Teleperformance SE (TLPFF) Q4 2022 Earnings Call Transcript

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Teleperformance SE (OTCPK:TLPFF) Q4 2022 Results Conference Call February 17, 2023 3:00 AM ET

Company Participants

Daniel Julien - Chief Executive Officer

Bhupender Singh - President of Transformation

Olivier Rigaudy - Deputy Chief Executive Officer & Group Chief Financial Officer

Conference Call Participants

Oscar Val Mas - JPMorgan

Simona Sarli - Bank of America

Suhasini Varanasi - Goldman Sachs

Anvesh Agrawal - Morgan Stanley

Daniel Julien

Hello. Do we person a video first? Okay. So everything is clear now. So bully morning, bully day aliases bully night, depending wherever you are. Maybe I'm going to spell there.

So, we are going to coming you nan results of 2022 and our first guidance for 2023. Well. So okay, you cognize nan group. So I'm not going to opportunity a batch of things astir this slide, isolated from that nan group is successful a metamorphosis shape passing twelvemonth aft twelvemonth from being wholly focused connected customer acquisition to enlarging our crippled section into what we telephone nan integer integrated business services, which intends that not only today, we are managing customer interaction, but we are besides managing end-to-end outsourced process for our clients.

As you tin see, nan nett number of group has been much aliases little unchangeable contempt nan growth. This is mostly linked to nan COVID onetime business that was overmuch much group intensive versus nan mean of our business. As you tin spot also, successful 2022, truthful astatine nan exit of nan COVID period, we are much aliases little astatine 50-50 successful position of activity organization, 50% moving from location and 50% moving from our centers. We deliberation that we are going to astir apt travel to stabilization astir nan extremity of 2023, that should return america pinch 40% moving from location and 60% moving from nan centers.

So nan year, in fact, we person a grounds maturation and grounds profitability. As usual, I would say, twelvemonth aft year. But successful a twelvemonth that has been everything but boring. First, it started pinch nan warfare successful Eastern Europe. Second, by nan truth that China did not unfastened astatine all, truthful which intends that we person an cognition location that we have not seen for 3 years, very simple.

Third has been a batch of incertitudes connected nan market, specifically successful nan 2nd portion of nan year. Fourth, we person seen nan emergence and nan autumn of nan cryptocurrency marketplace which, by nan way, impacted america besides because we are serving a ample platform, and we person ramped up very aggressively astatine nan opening of nan year, and past we had to ramp down very aggressively owed to nan grounds connected nan cryptocurrency and nan volatility of these markets truthful far.

And it has been besides challenging twelvemonth for nan guidance because abruptly retired of nowhere, we had to look a wholly unsubstantiated politic that distracted nan guidance from its day-to-day task for almost 3 months. Still, a small spot much than €8 billion, 15% maturation has reported 14.6%, 12.5% like-for-like if we exclude nan onetime COVID business. And contempt nan truth that €500 cardinal of COVID contracts went to an end, we still had altogether like-for-like maturation adjacent to positive 6%.

All -- I deliberation it's supra nan guidance we gave early 2022 and besides supra nan guidance that we gave successful summertime 2022. The separator has followed, location is positive 18.5% successful EBITDA, which is up 80 ground points versus 2021 and positive 17.8% successful EBITA. It follows to nan bottom, wherever nan maturation successful nett profit, we paid rather a batch of taxes arsenic usual, we are a group that ne'er tried to optimize its consequence by unusual taxation planning, and we salary our adjacent stock of tax. I telephone that ESG, for nan 1 we springiness lessons and don't salary tax.

We person -- truthful we are going to propose to nan wide assembly of shareholder to administer a dividend of €3.85, which is positive 17% versus past year. The rate travel has been very solid, and we kept our last output BBB standing which is nan benignant of standing that we like. We don't want to beryllium overly blimpish and person an AA rating. And of course, we want to beryllium coagulated capable to merit nan BBB rating.

What did we do? What did we do? Still successful that twelvemonth that was beautiful active. We made nan acquisition of a integer recruitment level that is beautiful absorbing for america because it helps america to enlistee nan group we request each twelvemonth internally, and it helps america to amended penetrate a sector, a vertical that is of precocious liking for america which is nan healthcare successful nan U.S.

The 2nd constituent of this is called CSF. But yes, we person been named champion -- we person nan champion employer certification successful 64 countries that screen much than 97% of nan group workforce. Maybe arsenic a guys who springiness nan champion -- nan champion moving place. Maybe they are unsighted to springiness america this benignant of ranking aliases possibly location are thing that immoderate group who wanted to commencement nan politic did not quote -- did not catch. Sorry.

By immoderate way, arsenic we person to publication nan property and arsenic we person to reside nan press, erstwhile it's negative, we should spot nan property erstwhile it's affirmative besides and nan mag Fortune classed Teleperformance 11 among 10,000 companies successful position of World Best Workplace. There are not galore companies that tin opportunity that. Maybe they are 10. With us, location are 10 users. After we person fewer friends who are a small spot down us, but for us, it's a awesome grant and it intends a lot.

Okay. And past what happened? I'm not going to make usage a gift not to travel backmost connected nan unfair, unsubstantiated, crazy large wind successful a solid of h2o politic that has been started and amplified successful immoderate places. We sewage a antagonistic sound successful media, societal media successful precocious '22 pinch respect to our contented moderation practice. And nan moving conditions astatine Teleperformance successful Colombia.

There was 2 articles successful 3 months from 2 different -- 1 from a journal, 1 from different one, and 1 tweet from a Vice Minister of Labor.

Then erstwhile I was successful a roadshow successful nan U.S. astatine 3 successful nan morning, personification called maine and told me, Daniel, aftermath up. It is simply a disaster, location is simply a monolithic neglect of and nan banal is down 38%, November 10, Black Thursday. If an atomic explosive comes connected nan European metropolis successful nan future, we will beryllium much prepared to that than ours to perceive to this hallucinating story.

So what did we do to reconstruct nan devices and nan trust? We had audited our cognition successful El Paso, Texas because nan 2 places that were successful chat wherever El Paso takes america and Teleperformance successful Colombia. We had nary recovered nary inconsistency. We inquire a third-party audit to double check. It was successful nan power of nan crisis, and this situation was mentioning a customer that is himself, a taxable of statement successful nan U.S., arsenic you know.

And -- by nan way, astatine that time, nan audit patient said, okay, we -- okay, we tin make nan audit, but we don't want to beryllium progressive successful that benignant of politic. So we make nan audit astatine nan information that you do not disclose nan sanction of nan Company that made nan audit.

In nan power of nan crisis, we said, yes, it was possibly a mistake, but we needed to person a 3rd statement because we really wanted it. Then immoderate group who springiness america a batch of in installments truthful that we did not want to uncover nan third-party situation -- nan 3rd statement audit because possibly it was 3rd level audit firm. No, it was a first, first level audit firm.

And what did they find? They're fine. No inconsistency pinch our Teleperformance USA connection and that location was nary agreed usage activity moderated successful El Paso, which we were saying from nan beginning. So nan journalist who question and reply 5 aliases six ex-guys who had activity successful our halfway astatine 1 portion of time, did a unusual job, I person to say. She could person interviewed possibly nan thousands of group moving successful El Paso, and possibly she would person sewage different story, and we are going to talk that afterwards.

But it was clear among nan power of nan play that a ample portion of nan financial organization was concerned pinch nan occupation of contented moderation. For us, we deliberation we are proud to make this job. We deliberation that it's nan astir -- it's possibly nan astir useful occupation that Teleperformance does because we protect nan public. We protect nan family. We protect nan kids from nan bad group successful nan integer world.

I mean successful nan existent world, location are group who are protecting. We telephone them cops. We telephone them firemen, we telephone them first responder. Nobody saying they are bad people, and they should not exist.

But okay, nether nan pressure, we decided we say, okay, fine. We are going to proceed nan contented moderation, but we are going to make judge that pinch our client, we segregate nan 5s that person a precocious level of recurrence of highly egregious content. And this one, we will extremity to return them, nan customer either is going to negociate them internally aliases will springiness this record to different provider. This is simply a determination that we announced successful November 17.

In December 1, because immoderate of nan sound was not wholly -- did not came conscionable wholly by chance, arsenic you tin imagine. So successful December 1, down nan scene, Olivier and I and different group who worked very positively pinch nan Federation of Union who was complaining astir nan business successful Colombia, and we signed a world statement pinch them, which is fundamentally nan contented of nan world statement of nan UN Global Compact that we signed successful 2011. But we admit them arsenic a valid interlocutor, a valid partner to talk nan implementation of nan ESG, that we person thing to hide is perfect. It goes very good pinch us.

