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Teleperformance: 2016 Annual Results
[February 28, 2017]

Teleperformance: 2016 Annual Results


Regulatory News:

The Board of Directors of Teleperformance (Paris:RCF), the worldwide leader in outsourced omnichannel customer experience management, met today and reviewed the consolidated and parent company financial statements for the year ended December 31, 2016. The Group also announced its financial results for the year.

GROWTH IN RESULTS AND MARGINS IN 2016



- Revenue:

      €3,649 million

up + 7.4% as reported

up + 7.4% like-for-like*

 

- EBITA before non-recurring items:

€408 million

- EBITA margin before non-recurring items:

11.2% versus 10.3% in 2015

- Diluted earnings per share:

€3.67, versus €3.45 in 2015

- Dividend per share:

€1.30**, versus €1.20 in 2015

- Net free cash flow:

€236 million, up + 16.8% on 2015

SIGNIFICANTLY STRONGER GLOBAL MARKET LEADERSHIP

  • Unique global presence in 74 countries
  • Continued expansion of the Group's worldwide footprint with the addition of more than 20 000 new workstations, notably in Asia, Latin America and Europe

ACQUISITION OF LANGUAGELINE SOLUTIONS (LLS)

  • Consolidation in the third quarter 2016 of LanguageLine Solutions, the US market leader in online interpreting solutions
  • Strong growth in revenue and EBITA margin before non-recurring items for LLS, in line with the Group's expectations
  • Creation of a new family of Teleperformance services: the "Specialized services" account for 15% of consolidated revenue***, generating an EBITA margin before non-recurring items of 30%***, and grouping together interpreting services, visa application management services, analytics solutions, and debt collection programs

2017 OBJECTIVES: CONTINUED PROFITABLE GROWTH

  • Like-for-like revenue growth above + 6%
  • EBITA margin before non-recurring items of at least 13%
  • Ongoing strong net free cash flow generation.

*at constant exchange rates and scope of consolidation
**submitted to shareholder approval at the annual general meeting on June 23, 2017
*** 2016 pro forma figure with LanguageLine Solutions consolidated over 12 months

2016 FINANCIAL HIGHLIGHTS

€ millions   2016   2015   % change
    €1=US$1.11   €1=US$1.11    
Revenue   3 649   3 398   + 7.4%
Like-for-like growth + 7.4%
EBITDA before non-recurring items 559 492 + 13.6%
% of revenue 15.3% 14.5%
EBITA before non-recurring items(1) 408 351 + 16.3%
% of revenue 11.2% 10.3%
Operating profit 339 308 + 10.1%
Net profit - Group share 214 200 + 6.8%
Diluted earnings per share (€) 3,67 3,45 + 6.4%
Dividend per share (€) 1.30* 1,20
Net free cash flow   236   202   + 16.8%

(1)Operating profit before amortization of acquisition-related intangibles, loss of goodwill value and excluding non-recurring items
*submitted to shareholder approval at the annual general meeting on June 23, 2017

Daniel Julien, Executive Chairman, and Paulo César Salles Vasques, Chief Executive Officer, Teleperformance Group, expressed their thoughts on the occasion:

"2016 was an exceptional year for Teleperformance, not only for its very good financial performance in line with its annual objectives, with a + 7.4% growth in its business and a significant increase in its operating margin, but also and especially for the very successful transformational operation carried out last September, namely the acquisition in September 2016 of LanguageLine Solutions, the leading provider of online interpretation solutions in the United States.

This acquisition definitely reflects the Group's strategic decision to develop high value-added specialized services, which combine a dynamic growth profile with high profitability levels. Via its targeted acquisitions, the Teleperformance Group has gradually positioned itself as a world-renowned high-end player in Business Process Outsourcing (BPO).

