Majorel Group Luxembourg S.A. (TEP) Earnings Call Transcript & Summary

Good day, and welcome to Teleperformance announces proposed acquisition of Majorel. Please note, this call is being recorded. [Operator Instructions] I will now hand over to Daniel Julien, CEO, please go ahead.

Thank you very much. Thank you. Good morning, good afternoon to everybody. It's a great day for us today because we are here to announce and to explain the extension of the Teleperformance business. And this extension in size and in the quality of the extension is transformative for Teleperformance. So this is the information about the integration of Majorel into the Teleperformance family. Typically, we consider at Teleperformance that our main limits are our own limits. And here, we are welcoming a fantastic company managed by a strong professional team, and we are extending our power, extending our ability to serve all around the world, globally our large customers. I'm very happy specifically because Teleperformance leadership is made of talented [ quarter ] a young generation that we are always a super keen to integrate into Teleperformance. And with this management team and the Teleperformance management team, we are going to build our future together. We have two convictions. First, we are a people business. We are a people business enhanced, augmented by IT. You know our mantra, High Touch, High Tech. High Touch is attentive listening, care, reassurance to make sure that the clients remain happy and loyal. High Tech is fast access to the accurate information. So how do we value a company? In fact, a company is valued by the quality of its management team, by the quality of its client base and by the quality of its business model. And for us, Majorel matches these three boxes. Very important to say that we share the same values. We are deeply convinced that our clients are going to be extremely satisfied of this combination. And of course, Thomas, the CEO of Majorel and his leadership team are going to be a fantastic addition to the leader -- to the global leadership of Teleperformance and to what I call the winning team. There is a lot of complementarities between the two groups. We are going to explain that a little bit later. And I have to say that it's great also to see that some major Majorel shareholders decided to continue the journey with us and to join us in building this ever stronger leadership. So one month time, we are a company made of a global melting pot rich of its difference of its diversity and since acquisition helps us to be strong in key markets where we were not necessarily strong. So now we are going to go directly to the presentation. Can we pass to next slide. Okay, we can pass the disclaimer. Next please. Yes. So what are we talking about? It's a voluntary public takeover offer to acquire all outstanding shares of Majorel. The price is at EUR 30 per share, for a consideration, a global consideration of EUR 3 billion. The Majorel shareholders will receive EUR 2 billion in cash and EUR 1 billion in Teleperformance shares. And the mix of cash and shares of course, has been capped in terms of shares. The majority shareholders of Majorel, Bertelsmann and Saham Customer Relationship Investment and Saham Outsourcing Luxembourg together with Saham have each irrevocably committed to tender their shares in Majorel to receive between 1/3 and 42% of their stake in Teleperformance shares. The Supervisory Board and the Management Board of Majorel have welcomed the transaction. And of course, the transaction is subject to the usual regulatory approval and is expected to close between Q4 2023 and Q1 2024. Next, please. So what are the rationale. First, a complementary position across key geographies. Teleperformance is strong in the Americas, strong in European multinational multi-language solutions, extremely strong in India. Majorel is strong in Europe, specifically on the French market, a key market, specifically on the German market. Majorel is strong in Africa. And together, Majorel presence and Teleperformance presence in Asia is going to make us the leading non-Asian company in the Asia territory. It clearly deepens the expertise of the group in some industry verticals, and we have a highly diversified client portfolio. We have won -- Teleperformance has 1,000 clients, Majorel has 500 clients. Some clients are the same, and they are going to be very happy of this consolidation and some clients are different. And so Majorel has some very large clients served. For example, in Europe but not with the Americas. Okay, I don't need to explain how we can take advantage of that. Teleperformance may have some global relationship with clients, but have difficulty to serve them at full capacity in Germany, for example, which is one of the key markets of the world. And the list is long and long and long. It's also -- the industry vertical is, for example, Majorel can be very strong in the luxury good customer service and customer experience management. Teleperformance has no experience in that specific vertical. Third, it enhanced our digital transformation capabilities and services. Majorel has already its platform, MajorelX. Teleperformance has that. Joining the 2 platforms, first is going to represent a business that will be over the EUR 100 million in pure digital transformation, solution building and consulting. But it's also mainly, mainly additional smart head here to serve our clients in the multiple geographies. Of course, Majorel is going to take advantage of the strength of Teleperformance in India. And you know how much India is our main engine to help to deliver professional high-quality service at the best price point in the world, in English mostly. I said it, we increased the management there. And this is, to me, the most important thing because a company as large as it can be, is made by the quality of the leadership. And we could not find better quality than the leadership that we have been interacting with in the recent weeks. There is also -- of course, we have the same values. We share the same vision and we know that the outsourcing of Digital Integrated Business Services market is going to continue to grow, and we are going to be -- clearly, we are already, but we are going to be even more the global leader to serve the global companies on this market in a seamless way and making the providing of solutions for our clients simpler, faster, better, more conservative. Another point is the fact that clearly, when you join two such companies, there are cost synergy potential. At this stage of signing, of course, no integration plan is done, and so we respect the law, but we can estimate that the synergies will add over EUR 100 million to EUR 150 million to the bottom line. So it's a win-win deal also. It was a win deal for the Majorel shareholder, but it's also a win deal for Teleperformance. It's an accretive transaction, even without the synergy. And of course, with this acquisition, we already achieved our 2025 objective. And so we are going to reset with Majorel at closing a new aggressive 4-year plan. Next, please. So this is our cube. We slice and dice the world by industry vertical, by line of expertise, line of services and by geography. In the geographical footprint, very simple, strength of Majorel in Europe, strength of Teleperformance in the Americas and India. And with the merger of the 2 the scale-up of a leading presence in Asia Pac and in Africa, where we should be around 45,000 people in multiple countries. Then, expansion of our Digital Integrated Business Services, we continue to develop scale and capabilities in Trust & Safety, which is so critical for the future of humanity. And the social media are not going to disappear. The virtual world is expanding. The virtual world is as complex as a real world, you need regulator, you need gatekeeper. You need a virtual police and already together -- already separate, Majorel and Teleperformance are significant actors here. Clearly, being together, we are going to be a top leader for any client in the vertical, in the social media, in the virtual world, in the Metaverse, in the e-commerce in terms of Trust & Safety because there are multiple [ declination ] in this business. I said it. We are broadening our portfolio of digital transformation capabilities with the ability to design, to fully design the customer experience journey and solutions. On that, Majorel has a team that we are going to put into action the day of the closing at a much higher level. Then -- yes, we strengthened our expertise in multiple, multiple diversified client portfolio. Next, please. Next slide, please. Oh, thank you. Okay. I'm not going to spend too much time on this slide except to show you that we cover the world. I think there is a mistake when I see Australia and New Zealand because yes, we do not have a physical presence in Australia and New Zealand due to the cost and so on. But we already serve major clients in Australia and New Zealand, either from India or from the Philippines. But as you can see, the world is well covered. On the slide on the right side, this is more or less the competitive landscape. I think that Concentrix, we announced the [ relish ] -- the merger with Webhelp. I announced that we are planning to be something around EUR 9 billion or something like that in 2023. In 2023, we should be around EUR 12 billion, so the difference is more or less 1/3. What -- there is nothing else to say except that we are accelerating our growth and accelerating our margins. Next, please. And next, please. If I remember well, I'm very happy to give the floor to Thomas Mackenbrock, the CEO of Majorel. Thomas?

