Teleperformance: Strong Growth in 2017 Annual Results

  • Revenue: €4.2 billion (up + 9.0% like-for-like)
  • Current EBITDA: €720 million (up + 29.0%), margin of 17.2%
  • Current EBITA: €556 million (up + 35.9%), margin of 13.3%
  • Diluted earnings per share: €5.31 (up + 44.7%)
  • Net free cash flow: €324 million (up + 37.3%)

PARIS--()--Regulatory News:

The Board of Directors of Teleperformance (Paris:RCF), the worldwide leader in outsourced omnichannel customer experience management, met today and reviewed the consolidated and parent company financial statements for the year ended December 31, 2017. The Group also announced its financial results for the year.

FURTHER STRONG GROWTH IN REVENUE AND EARNINGS IN 2017

  • Revenue: €4,180 million, up + 9.0% like-for-like, up + 14.6% as reported
  • Current EBITDA: €720 million, up + 29.0% vs. 2016, margin on revenue of 17.2%
  • Current EBITA: €556 million, up +35.9% vs. 2016, margin on revenue of 13.3%
  • Diluted earnings per share: €5.31, up +44.7% vs. 2016
  • Dividend per share: €1.85*, up + 42.3% vs. 2016
  • Net free cash flow: €324 million, up + 37.3% vs. 2016
  • Net debt: €1,326 million, or 1.88x EBITDA

KEY DEVELOPMENTS IN 2017

  • Growth in worldwide operations with the addition of nearly 12,000 new workstations
  • Facilities opened in two additional countries, Peru and Kosovo
  • First-time consolidation of LanguageLine Solutions over a 12-month period
  • Preparation for the launch of Praxidia, a unique high value-added customer experience consulting solution
  • Acquisition of Wibilong in the collaborative economy

2018 FINANCIAL OBJECTIVES: CONTINUED PROFITABLE GROWTH

  • Like-for-like revenue growth above + 6%
  • Current EBITA margin of at least 13.5%
  • Ongoing strong net free cash flow generation

CONFIRMATION OF THE FIVE-YEAR STRATEGIC PLAN AND 2022 TARGETS

  • Revenue of more than €6 billion, of which at least 20% from Specialized Services
  • Current EBITA of more than €850 million, or 14.2% of revenue
  • Organic and acquisition-led growth

CHANGES IN THE GROUP'S GOVERNANCE

A strengthened Board of Directors, with the appointment of Patrick Thomas as lead independent director

** Subject to shareholder approval at the next Annual General Meeting, to be held on April 20, 2018.

2017 FINANCIAL HIGHLIGHTS

€ millions   2017   2016   % change
    €1=US$1.13   €1=US$1.11    
Revenue 4,180 3,649 + 14.6%
Like-for-like growth + 9.0%
EBITDA before non-recurring items 720 558 + 29.0%
% of revenue 17.2% 15.3%
EBITA before non-recurring items 556 408 + 35.9%
% of revenue 13.3% 11.2%
Operating profit 355 339 + 4.6%
Net profit - Group share 312 214 + 46.0%
Diluted earnings per share (€) 5.31 3.67 + 44.7%
Dividend per share (€) 1.85* 1.30
Net free cash flow   324   236   + 37.3%

* Submitted to shareholder approval at the Annual General Meeting on April 20, 2018

Commenting on this performance, Teleperformance Chairman and Chief Executive Officer Daniel Julien said: “Teleperformance delivered another record year in 2017, posting revenues of €4.2 billion. At + 9.0%, our organic revenue growth was significantly higher than that of the market and reflected the strong momentum of our two business lines, core services and specialized services, which achieved like-for-like revenue growth of + 8.8% and + 10.4% respectively. Last year’s fourth quarter was also the 23rd consecutive quarter with growth of over + 5%, a testament to Teleperformance’s ability to deliver consistently high growth over the long term. This growth is also profitable and generates cash, as demonstrated by the further gain in EBITA margin before non-recurring items and the increase in net free cash flow of more than + 37%, which significantly reduces our debt and ensures that we are able to meet our financial commitments.