Was it enough? We are recovering a small bit, but not truthful much. So first, we thought that we beryllium to our Board to come, see, consciousness and touch. So we took nan Board of Teleperformance for their Board seminar, nan three-day Board seminar successful El Paso, Texas. So they could spot nan horrible information of our worker successful El Paso, Texas.

Here, you person conscionable a fewer pictures and you are going to spot that galore of you, you would for illustration to activity successful specified environment. By nan way, this is what you cannot spot is nan spot wherever we person nan free crystal shriek for our people, and they tin power them, 3 to 7 is free. That's for them. It is nan break rule. Honestly, I've seen galore of nan maturation of nan [indiscernible] institution.

[indiscernible] is remainder -- nan cafeteria, arsenic you tin see, it's early android. So sometimes, it's bully not to person a clip for, but sometimes things person to beryllium said.

What did we do? We continue. December 7, a third-party -- well-known third-party released its audit connected Teleperformance Colombia and nan consequence of nan audit connected nan compliance to nan norm ISO 26000, which is nan CSR successful operation, we walk it pinch 93 retired of 100. Guess what? I don't cognize if you person been to school.

But if you spell to school, this is an A, not a B. It's not action B, it's A. And if you don't spot over, please invited -- invited to Colombia.

December 13, of course, I was successful Bogota, gathering nan representant of nan authorities of nan caller authorities that has changed and truthful on. Asking them, successful fact, I met nan Secretary General to nan President, and I made nan Vice Minister of nan Economy and I asked nan very candid question. So far, we deliberation we person done only spell to nan state successful a state wherever 50% of nan labour is casual.

We are 100% formal. Second, astir of our occupation is work exportations. So we bring difficult rate to nan country. Third, we salary each our taxes and I showed each nan taxes we had paid during years. Four, if you want to spot our operations, please unfastened doors, welcome.

I don't deliberation that location is 1 institution successful nan state that has thing arsenic beautiful. And successful fact, I had 2 highly affirmative meetings wherever nan typical of nan authorities told maine location is no, you are not successful nan schedule of nan government. Of course, we want you to beryllium successful Colombia, and we want you to turn successful Colombia.

Just for nan 2nd -- by nan way, I was very happy to spot that yesterday nighttime astatine 11 p.m., nan Vice Minister of Labor who had tweeted astir Teleperformance, conscionable sent a tweet saying that 2023 is successful a bully guidance pinch three-party societal speech betwixt Teleperformance, nan government, nan unions, I mean it's a awesome love.

January 17 to January 24. What do we do because we spot still not there, you cognize columnist, columnist, location is ever thing that stay. So we opened doors, opened doors wherever we negociate contented moderation successful nan main country, USA for different deals, India, Portugal, Colombia, Greece, Albania to 16 investors and analysts.

And I americium judge that immoderate of you, you person been there. For nan 1 who person been there, I will fto them stock their acquisition pinch their colleagues. I person nary comment. I deliberation everyplace you spot ultra exemplary activity conditions, people, very master and very progressive and nary existent trace of soiled exploitation for illustration it was commented successful nan press.

January 30 '23. Finally, aft years -- Oh, yes, our aforesaid friend of Uni erstwhile nan COVID started pretended that we had put a threat nan wellness of our workers. I'm judge that nan stats of fatalities successful Teleperformance workers measurement beneath nan stats of nan countries wherever we are. We person been commended by nan way, by truthful galore people, including by nan worker councils successful Europe for what we person done.

I punctual you that we were 1 of nan uncommon institution to beryllium capable to find 6 cardinal disguise to administer to our labor astatine nan clip nan authorities were incapable to find masks. I mean immoderate governments and truthful on.

So finally, nan OECD nationalist constituent of interaction said, okay, -- we closed nan case, location is thing to say. Teleperformance respect nan OECD guidelines and each nan recommendations that we made person been implemented. Okay.

Let's proceed because it's not enough. When location are columnist, you person to support nan columnist because a columnist has 8 heads.

January 31. We sewage from halfway mentation and I swear, we did not thrust -- adjacent slide. Sorry, January 31, we sewage from halfway mentation that you cannot fishy that we effort to power nan results of their audit. They told america that looking astatine each nan cardinal aspects of nan worker acquisition astatine Teleperformance, nan Teleperformance for nan Trust & Safety division, nan contented moderation. The Trust & Safety section of Teleperformance halfway exceeded nan benchmark for 600 different companies by double-digit points.

I'm not saying that. It's halfway theory. So either you spot our mentation and you must Teleperformance. Oh, you don't spot Teleperformance. And truthful you don't spot halfway mentation either. Then January 14, 2023, aft Colombia, we asked nan Bureau Veritas to make nan aforesaid audit to Greece, India, Indonesia, Malaysia, Portugal, U.S.A. regarding ISO 26000.

Results, affirmative successful each cases, nan only objection being a general objection was nan truth that our U.S. cognition should beryllium amended documented connected their ESG process which is going to beryllium done successful nan coming weeks. It's insubstantial work. That's nan story, ladies and gentlemen.

Now let's spot what has been nan effect of this drama. I telephone that a play for -- mostly for nan French investors. It's called nan Butterfly Effect that has been identified by Eric Lorenz successful 1963. The butterfly fleet is wins, we thousands of malware and it trades -- don't request [indiscernible]. No, you person -- you person a business that astatine astir 270, 266 and truthful on.

Then nan Black Thursday, monolithic waste and past our 3 months of difficult activity that I described to you, and erstwhile you do that, you don't do thing else. So it's a distraction for nan management.

Three months to travel backmost wherever group cognize nan truth and restart nan trust. But nan problem is not nan problem, nan truth and I'm not going to judge connected that is look astatine what happened. Very simple. It has been concentrated connected 1 country, France, nan stock of nan French shareholders has reduced from 20% to 13% complete nan time, meaning that location has been a benignant of panic waste and who took advantage of that. The nether section, their stock is now 65% stock of shareholding of nan Company is now 65% and positive 8% that I'll fto you make your ain conclusion.

Now let's speak astir nan future. The early is -- early is complicated. If anybody successful this room dress that 2023 is an easy twelvemonth to forecast, I get it, we are fresh to prosecute nan personification instantly because we want to cognize what is nan concealed of smartness. It's complicated. Still and you cognize nan measurement we work.

For decades, we person managed to ever present our guidance. And still, we deliberation that we are going to person a double-digit like-for-like maturation astir 10%. I don't cognize if it will beryllium 10.5%. I don't cognize if it will beryllium 9.7%. In that case, it would not beryllium a double digit.

It will beryllium 2 digit, but pinch comma. But no, it will beryllium astir 10% and honestly, cipher tin beryllium much precise than that. This is going to spell pinch nan last termination of nan remaining COVID statement that are still coming successful 2022 for astir €200 million, which is going to springiness america COVID included a like-for-like gross maturation of supra positive 7%. As usual, because it's portion of our committedness to effort to good tune, good tune. We are going to amended our ratio. And truthful we deliberation that we are going to person 20 ground constituent EBITA ratio improvements.

And arsenic we are successful very beardown financial situation, we are going to proceed to look astatine targeted acquisition according to our strategy. And our strategy is very good known. We springiness nan privilege to business that we do not person successful our portfolio of work to enlarge our portfolio of work arsenic a business work company. And we -- usually, we return very well-managed and profitable company. And usually, we bargain nan companies pinch a discounted aggregate versus regular capacity successful bid to create further worth for our shareholders.

Our midterm objective. Again, we want to go a world leader successful integer integrated business work solution which is nan operation -- nan integration of each nan elements of nan integer to streamline nan process, but keeping good live nan affectional intelligence to support nan link, to rebuild nan spot betwixt nan customer and nan -- arsenic a company, they bargain a merchandise aliases work from aliases betwixt nan national and nan -- and nan authorities aliases nan management they are interacting with.

So yes, I spot present connected this descent that personification says that we are up of schedule. Okay. Yes, we are possibly a small spot up and -- but we will see. We will spot astatine what -- erstwhile we are going to execute nan €10 million. I don't cognize if it will beryllium astatine nan extremity of 2025 aliases mid 2025, nan €10 billion, but okay.

