2020 First-Half Results: presentation

2020 FIRST-HALF RESULTS

January 1, 2020 - June 30, 2020

July 29, 2020

Disclaimer

All forward-looking statements reflect 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.

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Contents

1. 2020 first-half highlights

1. 2020 first-half results
2. Outlook
3. Q&A

3

2020 first-half highlights

Key facts and figures (1)

• H1 financial results show Teleperformance's resilience in the face of adversity
• • Sustained organic growth of +5.0%
  • High profitability with 9.5% EBITA margin
  • Net free cash flow up +11.6% to €192m
• Teleperformance achieves agile transformation to overcome the global health crisis
• • Teleperformance "Protect x3" policy: employee health, business health, cash health
  • A total of 220,000 employees now working from home after a transformation period of just two months
  • Business continuity solutions with all clients
  • More than €1.5 billion in liquidity available
• June 2020 results show business model recovery
• • Strong commercial momentum
  • New financial objectives for profitable growth in 2020 and 2022 outlook

4

2020 first-half highlights

Key facts and figures (2)

• "Best/Great Employer" status confirmed for over 70% of Teleperformance's global network
• Employee health and safety are priority #1 for Teleperformance

Teleperformance - A Best Employer Story (Overall certifications (1))

IBERO LATAM

*

*

*

*

CEMEA INDIA & ME

*	*
	*

*

* Certified

APACEW

*

*

+70%	*17
Employees work at a	76%

*

*

across

subsidiary that has	countries awarded
Of our people work
been certified as a
renewal or first win

*

*

Teleperformance

Spain

1 time *

(1) GPTW + Best Places to Work

23 Countries

*

(2) Renewal process for the other countries in the chart expected in H2

best employer	in a GPTWstcertified
since 1	January
	company.		(2)
	2020

5

2020 first-half highlights

Key facts and figures (3)

• Numerous awards won in the industry

6

2020 first-half highlights

Teleperformance R&D innovation

• TP CLOUD CAMPUS: a comprehensive virtual eco-system to ensure the sustainability of work through remote management

Kernel campus in Lisbon

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Contents

1. 2020 first-half highlights

2. 2020 first-half results

1. Outlook
2. Q&A

8

2020 first-half results

Summary

€m	H1 2020	H1 2019
€/$ exchange rate (12-month average)	€1 = US$1.10	€1 = US$1.13
Revenue	2,660	2,564
Reported growth	+3.7%	+23.9%
Like-for-like growth* (LFL)	+5.0%	+10.4%

Highly resilient financial results

• Solid improvement in business in H1: like-for-like (LFL) revenue growth of +5.0%, accelerating in

EBITDA before non-recurring items*	450	505
% of revenue	16.9%	19.7%
EBITA before non-recurring items*	253	327
% of revenue	9.5%	12.8%
Operating profit	154	255
Net profit - Group share	63	145
Diluted earnings per share (€)*	1.08	2.49

June

• EBITA before non-recurring items: €253 million, or 9.5% of revenue
• Diluted EPS: €1.08

• For the definition of the financial indicators mentioned in the charts and tables, please refer to the Alternative Performance Measures in the appendix

9

2020 first-half results

Revenue growth analysis

		+5.0% LFL
2,564	(31)	+127	2,660
2,533

• Revenue growth: +5% LFL (+3.7% as reported)

• Unfavorable currency effect: decline against the euro in the main Latin American currencies and the Indian rupee, despite the positive impact from the stronger US dollar

H1 2019	Currency effect	H1 2019 at	Like-for-like	H1 2020
		constant	growth (LFL)
		exchange rates

10

2020 first-half results

Monthly LFL growth vs. last year

15%
		V-shaped monthly LFL growth:
10%		• January-February: LFL growth
		above +7% guidance
5%		• March 15-May 30: site
	shutdowns and travel bans
		• June: very strong LFL growth,
0%		except for TLScontact, still
	impacted by extremely low
		visa demand
-5%
	Group	11

