Teleperformance: 2012 Financial Results Business Wire PARIS -- February 26, 2013 RegulatoryNews: The Board of Directors of Teleperformance (Paris:RCF), the global leader in customer experience management, met today and reviewed the consolidated financial statements for the year ended December 31, 2012. The Group also announced its financial results for the year 2012. Strong growth in revenue and earnings, above Group’s target *Revenue: €2,347.1 million Organic growth: 6.9% year-on-year *EBITA before non-recurring items: €213.9 million, up 18.3% year-on-year EBITA margin before non-recurring items of 9.1% versus 8.5% in 2011 *Strong growth in the Ibero-LATAM region and a continuing recovery in operations in most European countries. *Diluted earnings per share: €2.27, up 39.3% year-on-year Full-year 2013 outlook *Continuing revenue gains, with organic growth of 3% to 5% *Continuing margin improvement, with an EBITA margin before non-recurring items of 9.3% to 9.5% *Strengthened governance as from June 2013 2012 FINANCIAL HIGHLIGHTS € millions 2012 2011 Change €1 = US $1.29 €1 = US$ 1.39 Revenue 2,347.1 2,126.2 10.4% EBITDA before non-recurring items 306.2 268.4 14.1% % of revenue 13.0% 12.6% EBITA before non-recurring items* 213.9 180.8 18.3% % of revenue 9.1% 8.5% Operating profit 193.2 152.3 26.9% Net profit – attributable to 127.5 91.9 38.7% shareholders Diluted earnings per share (€) 2.27 1.63 39.3% *Operating profit before amortization of acquired intangible assets and non-recurring items - Non-recurring items represented a net expense of €11.8 million in 2012 and €19.2 million in 2011 - Amortization of acquired intangible assets amounted to €8.9 million in 2012 and €9.3 million in 2011 Daniel Julien, Chairman and Chief Executive Officer of Teleperformance, said: “In 2012, we saw a significant increase in business, with reported growth of 10.4% and organic growth of 6.9%, exceeding our objectives. EBITA margin before non-recurring items sharply improved during the year, to 9.1% of revenue, again beating our initial objective. This good performance was primarily driven by the fast growth in our businesses in the Ibero-LATAM region, notably in Brazil where we are benefiting from a favorable environment and a premium positioning in expanding industries. In Europe, operations in a certain number of countries, such as the United Kingdom, Spain and Germany, reported a rebound in business and margins. Thanks to the tight management of our capital expenditure and assets, we once again increased our return on capital employed. These very good results confirm our global leadership of the outsourced customer experience management market and demonstrate the success of our value-creating growth strategy. Today, we are leveraging a number of powerful advantages to seize the opportunities offered by the mobile Internet revolution, which has only just begun. These include 140,000 young, ambitious, motivated employees, integrated processes and technology and an extremely solid customer base. The right moment has now come to carry out a smooth, orderly transition in the Group’s leadership. The Board of Directors will therefore ask shareholders at the Annual Meeting next May 30 to elect Paulo Cesar Vasques as director, with the aim of appointing him Chief Executive Officer. An engineer with an MBA degree, Mr. Vasques, 43, is an outstanding executive who in Brazil, in just a few years, successfully developed one of our most remarkable member companies. He is the symbol of a new generation of leaders, aged 35 to 50, who represent the life blood of our Group and who are now gradually moving into positions of responsibility, where they will drive our profitable growth for decades to come. I will remain Chairman of the Board of Directors and continue to exercise my CEO’s duties with Teleperformance Group Inc. for at least two or three more years. For 2013, we expect to deliver further gains in revenue, EBITA margin before non-recurring items, and return on capital employed, reflecting our confidence in our positioning and the future of our markets.” REVENUE CONSOLIDATED REVENUE Consolidated revenue amounted to €2,347.1million in 2012, an increase of 10.4% as reported. At constant scope of consolidation and exchange rates, organic growth was 6.9%, outpacing the 3.5% reported in 2011. Changes in exchange rates, mainly the appreciation of the US dollar against the euro, added €71.9 million to reported revenue. Changes in the scope of consolidation had a slight €2.2-million negative impact, reflecting the disposal of the Hungarian subsidiary in 2011. The 6.9% organic growth was led by the increase in business in the Ibero-LATAM region, particularly in Brazil. Organic growth also gained momentum throughout the year, increasing from 3.1% in the first half. REVENUE BY REGION € millions 2012 2011 Change Reported Organic English-speaking market & 910.4 819.6 + 11.1% + 3.2% Asia-Pacific Ibero-LATAM 737.6 628.1 + 17.4% + 16.5% Continental Europe & MEA 699.1 678.5 + 3.0% + 2.6% TOTAL 2,347.1 2,126.2 + 10.4% + 6.9% *English-speaking market & Asia-Pacific Regional revenue rose by 11.1% over the year, lifted by the increase in the US dollar and, to a lesser extent, the British pound against the euro. At constant scope of consolidation and exchange rates, growth in the region was 3.2%. Growth strongly varied from one half to the next. In the first half, business showed a year-on-year decline due to the particularly high prior-year comparatives, reflecting the ramp-up of a significant contract in the United States in first-half 2011. Second-half figures, however, benefited from a much more favorable basis of comparison, enabling regional operations to return to growth over the full year. Operations in the United Kingdom enjoyed significant growth following contract wins in new industries. *Ibero-LATAM Regional revenue rose by 17.4% as reported and 16.5% at constant scope of consolidation and exchange rates. The Group enjoyed a positive dynamic across the region during the year, with operations in every country except Argentina delivering revenue gains. Growth was spectacular in Brazil, where operations are benefiting from a favorable economic environment and their premium positioning, which is helping to drive market share gains in the country’s fast expanding industries, such as banking and the Internet/media sector. Operations in Spain have returned to growth. In Portugal, the Group continues to benefit from its high value-added positioning thanks to its multilingual hubs offering. This end-to-end customer experience management solution has proven highly successful with large accounts seeking to simplify their customer service strategy in Europe. *Continental Europe & MEA Regional revenue ended the year up 3.0% as reported and 2.6% at constant scope of consolidation and exchange rates. The renewed growth momentum was driven by the improvements reported in Northern Europe, the Eastern European countries, Greece and Turkey. Firm demand in Germany, the Netherlands and, to a lesser extent, Italy also made a positive contribution to the year’s performance. All of these positive factors helped to offset the decline in business at Teleperformance France which remained impacted by the major shift in the competitive landscape of its largest market, mobile telephony. The contrasting trends in Teleperformance’s three core operating regions over the past three years have noticeably altered its profile. Continental Europe now accounts for less than 30% of consolidated revenue, while the Ibero-LATAM region represents 31% and the English-speaking market & Asia-Pacific region 39%. RESULTS Consolidated EBITDA before non-recurring items rose by 14.1% to €306.2 million in 2012, representing 13.0% of revenue versus 12.6% in 2011. Consolidated EBITA before non-recurring items stood at €213.9 million for the year, an 18.3% gain on the €180.8 million reported in 2011. EBITA margin before non-recurring items widened to 9.1% from 8.5% a year earlier, exceeding the Group’s target, which was at the upper end of a range from 8.5% to 9%. EBITA MARGIN BEFORE NON-RECURRING ITEMS BY REGION – EXCLUDING THE HOLDING COMPANY % of revenue 2012 2011 English-speaking market & Asia-Pacific 11.3% 10.3% Ibero-LATAM 12.6% 11.1% Continental Europe & MEA 0.6% 0.4% TOTAL 9.1% 8.5% All of the operating regions helped to drive margin improvement over the year. The English-speaking market & Asia-Pacific and the Ibero-LATAM regions continued to deliver double-digit EBITA margins before non-recurring items, with year-on-year increases to respectively 11.3% and 12.6% in 2012. The Continental Europe & MEA region reported a positive margin, up slightly on 2011. Non-recurring items represented a net expense of €11.8 million for the year, analyzed as follows: *€2 million in costs of closure related to two subsidiaries based in Austria and Vietnam, where market’s size and growth outlook no longer warranted a local presence; *€9.8 million related to the 2011 performance share plan, as the requisite performance criteria were met. After accounting for these non-recurring items and the amortization of intangible assets (€8.9 million versus €9.3 million in 2011), operating profit came to €193.2 million for the year, up a sharp 26.9% from 2011. Net financial expense stood at €7.3 million, versus €5.6 million in 2011. It included a non-recurring €3 million expense incurred in setting the new €300-million syndicated line of credit. Income tax expense amounted to €56.5 million for the year, corresponding to an effective tax rate of 30.4%, versus 35.2% in 2011. The improvement primarily reflected the return to profit of operations in a certain number of countries that had reported tax losses in previous years. Following a certain number of buybacks, minority interests in net profit stood at €1.9 million in 2012, down from €3.1 million a year earlier. As a result, net profit attributable to shareholders came to €127.5 million, up 