Above all, 2017 enabled us to lay solid foundations for Teleperformance’s future. First, by defining new five-year targets and the strategies to achieve them, through organic growth and targeted acquisitions, primarily in specialized services with high value-added. And then by enhancing our corporate governance system and setting up a more agile and efficient organization to meet our targets. We also pursued our innovation strategy through a partnership agreement to develop chatbot systems and the recent acquisition of Wibilong, which specializes in digital customer and community experience.

In addition, Teleperformance secured a leading position in the fields of data security and privacy within its business sector. In recognition of our global data privacy policy, the Group was awarded a prestigious international HPE-IAPP Privacy Innovation Award during the year and obtained Binding Corporate Rules (BCR) certification from the French Data Protection Authority, CNIL.

Lastly, in order to support our clients as they strive to continually improve the customer experience, we decided to launch a new, high value-added consulting service called Praxidia.

We have entered the new year with confidence. Our financial objectives for 2018 include organic revenue growth of over + 6% and a further improvement in EBITA margin before non-recurring items compared with 2017 despite the decline in the US dollar, which has an unfavorable impact on our margins.”

CONSOLIDATED REVENUE

Consolidated revenue amounted to €4,180 million in 2017, up + 14.6% from 2016 as reported. The increase was mainly due to the €282 million positive contribution from the first-time consolidation of LanguageLine Solutions over a 12-month period and to a €72 million negative currency effect arising primarily from the decrease in the US dollar and the pound sterling, which amply offset the positive effect from the rise of the Brazilian real and the Colombian peso against the euro.

On a like-for-like basis (at constant exchange rates and scope of consolidation), revenue climbed by + 9.0% year-on-year.

REVENUE BY ACTIVITY

Since January 1, 2017, Teleperformance’s business operations have been organized into two activities: Core Services, which cover customer care, technical support and customer acquisition, and Specialized Services, which comprise the recently acquired interpreting services provided by LanguageLine Solutions, the visa application management services outsourced by governments to TLScontact, the analytics solutions offered by the Teleperformance Analytics subsidiary (formerly GN Research), and the services related to debt collection provided in North America by the AllianceOne Receivables Management (ARM) subsidiary.

    2017   % total   2016   % total   % change
€ millions                   Reported   Like-for-like
CORE SERVICES   3,542   85%   3,314   91%   + 6.9%   + 8.8%
English-speaking market & Asia-Pacific   1,607   39%   1,628   45%   (1.3)%   + 1.6%
Ibero-LATAM 1,084 26% 884 24% + 22.6% + 22.4%
Continental Europe & MEA   851   20%   802   22%   + 6.1%   + 8.1%
SPECIALIZED SERVICES   638   15%   335   9%   + 90.4%   + 10.4%
TOTAL   4,180   100%   3,649   100%   + 14.6%   + 9.0%
  • Core Services

Core Services revenue amounted to €3,542 million in 2017, a gain of + 6.9% as reported. Like-for-like revenue growth came to + 8.8% and was led mainly by the Ibero-LATAM region throughout the year.

  • English-speaking market & Asia-Pacific

Annual revenue for the region amounted to €1,607 million in 2017, representing a like-for-like increase of + 1.6% versus 2016.

Revenue was stable on a like-for-like basis in the fourth quarter, representing an improvement on the slight decline in like-for-like revenue recorded in the third quarter.

Teleperformance continued to diversify its client portfolio in the region during the year. The fastest growing client segments in the United States were consumer electronics and e-services, particularly e-tailing and e-transport. Consumer goods and healthcare also contributed to regional revenue growth. Good momentum in these sectors offset a weaker performance from telecommunications activities, particularly offshore. Business was stable year-on-year in the Philippines, reflecting the decision by certain clients to outsource their offshore services to Mexico, whose geopolitical and currency environment was seen as more favorable in 2017.

The downturn in business volumes in the United Kingdom was mainly due to the unfavorable economic and currency environment caused by Brexit, which caused the Group’s existing and potential clients to adopt a wait-and-see attitude. However, thanks to the improvements observed during the year, the Group is confident that business will be stronger in 2018.

In Asia-Pacific, annual growth was not as strong as expected because of the slow start-up of the sites recently opened in China and Malaysia. Given the outlook for new business, growth is not expected to pick up again until the second half of 2018.

  • Ibero-LATAM

In the Ibero-LATAM region, revenue rose by + 22.4% like-for-like and by + 22.6% as reported to represent €1,084 million in 2017. The net currency impact was limited, as the positive effects of gains in the Brazilian real and Colombian peso against the euro were offset by declines in the US dollar and the Argentine and Mexican pesos, also against the euro.