The group is coagulated and nan group is coagulated because nan group has values that personification person forgotten. The group has a beardown guidance civilization arsenic a very beardown activity very good aligned and is not made only of very aged people. You person 8 executive members astatine nan Executive Committee, and you person present Bhupender Singh. Bhupender Singh, who was nan CEO of Intelenet erstwhile we acquired Intelenet respective years ago, who is nan Chief Transformation Officer and who are successful nan group, nan work of our smart value-added teams, I mean, consultants and engineers, 2,000 group -- 1,800 something. He has a work of nan R&D, nan work of nan trading and nan work of nan Lean Six Sigma and of each our IT teams.

That's respective 1000 group and of nan CSO, which is nan security, nan information security.

So you person Bhupender, you person Eric, you person Miranda, you person Agustin. All these guys are successful U.S., you cannot spot nan age. But -- truthful I would opportunity each these guys are successful nan precocious 40s aliases very early 50s. Then you person Scott Klein, Olivier who still young contempt being -- contempt being nan world CFO of Teleperformance and present I am.

So, a beardown management, a beardown heavy chair of apical leaders, successful fact, we person much than 40 group successful nan guidance committee pinch a important magnitude of women by nan way. More than 30%, nan time location will beryllium 50%. I will beryllium very happy because -- having said that, having said that, to proceed nan position connected Teleperformance strategy and to beryllium much serious, please Bhupender.

Bhupender Singh

Thank you, Daniel, and hello, everyone. Today, I'll commencement pinch nan little explanation of immoderate nonfinancial business KPIs centered astir our labor and our clients and wider ESG themes, and past I'll get into nan group strategy.

So starting pinch nan worker metrics. We've been measuring our worker restitution for much than 10 years now, and this is done independently by our Knowledge Services division, which is our Analytics division. And it covers, for example, successful 2022, we had much than 55%, truthful much than 200,000 responses. With that, we had 64% promoters.

The measurement NPS useful is group are -- group complaint you connected a people of zero to 10, 10 is good. Zero is not good. Nine and 10, truthful A-grade successful Daniel's parts are considered to beryllium promoters. Seven and 8 are neutral and zero to 8 are detractors. And nan Net Promoter Score, NPS is nan subtraction of detractors from promoters. So we had 64% promoters and 14% detractors, giving america 50%.

At that scale, it's a very precocious NPS score. Not galore companies person that. But that's still internally -- done independently, but internal. So we look for outer validation of that too. So we had Great Place To Work. Again, we were certified. 64 countries now, which is an summation of 4 versus past year.

And successful summation to that, we were certified successful 23 National Best Workplaces List, which is an summation of 10 from nan erstwhile year. And past you touched upon nan Fortune recognition, wherever we were classed arsenic 11th Best Workplace successful nan World.

We besides person started doing thing beyond Great Place to Work, fixed that mostly of our unit are millennials. So we started looking astatine online sentiment firms, for illustration Glassdoor, Indeed, comparably, [indiscernible] and different firms, and we way them. And each of these, we are classed among nan apical companies. So Glassdoor, we are classed number 2 successful our manufacture base. Indeed, 4th comparably first.

And what's besides important to item present is nan standard again. For example, Glassdoor, nan Company that is classed number one, somewhat up of us. We are 4.2, they are 4.3 cardinal is 1/10 our size.

And each these bully worker engagement and sentiment scores person not travel by chance. They've travel because we person a continuous listening attack wherever we usage different opportunities, different channels to get worker feedback. So conscionable successful '22 we had much than 2.2 cardinal feedback interactions from our staff, including what you telephone a infinitesimal of truth service. So a different stages of an worker life rhythm successful nan Company, we inquire them arsenic to really do they feel? We person sewage regular sentiments.

We've sewage beat surveys aliases attraction groups connected immoderate circumstantial topics that we whitethorn want to excavation deeper. And because of this continuous listening and past uncovering what nan gaps are and continuously closing them is nan study results that you saw successful nan erstwhile slide.

Moving connected to customer metrics, customer satisfaction. This is, again, thing that we've been doing for 8 years now, and we had our champion twelvemonth ever successful 2022, 85% promoters only, 3% detractors, highest ever promoters, lowest ever detractors and hence, highest ever 82 successful position of NPS. Again, if we spell around, location will not beryllium that galore companies that person this precocious NPS people successful QSAT. And truthful it's not a immense astonishment erstwhile nan events of precocious past twelvemonth unfolded. All our clients stood firmly down us, and they proceed to turn pinch us.

Cloud Campus. This is our distant moving worth proposition, and we are very excited astir it because it increases nan talent pool. It improves nan value of life of our unit and besides gives them much elasticity and besides reduces nan c footprint. So arsenic of now, 52% of our unit proceed to activity from home. Of this 52%, 40% person been confirmed to activity remotely, moreover beyond BCP aliases nan business continuity planning.

So they will proceed to activity remotely beyond nan pandemic. And our programme has been good recognized externally too, and I'll touch upon this a spot later. Increasingly, our clients are besides asking america to thief instrumentality this successful their environment.

Some different cardinal ESG metrics. We imported much than 63 cardinal training hours successful 2022, which is an mean of 166 hours per FTE. We hired much than 125,000 group pinch their first occupation successful this year. We had an soul promotion complaint of 63%, which is somewhat little than 71% that we had for this successful 2021 and nan logic for that is because I'll touch upon successful nan strategy, we are getting into much specialized verticals, horizontals and integer areas. And while we do person a monolithic upskilling program, location is simply a span wherever we do request to prosecute from outer besides to meet our maturation requirements.

In guidance positions, 48% are women, and we are moving to return it supra 50%. We continued connected our travel of reducing nan c emissions. So it's different 9% simplification per worker this year. Since 2019, since we started search it, is down almost half, renewable energy, 28%.

In '21, it was 21%, truthful different 7% summation there. And successful position of our CSR national of nan world to nan satellite initiatives, we person now collected 81 million, which is an summation of 11 cardinal successful 2022. And our labor contributed to 99,000 of unpaid hours, again, an summation versus '21 erstwhile it was astir 60,000. And I'll beryllium remiss if I don't punctual each of america that we started these initiatives good earlier ESG became a frontline finance and firm topic.

Moving to nan group strategy. It fundamentally comprises 3 cardinal elements: one, proceed to build our queue, and I'll touch upon it successful a minute. Number two, augment our integer capabilities, leveraging TAP, which is technology, analytics and process consulting. And number three, specialized services. So conscionable for illustration user bully companies person aggregate brands astatine different value points to cater to different customer segments.

This is our balanced of that. We will person aggregate brands to cater to niche segments pinch different value and separator profiles.

Cube, historically, TP has been a customer acquisition leader. It has been an execution powerhouse wherever it has leveraged its immense geographic footprint and capabilities successful group management, processes and systems to present a good, accordant marque acquisition for immoderate of nan biggest companies successful nan world. And while that continues, erstwhile we started our translator travel from being a CX leader to a integer integrated business services leader, astir 4 years back, we started adding 2 much dimensions. One is statement of services. So we already had beardown capabilities and customer experience.

First, we added what we telephone a CX++, truthful which is sales, collections, real-time interpretation. And past gradually, we started getting into adjacent lines of services. So things for illustration spot and safety, things for illustration horizontal and vertical backmost agency and astir recently, integer services. So that's 1 dimension. The different magnitude is getting much expertise successful manufacture verticals, truthful arsenic to beryllium capable to connection customized solutions to our clients.

And I'll exemplify that pinch a mates of examples. The first is successful Banking & Financial Services. So we started -- this was our first vertical that we made investments in. We hired a vertical leader astir 2 years backmost and supported that leader pinch domain experts and connected nan backmost end, immoderate of our translator team, immoderate of our transportation teams were verticalized. And what squad started doing was alternatively of looking it arsenic a large vertical -- manufacture vertical wherever we spell successful pinch a very modular plain vanilla approach, they started looking astatine it successful sub-segments.

And wrong those subsegments, looking astatine from clients, and looking astatine what their symptom points and opportunity areas are, and past utilizing TP products and solutions to customize offerings for them. So for example, for immoderate of nan caller banks and fintechs who were increasing very fast. But connected nan backmost end, needed scaled operations, we helped them group up their scaled operations.

Or successful this sector, regulations and compliance is simply a large thing. We've each publication astir nan fines being imposed, nan PR consequence associated pinch nan non-compliance regulations. And what our squad did was they utilized immoderate of our integer capabilities to further fine-tune and amended KYC, FATCA AML and hence, present worth to nan clients.

So nan consequence of this, today, nan believe is 1.14 billion. We support much than 140 clients. And if you look astatine nan maturation rate, TP itself has been increasing well, and this is increasing astatine almost double nan TPs maturation rate.