For 2017, Teleperformance expects to enjoy continued growth in its market and gains in market share thanks to its worldwide leadership position, backed by the ongoing expansion of its global footprint, notably with new contact centers in Asia. The Group will also benefit from the consolidation of LanguageLine Solutions over 12 months. Thus the Group targets like-for-like revenue growth above + 6%, significant improvement in the EBITA margin before non-recurring items to at least 13.0% and ongoing strong cash flow generation.

In the longer term, we reaffirm with enthusiasm, conviction and passion what we announced at our Investor day on January 19th. The growth potential of our two business families in customer experience, core-services activities and high-value specialized services, our differentiating assets combining leadership, people, client centric culture, brain and technology and further targeted acquisitions, allows us to be confident to achieve in 2020 a turnover at least equal to 5 billion euros and a current EBITA margin at least equal to 14%. We thank all our teams who have worked for the success of the group so far and for continuing to contribute to our exciting, value-creating journey."

CONSOLIDATED REVENUE

Consolidated revenue amounted to €3,649 million, representing a + 7.4% increase as reported vs 2015. Reported growth includes the aggregate €114 million positive contribution from LanguageLine Solutions, consolidated since September 19, 2016, as well as a €106 million negative currency effect arising from the decrease against the euro of certain currencies, primarily Latin American currencies such as the Argentine, Mexican, and Colombian pesos, and the pound sterling.

On a like-for-like basis (at constant exchange rates and scope of consolidation), revenue climbed to + 7.4% year-on-year.

REVENUE BY REGION

The geographic breakdown continued to reflect Teleperformance's unique global leadership position. The English-speaking market & Asia-Pacific region accounted for 47% of consolidated revenue, LanguageLine Solutions - which operates mainly in North America - 3%, the Ibero-LATAM region 24% and Continental Europe & MEA 26%.

Throughout 2016, all of the operating regions reported satisfactory like-for-like growth, above the global market average.

ANNUAL REVENUE BY REGION

    2016   % total   2015   % total   % change
€ millions                   Reported   Like-for-like
English-speaking market & Asia-Pacific   1,716   47%   1,688   50%   + 1.7%   + 4.5%
Ibero-LATAM 884 24% 834 25% + 5.9% +11.3%
Continental Europe & MEA 935 26% 876 25% + 6.8% + 9.5%
LanguageLine Solutions 114 3% - -
TOTAL   3,649   100%   3,398   100%   + 7.4%   + 7.4%
  • English-speaking market & Asia-Pacific

Revenue in the English-speaking market & Asia-Pacific region rose by + 4.5% like-for-like over the full year. On a reported basis, growth amounted to + 1.7%, notably reflecting the significant decline in the pound sterling against the euro in the second half of 2016.

Regional business was particularly sustained in the healthcare, retail and transportation sectors. Growth was also satisfactory in the financial services and consumer electronics sectors. Teleperformance thus continued to diversify its client portfolio, reducing its dependence on the telecommunications sector (including pay-TV), which currently accounts for less than 30% of the region's revenue stream.

In the Asia-Pacific region, Teleperformance continued to enjoy robust business growth in China, both with locally based North American multinationals and, most recently, with major Chinese companies in high-growth sectors. Teleperformance opened a new multilingual facility in Kunming in the south of the country, which leverages substantial linguistic resources. The Group now operates out of four strategic locations in China: Beijing, Xi'an, Nanning and Kunming. Business was also strong in India, particularly with large multinationals in a range of sectors.

  • Ibero-LATAM

Operations in the Ibero-LATAM region expanded at a sustained pace, advancing + 11.3% like-for-like and + 5.9% as reported. The difference was mainly due to an unfavorable exchange rate environment shaped by the decrease in certain Latin American currencies, mainly the Brazilian real and the Mexican, Colombian and Argentine pesos.

The region's strong growth was driven primarily by a solid performance from operations in Portugal, fuelled by the success of the Lisbon-based multilingual hubs serving major multinationals. This performance also reflected the ramp-up of numerous major contracts signed recently in a variety of industries, such as the sharing economy, retail, IT, leisure, online travel agencies and financial services.