2020 first-half results

Revenue by activity

	2020	2019		Change (%)
Revenue (€m)	H1	Q2	H1	Q2	Like-for-like* (LFL)	Reported
	H1	Q2	H1	Q2
Core Services & D.I.B.S.	2,344	1,165	2,221	1,115	+7.3%	+7.9%	+5.6%	+4.5%
- EWAP	856	425	801	401	+4.8%	+4.9%	+6.9%	+6.0%
- Ibero-LATAM	711	355	645	329	+18.5%	+18.8%	+10.2%	+7.9%
- CEMEA	562	288	519	257	+8.3%	+12.9%	+8.1%	+12.1%
- India & Middle East	215	97	255	129	-13.3%	-19.8%	-15.5%	-24.3%
Specialized Services	316	142	344	178	-9.7%	-21.0%	-8.1%	-20.2%
Total	2,660	1,307	2,564	1,293	+5.0%	+3.8%	+3.7%	+1.1%

• At constant exchange rates and scope of consolidation

Core Services & D.I.B.S.:

+7.3% LFL growth, above the initial +7% Group guidance despite the depths of the Covid-19 crisis from March 15 to May 30

Specialized Services:

-9.7% LFL growth, a decline due to extremely low demand in TLScontact

12

2020 first-half results

Margin by activity

Recurring EBITA (€m)	H1 2020	H1 2019
€m	Margin	€m	Margin
Core Services & D.I.B.S.	171	7.3%	215	9.7%
- EWAP	44	5.1%	58	7.2%
- Ibero-LATAM	62	8.7%	69	10.7%
- CEMEA	22	3.8%	32	6.2%
-	India & Middle-East	18	8.4%	39	15.3%
-	Holding companies*	25	-	17	-
Specialized Services	82	26.1%	112	32.6%
Total	253	9.5%	327	12.8%

• Group holding companies relating primarily to Core Services & D.I.B.S. businesses

• H1 margins impacted in all activities:
• • Lockdowns, especially in Tunisia, Philippines and India
  • Work-at-homeagent (WAHA) transformation costs
  • Travel bans (no visa business for TLScontact)

13

2020 first-half results

Core Services & D.I.B.S. - English-speaking market & Asia-Pacific (EWAP)

• Lockdowns in Philippines
• Reduced demand in travel and accommodation
• Return to solid growth in APAC: China and Malaysia

Revenue (€m)

+4.8% LFL

		801	856
+4.9% LFL
401	425
Q2	Q2	H1	H1
2019	2020	2019	2020

EBITA (€m)

% of revenue

58
	44
7.2%
	5.1%
H1 2019	H1 2020

14

2020 first-half results

Core Services & D.I.B.S. - Ibero-LATAM

• Booming growth sustained in H1, despite the health crisis: Teleperformance has just been named Company of the Year in the Contact Center outsourcing services industry in Latin America by Frost & Sullivan
• Strong e-commerce,e-services & financial services wins in H1
• Margin impacted by WAHA transformation costs

Revenue (€m)	+18.5% LFL
		645	711
+18.8% LFL
329	355
Q2	Q2	H1	H1
2019	2020	2019	2020

EBITA (€m)

% of revenue

69	62
10.7%	8.7%
H1 2019	H1 2020

15

2020 first-half results

Core Services & D.I.B.S. - Continental Europe & MEA (CEMEA)

• H1 growth significantly above market
• Revenue: contrasting situations
• • Revenue down in countries with strict lockdowns: France, Tunisia, Italy
  • Revenue up in the rest of the region

• Temporary margin erosion
• • WAHA transformation costs
  • Lockdowns in Tunisia

Revenue (€m)

+8.3% LFL

		519	562
+12.9% LFL
257	288
Q2	Q2	H1	H1
2019	2020	2019	2020

EBITA (€m)

% of revenue

32
	22
6.2%
	3.8%
H1 2019	H1 2020

16

2020 first-half results

Core Services & D.I.B.S. - India & Middle East

• Significant decrease in revenue
• • Limitation to WAHA transformation
  • Major site lockdown in India
• Margin heavily compressed by numerous site closures

Revenue (€m)

-13.3% LFL

-19.8% LFL	255
215

129	97

Q2	Q2	H1	H1
2019	2020	2019	2020

EBITA (€m)

% of revenue

39
	18
15.3%
	8.4%
H1 2019	H1 2020

17

2020 first-half results

Specialized Services

• Decline in revenue explained by the near-shutdownof TLScontact business since April, in the wake of travel restrictions and border closures
• LanguageLine Solutions overcame the impact of the health crisis in healthcare and returned to strong growth in June, supported by its solid delivery model based on interpreters working from home
• Sharp margin contraction for TLScontact despite prompt implementation of cost measures
• Resilient, high EBITA margin for LanguageLine Solutions

