Teleperformance: Quarterly Information at 31 March 2021

Regulatory News:

Teleperformance (Paris:TEP), a leading global group in digitally integrated business services, today released its quarterly revenue figures for the three months from January 1 to March 31, 2021.

First-quarter 2021 revenue

• First-quarter 2021: €1,712 million
  • up +26.6% as reported
  • up +35.9% like-for-like

Record like-for-like growth in first-quarter 2021

• Strong sales momentum supported by faster digitalization of the client environment and the development of high-value solutions
• Growth in support services for government vaccination campaigns in continental Europe and the United Kingdom
• Dynamic driven by the efforts of more than 250,000 employees working from home and the rapid deployment of TP Cloud Campus, the Group’s digitally integrated solution for managing the customer experience remotely

Full-year 2021 revenue growth target raised

• Like-for-like* full-year revenue growth of at least +12% versus a previously announced target of at least +9%
• Confirmation of the EBITA margin before non-recurring items target of more than 14% in 2021, versus 12.8% in 2020
• Expected completion of the acquisition of Health Advocate during the second quarter

* At constant exchange rates and scope of consolidation

Commenting on this performance, Teleperformance Chairman and Chief Executive Officer Daniel Julien said: "Teleperformance set a new growth record in first-quarter 2021, with revenue up by almost 36% like-for-like. This excellent quarterly performance confirms the positive trends observed in the second half of 2020 despite the uncertainties associated with the global health crisis.

In the first three months of 2021, Teleperformance benefited in particular from strong sales momentum, notably in continental Europe and in the Ibero-LATAM region, in an environment shaped by faster development of the digital economy. We also benefited during the quarter from a favorable basis of comparison – given the onset of the global health crisis in March 2020 – and from the ramp-up of support services for governments, primarily in the Netherlands and the United Kingdom. Our performance in the first quarter once again underscores our relevant, strong business model, our agile organization and our successful growth strategy built around the digital transformation of our clients and the deployment of high-value solutions.

With around 250,000 employees now working from home, our growth is also responsible for creating numerous jobs around the world and for driving progress in the development of ESG best practices. Teleperformance was notably ranked by Equileap in March 2021 among the Top 100 companies globally for gender equality in the workplace.

Based on this very solid first-quarter performance, we are raising our like-for-like revenue growth target for the full year to at least +12% and confirming our objective of an EBITA margin above 14%, up sharply on 2020.”

Consolidated revenue

Consolidated revenue came in at €1,712 million for the first quarter of 2021, representing a year-on-year increase of +35.9% at constant exchange rates and scope of consolidation (like-for-like) and +26.6% as reported. The difference between reported and like-for-like growth was due to an unfavorable currency effect (-€93 million) stemming from the decline against the euro of the US dollar, the main Latin American currencies and the Indian rupee.

These sharp gains in revenue were primarily driven by a strong sales momentum in the Core Services & D.I.B.S. business, in an environment shaped by faster development of the digital economy. First-quarter revenue also benefited from a ramp-up in the deployment of Covid-19 support services for governments, which accounted for more than 40% of the Group’s quarterly like-for-like revenue growth. In addition, given the onset of the global health crisis in March 2020, the basis of comparison was favorable towards the end of the quarter.

Revenue by activity

* Digital Integrated Business Services
** Regional data is presented on a restated pro forma basis following the integration into the CEMEA region on January 1, 2021 of former Intelenet activities in the Middle East, which were previously included in the India & Middle East region.

• Core Services & Digital Integrated Business Services (D.I.B.S.)

Core Services & D.I.B.S. revenue amounted to €1,536 million in first-quarter 2021, a year-on-year increase of +39.7% like-for-like. Reported revenue growth came to +30.3%, with the difference primarily reflecting the decline against the euro of the US dollar and, to a lesser extent, the main Latin American currencies and the Indian rupee.

First-quarter like-for-like revenue growth in the Core Services & D.I.B.S business was driven by the strong sales momentum recorded in the CEMEA and Ibero-LATAM regions, in an environment shaped by faster development of the digital economy, particularly in e-tailing and online entertainment. Accelerated deployment of Covid-19 support services for governments, particularly in the CEMEA and EWAP regions, also contributed to the sharp gains posted during the quarter. In addition, all regions benefited from a favorable basis of comparison created by the prior-year impact of the global health crisis, which began in March 2020.

• English-speaking & Asia-Pacific (EWAP)

Regional revenue came to €508 million in first-quarter 2021, up +26.6% like-for-like. The reported gain of +17.7% included an unfavorable currency effect stemming notably from the US dollar’s decline against the euro.

In the North American market, a solid pace of growth was recorded in the e-tailing, online entertainment, automotive and consumer electronics segments. Travel and tourism, on the other hand, continued to be severely impacted by the global health crisis.

In the United Kingdom, operations expanded very rapidly during the quarter, benefiting not only from faster deployment of Covid-19 support services to the government but also from a strong sales dynamic in several segments, including consumer electronics and energy.

In Asia, revenue continued to increase at a very brisk pace. Growth in China, the leading revenue contributor in the region, was notably driven by the consumer electronics and e-tailing segments. The Group’s multilingual hubs in Malaysia continued to post very strong gains, thanks mainly to the contribution of contracts signed recently in the social media segment.