Growth was also sustained in Colombia, particularly in the transportation and Internet services sectors, as well as in El Salvador and the Dominican Republic in the healthcare, hospitality and pay-TV sectors.

Business in Mexico expanded at a satisfactory pace over the full year, with a rebound occurring in the second half. The transportation, financial services, consumer electronics and retail sectors made the biggest gains.

The Group continued to weather the unfavorable economic conditions in Brazil. The transportation, financial services and insurance sectors as well as the consumer electronics sector reported steady growth.

  • Continental Europe & MEA

Regional revenue rose by + 9.5% like-for-like and by + 6.8% as reported.

This robust growth reflects an ongoing network effect with global clients in several markets, in sectors ranging from consumer electronics and Internet services to retail and financial services.

The rapid expansion of subsidiary TLScontact, which specializes in face-to-face services, also had a very positive impact on the region's growth.

The strongest performances were observed in the Middle East - particularly in Egypt and Dubai - where recently opened centers serve major companies in the Internet services and consumer electronics sectors, in Greece, where clients are served by premium multilingual hubs based in Athens, and in Eastern Europe - particularly in Russia, Poland and Romania.

While their markets remained challenging, Germany and Italy also benefited from a network effect with the Group's global accounts.

  • LanguageLine Solutions

For the first time, the Group's revenue includes a €114 million contribution from LanguageLine Solutions. Acquired on September 19, 2016, LanguageLine Solutions is the US market leader in over-the-phone and video interpretation solutions provided to a wide range of organizations in the healthcare, insurance, financial services and government sectors.

The acquisition reinforces and boosts Teleperformance's global leadership as a provider of high-end value-added services, as well as the Group's growth and profitability profile. The company had revenue of US$388 million in 2015.

RESULTS

EBITDA before non-recurring items amounted to €559 million in 2016, up + 13.6% year-on-year. EBITDA margin before non-recurring items stood at 15.3%, versus 14.5% in 2015.

EBITA before non-recurring items rose by + 16.3% to €408 million from €351 million in 2015, while EBITA margin before non-recurring items widened by 90 basis points to 11.2% from 10.3% in 2015.

This performance demonstrates the effectiveness of the Group's strategic development decisions, particularly the development of the high-value specialized services business, which combines dynamic growth momentum and high profitability. In 2016, the improvement in Group margin reflected in particular:

  • Strong growth in outsourced visa application management services (TLScontact), which generated an EBITA margin before non-recurring items above the Group average.
  • The integration since September 19, 2016 of LanguageLine Solutions, which delivered an EBITA margin before non-recurring items of 36.3% in 2016.

EBITA BEFORE NON-RECURRING ITEMS BY REGION - EXCLUDING HOLDING COMPANIES

€ millions   2016   2015

English-speaking market & Asia-Pacific

 

158

 

170

% of revenue   9.2%   10.1%

Ibero-LATAM

109

105

% of revenue  

12.3%

  12.6%

Continental Europe & MEA

69

43

% of revenue   7.3%   5.0%

LanguageLine Solutions

41

-

% of revenue   36.3%   -

Total - including holding companies

408

351

% of revenue   11.2%   10.3%

The English-speaking market & Asia-Pacific region achieved EBITA before non-recurring items of €158 million in 2016, compared with €170 million the previous year. The corresponding margin narrowed to 9.2% from 10.1% in 2015, mainly due to i) an unfavorable basis of comparison in the first quarter stemming from a temporary decline in volume with a major client in the US telecommunications sector, ii) an unfavorable geographical mix effect resulting from significant growth in domestic operations in the United States, particularly in the financial services sector, iii) the gradually increasing contribution of new facilities recently opened in Australia and China, and iv) the ongoing commitment to security spending, initiated in 2015 and spread over two years.

The impact of these challenges was felt chiefly in the first half of the year, while in the second half, the Group reported a better trend, benefiting from a more favorable basis of comparison and the recently opened facilities becoming fully operational.

