the
MSCI Europe ESG Leaders index since 2019, the FTSE4Good index since
2018 and the S&P Global 1200 ESG index since 2017.
For more information: www.teleperformance.com Follow us on
Twitter: @teleperformance
Appendix 1 – Quarterly and Half-Yearly Revenue by
Activity
Q4 2023
Q4 2022
% change
€ millions
Like-for-like excluding Covid
support contracts
Like-for-like growth
Reported
CORE SERVICES & D.I.B.S.*
2,042
1,829
-1.7%
-3.0%
+11.6%
North America & Asia-Pacific
661
732
-4.6%
-4.6%
-9.7%
LATAM
390
416
-3.2%
-3.2%
-6.4%
Europe & MEA (EMEA)
648
681
+2.3%
-1.1%
-4.9%
MAJOREL
343
0
N/A
N/A
N/A
SPECIALIZED SERVICES
354
323
+13.3%
+13.3%
+9.5%
TOTAL
2,396
2,152
+0.5%
-0.6%
+11.3%
+2.4%*
* adjusted for hyperinflation
Q3 2023
Q3 2022
% change
€ millions
Like-for-like* excluding Covid
support contracts
Like-for-like
Reported
CORE SERVICES & D.I.B.S.*
1,643
1,749
+1.8%
+0.7%
-6.0%
North America & Asia-Pacific
618
683
-1.3%
-1.3%
-9.4%
LATAM
391
434
-2.7%
-2.7%
-9.9%
Europe & MEA (EMEA)
634
632
+8.0%
+5.2%
+0.3%
SPECIALIZED SERVICES
346
307
+16.9%
+16.9%
+12.4%
TOTAL
1,989
2,056
+4.0%
+3.1%
-3.3%
Q2 2023
Q2 2022
% change
€ millions
Like-for-like excluding Covid
support contracts
Like-for-like
Reported
CORE SERVICES & D.I.B.S.*
1,612
1,700
+3.3%
0.0%
-5.2%
North America & Asia-Pacific
609
636
-0.2%
-0.2%
-4.3%
LATAM
392
421
+1.6%
+1.6%
-6.7%
Europe & MEA (EMEA)
611
643
+7.7%
-0.9%
-5.0%
SPECIALIZED SERVICES
342
284
+17.4%
+17.4%
+20.4%
TOTAL
1,954
1,984
+5.3%
+2.5%
-1.5%
Q1 2023
Q1 2022
% change
€ millions
Like-for-like excluding Covid
support contracts
Like-for-like
Reported
CORE SERVICES & D.I.B.S.*
1,685
1,711
+7.3%
-0.4%
-1.6%
North America & Asia-Pacific
646
628
+0.8%
+0.8%
+2.8%
LATAM
396
382
+7.0%
+7.0%
+3.6%
Europe & MEA (EMEA)
643
701
+13.6%
-5.7%
-8.2%
SPECIALIZED SERVICES
321
251
+17.0%
+17.0%
+28.3%
TOTAL
2,006
1,962
+8.6%
+1.9%
+2.2%
* Digital Integrated Business Services
Appendix 2 – Simplified Consolidated Financial
Statements
Consolidated income statement
€ millions
2023
2022*
Revenues
8 345
8 154
Other revenues
9
10
Personnel
-5 604
-5 339
External expenses
-948
-1 044
Taxes other than income taxes
-27
-31
Depreciation and amortization
-266
-281
Amortization of intangible assets acquired as part of a business
combination
-141
-143
Depreciation of right-of-use assets (personnel-related)
-18
-15
Depreciation of right-of-use assets
-201
-192
Impairment loss on goodwill
-4
-8
Share-based payments
-105
-113
Other operating income and expenses
-29
-6
Share of profit or loss of equity-accounted investees
Operating profit
1 011
992
Income from cash and cash equivalents
21
10
Gross financing costs
-126
-72
Interest on lease liabilities
-48
-44
Net financing costs
-153
-106
Other financial income and expenses
-25
13
Financial result
-178
-93
Profit before taxes
833
899
Income tax
-231
-256
Net profit
602
643
Net profit - Group share
602
643
Net profit attributable to non-controlling interests
Earnings per share (in euros)
10,27
10,92
Diluted earnings per share (in euros)
10,18
10,77
* Restated following the finalization of the measurement of the
assets and liabilities of PSG Global Solutions
Consolidated balance sheet
€ millions
ASSETS 12.31.2023 12.31.2022*
Non-current assets Goodwill
5 147
3 068
Other intangible assets
1 297
1 483
Right-of-use assets
760
626
Property, plant and equipment
692
613
Loan hedging instruments
3
17
Other financial assets
100
98
Equity-accounted investees
5
Deferred tax assets
147
78
Total non-current assets
8 151
5 983
Current assets Current income tax receivable
116
75
Accounts receivable - Trade
2 132
1 707
Other current assets
359
245
Derivative financial instruments - positive fair values
4
Other financial assets
110
66
Cash and cash equivalents
882
817
Total current assets
3 603
2 910
TOTAL ASSETS
11 754
8 893
EQUITY AND LIABILITIES 12.31.2023 12.31.2022*
Equity Share capital
159
148
Share premium
1 098
576
Translation reserve
-117
9
Other reserves
3 092
2 937
Equity attributable to owners of the Company
4 232
3 670
Non-controlling interests
5
0
Total equity
4 237
3 670
Non-current liabilities Post-employment benefits
76
34
Lease liabilities
595
510
Loan hedging instruments
10
24
Other financial liabilities
3 822
2 021
Deferred tax liabilities
306
346
Total non-current liabilities
4 809
2 935
Current liabilities Provisions
102
90
Current income tax
172
167
Accounts payable - Trade
334
232
Other current liabilities
1 085
911
Lease liabilities
237
178
Other financial liabilities
778
710
Total current liabilities
2 708
2 288
TOTAL EQUITY AND LIABILITIES
11 754
8 893
Consolidated cash flow statement
€ millions
Cash flows from operating activities
2023
2022* Net profit - Group share
602
643
Net profit attributable to non-controlling interests
Income tax expense
231
256
Net financial interest expense
104
53
Interest expense on lease liabilities
47
44
Non-cash items of income and expense
716
761
Income tax paid
-349
-291
Internally generated funds from operations
1 351
1 466
Change in working capital requirements
24
-172
Net cash flow from operating activities
1 375
1 294
Cash flows from investing activities
