First-Half 2015 Results
Sustained growth in results and margins
PARIS, JULY 28, 2015 - The Board of Directors of Teleperformance, the global leader in outsourced multi- channel customer experience management, met today and reviewed the consolidated financial statements for the six months ended June 30, 2015. The Group also announced its half-year financial results.
GROWTH IN RESULTS AND MARGINS IN FIRST-HALF2015Versus first-half 2014:
| Revenue: Like-for-like growth*: | €1,658 million, up + 33.2% + 7.8% |
| EBITA before non-recurring items: EBITA margin before non-recurring items: | €144 million, up + 43.6% 8.7% versus 8.1% year-on-year |
| Diluted earnings per share: | €1.45, up + 45.1% |
| Net free cash flow | €95 million versus €15 million year-on-year |
Like-for-like revenue growth of at least + 7%
EBITA margin of at least 10.3%, versus 9.7% in 2014
GLOBAL MARKET LEADERSHIP CONFIRMED Unique global presence in more than 60 countries
Continued expansion of the Group's footprint during the first half of 2015, with the creation of c. 8,000 new workstations in its key markets, mainly in the Philippines, China and Southern Europe
A robust geographical mix: almost 50% of revenue generated in North America and Asia-Pacific,
26% in Latin America and 25% in Europe, the Middle East and Africa
*at constant exchange rates and scope of consolidation
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.1/10
INTERIM FINANCIAL HIGHLIGHTS
€ millions | H1 2015 | H1 2014 | % change |
€1 = US$ 1.12 | €1 = US$ 1.37 | ||
Revenue | 1,658 | 1,245 | + 33.2% |
Like-for-like growth | + 7.8% | ||
EBITA before non-recurring items* | 144 | 100 | + 43.6% |
% of revenue | 8.7% | 8.1% | |
Operating profit | 126 | 89 | + 41.3% |
Net profit - Group share | 83 | 57 | + 45.1% |
Diluted earnings per share (€) | 1.45 | 1.00 | + 45.1% |
*Operating income before amortization of acquisition related intangibles, loss of goodwill value and excluding non-recurring items.
Paulo César Vasques, Chief Executive Officer of Teleperformance, said: 'We had a good first half with like-for-like revenue growth of + 7.8% and a further improvement in our EBITA margin to 8.7%, which is in line with our 2015 targets. Driven by robust performances in our three operating regions, Teleperformance further strengthened its global market leadership. In North America, growth was particularly sustained following our strategic acquisition in
2014 of Aegis USA Inc., the integration of which is now complete. In Latin America, Brazil enjoyed particularly healthy business momentum. In Europe, where the Group remains the unrivaled leader, the fastest growth came from the southern and eastern regions.
Our growth was not only profitable but also controlled, with improved margins and liquidity management discipline, both reflected in high cash flow generation.
For 2015, we are confirming our full-year guidance, targeting at least + 7% like-for-like revenue growth and an EBITA margin before non-recurring items of at least 10.3%, despite the increase in costs due to measures required to strengthen data security and the geographic mix effect of lower growth in the Group's offshore activities.'
Daniel Julien, Executive Chairman of Teleperformance, added: 'With our excellent financial position and cash flows, there are still many opportunities for us to expand and create value for our shareholders and customers. Outsourcing is still relatively underdeveloped in the highly fragmented customer experience market.
The Group's continued expansion will also be supported by the growing complexity of our activities, not only due to the new needs triggered by the digital revolution but also the challenges of data security. Over time, these areas offer us a genuinely significant opportunity to make a difference and win market share.'
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N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.2/10
FIRST-HALF AND SECOND-QUARTER2015 REVENUECONSOLIDATED REVENUE
Consolidated revenue amounted to €1,658 million in the first half of 2015, representing a year-on-year increase of + 7.8% at constant exchange rates and scope of consolidation (like-for-like).