In the fourth quarter, revenue rose by + 21.9% like-for-like, confirming the momentum observed in the first three quarters of the year.

Teleperformance continued to benefit from the significant investments made in the region in 2016 and 2017 and from the successful diversification of its client portfolio among large local and international companies in various business sectors, including leading players in the new economy.

Operations in Portugal (multilingual platforms) and Colombia, along with offshore activities in the region, including in Mexico, delivered the highest levels of growth.

To help meet strong demand in the region, the Group established a presence in Peru during the year. In addition to a high-potential domestic market, Peru offers an attractive geographic position, as well as a working population and an environment that are favorable to offshore services.

  • Continental Europe & MEA

Regional revenue rose by + 8.1% like-for-like and by + 6.1% as reported. The negative currency effects stemmed mainly from the fall in the Egyptian pound and the Turkish lira against the euro.

Growth accelerated during the second half of the year to reach + 10.7% like-for-like in the fourth quarter. The faster pace of expansion reflected brisk sales momentum with global clients. The best performances were primarily achieved in the following geographies:

  • in the Mediterranean region, in Greece (multilingual platforms), Egypt and Turkey,
  • in Eastern Europe (Russia, Poland and Romania), and
  • in Scandinavia.

The region's fastest growing markets are consumer electronics, retail, leisure, financial services, travel agencies, transportation and consumer goods. E-services accounted for a good number of the contracts awarded throughout the year, particularly in retail.

Momentum in the region is strong and the economic environment favorable. Business is therefore expected to continue to progress well in 2018.

  • Specialized Services

Annual revenue from Specialized Services totaled €638 million in 2017, versus €335 million in 2016. On a like-for-like basis, revenue growth was + 10.4%.

Like-for-like revenue growth in the fourth quarter came to + 10.2%. For the first time, it includes LanguageLine Solutions for the full three months, given its acquisition date of September 19, 2016.

LanguageLine Solutions, the leading provider of online interpreting services to the US market, saw its business growth accelerate in the fourth quarter, notably due to the impact of hurricanes in the United States. For the full year, the company posted revenue growth that was in line with the forecasts provided by the Group when the acquisition was announced. Business at LanguageLine Solutions is expected to continue to expand at a similar pace in 2018.

TLScontact once again delivered strong business growth, driven by an increase in visa applications and by brisk sales of add-on services. Growth will continue to be sustained by tourist traffic, which is set to remain high in 2018 (particularly out of Asia), but is expected to be impacted by a higher basis of comparison.

The LanguageLine Solutions and TLScontact businesses accounted for around 85% of Specialized Services revenue in 2017.

RESULTS

EBITDA before non-recurring items amounted to €720 million in 2017, up + 29.0% year-on-year, for a margin of 17.2% versus 15.3% in 2016. EBITA before non-recurring items rose by + 35.9% to €556 million from €408 million in 2016. EBITA margin before non-recurring items widened by 210 basis points to 13.3% from 11.2% in 2016. Including the contribution of LanguageLine Solutions over 12 months, the margin widened by 50 basis points year-on-year (12.8% pro forma in 2016).

The further improvement in the Group’s profitability in 2017 reflected the following key trends:

  • Increased margins for Cores Services, with bullish business growth in the Ibero-LATAM region, which has the highest margins of the Group’s three linguistic regions (mix effect), and a continued gradual recovery in margins in Continental Europe & MEA.
  • Increased margins for Specialized Services, with continued strong growth in outsourced visa application management services (TLScontact) and the first-time consolidation over a 12-month period of LanguageLine Solutions, a high-margin business (mix effect).

EBITA BEFORE NON-RECURRING ITEMS BY ACTIVITY

    2017   2016
€ millions        
CORE SERVICES   365   321
% OF REVENUE   10.3%   9.7%
English-speaking market & Asia-Pacific   141   150
% of revenue 8.8% 9.2%
Ibero-LATAM 134 109
% of revenue 12.3% 12.3%
Continental Europe & MEA 43 31
% of revenue 5.0% 3.8%
Holding companies   47   31
SPECIALIZED SERVICES 191 87
% OF REVENUE   29.9%   25.9%
TOTAL   556   408
% OF REVENUE   13.3%   11.2%
  • Core Services

Core Services recorded EBITA before non-recurring items of €365 million in 2017, compared with €321 million the previous year. EBITA margin before non-recurring items increased to 10.3%, versus 9.7% in 2016.