Other illustration of manufacture virtualization is recreation and hospitality. We started connected this by appointing a leader for nan vertical successful Q4 of 2021. And it was nan aforesaid playbook, looked astatine nan sub verticals wrong nan bigger vertical. And wrong that, looks astatine different work lines wherever you could adhd worth and customize our products and solutions to that. And nan consequence is similar.

Today, we've sewage 25,000 group servicing much than 60 clients crossed beforehand office, mid-office, backmost agency and pinch 786 million, we whitethorn beryllium nan largest subordinate successful this sector. And if you look astatine maturation past year, 41%, yes, we did use from nan recreation bounce backmost but moreover aft we normalized for that, this is simply a ace normal growth.

And this SKU strategy is 1 of nan superior reasons why we are cautiously optimistic astir nan adjacent word contempt nan uncertain situation because really, we person deployed this successful 2 aliases 2.5 verticals, nan half being healthcare and nan 2 being recreation and banking financial services and 1 for horizontal spot and safety. There are a batch of different verticals. We are now doing akin things. and we expect to get akin results.

Moving to our integer journey. It really started successful earnest successful 2019. When we took our technology, analytics and process consulting capabilities and starting leveraging those to present our customer operations and soul run functions, safer, faster, and astatine little cost. And arsenic we build connected that maturity, we had capable usage cases, we started utilizing those arsenic evidences to commencement trading more, utilizing that arsenic a differentiator versus accepted competition.

Now we've sewage to a shape wherever immoderate of our mature capabilities, whether it's from nan consulting broadside aliases integer products, you tin besides commencement trading them, and that's already started successful 2022. We already have, without making a conscious income effort, we already person integer revenues successful nan scope of tens of millions. It is not a immense number arsenic a proportionality of wide revenues, but it does person a disproportionate use successful position of it being a doorway opener, it being overmuch higher separator and besides helping america shape deeper relationships pinch our clients.

This travel successful numbers. We started pinch astir 250 people, salary much than 1,800, nan number of bots that person been deployed transcend 23,000, and successful position of waste more, 67% of each our proposals supra 1 cardinal ACV person a translator component. And our extremity is to return it to supra 80% successful 2023.

Now past 2 months pinch each nan news frenzy astir ChatGPT and openAI, someway location is simply a emotion successful nan world that each these things started only 2 months back. The reality is we and our clients person been moving connected it for nan past fewer years. And today, 72% of our apical 200 clients person astatine slightest 1 of TP's apical 5 products embedded successful them. The astir communal are CX Automation.

So CX Automation are things for illustration converting sound to messaging and past handling nan simpler relationship done a chat bot aliases successful highest times converting inbound to outbound and again, nan super-tier interactions, managing those done bots, and we person our ain products, a merchandise called AI merchandise called Storify. And also, we leverage outer platforms, beryllium it [Telio], COROS, CX1.

Also, for nan past 2 years, we've had projects connected GPT, make AI, which is benignant of what ChatGPT a type of. We already person projects successful Europe and Latin America connected GPT.

RPA is deploying bots to automate parts of customer travel truthful arsenic to amended nan customer acquisition and aliases our supplier experience. TP recommender is simply a prescriptive analytics tool, which is astir applicable successful income and postulation situations. TP Interact, arsenic nan sanction suggests, is an automated relationship study too. It is very useful for QA automation. Historically, successful this industry, nan emblematic QA sample is astir 2% to 5% and it's done manually.

In an automated manner, we tin do QA of 100% of nan sample. It besides is useful for knowing nan guidelines origin analysis, drivers of a peculiar interaction, truthful arsenic to amended things upfront and it's besides useful for training and coaching our unit to beryllium capable to present amended customer experience. And clip character is simply a workflow monitoring and productivity enhancement product.

A speedy illustration of integer services. So this is astir consulting. So successful our case, integer services fundamentally 3 components, exertion products, analytics and consulting. This is an illustration of consulting wherever we leveraged our execution powerhouse processing systems, our unreality field and immoderate of nan integer devices that support unreality field and connection that arsenic a service. We won against 1 of nan apical 3 consulting firms successful nan world connected this task for 1 of nan biggest airlines successful nan world.

The task itself is only astir €0.5 cardinal aliases so, but much importantly, this has led america to a narration wherever we are astir to adjacent astir 8 cardinal ACV pinch this customer and nan opportunity is successful hundreds.

Finally, nan specialized services. As you know, we person 5 specialized services business. But successful nan liking of time, I'll screen only two, LanguageLine Solutions, which is our largest and PSG, which is nan astir caller addition.

So LanguageLine Solutions, it is simply a real-time interpretation, translator and localization institution pinch much than 30,000 clients. It provides mentation services crossed aggregate channels, whether it's audio, video, successful person, and nan transcription services are evidently asynchronous.

Now 1 of nan questions that has been asked for nan past 5 years astir this business is nan consequence of automation. And again, successful nan ChatGPT environment, again, this was brought up. So alternatively than really saying much, we thought fto nan numbers talk for themselves. So nan apical 2 charts present springiness nan audio and video minutes for 52 Mondays for nan past 4 years, and we way that arsenic an parameter of measurement of nan business. So if you look astatine nan audio volume, sometime astir -- it was astir 1.7 million, 1.8 cardinal successful 2019.

It was consistently supra 3 cardinal minutes successful extremity of 2022. On nan correct side, nan video, almost non-existing 5 years backmost was astir 60,000, 70,000 successful 2019, and we are now hovering supra 350,000. We've already had six weeks successful 2023. This inclination continues successful 2023. In audio, we've already group a caller azygous time grounds of 3.245 minutes.

And connected video also, we've group caller grounds of 387,000 minutes successful a azygous day. And it's not a astonishment that if your measurement is growing, nan request for interpreters is besides increasing.

Having said that, it does not mean that we do not look astatine technologies. We person a integer laboratory wherever our LanguageLine squad perpetually monitors, trial and past deploys nan applicable technologies. And we besides person a fewer patents successful nan AI area successful this space. So far, what we person seen is each nan technologies that are available, they are astir applicable for translator and transcription successful an asynchronous manner. Voice and video moreover much are difficult to automate.

And if you mates that pinch nan demographics of group who are utilizing this service, and nan ngo criticality of situations erstwhile nan work is involved, it becomes moreover much difficult to automate this activity.

Just for illustration user equipment companies, nan merchandise whitethorn beryllium made successful 1 factory. But erstwhile it comes out, it has a different packaging, different pricing profile. So we do leverage our backmost end. So much than 4,000 group for LanguageLine Solutions are being provided by our Core and D.I.B.S. business.

And arsenic portion of our verticalization strategy, we now person associated income effort crossed different specialized services that are catering to healthcare, moreover LanguageLine, much than 50% is to nan healthcare business, wellness advocate, PSG arsenic 1 company.

PSG, nan astir caller entrant, it is simply a recruitment process outsourcing company. And I do want to explain because this mobility was asked successful a fewer investor one-to-ones that it is not a staffing company. It does not return group connected its ain role. The group it hires are connected its clients' rules. What it does is leveraging its level and offshore transportation helps customers prosecute faster astatine little cost.

It has much than 4,000 labor and much than 110 customers. And arsenic you tin look astatine nan stats, some nan clients and labor are happy.

And finally, nan integration pinch Teleperformance, arsenic Daniel mentioned, TP itself hires much than 30,000 labor each period to return attraction of its maturation and backfill requirements. So we've already gone unrecorded successful Philippines and U.S.A. and AllianceOne because these are geographies wherever PSG has astir capabilities astatine this stage. And we are presently implementing their services successful LanguageLine. We've besides incorporated their worth proposition successful nan wide TP income portfolio.

And finally, conscionable for illustration different shared services, we will leverage our firm shared services of technology, procurement, finance, HR to supply these services to PSG also.

With that, I'll manus complete to Olivier.

Olivier Rigaudy

So bully greeting to all. I'm going to travel backmost connected nan fig that has been presented by -- quickly by Daniel, and we are going to excavation a small much successful nan figures themselves. So elemental figure, I'm going conscionable to mention them, 15 -- adjacent to 15% maturation successful sales, 18% successful EBITDA, adjacent to 18% successful EBITA and finally, adjacent to 16% successful nett results. I've seen worse fig moreover a difficult time. But that's nan figures that I conscionable wanted to mention.

What is absorbing is that not only we grew, and I will travel backmost connected this maturation but we improved dramatically connected operability. It's nan first clip present that Teleperformance achieved specified a fig aliases 15.5% of operational result. For those who are knowing america for immoderate years, I conscionable wanted you to punctual what was nan fig astir 10 years ago, which was successful nan scope of 10% and moreover beneath sometimes. So that is nan travel that we person achieved. And this travel is not over. I'll travel backmost later connected that.