The Ibero-LATAM region recorded EBITA before non-recurring items of €109 million in 2016, compared with €105 million the previous year. EBITA margin before non-recurring items remained high at 12.3% versus 12.6% in 2015. Although economic conditions in Brazil remained challenging, the Group enjoyed the positive impact of profitable business momentum in Portugal and Columbia, coupled with favorable currency trends for offshore business in Mexico serving the US market.

In the Continental Europe & MEA region, Teleperformance remained on the steady upward trend in profitability that began in 2012. EBITA before non-recurring items rose to €69 million from €43 million in 2015, for a margin of 7.3% and 5.0%, respectively. The improvement reflects the ongoing margin recovery in the French-speaking market and Nordic countries, as well as profitable growth in operations in a number of fast-growth markets in Southern and Eastern Europe, such as Greece, Egypt and Poland.

The increased profitability of TLScontact's outsourced visa application management services also helped to support good performance in the region.

EBITA before non-recurring items for LanguageLine Solutions, which was acquired on September 19, 2016, amounted to €41 million, representing a 36.3% margin, in line with the Group's expectations.

Operating profit rose to €339 million, versus €308 million in 2015. This included:

  • Amortization of intangible assets on acquisitions in an amount of €41 million, up from the previous year due to the acquisition of LanguageLine Solutions;
  • €22 million in accounting expenses on the performance share plans set up in 2013;
  • €6 million in other non-recurring expenses, mainly corresponding to the cost of acquiring LanguageLine Solutions.

The financial result represented a net expense of €39 million, versus €27 million in 2015.

Income tax expense amounted to €83 million, corresponding to an effective tax rate of 27.6%, unchanged from the prior year.

Net profit attributable to minority interests represented €3 million.

Net profit - Group share stood at €214 million for the year, up + 6.8% from the €200 million reported in 2015. Diluted earnings per share rose to €3.67, compared with €3.45 in 2015.

The Board of Directors will recommend that shareholders at the annual general meeting on June 23, 2017 approve an increase in the 2016 dividend to €1.30 per share from the €1.20 paid in respect of 2015. This would correspond to a payout ratio of 35%, unchanged from the prior year.

CASH FLOWS AND FINANCIAL STRUCTURE

Cash flow before interest paid and after tax amounted to €442 million in 2016, versus €400 million the year before.

The change in consolidated working capital requirement was an inflow of €17 million in 2016 compared with an outflow of €9 million in 2015. The Group applied steady, disciplined management of working capital requirement throughout the year. The growth in business outstripped the increase in working capital requirement.

Net capital expenditure rose to €190 million from €172 million in the previous year, corresponding to 5.2% versus 5.0% in 2015. These investments were committed to create or expand contact centers serving key markets in the Group's three regions.

Consolidated net free cash flow improved significantly to €236 million from €202 million in 2015, despite the rise in interest paid. This solid performance reflects growth in both revenue and margins. Net free cash flow divided by EBITDA before non-recurring items stood at 42% (41% in 2015).

After the payment of €68 million in dividends and €1,380 million in financial investments, reflecting the acquisition of LanguageLine Services in September 2016, net debt stood at €1,667 million at December 31, 2016, versus €363 million recorded at the previous year-end. The net debt-to-equity ratio amounted to 87% and the net debt-to-EBITDA ratio represented 2.6 on a restated pro forma basis.

SIGNIFICANTLY STRONGER GLOBAL MARKET LEADERSHIP

  • Extending and creating new facilities in 2016

To support the rapid expansion of its business, in 2016 the Group continued to enhance both its offshore capacity and its presence in fast-growth markets by extending and opening facilities across the three linguistic regions.

In all, 24 new contact centers were opened*, and the number of workstations was increased at a number of existing sites, for a total of more than 20,000 additional workstations*.