  • English-speaking market & Asia-Pacific

The English-speaking market & Asia-Pacific region posted EBITA before non-recurring items of €141 million in 2017, down from the previous year. EBITA margin before non-recurring items came to 8.8% versus 9.2% in 2016. This primarily reflects:

  • An unfavorable geographic mix effect, with growth in domestic business in the United States stronger than growth in offshore business in the Philippines. Offshore activities flattened during the year to the advantage of nearshore business in Mexico (Ibero-LATAM region), a country that currently has high appeal among clients.
  • A very gradual ramp-up of the sites opened in China and, more recently, Malaysia.
  • An uncertain economic environment in the United Kingdom, which is holding back the Group’s revenues and margins.

Given the contracts signed recently and the projects already under way, together with continued cost discipline and the non-recurrence of the negative effects felt in 2017, the Group is confident in its ability to improve margins in the region in 2018.

  • Ibero-LATAM

EBITA before non-recurring items in the Ibero-LATAM region rose to €134 million in 2017, from €109 million the previous year, and the margin remained high at 12.3%, unchanged from 2016.

Growth in operations in Portugal and Colombia was particularly robust and profitable over the year, while margins continued to improve steadily in Spain.

The region benefited once again from the currency trends that continue to favor nearshore business in Mexico serving the US market.

With the market environment remaining very dynamic, the Group intends to continue to improve its margins in the region in 2018.

  • Continental Europe & MEA

In the Continental Europe & MEA region, Teleperformance remained on the steady upward trend in profitability that began in 2012. EBITA before non-recurring items amounted to €43 million in 2017, for a margin of 5.0% versus 3.8% in 2016. The increase reflects two main positive factors:

  • Strong growth in demand from global clients, notably through the sustained development of multilingual solutions, and very good margin improvements in a number of countries in Southern and Eastern Europe, including Turkey, Egypt and Romania. The mix effect stemming from strong growth in business in Greece and Russia was also positive.
  • Ongoing improvement in profitability driven by strict cost discipline in certain countries, such as Germany and the Nordics, and to a lesser extent Italy with the development of its offshore solutions in Albania. The Group strengthened its offshore portfolio by setting up operations in Kosovo to serve the German market, thereby improving the competitiveness of its offering in the region.

In light of the promising economic environment and its positioning in the region, the Group is confident that margins will continue to improve in 2018.

  • Specialized Services

Specialized Services reported EBITA before non-recurring items of €191 million in 2017, compared with €87 million the previous year. EBITA margin before non-recurring items increased to 29.9%, versus 25.9% in 2016.

The change was primarily due to the first-time consolidation of LanguageLine Solutions over a 12-month period in 2017.

If the contribution from LanguageLine Solutions had been included over the full 12 months in 2016, revenue and EBITA before non-recurring items for that year would have been €596 million and €178 million respectively, for a margin of 29.9%.

Specialized Services margins are expected to remain high in 2018.

Consolidated operating profit (EBIT) amounted to €355 million in 2017, versus €339 million the previous year. It included:

• Amortization of intangible assets on acquisitions in an amount of €87 million, up from the previous year due to the acquisition of LanguageLine Solutions,

• €67 million in goodwill impairment,

• €24 million in accounting expenses relating to performance share plans,

• €23 million in other non-recurring expenses.

The financial result represented a net expense of €50 million, versus €39 million in 2016.

Income tax expense amounted to €122 million before taking into account US tax reform, which generated tax income of €131 million for the Group. As a result, tax income of €9 million was recorded in the Group’s consolidated statement of income for 2017.

Net profit attributable to non-controlling interests represented €2 million.

Net profit - Group share amounted to €312 million, up + 46.0% from the previous year (€214 million). Diluted earnings per share rose to €5.31, compared with €3.67 in 2016.

The Board of Directors will recommend that shareholders at the Annual General Meeting on April 20, 2018 approve an increase in the 2017 dividend to €1.85 per share from the €1.30 paid in respect of 2016. This would correspond to a payout ratio of 35%, unchanged from the prior year.