On a reported basis, growth was + 33.2%. It includes the aggregate €190 million contribution from Aegis USA Inc., consolidated since August 7, 2014, and City Park Technologies (CPT), consolidated since July 1, 2014. It also reflects the €117 million positive currency effect arising from the increase in the US dollar, British pound and certain other currencies against the euro.
Consolidated revenue for the second quarter stood at €827 million, an increase of + 30.2% as reported and of
+ 5.7% like-for-like.
REVENUE BY REGION
In the first half of 2015, all of the operating regions reported satisfactory like-for-like growth, above the global market average.
The geographic mix remains robust, with 75% of revenue generated in predominant markets delivering profitability and growth, compared to 65% in 2010. During the period, the English speaking market & Asia- Pacific region represented almost 50% of consolidated revenue, the Ibero-LATAM region 26% and Continental Europe & MEA 25%.
€ millions 2015 2014
% change
Reported Like-for-like
FIRST HALF
English-speaking market & Asia-Pacific | 815 | 495 + 64.7% + 6.4% |
Ibero-LATAM | 422 | 367 + 15.0% + 8.1% |
Continental Europe & MEA | 421 | 383 + 9.9% + 9.8% |
TOTAL | 1,658 | 1,245 + 33.2% + 7.8% |
SECOND QUARTER
English-speaking market & Asia-Pacific | 399 | 249 + 59.8% + 3.0% |
Ibero-LATAM | 214 | 188 + 13.8% + 7.9% |
Continental Europe & MEA | 214 | 198 + 8.4% + 7.8% |
TOTAL | 827 | 635 + 30.2% + 5.7% |
FIRST QUARTER
English-speaking market & Asia-Pacific | 416 | 245 + 69.7% + 9.9% |
Ibero-LATAM | 209 | 180 + 16.3% + 8.3% |
Continental Europe & MEA | 206 | 185 + 11.5% + 12.0% |
TOTAL | 831 | 610 + 36.3% + 10.0% |
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.3/10
English-speaking market & Asia-Pacific
Compared with the prior year, first-half regional revenue rose by + 6.4% like-for-like and by + 64.7% as reported, led mainly by the acquisition in the United States and the positive currency effect.
In the second quarter, revenue rose by + 3.0% like-for-like and by + 59.8% as reported due to the favorable currency environment coupled with acquisitions.
Following a second quarter in which like-for-like growth was less sustained - reflecting a very high basis of comparison in 2014 and a slowdown in offshore business with some clients - business momentum should remain favorable in the second half, driven by the new contracts recently signed in the United States in the healthcare, financial services and insurance sectors.
The pace of growth also remained strong in the Asia-Pacific region, particularly in China where Teleperformance has successfully forged preferred partnership relations with locally based North American multinationals. The Group continues to strengthen its presence by opening and expanding new facilities.
Ibero-LATAM
The Ibero-LATAM region delivered strong revenue growth in the first half of 2015, advancing + 8.1% like-for- like and + 15.0% as reported. The difference was mainly due to the favorable currency environment driven by the increase in the US dollar.
In the second quarter, revenue rose by + 7.9% like-for-like and by + 13.8% as reported thanks to the favorable currency environment.
Despite a still lackluster economy, Brazil remained the Group's most dynamic market in the Ibero-LATAM region, with Teleperformance continuing to benefit in first-half 2015 from the successful ramp-up of new contracts signed with existing premium clients during the second half of last year.
Operations in Portugal continued to deliver satisfactory growth, still powered by the success of the Lisbon- based multilingual platforms.
Continental Europe & MEA
Regional revenue rose by + 9.8% like-for-like and by + 9.9% as reported in the first half, and by + 7.8% like-for- like and + 8.4% as reported in the second quarter.
The quarter-on-quarter slowdown in the region was largely due to a higher basis of comparison relating to the start-up of a major new contract in outsourced visa application management in the second quarter of 2014.
