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
- 2020 first-half results
- Outlook
- 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
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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 |
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2020 first-half highlights
Key facts and figures (3)
- Numerous awards won in the industry
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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
- Outlook
- 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
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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 |
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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
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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)
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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 |
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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 |
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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 |
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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 |
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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
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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
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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
- 2020 first-half highlights
- 2020 first-half results 3. Outlook
- Q&A
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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
- 2020 first-half highlights
- 2020 first-half results
- Outlook
4. Q&A
26
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Teleperformance SE published this content on 29 July 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 July 2020 17:25:13 UTC