• Ibero-LATAM

First-quarter 2021 revenue for the Ibero-LATAM region amounted to €442 million, a year-on-year increase of +37.4% like-for-like. On a reported basis, growth came out at +24.1%, with the difference primarily reflecting the decline against the euro of the US dollar, the Brazilian real, the Colombian peso, the Argentinian peso and the Mexican peso.

The region maintained a very strong pace of growth thanks to the large-scale deployment of work-from-home solutions and the numerous contracts signed with e-clients.

Sharp gains were recorded in Colombia and by the Group’s nearshore operations in Mexico, Dominican Republic and El Salvador. Portugal and Spain also reported solid revenue growth. The e-tailing, online entertainment and consumer electronics segments were particularly dynamic, and rapid progress was also made during the quarter in the online food services, healthcare and consumer goods segments.

• Continental Europe & MEA (CEMEA)

In the CEMEA region, revenue rose by +72.8% like-for-like to €481 million in first-quarter 2021, and by +69.5% year-on-year as reported.

The region’s sales performance with multinational clients remained very dynamic, particularly in the online entertainment, e-tailing and consumer electronics segments. This was notably the case in Greece (multilingual hubs), for the German-speaking market and in the Netherlands, Italy, Turkey and Egypt.

The acceleration in growth over the past three quarters also reflects the rapid ramp-up of support services for government vaccination campaigns in the Netherlands and, to a lesser extent, in France and Germany.

• India

In the first quarter of 2021, operations in India generated €105 million in revenue, up +6.7% from the prior-year period on a like-for-like basis and down 2.5% as reported, due to the negative currency effect caused by the decline in the Indian rupee against the euro.

In offshore operations, which were given priority for the deployment of work-from-home solutions and include high-value solutions, satisfactory gains were recorded, particularly in the e-tailing, consumer electronics and food services segments.

• Specialized Services

In first-quarter 2021, Specialized Services revenue amounted to €176 million, up +10.1% from the prior-year period on a like-for-like basis and up +1.4% as reported, due to the decline in the US dollar against the euro.

Business remained sharply down at TLScontact during the quarter, reflecting ongoing travel restrictions and border closures. Given that these restrictions were implemented gradually from March 2020, the basis of comparison will become less unfavorable starting in the second quarter. An upturn in revenue is not expected to occur until the second half of 2021, and its magnitude will depend on how the health crisis evolves.

Primary contributor and growth driver LanguageLine Solutions continued to advance at a brisk pace during first-quarter 2021. The company was able to respond effectively to strong demand, thanks to its offering based on 13,700 interpreters who work from home. It also benefited from a favorable basis of comparison for the month of March, because business slowed temporarily in March 2020 due to the impact of Covid-19 on the healthcare segment.

The debt collection business in North America recorded solid quarterly revenue growth, driven by a strong sales dynamic during the health crisis.

Outlook

Based on the solid performance delivered in the first quarter, Teleperformance has raised its full-year 2021 revenue growth objective and is now targeting at least +12% like-for-like revenue growth, versus the previously announced target of "at least +9%”.

In addition, the Group confirms its objective of achieving an EBITA margin before non-recurring items of at least 14% (versus 12.8% in 2020).

Disclaimer

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.

Conference call with analysts and investors

Monday, April 12, 2021 at 8:45 AM CET

A replay of the conference call will be available for subsequent listening on Teleperformance’s website, along with the relevant documentation, in the Investor Relations section under Quarterly Financial Information (www.teleperformance.com), and by clicking on the following link:

https://www.teleperformanceinvestorrelations.com/en-us/press-releases-and-documentation/quarterly-financial-information

Investor calendar (indicative)

Annual General Meeting: April 22, 2021
First-half 2021 results: July 28, 2021
Third-quarter 2021 revenue: November 3, 2021

About Teleperformance Group

Teleperformance (TEP – ISIN: FR0000051807 – Reuters: TEPRF.PA - Bloomberg: TEP FP), a leading global group in digitally integrated business services, serves as a strategic partner to the world’s largest companies in many industries. It offers a One Office support services model combining three wide, high-value solution families: customer experience management, back-office services and business process knowledge services. These end-to-end digital solutions guarantee successful customer interaction and optimized business processes, anchored in a unique, comprehensive high tech, high touch approach. The Group's 380,000+ employees, based in 83 countries, support billions of connections every year in over 265 languages and over 170 markets, in a shared commitment to excellence as part of the "Simpler, Faster, Safer” process. This mission is supported by the use of reliable, flexible, intelligent technological solutions and compliance with the industry’s highest security and quality standards, based on Corporate Social Responsibility excellence. In 2020, Teleperformance reported consolidated revenue of €5,732 million (US$6.5 billion, based on €1 = $1.14) and net profit of €324 million.

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: CAC 40, CAC Support Services, STOXX 600, S&P Europe 350 and MSCI Global Standard. In the area of corporate social responsibility, Teleperformance shares are included in the Euronext Vigeo Eurozone 120 index, the FTSE4Good index and the Solactive Europe Corporate Social Responsibility index (formerly Ethibel Sustainability Excellence Europe index).

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

Appendix

Glossary - Alternative Performance Measures

Change in like-for-like revenue:

Change in revenue at constant exchange rates and scope of consolidation = [current year revenue - last year revenue at current year rates - revenue from acquisitions at current year rates] / last year revenue at current year rates.

EBITDA before non-recurring items or current EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization):

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 or current EBITA (Earnings before Interest, Taxes and Amortization):

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

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.

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NB: The alternative performance measures (APM) are defined in Appendix

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