Teleperformance SE: Sustained Business and Earnings Growth in First-Half 2022 – QNT Press Release


2022 guidance confirmed

  • First-half 2022 revenue up +15.0% as reported, including like-for-like growth* of +5.5% despite high prior-year comparatives and +12.9% excluding non-recurring items**
  • Faster like-for-like growth of +14.5% in second-quarter 2022, excluding non-recurring items**
  • Improved EBITA margin excluding non-recurring items, at 14.3% versus 14.0% in first-half 2021
  • 2022 targets for like-for-like revenue growth and EBITA margin confirmed

Regulatory News:

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20220727005551/en/

Analysis of first-half 2022 revenue growth (Graphic: Teleperformance)

The Board of Directors of Teleperformance (PARIS:TEP), the global leader in outsourced customer and citizen experience management and related digital solutions, met today and reviewed the consolidated financial statements for the six months ended June 30, 2022. The Group also announced its first-half 2022 financial results.

Strong business and earnings growth

  • H1 2022 revenue: €3,946 million

    – up +15.0% as reported and +5.5% like-for-like

    – up +12.9% like-for-like excluding impact of lower revenue from Covid support contracts

  • Q2 2022 revenue: €1,984 million

    – up +15.4% as reported and +4.5% like-for-like

    – up +14.5% like-for-like excluding impact of lower revenue from Covid support contracts

  • EBITA before non-recurring items: €566 million, for a margin of 14.3% vs. 14.0% in H1 2021
  • Net profit – Group share: €274 million vs. €255 million in H1 2021

Robust sales dynamic maintained

  • Despite an uncertain economic environment, the market's structural digitalization and the Group's robust and diversified client portfolio continued to drive momentum, especially in the social media, healthcare and travel sectors
  • TLScontact's visa application management business recovered strongly
  • The Group's 2021 acquisitions in the United States in the healthcare and government sectors (Health Advocate and Senture) were successfully integrated
  • Revenue from support services for government vaccination campaigns (“Covid contracts”) fell sharply as expected

2022 financial objectives confirmed

  • More than +10% like-for-like revenue growth excluding the impact of Covid support contracts
  • More than +5% like-for-like revenue growth
  • A 30 basis-point increase in EBITA margin before non-recurring items
  • Further targeted acquisitions capable of creating value and strengthening the Group's high value-added businesses

* At constant scope of consolidation and exchange rates

** Excluding the impact of the change in revenue from Covid support contracts (Covid contracts)

Commenting on this performance, Teleperformance Chairman and Chief Executive Officer Daniel Julien said: "We continued to deliver strong growth in the first half in line with our targets for the year, with revenue up +5.5% like-for-like, or +12.9% excluding the decrease in the contribution from Covid support contracts, which we had expected. We are very satisfied with this performance, which was achieved despite a particularly high basis of comparison in 2021 and a very unsettled macroeconomic environment. Adjusted like-for-like growth even accelerated in the second quarter, led by the structural digitalization of our market and the Group's robust and diversified client portfolio.

The strong recovery of TLScontact's visa application management business also contributed to this good performance. The Group's recent strategic acquisitions in the United States, Health Advocate and Senture, were successfully integrated and made a significant contribution to first-half revenue growth. Thus, despite the sharp decline in the contribution of Covid support contracts to first-half 2022 revenue, EBITA margin continued to improve in line with the annual target.

On the strength of this encouraging first half, taking into account the uncertain economic environment and ever-present health risk, we confirm our 2022 targets of like-for-like revenue growth of more than +5%, or more than +10% excluding the impact of the Covid support contracts, and a 30-basis point increase in EBITA margin."

INTERIM FINANCIAL HIGHLIGHTS

€ millions

H1 2022

H1 2021

 

€1=US$1.09

€1=US$1.21

Revenue

3,946

3,431

Reported growth

+15.0%

 

Like-for-like growth

+5.5%

 

Like-for-like change excluding non-recurring items*

+12.9%

 

EBITDA before non-recurring items

792

678

% of revenue

20.1%

19.8%

EBITA before non-recurring items

566

479

% of revenue

14.3%

14.0%

EBIT

438

398

Net profit – Group share

274

255

Diluted earnings per share (€)

4.60

4.31

Net free cash flow

325

333

* Excluding the impact of the change in revenue from Covid support contracts

FIRST-HALF AND SECOND-QUARTER 2022 REVENUE

Consolidated revenue

First half 2022 revenue came in at €3,946 million, representing a year-on-year increase of +5.5% at constant exchange rates and scope of consolidation (like-for-like) and of +15.0% as reported. Reported revenue was lifted by the +€159 million positive currency effect, stemming mainly from the rise in the US dollar against the euro. Changes in the scope of consolidation had a +€160 million positive impact, reflecting the consolidation of Health Advocate from July 1, 2021 and of Senture from January 1, 2022.