This is astir apt nan astir absorbing descent conscionable to show nan dynamics of nan maturation of Teleperformance. Of course, you person nan rate effect, which is $351 cardinal -- €351 million, sorry. And you person this celebrated effect of vanishing of €500 cardinal from COVID line. That was nan commencement of nan year. But beyond that, we person been capable to turn by adjacent to €1 cardinal income successful this twelvemonth organically.

I conscionable want you to enactment a infinitesimal connected this figure, which is €1 billion. Do you ideate what does it mean successful position of operational business? We grew adjacent to €1 cardinal income activity successful 2022. Despite this noise, contempt this world situation that has been, I would say, astatine slightest a blurry nan imagination worldly nan determination that is coming and each nan worldly astatine nan extremity of nan year.

On apical of that, of course, we had 265 cardinal coming from scope, which are nan effect of elaborate successful nan first half and nan acquisition of Senture and nan past 2 months of PSGs that conscionable joined nan family early November. So that is nan astir important worldly to remember, contempt this awesome difficult year, we person been capable to adhd adjacent to €1 cardinal income successful our figures.

Coming to this slide. I cognize immoderate of you are puzzled by that but because we changed our organization. And I cognize it's -- we didn't do that for -- make your life much complex. And I cognize it's analyzable for you, but nan thought was conscionable to header pinch nan reality of our business. What is nan reality of our business is 3 awesome zone.

I'm putting speech specialized service. So nan North American activity, which case, of course, U.S., Canada and nan 2 large betwixt marketplace factory, which are Philippine and India that are moving mostly for U.S., not only but mostly for U.S. And connected apical of that, we had to adhd a battalion connected it. That is built nan bulk of nan business that has to beryllium nether nan U.S. North American name.

Ibero-LATAM has been I would say, constricted to beryllium Ibero to LatAm, meaning that Spain and Portugal are now joining Europe and U.K., contempt nan Brexit subordinate besides Europe. So we are now 3 awesome markets: North America, Europe and South America. That is nan measurement we are pursuing nan business is nan measurement we shape internally also. And arsenic you know, we person to study nan measurement we organize, I would say, internally. And of course, you person specials that didn't change.

So coming to this celebrated position that is nan astir analyzable to read. And we person put present nan maturation by activity for nan quarter, for nan afloat twelvemonth versus past year, like-for-like, published like-for-like and published like-for-like excluding COVID, which is astir apt nan portion that is nan astir absorbing for you. We delivered for nan year, 5.5%. And I cognize immoderate of you are waiting -- we are waiting 13%. So it's beneath dramatic. Where does it travel from? It's travel from chiefly 2 issues.

One is Argentina impaired ostentation that costs america astir 1%. I'll travel backmost successful a infinitesimal to that. And nan different one, pursuing that, Daniel mentioned astir nan situation successful nan crypto situation wherever we had very, very bully business past twelvemonth successful Q4, that Danish of course, this year. But if you correct for these 2 figures for these 2 events, astir 2% we are astir successful statement pinch what we were delivering successful Q3, which was 13.1%.

Of course, this fig has to beryllium understood without COVID, and this is astir apt nan astir difficult measurement to spot that. I'm going to travel backmost region by region successful item to explicate you what happened.

Let's move now to nan results. So that's wherever we person achieved 15.5%, which is nan ne'er achieved figures that nan group has done complete nan year. I'm not moreover speaking of 2023, wherever you understood that we are going to adhd 20 ground points connected this figure. Where does this travel from? Of course, North America and APAC is backmost connected track.

We'll travel backmost later connected that is India, but besides nan North American part, which was, I wouldn't opportunity underperforming, but not precisely astatine level came back. And you spot that Europe is, of course, a small down fixed nan COVID disappear.

But what is much absorbing is to spot nan emergence of nan specialized service, which has been besides driven by nan TLS results that we are going to spot successful a minute.

North America. So maturation is 11.3% successful nan -- for nan year, adjacent to 6% successful Q4, possibly 7% if you return retired nan crypto issue. And what is much absorbing is to spot that nan separator has grown dramatically from 10.8% to 12.3%. Where does travel from? North America, domestic, bully activity successful India.

And we cognize that China, arsenic mentioned by Daniel, is still nether analyzable days, and we dream that it will beryllium vanishing again backmost to, I would say, normal successful 2023.

LatAm, LatAm is simply a prima a 15.4% maturation successful Q4 for nan afloat year, 12.5% successful Q4. Why it's -- what is nan effect of Argentina impaired inflation? Just for you to understand erstwhile you person impaired inflation, you're obliged to correct nan fig pinch nan level of nan scale of nan price. At nan extremity of September, nan speech complaint of Argentinian pesos went down by 24% versus nan first time of nan year. The value scale was minus -- positive 26%.

So value and speech complaint were aligned. Surprisingly, astatine nan extremity of nan year, nan value scale and by which we are correcting our fig is minus -- it's positive 34%, truthful 10% much than 3 months before. But nan speech rates moved from minus 24% to minus 62%. So it intends that probably, and I don't want to participate successful item that nan scale of value that has been published by nan Argentinian authorities is not precisely reflecting nan reality.

But nan measurement we are computing our fig is this is simply a measurement we are obliged to do that. And that costs america intimately to 0.8% maturation successful Q4 and 0.2% for nan afloat year. But too that, nan momentum was beardown successful astir countries successful nan region. Dynamic sector, we mentioned healthcare, societal media, online intermezo and automotive.

Lastly, location are immoderate improvement cuts that person been incurred successful Q4. As you mightiness person known, we person opening -- we are opening 2 caller countries, Belize and Paraguay that are going to travel connected apical of that adjacent year. But arsenic a whole, bully figure.

Europe, Europe now is including Spain, Portugal and U.K. Of course, location was a diminution successful gross linked to COVID because each nan COVID business were successful Europe, and this is vanished astir totally. But if you return that out, nan like-for-like maturation for nan -- is rather good. In revenue, it's 10.2%, if you exclude COVID, and 11.8% for nan quarter. So very bully figures successful Europe, and we do judge this is simply a bully inclination for nan future.

Of course, location is an effect of nan profitability, but we are staying astatine a level that is double digit. For those who cognize america for immoderate years, nan 10% was a dream for Europe years ago. And now we are importantly up of it.

I'm going to decorativeness pinch nan specialized service. I would opportunity a fewer things to tell. 17.5% maturation successful Q4, 18.6% for nan afloat year. EBITDA adjacent to 32%. This is, of course, has been driven dramatically by TLS that is backmost connected way that execute volumes that are higher than what we had achieved successful 2019.

I conscionable wanted to constituent it retired that astatine this time, we person nary Chinese and that mightiness travel backmost hopefully successful 2023.

Some last fig connected nan -- truthful immoderate comments connected nan figure, very fewer things to tell, of course, summation successful nonrecurring point owed to nan capacity stock plan, I punctual for each of you successful non rate charges. And this is intelligibly linked to nan occurrence of nan group and nan truth that nan value astatine that clip were increasing up.

Performance plan. So immoderate amortization of intangible assets that grew for tourism, of course, of nan acquisition and besides nan dollar that push this magnitude besides noncash impact. Operating profit astatine 14.4%.

Let's decorativeness pinch nan financial results and nan income tax. Financial besides is unchangeable contempt nan summation of rates. So you retrieve that we took immoderate action early -- astatine nan extremity of nan first half to unafraid of our finance connected nan agelong word and to protect against liking rates. So we are level versus past year. We salary a batch of tax, I'm judge I'm not going backmost connected what Daniel said astir our CSR approach, but we are paying taxation everyplace wherever we are incorporated.

And finally, our nett profit is €645 million. What is much absorbing astir apt nan rate travel analysis, wherever we person 2 issues. When you look astatine nan rate flow, we are increasing to €700 million, which mightiness look to beryllium mini aliases unsufficient. In fact, we had 2 issues. We had nan effect of €18 cardinal that were societal information contributions that person been delayed particularly successful nan U.K. and successful U.S. pursuing nan COVID.

We should person paid that past year, but we person been paying that this year. But much importantly, arsenic you mightiness remember, we person -- we are utilizing impermanent agents notably successful U.K. for nan [indiscernible] business successful 2021 that wholly vanish successful 2022 and these group who are paying precocious than our classical employees. This has wholly vanished successful 2022 and won't continue, of course, successful 2023. So if you return that out, for 2022. This COVID alleged COVID impact. We were person to €800 cardinal rate flow.