Thanks, Daniel. First of all, let me say also warm welcome from my side. It's really a pleasure being with you today. And it's really a pleasure as Daniel said, to be here with the team around the table. I'm really deeply convinced that this step is a transformative move, as Daniel said, transformative in a sense that the room that we are entering together is a room that would have not been possible for each one of our own. We are really creating an unparalleled platform that allows us to really provide opportunities first and foremost, for our clients, for our team members, our shareholders, for all the stakeholders involved. But before we go into that, let me just take a brief look for those of you who don't know Majorel so well, what Majorel is all about. Majorel is already today a tech-enabled global CX BPO platform. We are privileged, I have to say, to serve more than 500 blue chip clients around the world. We're present in 45 countries, and we are doing this by really combining three things: first and foremost, human talent. We have more than 82,000 team members around the world and being a good home for talent is key. It's the foundation, Daniel called this the high human touch -- no, the High Touch, and this is key because that's a basis that makes the difference every day. Second combination is next to human talent is technology. We also believe that augmenting our human talent with technology is key and will be of increasing importance. Being at the cutting edge of technology is essential to provide services and value to our clients. And the third element, we always believe is process because mastering the process being excellent in what we do is key. Because combining human talent with technology only works if you have the [ main ] expertise, you have the process know-how to do this every day a bit better. And that's why we have the slogan driven to go further. As you can see, this is not just an attack line, but a mission for us every day. If we go to the next page, you have a quick snapshot of what we do. Daniel already said that we are honored to take care of the most valuable asset of our clients, their relationship with their customers, with their end customers. And this relationship management we really see from a holistic perspective, end-to-end, covering front-end services, classical customer interaction services, covering related business process services in the areas of Trust & Safety, vertical BPO services, integrating front and back end services, which is key. And thirdly, that is of increasing importance, the area of digital transformation services, what we call Tech & Expert Services. And having this end-to-end spectrum plus the broader capabilities from TP, I really believe is quite a parallel because it's going beyond what you might consider as [ it is ], but really providing a holistic digital business services for our clients. Majorel, as you will also see on the next chart, is really founded on two strong pillars. On the one hand, we serve what we call global Internet clients. That's the broad spectrum of technology companies, social networks, digital retailers, where we are really proud that it has been a focus since the inception of Majorel and it's half of our net revenue. And the other strong pillar is our exposure, our client base across multiple verticals: banking, insurance, automotive, consumer goods, telco, utilities, government services. I can go on and on. And having this diversified and strong client portfolio, and particularly in EMEA, I think that combining these 2 be quite an unparalleled scope that we can offer. Second thing, and that's -- those of you who know Majorel since we did our public listing in Amsterdam in 2021 was always our strategic focus. We have a very strong base in EMEA, we are one of the leading players in EMEA and Africa and in the Middle East. But expanding further to the global English market, to Asia has been a strategic imperative for us and we're essentially with this proposed transaction, taking a quantum leap here. Lastly, just to give you a quick snapshot, the history. But as you know, the future always starts every day. So the past, if you look on the next page, if we can move to there, it's just the reflection of the work that we have done. We have been, let's say, the outcome of our workday today has been also reflected in the numbers. As you can see, we have demonstrated since inception 2019, you see here the last year's double-digit like-for-like growth and also an expansion in our operating EBITDA numbers. But as I said, these numbers are the outcome of hard work every day. And as I say, you need to own the machine every day a bit to continue on this journey. With this, back to you, Daniel.