CASH FLOWS AND FINANCIAL STRUCTURE

Cash flow after interest paid and tax amounted to €529 million in 2017, versus €409 million the year before.

The change in consolidated working capital requirement was an outflow of €58 million in 2017 compared with an inflow of €17 million in 2016.

The Group continued to increase its production capacity during the year, in line with a strategy of controlled investment and optimum allocation of capital. Net capital expenditure amounted to €147 million versus €190 million the previous year, corresponding to 3.5% of revenue versus 5.2% in 2016. The funds were used to create and extend contact centers, particularly in the Ibero-LATAM region.

Consolidated net free cash flow totaled €324 million in 2017 versus €236 million the previous year, representing a sharp 37.3% increase despite the rise in interest paid. This solid performance reflects growth in both revenue and margins. Cash conversion (net free cash flow divided by EBITDA before non-recurring items) stood at 45%, up from 42% in 2016.

After the payment of €75 million in dividends, net debt stood at €1,326 million at December 31, 2017, versus €1,667 million a year earlier.

The net debt-to-equity ratio amounted to 72% and the net debt-to-EBITDA ratio was 1.88, down from 87% and 2.60 respectively at December 31, 2016.

KEY DEVELOPMENTS IN 2017

  • Extensions and new facilities

To support the rapid expansion of its business, in 2017 the Group continued to enhance both its offshore capacity and its presence in fast-growth markets by extending and opening facilities across the three linguistic regions. In all, 18 new contact centers were opened, primarily in the Ibero-LATAM region, and the number of workstations was increased at existing sites, for a total of nearly 12,000 additional workstations.

The breakdown by region was as follows:

• In Continental Europe & MEA, several new centers were opened during the year: in Kosovo, where the Group has set up operations to serve the German market, as well as in Russia, Turkey, Poland and the Netherlands.

• In the English-speaking market & Asia-Pacific region, new facilities were opened in Canada, China and the United Kingdom.

• In the Ibero-LATAM region, the Group established a presence in Peru and opened new facilities in Colombia, Spain, Portugal and Brazil.

  • Acquisition of Wibilong

In November 2017, Teleperformance acquired French start-up Wibilong, a pioneer in collaborative brand and consumer solutions. Wibilong provides digital businesses with a SaaS (Software as a Service) platform that generates huge amounts of content through product-related discussions, thanks to the creation and activation of consumer communities.

The acquisition reflects the Group’s ambitions for 2022 and is an example of the strategic drivers that it intends to implement over the next five years. It enables Teleperformance to enhance its digital and omnichannel offering and reinforce its positioning as the customer experience partner of choice for major retail and consumer goods brands.

  • Launch of the Praxidia solution

Scheduled for rollout in 2018, Praxidia is Teleperformance’s new high value-added customer experience (CX Consulting & Analytics) consulting solution.

The Praxidia approach is based on the Group’s front-line expertise in customer experience, acquired in the four corners of the globe. The business benefits from the Group’s expertise in more than 20 key sectors, its cutting-edge capabilities in research and development (CX Lab) and its Analytics solutions.

CHANGES IN THE GROUP'S GOVERNANCE AND ORGANIZATION

Teleperformance adopted a leaner, more “agile” organization in 2017 with a diverse, strengthened Executive Committee whose members represent a broad range of nationalities and cultures and years of experience in the Group, and has also streamlined its governance structure.

Daniel Julien has become the Group’s Chairman and Chief Executive Officer, a decision that reflects the Board’s confidence in his ability to implement the Group’s new five-year strategic plan, presented in October 2017.
In addition, Olivier Rigaudy has been appointed Deputy Chief Executive Officer in charge of Finance.

On December 7, 2017, the Board of Directors appointed Patrick Thomas as an independent director, as recommended by the Remuneration and Appointments Committee. The appointment will be submitted to shareholders for ratification at the next Annual General Meeting, to be held in Paris on April 20, 2018. The Board appointed Patrick Thomas as lead independent director on February 28, 2018.

These appointments reflect the Group’s commitment to meeting the highest standards of corporate governance and complying with the recommendations of the Afep-Medef governance code.