Like-for-like growth in first-half 2022 was particularly strong given the negative impact of lower revenue from Covid support contracts (down -€266 million compared with first-half 2021), which was expected. Adjusted for this non-recurring impact, like-for-like growth stood at +12.9% for the period. The very strong momentum was driven by structural digitalization of the market and by the Group's robust and diversified client portfolio. Growth in the social media, healthcare, and travel sectors was particularly brisk. The Specialized Services activity also enjoyed sustained growth, helped by the resounding recovery of TLScontact's visa application management business.

Revenue for the second quarter of 2022 amounted to €1,984 million, up +15.4%, including a favorable currency effect linked mainly to the rise in the US dollar against the euro and a scope effect linked to the consolidation of Health Advocate and Senture in the Group's accounts. Growth was +4.5% on a like-for-like basis compared to second-quarter 2021. This performance, which came on the back of +6.5% like-for-like growth in first-quarter 2022, was very satisfactory given the sharp drop in the contribution of Covid support contracts. Adjusted for this non-recurring impact, like-for-like growth was +14.5% in second-quarter 2022 versus +11.1% in the first quarter, reflecting increased momentum across both of the Group's activities. 

Revenue by activity

 

H1 2022

H1 2021

% change

€ millions

 

 

Like-for-like

Reported

CORE SERVICES & D.I.B.S.*

3,412

3,075

+3.8%

+10.9%

English-speaking & Asia-Pacific (EWAP)

1,175

992

+1.2%

+18.5%

Ibero-LATAM

1,098

895

+17.0%

+22.6%

Continental Europe & MEA (CEMEA)

875

977

-9.5%

-10.4%

India

264

211

+18.0%

+24.8%

SPECIALIZED SERVICES

534

356

+19.3%

+50.1%

TOTAL

3,946

3,431

+5.5%

+15.0%

Adjusted like-for-like growth**

 

 

+12.9%

 

 

Q2 2022

Q2 2021

% change

€ millions

 

 

Like-for-like

Reported

CORE SERVICES & D.I.B.S.*

1,700

1,539

+2.2%

+10.5%

English-speaking & Asia-Pacific (EWAP)

576

484

+0.5%

+18.9%

Ibero-LATAM

573

454

+17.7%

+26.2%

Continental Europe & MEA (CEMEA)

416

495

-15.3%

-16.0%

India

135

106

+18.9%

+28.0%

SPECIALIZED SERVICES

284

180

+22.9%

+57.7%

TOTAL

1,984

1,719

+4.5%

+15.4%

Adjusted like-for-like growth**

 

 

+14.5%

 

* Digital Integrated Business Services

** Excluding the impact of the change in revenue from Covid support contracts

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

Core Services & D.I.B.S. revenue amounted to €3,412 million in first-half 2022, a year-on-year increase of +3.8%. Reported growth came to +10.9%, with the difference versus like-for-like growth primarily attributable to the rise against the euro in the US dollar and most other currencies including the Brazilian real, the Indian rupee, the pound sterling, the Mexican peso and the Colombian peso. In addition, reported growth includes the contribution of Senture, which has been consolidated in the Group's financial statements from January 1, 2022.

Second-quarter 2022 revenue rose by +2.2% like-for-like versus the prior-year period. The slower growth compared to first-quarter 2022 (+5.4%) was mainly due to the sharply lower contribution of Covid support contracts to Group revenue. Excluding the impact of Covid support contracts, the Core Services & D.I.B.S. activity delivered double-digit growth in first-half 2022, with an acceleration in the second quarter compared to the first. This solid momentum was supported by further structural digitalization of the market and the Group's robust client portfolio spread across a wide variety of sectors. The Group performed particularly well in the social media, online entertainment and food services, healthcare and travel sectors.

  • English-speaking & Asia-Pacific (EWAP)

EWAP region revenue came to €1,175 million in first-half 2022, up +1.2% like-for-like. The reported increase of +18.5% was primarily attributable to favorable currency effects – corresponding to the rise against the euro in the US dollar and, to a lesser extent, in the Indian rupee as well as in the pound sterling– and the positive impact of consolidating Senture from January 1, 2022.

Second-quarter 2022 revenue was globally stable versus the first quarter, rising by +0.5% like-for-like. Growth was dampened by the sharp decline in the revenue contribution of Covid support contracts in the United Kingdom. Excluding Covid support contracts, like-for-like growth was in the double digits.

After staging a recovery in the second half of 2021, the North American market continued to enjoy renewed momentum in first-half 2022, both in the domestic market and in the Philippines (offshore). In particular, revenue in the social media, online entertainment, travel and financial services sectors grew at a brisk pace.