The breakdown by region was as follows:

- In Continental Europe & MEA, several new centers were opened, including: in Madagascar where the Group established a presence for the first time to serve the French market, and in Germany, the Netherlands, Greece, Turkey, Russia, Poland and the Czech Republic. The Group also increased capacity at existing sites, notably in Egypt, Dubai (UAE), Romania, Albania, Turkey, Lithuania, Russia, Morocco and Italy;
- In the English-speaking market, the Group opened two new contact centers in the United States and seven across the Asia-Pacific region, in Australia, China, India, Philippines and Malaysia). Given the strong momentum in the Asia-Pacific region, the Group is planning to continue opening new facilities throughout 2017, particularly in China;
- In the Ibero-LATAM region, six new facilities were opened in Portugal, Brazil, Colombia, Mexico, the Dominican Republic and El Salvador.

  • Development strategy and 2020 objectives

The outsourcing market continues to offer attractive growth prospects in many regions throughout the world as well as strong potential for consolidation. The positive trend is being reinforced by an increasingly complex digital environment where interaction with the customer is constantly changing.

The acquisition of LanguageLine Solutions in September 2016 reflects the Group's strategic decision to develop, high-value specialized services. Through targeted acquisitions, Teleperformance has gradually transformed the Group into a premium provider of Business Process Outsourcing (BPO) with an international scope.

The Group therefore decided to disclose a new organization of its operations**, with the "Core Services" now covering customer care, technical support and customer acquisition, and "Specialized Services" bringing together the recently acquired interpreting services provided by LanguageLine Solutions, the visa application management services for governments provided by TLScontact, analytics solutions, and debt collection programs. Specialized services delivered an EBITA margin of approximately 30% in 2016 and have the potential to generate revenue growth of at least + 6% per year over the next three years.

Teleperformance expects to maintain like-for-like growth above the market average, to achieve revenue of €5 billion in 2020. At the same time, management will continue to make targeted acquisitions, particularly in specialized, high added-value services. As a result of the positive impact on margin of the higher contribution from specialized services, which are expected to account for 20% of revenue, coupled with the gains generated by specific initiatives to improve profitability, the Group aims to achieve an EBITA margin before non-recurring items of at least 14% in 2020.

* excluding LanguageLine Solutions
** 2016 pro forma data disclosed in the appendices

2017 OUTLOOK

Teleperformance expects to enjoy continued growth in its market in 2017, backed by the ongoing expansion of its global footprint, notably with new contact centers in Asia and multilingual hubs in Portugal, as well as the consolidation of LanguageLine Solutions over 12 months. Its integration is strengthening Teleperformance's global leadership as a provider of high-end value-added services, as well as the Group's growth and profitability profile.

Teleperformance expects to deliver another year of growth in 2017, with the following full-year targets:

- Like-for-like revenue growth above + 6%, outpacing growth in the worldwide outsourced customer experience management market;
- Significant improvement in the EBITA margin before non-recurring items to at least 13.0%;
- Strong cash flow generation.

DISCLAIMER

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

All forward-looking statements are based on Teleperformance management's present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a detailed description of these factors and uncertainties, please refer to the "Risk Factors" section of our Registration Document, available at www.teleperformance.com. Teleperformance undertakes no obligation to publicly update or revise any of these forward-looking statements.

ANALYST AND INVESTOR INFORMATION MEETING

Date: Wednesday, March 1, 2017 at 9:00 AM CET
The meeting, which will be held in Paris, will be simultaneously webcast on www.teleperformance.com. The related presentation may also be downloaded from the site.