DEVELOPMENT STRATEGY AND 2022 FINANCIAL OBJECTIVES

On October 13, 2017, upon publication of its third-quarter 2017 revenue, Teleperformance updated its five-year strategic plan and presented its financial objectives for 2022. The strategic plan provides for two avenues of development – organic growth and further acquisitions.

  • Organic growth drivers

The Group will support organic growth through four main strategic drivers, namely by:

  • Honing industry expertise in high-potential verticals and environments.
  • Continuing to expand across BRICS (Brazil, Russia, India, China and South Africa) and MIST (Mexico, Indonesia, South Korea and Turkey) countries.
  • Enhancing digital and omnichannel integration, targeting more efficient and seamless customer interaction.
  • Launching Praxidia, the Group’s new high value-added customer experience (CX Consulting & Analytics) consulting solution.
  • Additional acquisitions

The acquisition of LanguageLine Solutions in September 2016 illustrated the Group's strategic decision to develop specialized, high value-added services.Through targeted acquisitions, Teleperformance intends to gradually transform the Group into a premium provider of Business Process Outsourcing (BPO) with an international scope. The Group has the financial resources necessary for this acquisition-led growth.

  • 2022 financial objectives

Teleperformance aims to maintain annual organic growth at + 6% between now and 2022. At the same time, the Group will continue to make targeted acquisitions, particularly in specialized, high value-added services, with the goal of generating revenue of at least €6 billion in 2022.

As a result of the positive impact on margins of the higher contribution from specialized services, which are expected to account for at least 20% of revenue, coupled with the gains generated by specific initiatives to improve profitability, the Group aims to achieve EBITA before non-recurring items of at least €850 million in 2022.

OUTLOOK FOR 2018

Confident about the year ahead, Teleperformance has set the following annual financial targets for revenue and margins:

  • Like-for-like revenue growth above + 6%
  • Further growth in EBITA margin before non-recurring items to at least 13.5% of revenue despite the decline in the US dollar against the euro, which has an unfavorable impact on margins.

The Group is also confident about its ability to continue to generate a strong level of cash flow during the year, enabling it to pursue its dynamic development strategy while maintaining strict financial discipline.

DISCLAIMER

The consolidated financial statements have been audited and the auditors have issued their corresponding report.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 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

Date: Thursday, March 1, 2018 at 9:00 AM CET
The meeting, which will be held in Paris, will be simultaneously webcast on www.teleperformance.com. The related presentation may also be downloaded from the site.

The webcast will be available live or for delayed viewing at:
http://teleperformance.webcast.ldvproduction.com/WebcastList.aspx?eid=153&LngId=en

The annual financial report and related presentation will be available after the conference call on www.teleperformance.com at:
https://www.teleperformance.com/en-us/investor-relations/press-releases-and-documentation/financial-results

INVESTOR CALENDAR

Annual general meeting:         April 20, 2018
First-quarter 2018 revenue: April 24, 2018
First-half 2018 results: July 26, 2018
Third-quarter 2018 revenue: November 12, 2018

ABOUT TELEPERFORMANCE

Teleperformance (RCF – ISIN: FR0000051807 – Reuters: ROCH.PA – Bloomberg: RCF FP), the worldwide leader in outsourced omnichannel customer experience management, serves companies and administrations around the world, with customer care, technical support, customer acquisition (Core Services), as well as with online interpreting solutions, visa application management services, data analysis and debt collection programs (Specialized Services). In 2017, Teleperformance reported consolidated revenue of €4,180 million (US$4,720 million, based on €1 = $1.13).

The Group operates 171,000 computerized workstations, with 223,000 employees across 350 contact centers in 76 countries and serving 160 markets. It manages programs in 265 languages and dialects on behalf of major international companies operating in a wide variety of industries.

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 Large 60, CAC Next 20, CAC Support Services, STOXX 600, SBF 120, S&P Europe 350 and MSCI Global Standard. They also have been included in the Euronext Vigeo Eurozone 120 index since December 2015, with regard to the Group’s performance in corporate responsibility.