Thank you. Next slide, and I think I'm going to pass to Olivier, who is going -- Olivier, the Chief Financial Officer of the group, delegated CEO, who is going to explain the numbers.

Yes. Just a quick slide to show you where the group is going to land based on 2022 figure. Here, you have the figure of TP for 2022. And those for Majorel and you have the total combined for 2022 in terms of net revenue and EBITDA. We just had -- on top of that, what we call, what we believe is achievable amount of synergy, between EUR 100 million and EUR 150 million over the next 2 years or 3 years. So this is going to push dramatically the EBITDA to 21.9% versus for the full group once the synergies, I would say, are realized. As a whole, we do believe that we are absolutely sure that the business will be accretive in first year before synergy. And once the synergy will be totally expanded and all developed, the accretive will be much more than that, close to more than double digit -- double-digit pro forma on the run rate cost synergy. That is the level of the P&L. And I'm not even speaking here about any sale synergy or revenue synergies that are not, of course, take into account at this stage. Let's move now to clarify two or three things on the deal. First of all, just to be clear for the questions that you may have, this offer is in cash, but there is for everybody, but the 2 major shareholders, meaning Saham and Bertelsmann irrevocably committed to follow 1/3 through [ 42% ] share -- to a total share of -- value share of EUR 1 billion, 4.6 million of shares. The EUR 2 billion are financed through a syndicate of bank of different banks that we have the money of EUR 2 billion that is committed to secure the financing. And when you put that together, if you project beyond 2022 and once the deal will be over in 2023e pro forma, the group will be able to deliver leverage of 1.8x pro forma EBITDA 2023 roughly. So that means that the group will be still in a position to of course, to lead with this debt, but to continue to move on the M&A strategy. So exactly, we maintain a significant financial flexibility. We expect the BBB rating to remain unchanged. We will have a robust capital structure and strong cash generation that will give us financial flexibility for further growth opportunity. And we are going to continue our dividend policy with a 35% payout ratio for the next year. That is the deal. I hope it's clear for you, this is a deal that is going to be, of course -- I would say, achieved during hopefully, the third quarter or fourth quarter of this year, and we will be able to now to answer the questions with all the team here.

Thank you, Olivier. So this concludes our initial presentation. And one line, we are building a stronger, better version of our selves by enlarging the talent pool of the leadership of this group. Thank you very much. We are ready for your questions.

