Teleperformance (TEP) H1 2024 earnings summary

Executive summary

• H1 2024 revenue reached €5,076 million, up 28.2% year-over-year as reported and 1.7% pro forma, with Q2 pro forma growth accelerating to 2.4% from 0.9% in Q1.

• Majorel integration is progressing well, with no client losses and cost synergies expected to reach €100 million in 2024 and €150 million in 2025, with further upside potential.

• Over 300 AI and GenAI projects are underway, driving client growth, internal efficiency, and productivity, with industry awards and new digital partnerships.

• Governance changes include the appointment of Moulay Hafid Elalamy as Lead Independent Director.

• 97% of the workforce in 69 countries certified as "Best Employers" by Great Place to Work® Institute.

Financial highlights

• EBITDA before non-recurring items: €982 million (19.4% margin); EBITA before non-recurring items: €703 million (13.9% margin, up 10 bps pro forma); EBITDA excludes €36 million synergy costs.

• Net profit (Group share) at €291 million; adjusted net profit at €432 million; diluted EPS at €4.83; adjusted diluted EPS at €7.17.

• Free cash flow reached €448 million, up 45% year-over-year; net debt reduced to €4,459 million at June 30, 2024.

• Share buybacks totaled €117 million and dividends paid €231 million in H1 2024.

• Effective tax rate at 28.0% (H1 2024), slightly up from 27.3% in H1 2023.

Outlook and guidance

• Full-year 2024 pro forma revenue growth confirmed at +2% to +4%, with higher growth expected in H2 due to easier comps and new business.

• EBITA margin before non-recurring items expected to improve by 10–20 bps pro forma; net debt-to-EBITDA ratio targeted below 2x by year-end.

• Sustained increase in net free cash flow and continued share buyback program planned.

• Credit rating expected to remain at BBB.