The Group continues to post solid business gains with global clients, particularly in the Netherlands, Eastern
Europe (Russia, Poland and Romania) and Southern Europe (Greece, Turkey and Egypt).
Germany and, to a lesser extent, the Nordic countries, remain highly competitive markets where developing the Group's solutions profitably is more challenging.
Thanks to healthy growth in offshore business in Morocco and Tunisia, France delivered an improved year-on- year performance, as expected. Action plans aimed at restoring profitability in France continue apace and on track with the Group's targets.
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.4/10
FIRST-HALF2015 RESULTS
EBITA before non-recurring items stood at €144 million, up + 43.6% from the €100 million reported in first-half
2014. EBITA margin before non-recurring items widened to 8.7% from 8.1% a year earlier.
EBITA BEFORE NON-RECURRING ITEMS BY REGION- EXCLUDING HOLDING COMPANIES
€ millions H1 2015 H1 2014
English-speaking market & Asia-Pacific 75 47
% of revenue 9.2% 9.4%
Ibero-LATAM 44 37
% of revenue 10.4% 9.8%
Continental Europe & MEA 9 4
% of revenue 2.1% 1.0%
Total - including holding companies 144 100
% of revenue 8.7% 8.1%
EBITA before non-recurring items in the English-speaking and Asia-Pacific region rose to €75 million in the first half of 2015, compared to €47 million in the prior-year period. These gains were driven by satisfactory volume growth, the contribution of Aegis USA Inc. acquired in August 2014, and the sharp increase in the US dollar against the euro. EBITA margin before non-recurring items remained high, at 9.2% versus 9.4% for the prior- year period. The slight decline was mainly due to start-up costs on major contracts in the United States, an unfavorable mix effect stemming from business trend with some clients, and the impact on payroll costs of the Patient Protection and Affordable Care Act (Obama Care) in the United States.
EBITA before non-recurring items in the Ibero-LATAM region rose to €44 million in the first half of 2015, compared to €37 million in the prior-year period. EBITA margin before non-recurring items remained high, rising to 10.4% versus 9.8% in the first half of 2014, mainly due to strong, profitable growth in the Brazilian market, coupled with favorable currency trends for offshore business in Mexico serving the US market.
EBITA before non-recurring items in the Continental & MEA region came to €9 million, giving a margin of 2.1% versus 1.0% in the prior-year period. This improvement reflects the success of the profitability recovery strategy pursued by Teleperformance in the region over the past few years. The Group benefited from healthy business growth in a certain number of countries in Southern and Northern Europe and sustained expansion of TLScontact's business in outsourced visa application management.
Operating profit amounted to €126 million, up + 41.3% from €89 million in first-half 2014.
First-half 2015 operating profit reflects the amortization of intangible assets in an amount of €12 million versus
€4 million in the prior-year period. The increase was due to the acquisition of Aegis USA Inc. in August 2014 coupled with non-recurring expenses, mainly corresponding to a €6 million accounting expense on the performance share plans set up in 2013.
Financial result stood at €4 million, versus €5 million in 2014. Although debt increased following the US acquisition in 2014, the increase in interest income was more than offset by foreign exchange gains resulting from the Group's active hedging policy.
Income tax expense amounted to €38 million, corresponding to an effective tax rate of 31.6%, versus 31.4% in the prior-year period.
Minority interests in net income amounted to €1 million.
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.5/10
Net profit - Group share increased by + 45.1%, to €83 million from €57 million in the prior-year period. Diluted earnings per share stood at €1.45, up + 45.1% year-on-year.
CASH FLOWS AND FINANCIAL STRUCTURE
Cash flow after tax rose to €158 million from €108 million in first-half 2014.
Change in consolidated working capital requirement was an inflow of €23 million, vs an outflow of €17 million in the prior-year period. This good performance reflects the success of the policy deployed to improve the Group's liquidity.