Acquisition of intangible assets and property,
plant and equipment
-233
-298
Loans granted
-6
-16
Acquisition of subsidiaries, net of cash and cash equivalents
acquired
-2 373
-304
Proceeds from disposals of intangible assets and property, plant
and equipment
21
1
Loans repaid
4
15
Net cash flow from investing activities
-2 587
-602
Cash flows from financing activities
Increase in parent company share capital
581
Acquisition net of disposal of treasury shares
-366
-146
Change in ownership interest in controlled entities
-16
Dividends paid to parent company shareholders
-227
-194
Financial interest paid
-88
-49
Lease payments
-261
-244
Increase in financial liabilities
5 779
1 627
Repayment of financial liabilities
-4 083
-1 709
Net cash flow from financing activities
1 319
-715
Change in cash and cash equivalents
107
-23
Effect of exchange rates on cash held
-53
1
Net cash at January 1
813
835
Net cash at December 31
867
813
* Restated following the finalization of the measurement of the
assets and liabilities of PSG Global Solutions
Appendix 3 – Glossary - 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.
2022 revenue
8,154
Currency effect
-346
2021 revenue at constant exchange
rates
7,808
Like-for-like growth
133
Change in scope
404
2023 revenue
8,345
EBITDA before non recurring items or current EBITDA (Earnings
before Interest, Taxes, Depreciation and Amortizations):
Operating profit before depreciation & amortization,
depreciation of right-of-use of leased assets, amortization of
intangible assets acquired as part of a business combination,
goodwill impairment charges and non-recurring items.
2023
2022*
Operating profit
1,011
992
Depreciation and amortization
266
281
Depreciation of right-of-use of leased
assets
201
192
Depreciation of right-of-use of leased
assets – personnel related
18
15
Amortization of intangible assets acquired
as part of a business combination
141
143
Goodwill impairment
4
8
Share-based payments
105
113
Other operating income and expenses
29
6
EBITDA before non-recurring
items
1,775
1 750
* Restated following the finalization of the measurement of the
assets and liabilities of PSG Global Solutions
EBITA before non recurring items or current EBITA (Earnings
before Interest, Taxes and Amortizations):
Operating profit before amortization of intangible assets
acquired as part of a business combination, goodwill impairment
charges and non-recurring items.
2023
2022*
Operating profit
1,011
992
Amortization of intangible assets acquired
as part of a business combination
141
143
Goodwill impairment
4
8
Share-based payments
105
113
Other operating income and expenses
29
6
EBITA before non-recurring
items
1,290
1,262
* Restated following the finalization of the measurement of the
assets and liabilities of PSG Global Solutions
Non recurring items:
Principally comprises restructuring costs, incentive share award
plan expense, costs of closure of subsidiary companies, transaction
costs for the acquisition of companies, and all other expenses that
are unusual by reason of their nature or amount.
Net free cash flow:
Cash flow generated by the business - acquisitions of intangible
assets and property, plant and equipment net of disposals - lease
payments - financial income/expenses.
2023
2022
Net cash flow from operating
activities
1,375
1,294
Acquisition of intangible assets and
property, plant and equipment
-233
-298
Proceeds from disposals of intangible
assets and property, plant and equipment
21
1
Loans granted
-6
-16
Loans repaid
4
15
Lease payments
-261
-244
Financial interest paid
-88
-49
Net cash flow from financing
activities
812
703
Net debt:
Current and non-current financial liabilities - cash and cash
equivalents
12/31/2023
12/31/2022
Non-current liabilities*
Financial liabilities
3,822
2,021
Current liabilities*
Financial liabilities
778
710
Lease liabilities (IFRS 16)
832
688
Loan hedging instruments
3
7
Cash and cash equivalents
-882
-817
Net debt
4,553
2,609
* Excluding lease liabilities
Diluted earnings per share (net profit attributable to
shareholders divided by the number of diluted shares and
adjusted): Diluted earnings per share is determined by
adjusting the net profit attributable to ordinary shareholders and
the weighted average number of ordinary shares outstanding by the
effects of all potentially diluting ordinary shares. These include
convertible bonds, stock options and incentive share awards granted
to employees when the required performance conditions have been met
at the end of the financial year.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240306474401/en/
FINANCIAL ANALYSTS AND INVESTORS Investor relations and
financial communication department TELEPERFORMANCE Tel: +33 1 53 83
59 15 investor@teleperformance.com
PRESS RELATIONS Europe Karine Allouis – Laurent
Poinsot IMAGE7 Tel: +33 1 53 70 74 70 teleperformance@image7.fr
PRESS RELATIONS Americas and Asia-Pacific Nicole
Miller TELEPERFORMANCE Tel: + 1 629-899-0675
tppublicaffairs@teleperformance.com
Telecom Plus (LSE:TEP)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Telecom Plus (LSE:TEP)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