The webcast will be available live or for delayed viewing at:
http://teleperformance.webcast.ldvproduction.com/webcastlist.aspx?eid=150

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

INVESTOR CALENDAR

First-quarter 2017 revenue:       April 27, 2017
Annual general meeting: June 23, 2017
First-half 2017 results: July 25, 2017
Third-quarter 2017 revenue: November 13, 2017

ABOUT TELEPERFORMANCE

Teleperformance (RCF - ISIN: FR0000051807 - Reuters: ROCH.PA - Bloomberg: RCF FP), the worldwide leader in outsourced omnichannel customer experience management, serves companies and administrations around the world, with customer care, technical support, customer acquisition (Core Services), as well as with online interpreting solutions, visa application management services, data analysis and debt collection programs (Specialized Services). In 2016, Teleperformance reported consolidated revenue of €3,649 million (US$4,050 million, based on €1 = $1.11).

The Group operates 163,000 computerized workstations, with 217,000 employees across 340 contact centers in 74 countries and serving 160 markets. It manages programs in 265 languages and dialects on behalf of major international companies operating in a wide variety of industries.

Teleperformance shares are traded on the Euronext Paris market, Compartment A, and are eligible for the deferred settlement service. They are included in the following indices: STOXX 600, SBF 120, Next 150, CAC Mid 60 and CAC Support Services. They also have been included in the Euronext Vigeo Eurozone 120 index since December 2015, with regard to the Group's performance in corporate responsibility.

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

APPENDICES

REVENUE BY REGION

€ millions   2016   2015   % change
      Reported   Like-for-like
                 
FOURTH QUARTER                
English-speaking market & Asia-Pacific   454   451   + 0.7%   + 3.3%
Ibero-LATAM   255   218   + 17.2%   + 10.6%
Continental Europe & MEA   244   233   + 4.5%   + 7.9%
LanguageLine Solutions   97   -        
TOTAL   1,050   902   + 16.4%   + 6.3%
THIRD QUARTER                
English-speaking market & Asia-Pacific   433   422   + 2.7%   + 6.2%
Ibero-LATAM   229   194   + 17.8%   + 20.8%
Continental Europe & MEA   232   222   + 4.6%   + 6.7%
LanguageLine Solutions   16            
TOTAL   910   838   + 8.7%   + 9.7%
SECOND QUARTER                
English-speaking market & Asia-Pacific   404   399   + 1.3%   + 5.9%
Ibero-LATAM   210   214   - 2.0%   + 9.8%
Continental Europe & MEA   231   214   + 7.8%   + 10.8%
TOTAL   845   827   + 2.1%   + 8.2%
FIRST QUARTER                
English-speaking market & Asia-Pacific   425   416   + 2.1%   + 2.6%
Ibero-LATAM   190   209   - 8.7%   + 4.0%
Continental Europe & MEA   229   206   + 10.9%   + 12.9%
TOTAL   844   831   + 1.6%   + 5.5%

2016 PRO FORMA REVENUE AND EBITA BEFORE NON-RECURRING ITEMS*:
NEW PRESENTATION

€ millions   Revenue  

EBITA

before non-
recurring items

   
      as a % of revenue
             
CORE-SERVICES   3,314   322   9.7%
English-speaking market & Asia-Pacific   1,628   150   9.2%
Ibero-LATAM   884   109   12.3%
Continental Europe & MEA   802   31   3.8%
Holdings**   -   32   -
SPECIALIZED SERVICES   596   178   29.9%
TOTAL   3,910   500   12.8%

*LanguageLine Solutions consolidated over 12 months
**Mainly related to core-services in 2016

CONSOLIDATED INCOME STATEMENT

€ millions

  2016   2015
 
Revenues 3,649 3,398
Other operating revenues 5 6
Personnel (2,435) (2,269)
External expenses (642) (626)
Taxes other than income taxes (19) (17)
Depreciation and amortization (150) (141)
Amortization of intangible assets acquired as part of a business combination (41) (23)
Share-based payments (22) (17)
Other operating income and expenses (6) (3)
Operating profit 339 308
Income from cash and cash equivalents 1 1
Interest on financial liabilities (35) (23)
Net financing costs (34) (22)
Other financial net expenses (5) (5)
Financial result (39) (27)
Profit before taxes 300 281
Income tax (83) (78)
Net profit 217 203
Net profit - Group share 214 200
Net profit attributable to non-controlling interests 3 3
Basic earnings per share (in €) 3.73 3.51
Diluted earnings per share (in €) 3.67 3.45