For more information: www.teleperformance.com
Follow us: Twitter @teleperformance

APPENDICES

BREAKDOWN OF QUARTERLY REVENUE BY ACTIVITY

    Q4 2017   % total   Q4 2016   % total   % change
€ millions                   Reported   Like-for-like
CORE SERVICES   929   86%   900   86%   + 3.1%  

+ 8.8 %

English-speaking market & Asia-Pacific   412   38%   432   41%   (4.8)%   + 0.3%
Ibero-LATAM 284 26% 255 24% + 11.3% + 21.9%
Continental Europe & MEA   233   22%   213   21%   + 9.4%   + 10.7%
SPECIALIZED SERVICES   153   14%   150   14%   + 4.2%   + 10.2%
TOTAL   1,014   100%   1,050   100%   + 3.3%   + 9.0%
    Q3 2017   % total   Q3 2016   % total   % change
€ millions                   Reported   Like-for-like
CORE SERVICES   861   85%   838   92%   + 2.8%   + 7.0%
English-speaking market & Asia-Pacific   383   38%   413   45%   (7.2)%   (1.2)%
Ibero-LATAM 266 26% 229 25% + 16.2% + 17.7%
Continental Europe & MEA   212   21%   196   22%   + 8.1%   + 11.1%
SPECIALIZED SERVICES   153   15%   72   8%   + 111.2%   + 9.2%
TOTAL   1,014   100%   910   100%   + 11.4%   + 7.2%
    Q2 2017   % total   Q2 2016   % total   % change
€ millions                   Reported   Like-for-like
CORE SERVICES   851   84%   785   93%   + 8.4%   + 7.9%
English-speaking market & Asia-Pacific   387   38%   384   45%   + 0.8%   + 2.3%
Ibero-LATAM 264 26% 208 25% + 26.7% + 20.0%
Continental Europe & MEA   200   20%   193   23%   + 3.6%   + 4.9%
SPECIALIZED SERVICES   164   16%   59   7%   + 177.2%   + 10.1%
TOTAL   1,015   100%   844   100%   + 20.2%   + 8.0%
    Q1 2017   % total   Q1 2016   % total   % change
€ millions                   Reported   Like-for-like
CORE SERVICES   901   85%   790   94%   + 14.0%   + 11.7%
English-speaking market & Asia-Pacific   425   40%   399   47%   + 6.4 %   + 5.0%
Ibero-LATAM 271 25% 192 23% + 40.9% + 30.6%
Continental Europe & MEA   206   20%   199   24%   + 3.2%   + 5.4%
SPECIALIZED SERVICES   165   15%   54   6%   ns   + 12.9%
TOTAL   1,066   100%   844   100%   + 26.3%   + 11.7%

CONSOLIDATED INCOME STATEMENT

€ millions

    2017   2016
         
Revenues   4,180   3,649
Other operating revenues 8 5
Personnel (2,746) (2,435)
External expenses (700) (642)
Taxes other than income taxes (22) (19)
Depreciation and amortization (164) (150)
Amortization of intangible assets acquired as part of a business combination (87) (41)
Goodwill impairment (67) -
Share-based payments (24) (22)
Other operating income and expenses (23) (6)
Operating profit 355 339
Income from cash and cash equivalents 1 1
Interest on financial liabilities (60) (35)
Net financing costs (59) (34)
Other financial net expenses 9 (5)
Financial result (50) (39)
Profit before taxes 305 300
Income tax 9 (83)
Net profit 314 217
Net profit - Group share 312 214
Net profit attributable to non-controlling interests 2 3
Basic earnings per share (in €) 5.40 3.73
Diluted earnings per share (in €) 5.31 3.67

CONSOLIDATED BALANCE SHEET

€ millions

ASSETS   12.31.2017   12.31.2016
         
Non-current assets    
Goodwill 1,676 1,938
Other intangible assets 946 1,172
Property, plant and equipment 423 476
Financial assets 43 55
Deferred tax assets 28 31
Total non-current assets 3,116 3,672
Current assets
Current income tax receivable 62 46
Accounts receivable – Trade 896 871
Other current assets 93 100
Other financial assets 38 24
Cash and cash equivalents 285 282
Total current assets 1,374 1,323
Total assets 4,490 4,995
 