Revenue (€m)	-9.7% LFL
		344	316
-21.0% LFL
178	142
Q2	Q2	H1	H1
2019	2020	2019	2020

EBITA (€m)

% of revenue

112
	82
32.6%	26.1%
H1 2019	H1 2020

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2020 first-half results

Operating profitability

€m	H1 2020	H1 2019	Change
Revenue	2,660	2,564	+3.7%
EBITA before non-recurring items	253	327	-22.8%
% revenue	9.5%	12.8%
Amortization of intangible assets	(88)*	(56)
Non-recurring items	(10)	(16)
- Performance share plan	(10)	(11)
- Others	-	(5)
Operating profit	154	255	-39.4%

* Including goodwill impairment for €(34)m related mainly to French-speaking markets

• EBITA margin of €253 million or 9.5% of revenue
• Operating profit of €154 million reflects the impact of:
• • Expenses incurred to protect employees and deploy WAHA during the peak of the crisis for €22 million, partially offset by rent reductions for €3 million and various government support measures for €4 million
  • Goodwill impairment for €34 million related mainly to French-speaking markets
  • Write downs on receivables for €10 million

19

2020 first-half results

Earnings performance

€m	H1 2020	H1 2019	Change
Operating profit	154	255	-39.4%
Financial result	(50)	(47)
Income tax	(41)	(63)
Effective tax rate	39.5%	30.1%
Minority interest	-	-
Net profit - Group share	63	145	-56.6%
Diluted earnings per share (€)	1.08	2.49	-56.6%
Weighted average number of shares* (m)	58.7	58.5
* Used to calculate diluted earnings per share

• Higher effective tax rate owing to impairment losses on goodwill
• Decline in net financing costs related to debt before the impact of IFRS 16
• Net profit - Group share: €63 million
• Diluted earnings per share: €1.08

20

2020 first-half results

Cash flow

€m	H1 2020	H1 2019
Cash flow*	232	286
Change in working capital	80	(13)
Net capital expenditure	(120)	(101)
% revenue	4.5%	3.9%
Net free cash flow*	192	172
* After lease payments, interest paid and taxes

• Net free cash flow: €192 million, up +11.6%
• Capex ratio at 4.5% of revenue, up from 3.9% in

2019

• • Rapid expansion of WAHA during the health crisis
  • Ongoing expansion and new sites reflecting strong client demand, notably in the Ibero- LATAM region
• Decrease in WCR (inflow) reflecting the attention paid throughout the period to outstanding

receivables and postponement of payments on certain tax liabilities

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2020 first-half results

Balance sheet summary

€m	06/30/2020	12/31/2019
	€1 = US$1.12	€1 = US$1.12
Non-current assets	4,643	4,836
o/w intangible assets	3,337	3,479
Working capital*	583	731
Total net assets	5,226	5,567
Equity	2,372	2,569
Provisions and deferred tax liabilities	319	333
Net debt**	2,535	2,665
Total equity and net liabilities	5,226	5,567

• Defined as: trade receivables + current income tax receivable + other current and financial assets
  - trade payables - current income tax - other current liabilities
• Including €653m in lease liabilities (IFRS 16)

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2020 first-half results

Financial position

2,665 (192)

+141 (76)

2,535

• Solid financial structure

(3)

• Over €1.5 billion in liquidity

• Decrease in net debt of €130 million compared with end of 2020

• S&P credit rating confirmed BBB-

Investment Grade in April

Net debt as of	Net free cash	Financial	Dividend	Other*	Net debt as of
12/31/2019	flow	investments			06/30/2020

* Other items include
FX	(58)
Other	(18)
Total	(76)

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Contents

1. 2020 first-half highlights
2. 2020 first-half results 3. Outlook

1. Q&A

24

Outlook

2020 outlook and 2022 financial objectives

• 2020 outlook
• • More dynamic growth expected in H2 2020 vs. H1 2020
  • Annual like-for-like revenue growth of around +6%
  • EBITA margin before non-recurring items of at least 12.5%
• 2022 financial objectives:
• • Revenue of around €7 billion in 2022, including acquisitions in high added-value services
  • Annual average like-for-like revenue growth of at least +6% per year over 2020-2022
  • EBITA margin of around 14.5% in 2022

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Contents

1. 2020 first-half highlights
2. 2020 first-half results
3. Outlook

4. Q&A

26

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