  • Ibero-LATAM

First-half 2022 revenue for the Ibero-LATAM region amounted to €1,098 million, a year-on-year increase of +17.0% like-for-like. The reported increase of +22.6% mainly reflected the rise in the US dollar, Brazilian real, Mexican peso and Colombian peso against the euro. Like-for-like revenue growth in the second quarter came to +17.7%.

Business in the region grew at a rapid pace throughout the first half against a high basis of comparison, particularly in the social media, online entertainment, healthcare, financial services and travel sectors.

Growth rates were high in all the countries of the region in the first half, led by Argentina, Peru, Dominican Republic and Guatemala (nearshore activities), as well as in Honduras and Nicaragua, where the Group recently launched operations. Multilingual activities in Spain and Portugal, on behalf of global leaders of the digital economy, continue to expand rapidly.

  • Continental Europe & MEA (CEMEA)

Revenue in the CEMEA region amounted to €875 million in first-half 2022, a year-on-year decline of -9.5% like-for-like and of -10.4% as reported, with the difference corresponding to negative currency effects due to the depreciation of the Turkish lira against the euro. Revenue contracted by -15.3% in second-quarter 2022 on a like-for-like basis, due to the sharp decline in the contribution from Covid support contracts in the Netherlands, France and Germany.

Excluding the impact of the Covid support contracts, first-half 2022 business growth in the region was strong, with the start-up of new contracts driving a clear acceleration in the second quarter compared with the first. Business with multinational clients, particularly in the travel, automotive, financial services and online entertainment sectors, was brisk over the period. This was particularly the case in Romania, Egypt, Poland and the German-speaking market (domestic activities excluding Covid support contracts and nearshore activities).

  • India

In first-half 2022, operations in India generated €264 million in revenue, up +18.0% like-for-like from the prior-year period and by +24.8% as reported, taking into account the positive currency effect corresponding to the appreciation of the Indian rupee against the euro. Like-for-like revenue growth in the second quarter came to +18.9%.

Offshore activities, which are the region's main source of revenue and include high value-added solutions, continued to grow rapidly. They benefited from the dynamism of the Group's client base of global leaders in the buoyant travel, consumer electronics, healthcare, internet, online entertainment and e-tailing sectors. Revenue in the automotive sector also grew rapidly during the period.

  • Specialized Services

Revenue from Specialized Services stood at €534 million in first-half 2022, a year-on-year increase of +19.3% like-for-like and of +50.1% as reported. The difference between like-for-like and reported growth stemmed from a favorable currency effect linked to the increase in value of the US dollar against the euro and a positive scope effect due to the consolidation of Health Advocate in the consolidated financial statements since July 1, 2021. Like-for-like revenue growth in second-quarter 2022 came to +22.9%.

Faster revenue growth in the second quarter was mainly due to the resounding recovery in TLScontact volumes and also reflected the very favorable prior-period basis of comparison. In particular, UK visa applications managed by TLScontact in first-half 2022 exceeded pre-crisis levels. Business in the Schengen area continued to trend upwards, but remained below pre-crisis levels, primarily due to the dearth of inbound travelers from China. The recovery in revenue is expected to continue in the second half of the year, albeit at a slower pace than in the first half due to the higher basis of comparison.

LanguageLine Solutions, the main contributor to Specialized Services revenue, grew at a satisfactory rate, especially in the healthcare sector which accounts for more than half of its revenue, although growth rates were dampened by a high basis of comparison, especially in the spring 2021. The basis of comparison will be lower in the second half.

The rapid growth of debt collection activities in North America (AllianceOne) during the first half of the year was supported by the robust business momentum enjoyed since last year, particularly in nearshore activities.

FIRST-HALF 2022 RESULTS

EBITDA before non-recurring items stood at €792 million for first-half 2022, up +16.7% from the prior-year period.

EBITA before non-recurring items rose by +18.2% to €566 million from €479 million in first-half 2021, representing a margin of 14.3% versus 14.0% in the prior-year period. The improved margin was primarily attributable to the stability of margin rates in the Core Services & D.I.B.S activities, despite the negative effect of the sharply lower contribution of Covid support contracts, and higher Specialized Services margins, lifted by the resounding recovery of TLScontact's activities. Reported margins were also boosted by the rise in the dollar against the euro with a positive transaction effect linked to the Group's offshore activities and a positive translation effect (mix).

Earnings by activity

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EBITA before non-recurring items

H1 2022

H1 2021

€ millions

 

 

CORE SERVICES & D.I.B.S.*

398

374

% of revenue

11.7%

12.2%

English-speaking & Asia-Pacific (EWAP)

97

57

% of revenue

8.2%

5.7%

Ibero-LATAM

133

Full story available on Benzinga.com



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