CONSOLIDATED BALANCE SHEET

€ millions

ASSETS   12.31.2016   12.31.2015
         
Non-current assets    
Goodwill 1,952 1,123
Other intangible assets 1,175 281
Property, plant and equipment 476 428
Financial assets 55 34
Deferred tax assets 30 36
Total non-current assets 3,688 1,902
Current assets
Current income tax receivable 46 36
Accounts receivable - Trade 871 754
Other current assets 100 107
Other financial assets 24 43
Cash and cash equivalents 282 257
Total current assets 1,323 1,197
Total assets 5,011 3,099
 
EQUITY AND LIABILITIES   12.31.2016   12.31.2015
         
Shareholders' equity
Share capital 144 143
Share premium 575 575
Translation reserve 100 69
Other reserves 1,093 971
Equity attributable to owners of the company 1,912 1,758
Non-controlling interests 10 7
Total shareholder's equity 1,922 1,765
Non-current liabilities
Provisions 13 10
Financial liabilities 1,688 469
Deferred tax liabilities 464 110
Total non-current liabilities 2,165 589
Current liabilities
Provisions 34 70
Current income tax 61 46
Accounts payable - Trade 126 117
Other current liabilities 442 361
Other financial liabilities 261 151
Total current liabilities 924 745
Total equity and liabilities 5,011 3,099

CONSOLIDATED CASH FLOW STATEMENT

€ millions

Cash flows from operating activities   2016   2015
         
Net profit - Group share   214   200
Net profit attributable to non-controlling interests 3 3
Income tax expense 83 78
Net financial expense 29 17
Expense (income) without effect on cash 196 183
Income tax paid (83) (81)
Internally generated funds from operations 442 400
Change in working capital   17   (9)
Net cash flow from operating activities   459   391
 
Cash flows from investing activities        
         
Acquisition of intangible assets and property, plant and equipment (192) (174)
Loans made (10)
Proceeds from disposals of intangible assets and property, plant and equipment 2 2
Repayment of loans 1 10
Investments in subsidiaries   (1,380)    
Net cash flow from investing activities   (1,579)   (162)
 
Cash flows from financing activities        
         
Acquisition/disposal of treasury shares (17) (5)
Change in ownership interest in controlled entities (33) (5)
Dividends paid to parent company shareholders (68) (53)
Financial income/expense (33) (17)
Increase in financial liabilities 2,696 749
Repayment of financial liabilities   (1,355)   (806)
Net cash flow from financing activities   1,190   (137)
 
Change in cash and cash equivalents 70 92
Effect of exchange rates on cash held -   (45)   (52)
Net cash at January 1st 254 214
Net cash at December 31st   279   254

GLOSSARY

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

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

Non-recurring items:
Principally comprises restructuring costs, incentive share award plan expense, costs of closure of subsidiary companies, transaction costs for the acquisition of companies, and all other expenses that are unusual by reason of their nature or amount.

Net free cash flow:
Cash flow generated by the business - acquisitions of intangible assets and property, plant and equipment net of disposals - financial income/expenses.

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

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

Diluted earnings per share (net profit attributable to shareholders divided by the number of diluted shares and adjusted):
Diluted earnings per share is determined by adjusting the net profit attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding by the effects of all potentially diluting ordinary shares. These include convertible bonds, stock options and incentive share awards granted to employees when the required performance conditions have been met at the end of the financial year.

----------------------------------------------------------------------------------------------------------------------------------

NB: The consolidated financial statements have been audited and certified /15

Teleperformance SE is a European Company (Societas Europaea). Share capital of 144.450.000 €.
21-25 rue Balzac, 75406 Paris Cedex 08 France. 301 292 702 RCS Paris. Siret 301 292 702 00059. Code APE 6420Z.


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