I'm not going to fuss you pinch nan equilibrium sheet, isolated from if you person questions, but -- possibly a speedy connection astir nan financial position that is interesting, conscionable to show that retired of €700 cardinal -- I'm sorry, I should person mentioned -- aliases I'm sorry, I forgot to mention that because this is astir apt thing that you are going to inquire maine later connected and to debar it. Net superior expenditure, we are backmost astatine classical level. You retrieve that past year, we were astatine 3.2% of course, pursuing nan COVID. Now we are astatine 3.6%. I do judge this is -- I wouldn't opportunity normative but thing structural for nan future.

We are going to person a [nibribed] exemplary arsenic you understood, some connected site, some astatine home. So nan 3.5%, 3.6%, I would say, fig it's astir apt normative for nan year. I conscionable besides want to punctual that immoderate years ago, we were person to 5%.

So coming to nan financial position, what we do is our €700 cardinal past year. We do 2 things. Of course, we bought PSG, €300 cardinal to make it simple. And we usage -- we springiness backmost to nan shareholders, €340 cardinal betwixt dividend and stock buybacks that we started successful 2020 successful November pursuing nan crisis. And we person a unchangeable day today, erstwhile you look nan debt, we are astatine €2.6 billion, which is 1.5x EBITDA, 1.47x, if you retreated PSG connected a afloat twelvemonth ground which is perfectly not a problem.

The costs of this indebtedness is nether control. We person paid 1.88 past year. I do judge we are going to summation that a small this twelvemonth by 20 aliases 30 ground points, but this will beryllium still nether control. And I'm, of course, good protected against imaginable further liking summation successful rate.

So I'm going to extremity pinch 2 things conscionable to show what we are going to propose arsenic a dividend, which is simply a 16% -- adjacent to 17% maturation again successful 2020 -- for 2022 and 2023 which person seen worse fig again.

I would conscionable past -- conscionable wanted to decorativeness by giving you conscionable a sentiment astatine nan opening of nan twelvemonth arsenic we said that January is -- has been solid. Thank you.

Question-and-Answer Session

A - Daniel Julien

So, is it working? Yes. So, we are going to now to perceive to immoderate questions. I'm judge location are questions from location and from nan call, from everybody. So let's start.

Let's start.

Antonin Baudry

Thank you very much. Antonin Baudry from HSBC. I person 2 questions. The first 1 is astir your 2023 guidance. Solid. So I wanted to cognize what support this guidance successful position of pipeline, successful position of ramp-up of caller clients, which sector, which geographies for revenues and operating separator arsenic well?

My 2nd mobility is astir nan G of ESG, nan governance of nan Company. We person questions astir nan improvement of nan governance from 2024. I conscionable wanted to cognize erstwhile you will explicate america really nan governance of nan Company would measure successful nan future?

Daniel Julien

Maybe I'm going to commencement by nan governance. I conjecture it's a polite measurement to inquire maine erstwhile I'm going to retire. I don't know. I don't know. I'm successful awesome shape.

Any case, arsenic you tin see, first, connected slide, location is simply a beardown executive committee. As you tin spot connected this table, you spot 1 different personnel of nan Executive Committee presenting, I tin show you that nan succession scheme for illustration we opportunity is good known by nan Board, nan succession scheme tin hap successful 2 different manners, either for illustration immoderate group person a bad mishap and successful that case, I tin show you nan Company will proceed very good aliases nan succession scheme tin travel because without needfully maine disappearing, fto beryllium clear a caller CEO tin travel connected board. It's not going to hap this year. If you judge accident, Will it hap successful foreseeable future? Absolutely. That's it.

Now location is thing erstwhile you determine to make a change, you person to make nan alteration astatine nan infinitesimal you speak astir nan change. That's why I'm not going to speak astir nan change. okay? So having said that, and I'm successful awesome shape. Having said that nan commitment, we telephone that committedness wrong nan group, which are nan budgets.

Come from bottommost up, and they travel from bottommost up by reviewing customer by client, nan anticipation by having it's a agelong process by having chat pinch nan clients and truthful on, past by seeing nan normal statistic of publication of caller business, past by looking astatine immoderate vertical past by analyzing nan pipeline, everything being connected income force, everything is measured nan slice, dice inclination is whatever. And we travel to a commitment.

Right now pinch what is foreseeable, we consciousness comfortable to opportunity that we are going to person an integrated growth, excluding nan COVID statement of 10%. And I don't cognize if it will beryllium 9.5% aliases 10.5% honestly, that's nan level of precision that we don't know. But we person a very satisfied client. We person a beardown business improvement team. We person a beardown apical team.

We portion and dice nan Cube that Bhupender was explaining. And erstwhile we do each this operation, we consciousness decently comfortable.

By nan way, location is -- we saw that possibly nan first 4th would beryllium a small spot challenging. And by nan way, successful truth -- erstwhile we look astatine nan results of January, they are perfectly successful statement pinch what we say, okay, January is conscionable 1 period retired of 12. I cognize but it's amended erstwhile nan results first months are successful statement than erstwhile they are not successful line.

Olivier Rigaudy

Yes. I conscionable wanted to show you -- to punctual you, Antonin, that this is retired without COVID. And we cognize that nan effect of nan COVID will beryllium mostly happening successful Q1. The fig that Daniel is mentioning, is without COVID. Of course, nan like-for-like pinch COVID will beryllium smaller and astir apt impacted successful Q1 until by COVID.

Daniel Julien

Until nan extinction of nan COVID story. But connected underlying, excluding COVID, we are really synchronized correct now successful nan transportation of nan cognition pinch our planning. And we person nary circumstantial signs of weaknesses. We are going to proceed to grow, of course, successful nan verticals that are beautiful beardown correct now, which are evidently recreation and accommodation and TLS for nan service. We are astir apt going to proceed to person a very coagulated twelvemonth successful LanguageLine because location is much and much immigration, moreover if nan group don't for illustration immigration.

By nan way, they are incorrect because migration makes nan wealthiness of nan country, but that's different story. Then -- we deliberation that we are going to proceed to turn pinch nan societal level pinch nan integer platform, each this portion of nan system that remains dynamic. Then you person thing that we get stronger and stronger and that is very important for us, which is nan healthcare marketplace successful nan U.S. and we scheme to push much connected nan healthcare marketplace successful nan U.S. But erstwhile we put each together, our activities, I mean specialized work and halfway healthcare marketplace successful nan U.S., we are position successful nan apical activity of nan business work companies for nan U.S. healthcare market. That was presented, I think, successful what is simply a institution that U.S. standard marke that was presented successful Everest a fewer months ago.

So -- this is an reply to portion of -- I deliberation this is an reply to your question. Now location is thing other that I wanted to opportunity because Olivier did not mention it, but I deliberation it's thing important and it's besides important to explicate why we are beautiful assured successful nan separator here. I'm not speaking astir nan apical line, but astir nan margin.

In fact, location is thing a small spot circumstantial successful nan Q4 2022. If you look astatine nan U.S. and APAC, you spot that nan U.S. and APAC maturation is little than nan maturation successful nan different region. Is it because we person a problem successful nan U.S. and APAC? Not astatine all. It is precisely switch, but a affirmative move and coagulated maturation successful measurement betwixt a alteration of home U.S. business and an summation but a stronger summation of nan business successful nan Philippines, not nan aforesaid value point, but amended margin. Am I clear?

Oscar Val Mas

It's Oscar from JPMorgan. I deliberation going backmost connected nan outlook, it's rather important. A batch of tech companies successful nan U.S. person announced layoffs. Can you conscionable talk astir caller outsourcing?

And are you seeing caller outsourcing pinch your customers?

The 2nd mobility is conscionable connected costs inflation. What levels are you seeing successful nan U.S. and Europe? Could you quantify that? Or could you talk astir is that getting amended aliases worse?

And past nan last question, sorry. You talked astir complete nan past fewer years, transitioning a spot much aliases importantly into integer business services. Are you competing against different companies now? Is it little of nan accepted this benignant of contented -- customer guidance companies and much nan accentures and nan consulting companies?

Daniel Julien

Okay. Very quickly, we're seeing monolithic alteration from in-house to outsourcing. We spot affirmative moves. I'm not saying that correct now, it's a barrel, not a barrel. I mean I tin opportunity that today, it's a travel but for example, we signed successful nan financial business, a important financial business that tin beryllium 1 of our locomotive that is simply a institution that ne'er outsourced before. So that's an example. But 1 character doesn't make a forest.