Net capital expenditure amounted to €86 million, or 5.2% of revenue, versus €76 million, or 6.1% of revenue, in the first half of 2014, which included some significant expenditures related to the new visa application management contract signed with the UK government. In the first half of 2015, the Group's capital expenditure focused on creating or expanding contract centers serving key markets in Asia, North & Latin America and CEMEA.
In all, free cash flow increased sharply, to €95 million versus €15 million in the prior-year period.
After the payment of €53 million in dividends, net debt stood at €429 million at June 30, 2015. The Group's financial structure therefore remains very solid, with equity of €1,701 million at June 30, 2015.
In the first half of 2015, Teleperformance continued to deploy its strategy of expanding in a large number of key countries, opening new facilities in Asia (Philippines and China), Latin America (Guyana and Surinam) and CEMEA (Albania and Dubai). Most of these developments have strengthened the Group's global offshore network.
The Group also expanded the number of workstations in existing facilities in Canada, the Philippines, China, El
Salvador, Mexico and CEMEA (Greece, Italy, Morocco, Netherlands and Russia). In all, 8,000 new workstations were installed during the first half.
Based on half-year results, Teleperformance is confirming its full-year guidance, targeting at least + 7% like-for- like revenue growth and an EBITA margin of at least 10.3%, despite the increase in certain costs due to measures required to strengthen data security and the unfavorable geographical mix effect stemming from business trend with some clients.
In addition, Teleperformance expect to deliver a strong growth in its net free cash flow vs 2014.
Date: Tuesday, July 28, 2015 at 6:30 PM CEST
Presentation materials will also be available at www.teleperformance.com.
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.6/10
INVESTOR CALENDARThird-quarter 2015 revenue: Thursday, November 12, 2015
ABOUTTELEPERFORMANCEGROUP
Teleperformance, the worldwide leader in outsourced multichannel customer experience management, serves companies around the world with customer care, technical support, customer acquisition and debt collection programs. In 2014, it reported consolidated revenue of €2,758 million ($3,665 million, based on €1 = $1.33).
The Group operates around 135,000 computerized workstations, with more than 182,000 employees across around 270 contact centers in 62 countries and serving more than 160 markets. It manages programs in
75 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: STOXX 600, SBF 120, Next 150, CAC Mid 60 and CAC Support Services.
Symbol: RCF - ISIN: FR0000051807 - Reuters: ROCH.PA - Bloomberg: RCF FP
For more information:www.teleperformance.com
Follow us on Twitter: @teleperformance
CONTACTSINVESTORRELATIONS ANDPRESS
QUYNGUYEN-NGOC
Tel: +33 1 53 83 59 87 quy.nguyen@teleperformance.com
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.7/10
APPENDICESCONSOLIDATED INCOME STATEMENT
€ millions
1st half
year 2015
1st half
year 2014
Revenues 1 658 1 245
Other operating revenues 3 3
Personnel -1 124 -868
External expenses -317 -226
Taxes other than income taxes -8 -6
Depreciation and amortization -68 -50
Amortization of intang. assets acquired as part of a business com -12 -4
Share-based payments -6 -3
Other operating income and expenses -2
Operating profit 126 89
Income from cash and cash equivalents 1
Interest on financial liabilities -12 -6
Net financing costs -12-5
Other financial income 44 15
Other financial expenses -36 -15
Financial result -4 -5
Profit before taxes 122 84
Income tax -38 -27
Net profit 84 57
Net profit - Group share 83 57
Net profit attributable to non-controlling interests 1 0
Basic earnings per share (in €) 1,45 1,00