38.7% from the €91.9 million reported in 2011. CASH FLOWS AND BALANCE SHEET STRUCTURE The programs underway for the past two years to increase cash generation were pursued in 2012. Cash flow before non recurring items and taxes stood at €296.1 million, up 15.3% from €256.9 million in 2011. Restructuring cash outlays declined significantly to €10 million from €47.7 million the year before, when they rose sharply on implementation of the restructuring plan in France that was decided in late 2010 but carried out primarily in 2011. Consolidated working capital requirement swung to a €26 million outflow in 2012 from a €32.6 million inflow in 2011, mainly due to the robust increase in business at year-end, even as days sales outstanding continued to improve, with a decline of two days vs 2011. Net capital expenditure was nearly unchanged as a percentage of revenue, at 4.6%, and stood at €108.4 million versus €95.5 million in 2011. Net free cash flow continued to increase, rising to €94.5 million from €88.2 million in 2011, while net cash and cash equivalents rose by €54.9 million to end the year at €80 million. As a result, the Group’s balance sheet at December 31, 2012 was very solid. Equity amounted to 1,382.4 million, of which €1,376.4 million attributable to shareholders. It amply covered the Group’s non-current assets, which totaled €1,138.6 million at year-end. CHANGE IN GOVERNANCE Today, Teleperformance is a global industry leader, ready to meet the challenges and seize the opportunities offered by the mobile Internet revolution. To do so, it has successfully built up a wide array of competitive advantages: *The robustness of its seamless processes, integrated technology and customer base. *Powerful innovation capabilities with the development of competitively differentiated solutions. *A people-driven culture, with nearly 140,000 young, motivated and ambitious employees. In accordance with the commitment to separating the offices of Chairman of the Board of Directors and Chief Executive Officer, the Board is considering: *Requesting Daniel Julien to retain his position as Chairman of the Board of Directors as well as CEO of Teleperformance Group Inc., at least for the next two or three years. *Asking shareholders at the next Annual Meeting to elect Paulo Cesar Vasques as director, with the aim of appointing him Chief Executive Officer. An engineer with an MBA degree, Mr. Vasques, 43, is an outstanding executive who, in just a few years in Brazil, successfully developed one of the Group’s most remarkable member companies. In this way, the Group will be led towards new success by a strengthened, younger management team, thereby demonstrating its solidity and proficiency in managing the planning of transition from generation to the next. FULL-YEAR 2013 OUTLOOK In 2013, Teleperformance is pursuing its strategy of creating value and driving balanced growth, which will lead to a further improvement in its return on capital employed. The English-speaking markets & Asia-Pacific and Ibero-LATAM regions are expected to continue delivering a high EBITA margin before non-recurring items, while the margin in the Continental Europe & MEA region, despite the uncertain economic environment, should continue to gradually improve, notably in France, Germany and Italy. For the full year, Teleperformance expects to see an organic growth in revenue of between 3% to 5%, as well as an improvement in its profitability ratios, with the objective of an EBITA margin before non-recurring items of between 9.3% and 9.5%. PROPOSED DIVIDEND Following the improvement in net profit for the year, the Board of Directors will recommend that shareholders at the Annual Meeting on May 30 approve an increase in the 2012 dividend to €0.68 per share from the €0.46 paid in respect of 2011, payable in cash or in shares at the shareholders’ option. The proposed dividend corresponds to a total payout of 30%, in line with market practices and the Group’s dividend payment policy defined two years ago. INVESTOR CALENDAR May 7, 2013: First-quarter 2013 revenue released May 30, 2013: Annual Shareholders Meeting ABOUT TELEPERFORMANCE Teleperformance, the world’s leading provider of outsourced CRM and contact center services, serves companies around the world with customer acquisition, customer care, technical support and debt collection programs. In 2012, it reported consolidated revenue of €2,347 million ($3,028 million, based on €1 = $1.29). The Group operates about 98,000 computerized workstations, with 138,000 employees across more than 260 contact centers in 46 countries serving 78 markets. It manages programs in more than 66 languages and dialects on behalf of major international companies operating in a wide variety of industries. Teleperformance shares are traded on the NYSE Euronext Paris market, Compartment A, and are eligible for the deferred settlement service. They are included in the following indices: SBF 120, STOXX 600 and France CAC Mid & Small. Symbol: RCF - ISIN: FR0000051807 - Reuters: ROCH.PA - Bloomberg: RCF FP For further information and media inquiries please visit the Teleperformance website at www.teleperformance.com. STATEMENT OF INCOME € thousands 2012 2011 Revenues 2 347 093 2 126 222 Other revenues 9 980 7 348 Personnel -1 650 020 -1 487 530 Share-based payments -9 842 -2 044 External expenses -385 938 -365 981 Taxes other than income taxes -13 403 -12 441 Depreciation and amortization -92 210 -87 646 Amortization of intangible assets acquired as part -8 884 -9 270 of a business combination Change in inventories -557 185 Other operating income 6 586 5 587 Other operating expenses -9 644 -22 095 Operating profit 193 161 152 335 Income from cash and cash equivalents 1 619 869 Interest on financial liabilities -12 795 -8 311 Net financing costs -11 176 -7 443 Other financial income 29 177 33 922 Other financial expenses -25 275 -32 125 Financial result -7 274 -5 646 Profit before taxes 185 887 146 689 Income tax -56 569 -51 651 Net profit 129 318 95 038 Net profit - Group share 127 464 91 896 Net profit attributable to non-controlling interests 1 854 3 142 Basic earnings per share (in €) 2,30 1,63 Diluted earnings per share (in €) 2,27 1,63 BALANCE SHEET € thousands ASSETS 12. 31. 2012 12. 31. 2011 Non-current assets Goodwill 711 918 710 272 Other intangible assets 88 423 97 972 Property, plant and equipment 274 964 255 170 Financial assets 26 981 24 099 Deferred tax assets 36 304 32 006 Total non-current assets 1 138 590 1 119 519 Current assets Inventories 61 621 Current income tax receivable 38 516 40 838 Accounts receivable - Trade 479 628 450 503 Other current assets 82 997 93 104 Other financial assets 12 677 6 961 Cash and cash equivalents 170 362 159 612 Total current assets 784 241 751 639 Total assets 1 922 831 1 871 158 EQUITY AND LIABILITIES 12. 31. 2012 12. 31. 2011 Shareholder's equity Share capital 141 495 141 495 Share premium 556 181 556 181 Translation reserve 17 415 23 554 Other reserves 661 257 551 983 Equity attributable to owners of the company 1 376 348 1 273 213 Non-controlling interests 6 079 4 364 Total shareholder's equity 1 382 427 1 277 577 Non-current liabilities Long-term provisions 6 639 5 755 Financial liabilities 13 914 25 686 Deferred tax liabilities 47 310 48 357 Total non-current liabilities 67 863 79 798 Current liabilities Short-term provisions 14 814 25 898 Current income tax 32 221 26 577 Accounts payable - Trade 80 483 83 345 Other current liabilities 268 573 269 106 Other financial liabilities 76 450 108 857 Total current liabilities 472 541 513 783 Total equity and liabilities 1 922 831 1 871 158 CASH FLOW STATEMENT € thousands Cash flows from operating activities 2012 2011 Net profit - Group share 127,464 91,896 Net profit attributable to non-controlling interests 1,854 3,142 Income tax expense 56,569 51,651 Depreciation and amortization 101,083 96,439 Change in provisions -9,984 -37,750 Unrealized gains and losses on financial instruments -713 1,206 Share-based payments 9,842 2,235 Net gains on disposal of non-current assets (after tax) 133 494 Income tax paid -57,221 -58,244 Other -45 -71 Internally generated funds from operations 228,982 150,998 Change in accounts receivable - trade -30,922 33,100 Change in accounts payable - trade -8,970 -9,605 Other changes 13,868 9,172 Change in working capital requirements relating to -26,024 32,667 operations Net cash flow from operating activities 202,958 183,665 Cash flows from investing activities Acquisition of intangible assets and property, plant and -109,921 -97,114 equipment Acquisition of subsidiaries, net of cash acquired -5,035 -15,087 Loans and advances made -3,957 -32 Proceeds from disposals of intangible assets and 1,516 1,609 property, plant and equipment Proceeds from disposals of other non - current assets 126 1,182 Net cash flow from investing activities -117,271 -109,442 Cash flows from financing activities Proceeds from the issue of share capital 379 Acquisition of treasury shares -267 -18,015 Dividends paid to parent company shareholders -25,488 -18,654 Dividends paid to minority interests in consolidated -181 -256 subsidiaries Proceeds from new borrowings 254,855 39,722 Repayment of borrowings -293,980 -38,942 Net cash flow from financing activities -64,682 -36,145 Change in cash and cash equivalents 21,005 38,078 Effect of exchange rates on cash held and -7,699 -2,717 reclassifications Net cash at January 1 147,073 111,712 Net cash at December 31 160,379 147,073 NB: The consolidated financial statements have been audited. The auditors will issue their report once they have completed the procedures required for the publication of the annual financial report Contact: INVESTOR RELATIONS Teleperformance QUY NGUYEN-NGOC, + 33 1 53 83 59 87 Investor Relations Director firstname.lastname@example.org
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Teleperformance: 2012 Financial Results
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