EQUITY AND LIABILITIES   12.31.2017   12.31.2016
         
Shareholders' equity
Share capital 144 144
Share premium 575 575
Translation reserve (165) 100
Other reserves 1,356 1,092
Equity attributable to owners of the company 1,910 1,911
Non-controlling interests 12 10
Total shareholder's equity 1,922 1,921
Non-current liabilities
Provisions 15 13
Financial liabilities 1,387 1,688
Deferred tax liabilities 234 444
Total non-current liabilities 1,636 2,145
Current liabilities
Provisions 52 39
Current income tax 90 61
Accounts payable - Trade 141 126
Other current liabilities 425 442
Financial liabilities 224 261
Total current liabilities 932 929
Total equity and liabilities 4,490 4,495

CONSOLIDATED CASH FLOW STATEMENT

€ millions

Cash flows from operating activities   2017   2016
         
Net profit - Group share   312   214
Net profit attributable to non-controlling interests 2 3
Income tax expense (credit) (9) 83
Net financial expense 53 29
Expense (income) without effect on cash 363 196
Income tax paid (147) (83)
Internally generated funds from operations 574 442
Change in working capital (58) 17
Net cash flow from operating activities 516 459
 
Cash flows from investing activities        
         
Acquisition of intangible assets and property, plant and equipment (148) (192)
Loans made (10)
Proceeds from disposals of intangible assets and property, plant and equipment 1 2
Repayment of loans 1
Investments in subsidiaries (4) (1,380)
Net cash flow from investing activities (151) (1,579)
 
Cash flows from financing activities        
         
Acquisition/disposal of treasury shares (1) (17)
Change in ownership interest in controlled entities (39) (33)
Dividends paid to parent company shareholders (75) (68)
Financial income/expense (45) (33)
Increase in financial liabilities 1,729 2,696
Repayment of financial liabilities (2,022) (1,355)
Net cash flow from financing activities (453) 1,190
 
Change in cash and cash equivalents (88) 70
Effect of exchange rates on cash held -   92   (45)
Net cash at January 1st   279   254
Net cash at December 31st   283   279

ALTERNATIVE PERFORMANCE MEASURES

EBITDA before non-recurring items or current EBITDA (Earnings before Interest, Taxes, Depreciation and Amortizations):
Operating profit before depreciation & amortization, amortization of intangible assets acquired as part of a business combination, goodwill impairment charges and non-recurring items.

    2017   2016
           
Operating profit   355   339
Depreciation and amortization 164 150
Amortization of intangible assets acquired as part of a business combination 87 41
Goodwill impairment 67 0
Share-based payments 24 22
Other operating income and expenses 23 6
EBITDA before non-recurring items 720 558

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.

    2017   2016
           
Operating profit   355   339
Amortization of intangible assets acquired as part of a business combination 87 41
Goodwill impairment 67 0
Share-based payments 24 22
Other operating income and expenses 23 6
EBITA before non-recurring items 556 408

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 - financial income/expenses.

    2017   2016
           
Net cash flow from operating activities   516   459
Acquisition of intangible assets and property, plant and equipment (148) (192)
Proceeds from disposals of intangible assets and property, plant and equipment 1 2
Financial income/expense (45) (33)
Net cash flow from financing activities 324 236

Net debt:
Current and non-current financial liabilities - cash and cash equivalents

    2017   2016
           
Non-current liabilities    
Financial liabilities 1,387 1,688
Current liabilities
Financial liabilities 224 261
Cash and cash equivalents (285) (282)
Endettement net ou dette nette 1,326 1,667

Change in like-for-like revenue:
Change in revenue at constant exchange rates and scope of consolidation, corresponding to current year revenue - last year revenue at current year rates - revenue from acquisitions at current year rates / last year revenue at current year rates.

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.

NB:

  • The consolidated financial statements have been audited and certified
  • The Alternative Performance Measures (APMs) are defined in the Appendix

Contacts

INVESTOR RELATIONS
TELEPERFORMANCE
QUY NGUYEN-NGOC
SVETLANA SAVIN
Phone: +33 1 53 83 59 87 / 59 15
investor@teleperformance.com
or
PRESS RELATIONS
IMAGE7
SIMON ZAKS, Phone: +33 1 53 70 74 70
szaks@image7.fr

Contacts

INVESTOR RELATIONS
TELEPERFORMANCE
QUY NGUYEN-NGOC
SVETLANA SAVIN
Phone: +33 1 53 83 59 87 / 59 15
investor@teleperformance.com
or
PRESS RELATIONS
IMAGE7
SIMON ZAKS, Phone: +33 1 53 70 74 70
szaks@image7.fr