• Revenue: Over EUR10 billion, a statutory increase of 23% on a like-for-like basis, 2.6%.
• Free Cash Flow: More than EUR1.08 billion.
• Margin Expansion: Margin increased slightly, with a focus on core BPO business.
• Specialized Services Growth: Double-digit growth, despite a dip due to non-renewal of a visa services contract.
• Majorel Integration Synergies: Over EUR90 million in synergies recorded, with a target of EUR150 million.
• Share Buyback Program: EUR500 million executed, with EUR184 million delivered last year.
• Dividend Proposal: Increase to EUR4.20 per share, with a payout ratio of 48%.
• Debt to EBITDA Ratio: 1.9 times.
• Adjusted Net Result: Up by 10.2% versus last year.
• Currency Effects: EUR110 million impact, with significant effects from Egyptian Lira, Turkish Lira, Brazilian Real, and Colombian Pesos.
• EBITDA Margin: Achieved guidance for progression in 2024 versus 2023 pro forma margin.
• Majorel Synergies: EUR94 million booked in 2024, with EUR58 million in implementation costs.
• Free Cash Flow Generation: Close to EUR1.1 billion, with a cash conversion rate of 52%.
• Net Debt: Reduced to EUR3.1 billion, with a cost of less than 4% and maturity above three years.
• 2025 Revenue Guidance: 3% to 5% growth, excluding the non-renewal of the TLS contract.
• 2025 Margin Guidance: Expected to improve relative to 2024, with a target of 15% EBITDA margin.

• Warning! GuruFocus has detected 4 Warning Sign with XMAD:VID.

Release Date: February 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Teleperformance SE (TLPFF) achieved over EUR10 billion in revenue for the first time, marking a 23% increase on a statutory basis.
• The company generated more than EUR1.08 billion in free cash flow, demonstrating a strong and resilient business model.
• Specialized services experienced double-digit growth, showcasing the strength and resilience of this business segment.
• The integration with Majorel is on track, with over EUR90 million in synergies recorded, aiming for EUR150 million.
• Teleperformance SE (TLPFF) is proposing an increase in the dividend to EUR4.20 per share, with a payout ratio rising to 48%.

Negative Points

• A long-standing visa services contract was not renewed, causing a dip in Q4 and impacting growth momentum.
• The company experienced a 60-basis point negative impact on margins due to FX effects in 2024.
• The non-renewal of the TLS contract will cause a 60-basis point negative impact on 2025 margins.
• There is a planned voluntary departure of 600 employees in France, with limited impact expected in 2025.
• The company faces pricing pressure in certain segments, such as the telecom vertical, which saw a reduction.

Q & A Highlights

Q: Can you provide more details on your medium-term growth strategy? Is it based on organic growth or does it include M&A? A: Our medium-term growth strategy is primarily organic. We are currently working on a more detailed breakdown of our M&A strategy and will provide updates on potential investments and their impact on growth.

Q: What was the impact of the contract loss in Q4 on your growth and margins? A: The contract loss in Q4 primarily impacted sales, with a reduction of approximately EUR20 million, particularly from mid-November to the end of December. There was also a margin impact, but the sales impact was more significant.

Q: How do you see the revenue growth visibility for 2025 compared to last year? A: We expect stronger growth dynamics in the second half of 2025. While we remain prudent, the second half is anticipated to be stronger due to new business kicking in and the absence of the special effect seen in Q1 2024.

Q: Can you elaborate on the impact of FX and other factors on your 2024 margins? A: In 2024, we had a positive impact of 90 basis points from synergies and 30 basis points from mix effects. However, these were offset by a 60-basis point negative impact from FX and approximately 40-45 basis points from investments in business development.

Q: What are your expectations for the financial results and tax rate in 2025? A: We expect the financial results to be influenced by the debt raised for the ZP acquisition, which will increase the cost of debt. The tax rate is expected to decrease over the next two years, with a focus on reducing cash tax through strategic tax planning.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.