Diluted earnings per share (in €) 1,45 1,00
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.8/10
CONSOLIDATED CASH FLOW STATEMENT
€ millions
Cash flows from operating activities | 1s t ha l f 1s t ha l f year 2015 year 2014 | ||
Net profi t - Group s ha re Net profi t a tti buta bl e to non-c | 83 1 38 85 -49 158 23 | 57 | |
Net profi t - Group s ha re Net profi t a tti buta bl e to non-c | ontrol l i ng i nteres ts | 83 1 38 85 -49 158 23 | 0 |
I ncome ta x expens e | 83 1 38 85 -49 158 23 | 27 | |
Expens e (i ncome) wi thout effect on ca s h | 83 1 38 85 -49 158 23 | 53 | |
I ncome ta x pa i d | 83 1 38 85 -49 158 23 | -29 | |
Internally generated funds from operations | 83 1 38 85 -49 158 23 | 108 | |
Change in working capital | 83 1 38 85 -49 158 23 | -17 | |
Net cash flow from operating activities 181 91 |
Cash flows from investing activities
Acqui s i ti on of i nta ngi bl e a s s ets a nd property, pl a nt a n | d -88 -1 2 2 | -77 |
Loa ns ma de | d -88 -1 2 2 | 0 |
Proceeds from di s pos a l s of i nta ngi bl e a s s ets a nd property, pl a nt a nd equi pment | d -88 -1 2 2 | 1 |
Repa yment of l oa ns | d -88 -1 2 2 | 1 |
Net cash flow from investing activities -85 -75 |
Cash flows from financing activities
Acqui s i ti on/di s pos a l of trea s ury s ha res | -2 -2 -53 415 -381 | -1 |
Cha nge i n owners hi p i nteres t i n control l ed enti ti es | -2 -2 -53 415 -381 | -7 |
Di vi dends pa i d to pa rent compa ny s ha rehol ders | -2 -2 -53 415 -381 | -46 |
I ncrea s e i n fi na nci a l l i a bi l i ti es | -2 -2 -53 415 -381 | 127 |
Repa yment of fi na nci a l l i a bi l i ti es | -2 -2 -53 415 -381 | -84 |
Net cash flow from financing activities -23 -11 |
Change in cash and cash equivalents | 73 -31 | 5 |
Effect of exchange rates on cash held | 73 -31 | 4 |
Net cash at January 1st 214 160 Net cash at June 30th 256 169 |
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.9/10
CONSOLIDATED BALANCE SHEET
€ millions
2 927
EQUITY AND LIABILITIES | 06.30.2015 | 12.31.2014 |
Equity Share capital Share premium Translation reserve Other reserves | 143 | 143 575 32 845 |
Equity Share capital Share premium Translation reserve Other reserves | 575 | 143 575 32 845 |
Equity Share capital Share premium Translation reserve Other reserves | 103 874 | 143 575 32 845 |
Equity attributable to owners of the company 1 695 1 595 | ||
Non-controlling interests | 6 | 5 |
Total shareholder's equity 1 701 1 600 | ||
Non-current liabilities Provisions Financial liabilities Deferred tax liabilities | 12 | 10 425 125 |
Non-current liabilities Provisions Financial liabilities Deferred tax liabilities | 450 | 10 425 125 |
Non-current liabilities Provisions Financial liabilities Deferred tax liabilities | 119 | 10 425 125 |
Total non-current liabilities 581 560 | ||
Current liabilities Provisions Current income tax Accounts payable - Trade Other current liabilities Other financial liabilities | 63 | 43 49 123 338 214 |
Current liabilities Provisions Current income tax Accounts payable - Trade Other current liabilities Other financial liabilities | 46 | 43 49 123 338 214 |
Current liabilities Provisions Current income tax Accounts payable - Trade Other current liabilities Other financial liabilities | 119 | 43 49 123 338 214 |
Current liabilities Provisions Current income tax Accounts payable - Trade Other current liabilities Other financial liabilities | 351 | 43 49 123 338 214 |
Current liabilities Provisions Current income tax Accounts payable - Trade Other current liabilities Other financial liabilities | 240 | 43 49 123 338 214 |
Total current liabilities 819 767 |
Total equity and liabilities 3 101 2 927
N.B.: The half-year financial statements at June 30, 2014 and June 30, 2015 have been subject to review by the auditors.10/10
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