Second, connected nan costs ostentation we person 2 different measurement to see it. Typically, nan costs ostentation erstwhile we offshore. In fact, location is simply a typically, successful astir of nan case, location is simply a devaluation of nan offshore rate versus nan our rate versus nan dollar that thief america to screen nan costs inflation. It happened 90% of nan case, sometimes you person currencies that are stubborn and this becomes a problem for illustration nan Mexican peso. But we cognize why nan rate is [indiscernible] because correct now, Mexico is taking a ace advantage of nan decoupling of U.S. and China economy. So successful that case, we person a simplification of separator and past we person to adjust.

In immoderate cases, it's nan opposite. We tin person an summation of separator until you person a stabilization. Then erstwhile we are domestic, home to domestic. Typically, our clients are ample responsible companies. So moreover though astatine nan beginning, it's a small spot difficult to renegotiate nan word of a contract. We renegotiate nan word of statement to neutralize nan effect of nan costs ostentation connected our margin.

Now connected your competition, Besides -- yes, clearly, too nan accustomed respect nan -- nan business work world is not a world wherever you person each class of institution good classed successful -- successful a cluster. I mean you person -- it's very porous from 1 type of institution to different type of institution successful position of business. And basically, yes, Teleperformance, it happened that Teleperformance is successful title pinch Accenture aliases pinch Cognizant, pinch different Indian BPOs and sometimes we are successful title pinch them because we are entering nan accustomed territory aliases sometimes they are successful title pinch america because they are entering our accustomed territory. So I mean, it's portion of -- it's for illustration nan tectonic plates successful nan continent moves.

Obviously -- Fortunately, we don't person earthquake. But it's -- it's clear that pinch a floor plan that presented to you and which is simply a floor plan that is astatine activity for years. It's not conscionable -- it did not travel 3 months agone because we had to make a position now. Teleperformance, competitory beingness is larger than earlier which intends that our opportunities are larger than before.

Unidentified Company Representative

Maybe immoderate questions from outside, from nan telephone aliases from nan video.


[Operator Instructions] We will now return our audio mobility from Simona Sarli astatine Bank of America.

Simona Sarli

So a mates of them, please. First of all, a speedy update connected contented moderation. Can you please talk a small spot nan commercialized momentum there? And besides pursuing your determination to exit highly egregious content, truthful far, person you mislaid immoderate of nan existing contracts? And really is impacting your discussions regarding nan caller business? So I will return nan questions 1 by one.

Bhupender Singh

Yes. So reply to your 2nd question, no, you've not mislaid anything. And nan momentum continues. We are forecasting our 2023 contented moderation business and nan wider spot and information business to beryllium higher than what it was successful 2022. So contempt what we announced, we will turn successful this business.

Simona Sarli

And is location immoderate measurement that you tin bespeak truthful what is nan maturation anticipation for 2023? So if you will still beryllium integrated maturation accretive to nan group? And secondly, Bhupender, if you tin please springiness immoderate tangible examples of really you are now considering separating successful different queues egregious grades from highly egregious?

Bhupender Singh

Yes. So -- successful position of nan numbers, my elemental norm is to ever nonstop it to Olivier. I tin reply nan 2nd mobility first.

As we person discussed and besides mentioned successful wider forums, 1 of nan challenges nan manufacture has is location is nary industry-wide modular meaning of highly egregious What exists coming are different platforms policies, while location is immoderate similarity, but they besides are different. So what we person done is we've made an operative meaning ground nan contented and nan wave of occurrence of that content.

And now we are successful discussions pinch different platforms to get that consistency. We've not -- we've sewage bully feedback connected that, but we've not had immoderate awesome challenges. More importantly, from a financial effect connected Teleperformance, it will beryllium -- we tin safely opportunity that it will beryllium adjacent to nothing. It's a very negligible constituent of our spot and information business.

Olivier Rigaudy

Simona, to reply your question, possibly nan champion measurement to show you that nan maturation that we scheme for spot and information is not dilutive to our world growth.

Simona Sarli

That's very clear. And if I may, 1 past question. So regarding going backmost to your outlook for 2023, you are guiding for separator betterment of 20 bps. So you person already mentioned that, obviously, location is an constituent of beardown maturation successful nan Philippines is simply a affirmative publication from offshore. Is location immoderate different moving portion that will beryllium contributing to this separator progression successful 2023?

Olivier Rigaudy

Yes, of course, connected different stuff. You person nan maturation that mightiness -- that will astir apt hap from nan specialized work and astir apt nan maturation from TLS that is going to thief nan mix. So nan operation is going to thief nan margin. Secondly, I'm judge you person noticed that nan North American portion is improving since now 2 years. So this activity will continue.

That is nan 2nd part. The 3rd portion is, of course, nan China that mightiness travel backmost not only for recreation but besides for our business locally, and we dream that APAC is going to beryllium better.

Of course, there's still a antagonistic effect coming from nan remaining COVID business that is going to vanish. But arsenic a whole, we made this computation of 20 bps. And of course, I didn't moreover mention nan activity that is -- which is launched coming to, I would say, to -- to power nan costs person successful this dice and slice, I would world situation that is caller for Teleperformance.

Daniel Julien

Yes. There is 1 constituent that I would for illustration to underline which is nan truth that we are very bullish connected India. We person already 90,000 group moving there. India, mundane impervious that it has nan quantitative and nan qualitative resources that we request to present our digitally integrated business services, and we are going to proceed to push India wherever we welcomed successful 2022 from extracurricular a caller very seasonal but superb CEO. And it's going to beryllium a constituent important successful nan building of nan early of Teleperformance.

All of nan points because I would for illustration to travel backmost again connected nan Q4 USA. I conscionable made a calculation briefly. In fact, during nan Q4, we had -- for each 1 individual that you tin invoice that we mislaid home successful nan USA, we grew 3x nan number of individuals successful nan Philippines. When you cognize that nan value of nan Philippines, nan value constituent of nan Philippines is much aliases little 2.2x little than nan value domestically speaking.

So it's conscionable to explicate aliases possibly to put successful ray thing that I very often explain, which is nan anti-crisis characteristic of our business. In fact, erstwhile nan system is booming, location are caller products, caller services, a batch of activities, truthful a batch of frictions, truthful a batch of request of Teleperformance. And truthful erstwhile nan activity is booming, Teleperformance mostly does well.

But erstwhile nan system is successful crisis, each nan companies are searching for costs cutting typically, truthful nan 1 that we are in-house, they are considering towards nan ones that we're outsourcing a mini part, they want to outsource a larger portion and typically.

And if you tin find that successful nan crisis, 2009, 2010, 2011, we proceed to grow.

So clearly, we are successful a twelvemonth of 2023, wherever location is going to beryllium a caller push and it's astonishing because it's very acold from nan governmental stance that we tin hear, but location will beryllium a caller push for offshorization.

Unidentified Company Representative

And I will travel backmost to later.

Unidentified Analyst

[indiscernible] So 2 very classical questions. First 1 connected currencies. So pinch a weaker dollar, weaker Colombian peso, could you elaborate a spot connected what you expect for rate successful 2023 gross and margins? And 2nd question, could you elaborate a spot besides connected nan M&A pipeline, please?

Olivier Rigaudy

I'm going to return nan currency. Weaker dollar, but you retrieve that it's 2 effect. One is translator and 1 is conveyor transaction, sorry. So translator mightiness person an effect possibly because we are going to beryllium a small little astatine bully levels than past year, we are coming astatine 107 versus 105, truthful it's not going to beryllium a play truthful acold connected nan conversion effect.

Under nan transaction effect, arsenic you tin imagine, we person hedged a important portion of our business importantly successful advance. And I'm speaking retired of nan power of [indiscernible] who they were astir 70%, 75% of our vulnerability that is covered.

I'm not judge we person covered severely Colombian pesos, Philippine pesos and Indian rupee, which are nan astir -- nan 3 astir important, I would say, rate to beryllium covered. There are immoderate exceptions, Daniel mentioned astir Mexican aliases [indiscernible], but location are others that are besides positive.

So arsenic a word, it's going -- not going to beryllium a load successful arsenic we tin opportunity today, for 2023.

Daniel Julien

The 2nd mobility was nan M&A pipeline. I don't cognize if it's owed to nan truth that during nan past 3 months, we person been burdened by nan distraction that I was mentioning before. But our activity connected M&A has been beautiful slow complete nan past 3 months. It doesn't mean that we do not person opportunities. The truth is that correct now successful nan market, nan aforesaid sanction travel complete and complete from nan M&A teams of nan banks.

That aforesaid names, immoderate presence, immoderate interest, immoderate less. Right now, location is thing ace basking that tells america that an acquisition is going to beryllium to hap successful nan first half of nan year. Now we are going to beryllium a small spot much free to beryllium a small spot much proactive. So it tin velocity up nan agenda. But you cognize us, we ne'er forced nan calendar. I mean, astatine nan time, location will beryllium nan correct acquisition astatine nan correct price, we will effort to do it.

Olivier Rigaudy

And we person nan intends to do it. You understood that.

Daniel Julien

Yes. Yes. Fortunately, respective large financial institutions person a beardown spot successful Teleperformance.

Unidentified Company Representative

Maybe different mobility from online.


We'll now return our adjacent mobility from Suhasini Varanasi astatine Goldman Sachs. Please spell ahead.

Suhasini Varanasi

A mates for me, please. On Slide 26, you really show nan TP 1 agency that covers customer services, business services and income operations. Can you springiness america immoderate thought really large each of these are successful nan operation wrong this? Is that thing that you way aliases person targets for mean term? It would beryllium conscionable absorbing to spot really nan modulation is progressing.

I tin return nan questions 1 by one.

Olivier Rigaudy

This is nan cube mix. Yes. Suhasini, we do way -- aliases we person started search only from past year, our revenues and gross margins by statement of service. At nan moment, mostly is still successful nan first two, nan customer services and business services and income operations besides is benignant of its -- nan different 2 are not immense numbers successful position of revenue. But successful position of maturation rate, they are much, overmuch higher. Specifics of each of these things. I'm not judge whether we person started disclosing them aliases not.

Bhupender Singh

No. Just to beryllium clear, Suhasini, we want to enactment connected nan -- I would say, connected nan position connected nan scope that we coming a infinitesimal ago, I understood that already immoderate analysts were happy that we changed nan sector. So I'm not going to adhd caller statement of merchandise to make your life much complex. So we are not going to study by statement of business truthful far.

Olivier Rigaudy

But internally, we do way it. We started it past year.

Daniel Julien

Yes. We way everything internally, arsenic you tin imagine. We emotion that. We emotion tracking.

Suhasini Varanasi

Yes. Thank you very much. The adjacent mobility is connected that, Olivier, connected nan business conception change. I admit that you request to realign nan business arsenic each now and then, but it has go a spot difficult to support nan trends historically. Will you beryllium capable to stock a fewer much years of historics, please, there's a caller format? I'd beryllium very adjuvant to study connected it.

Olivier Rigaudy

You want america to present to reporting, 1 connected nan erstwhile 1 and 1 connected nan caller one. That's precisely what you asked for me?

Suhasini Varanasi

No. The 2nd 1 is conscionable connected nan progressive number, you want fixed it for 2 years. So if you person it for a fewer much years, I deliberation that sold. The different 1 is much for illustration are you search nan transition?

Olivier Rigaudy

It mightiness beryllium possible. Let maine cheque that -- that point, and I judge we are capable to do so. I don't cognize when, but we person nary problem to do it anyway. So we'll -- we are moving connected that, and we will beryllium capable to stock it successful a week from now.

Daniel Julien

We would do everything to please each our stakeholders.

Suhasini Varanasi

Just nan past one, please, connected PSG. It was increasing astatine 40% CAGR, 2019 to '22, and I admit that possibly nan maturation rates are not sustainable going into '23, but conscionable would beryllium adjuvant to understand really you are seeing nan maturation numbers, is it for illustration earning astatine 20% positive successful your numbers, 30% plus, conscionable because it's a decent separator constituent for '23?

Bhupender Singh

Yes. So yes, obviously, location will beryllium a slowdown. It won't beryllium 40% CAGR but it will still beryllium double digits, and it will beryllium arsenic per our business case. So we don't foresee a large rumor there. Other point that we besides request to understand what I was talking about, we hired 30,000 aliases much than 30,000 group wrong TP. And we would beryllium leveraging capabilities of that because from nan early estimates that we person done, their costs to prosecute will beryllium successful nan is 50% to 60% little than what TPs costs per prosecute is successful akin geographies. So location is simply a sizable use to beryllium had to divert immoderate of their resources besides for TPs soul hiring.

Unidentified Company Representative

Other mobility from online.


We'll return our adjacent mobility from Anvesh Agrawal astatine Morgan Stanley. Please spell ahead.

Anvesh Agrawal

I will besides benignant of spell 1 by one, if that's okay. So first, conscionable to travel up connected nan outlook and nan guidance. And obviously, Q4 had immoderate circumstantial impacts from crypto hyperinflation. Possibly, location was immoderate benignant of guidance clip taken distant because of each nan events and it looks for illustration benignant of January has started really good for you. So nan mobility really is for illustration TP is known to supply guideline conservatively.

And is your 10% guideline baking successful nan capable benignant of conservatism wrong that aliases not? Or that's benignant of nan champion number you could present benignant of this year, fixed what nan macro situation is. Maybe if you want to return that up, first, please.

Olivier Rigaudy

As mentioned, location are immoderate uncertainty successful 2023. I'm judge group person understood that moreover Daniel was telling that we were astir 10%, and it's not because January has been bully that we are going to alteration our guidance today. Frankly, it's difficult to tell. The world situation seems to beryllium reasonably well. There are immoderate immense strategies that would thief to grow. There are immoderate sectors that mightiness beryllium supportive. There are things that we don't know. So starting 17th of February, we are going to enactment wherever we are, let's say.

Daniel Julien

Typically, erstwhile we build our budget, we ever merge nan chartless factor. And nan chartless facet is nan bad deed that we are going to get during nan year. We don't cognize what it is. We don't cognize precisely really overmuch it will be, but we cognize that it will exist. And this is factoring this bad deed that we springiness our guidance, and that helps america sometimes to summation our guidance mid of nan year, sometimes yes, sometimes no. But successful 45 years of managing person ne'er seen 1 twelvemonth going soft for illustration it was planned successful nan budget.

Anvesh Agrawal

That is yes -- sorry, spell ahead. Yes, that's clear. Then nan 2nd mobility I person is connected wellness advocate. I mean that's benignant of nan business, which I retrieve had difficulties past year. Just wondering really is nan business performing now? I judge location were immoderate benignant of changes astatine nan apical level wrong that business arsenic well.

Daniel Julien

Yes. It's advocate, first, is an fantabulous business, very bully business model. When we acquired this company, a batch of shares services were managed by their erstwhile genitor company. And we had a play of thing astir of past year, taking complete strategy from nan ex-parent institution to merge nan -- truthful it was a play of integration.

Then arsenic advocator continued to present a patient margin, but not capable dynamic. And truthful we came to nan determination to put successful spot a caller CEO astatine Health Advocate, who is seasonal managers coming from LanguageLine, by nan way, but we knew arsenic advocator successful erstwhile life. And truthful it took complete a institution that a caller strategy because wellness advocator has a batch of information and a batch of system. It took complete this system. The feline is ace smart leader and IT manager.

And we expect wellness advocator being nether nan double activity of nan caller CEO and nan governance coming from Scott Klein who is nan caput of nan specialized services to person a overmuch amended floor plan coming this twelvemonth and successful nan years to come. It's process.

Bhupender Singh

And if I tin adhd 1 point there, which is, again, a cross-pollination betwixt different parts of Teleperformance. In wellness advocate, akin to what was done successful LanguageLine Solutions, we person now added a video channel. And arsenic you've seen nan floor plan that I showed to you nan measurement nan video transmission has grown, it's some much resilient and successful a higher separator business is moreover much margin. So we've already initiated that successful patient advocate.

Unidentified Company Representative

Just to comment, I conscionable wanted not to fto nan impressions that elaborate is not generating bully margin, and this is simply a very bully business. And lastly, I judge that Mr. Julien has to time off us, I don't cognize if location is simply a mobility past question.

Anvesh Agrawal

Yes. Just 1 follow-up. In being a drag, tin you show america really large that is simply a portion of nan D.I.B.S. and TLS piece, what's nan vulnerability there?

Unidentified Company Representative

What was it? I didn't drawback nan question. How overmuch TLS was?

Anvesh Agrawal

I'm saying really large China is wrong D.I.B.S. and TLS?

Olivier Rigaudy

China was betwixt 15% and 20% earlier nan crisis.

Unidentified Company Representative

What? Of measurement what of TLS. Okay. It was difficult to understand from here.

Daniel Julien

So we would for illustration to convey you very overmuch astatine these 2 years -- aft these 2 hours. It's 2 hours -- aft this 2 hours meeting. And it's ever a pleasance to interact pinch you. Thank you very much.

Editor: Naga

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