[Operator Instructions] We will take question from Simona Sarli from BofA.

Yes. I will take one by one, please. First of all, you both have quite elevated client concentration. Could you please comment across the top 20 clients how much overlap do you have between Teleperformance and Majorel? And what do you think the risk of potential revenue [ of the ] synergies is here? That's the first one.

I can take it. Let's -- yes, let's be clear. For a business service company, and if you compare ourselves to the competition, we are probably the less concentrated company in the world. I'll remind you that Teleperformance's major client is significantly less than 4% of our business and so on. Having said that, yes, among our top 20 clients, we have several joint clients that -- but in all cases, we -- there is no one -- no specific cases where suddenly we become so large that it -- 1 plus 1 would make less than 2. Right now, we start to get after the pre [ consolidatory ] period, we start to get the first reaction of our clients, and they are extraordinarily pleased. And I'm going to explain you why. Our key clients are major, major multinational clients. In themselves are in the process of consolidating their partner because it's too demanding for them to manage a different partner, different culture, different modus operandi and so on. And specifically, now that we are in the economic environment that you know our clients really -- of course, they are not going to put all their eggs in the same basket, but we are really looking for simplification. So in the vast majority of the case, it's going to be perceived very positively. And if it would have an impact, I think it's going to have a positive impact versus a negative impact that. But Thomas?

Nothing to add. I really see -- I mean, obviously, we cannot disclose our client names, but the feedback after the announcement in the last hours was really overwhelmingly positive. So that's why it's encouraging to see that our clients who is actually the fundament of our business see and put merits to this potential combination.

And my second question is, again, more related to cost synergies. So you have mentioned in your press release, EUR 100 million to EUR 150 million. If you can clarify if that is entirely cost synergies or if there are also baked in some revenue synergies? Secondly, what is the phasing of this EUR 100 million to EUR 150 million? And how much you are assuming in terms of cost to implement those synergies? And then I will have another one.

You know what? We are 2 public companies and we are 2 law abiding companies. And there are very strict regulation in such a process in which when you are at the time of the signing, you are absolutely not allowed to start to build a specific detailed integration plan. That's the first part. This will be the next step. Having said that, the estimated synergy that we say are almost of the [ view ] extremely reasonable, of course, is eliminating double cost synergy. It has nothing to do with revenue synergies. The potential revenues synergies and so on are going to feed our growth in the future, but they are not in the synergy yet. So the phasing -- we will go as fast as we can, but as slow as we need in order to make sure that we make a smooth transition. And finally, the cost of those synergies, I think it's not unreasonable to estimate that it will be more or less one year of synergy. So as you see, the LOI is extremely higher. Any comment?

No, no comment. What you have said is clear. It's cost synergy -- of course, we do believe that the implementation of this synergy will be done between 2 or 2.5 years. And the cost of synergy is roughly maximum 1 year of -- of the low end of the forecast synergy figure.

And lastly, on -- first of all, a clarification on when is the deal expected to close. So initially, you said Q4 of 2023 and Q1. And then later on, it was mentioned, Q3, Q4, so just this clarification. And then a question more related to your digital expertise. You mentioned that one of the key points of doing this acquisition is that you will strengthen your digital portfolio. Can you provide a little bit more color here and maybe give some examples?

The timing, we are not the master of the clock. The timing will depend on our -- first, we will get the clearance from the respective authorities antitrust authorities. It should not be raising any issue, but there is a timing that belongs to them and not to us. But frankly speaking, if you have seen in one communication Q3, Q4 and in the other one, Q4, Q1, it shows how much uncertainty about the timing exists. It's not a big uncertainty, but it can be 3 months more, 3 months more, 3 months less. Nobody knows. Now an example about our extended digital capacities, I'm going to let Thomas start to answer. And maybe I will add something after.

As you maybe think about digital capabilities, there are 2 big areas. One is, as Daniel said earlier, areas where we provide digital transformation services to our clients. So in a sense, generate digital revenues by providing either expertise or digital tools to our clients. That's one. The other element is having digital capabilities in-house, if you will, that allows us to constantly improve and transform our own operation through automation tools, through analytic tools, through process enhancement tools, augmenting our people. And in both areas, I really see a lot of potential. If you look at the expertise, the breadth, the scale in particular, of TP that has in this second element, providing competence in-house to improve your operation. I think honestly, we can learn a lot and complement each other of providing the tools. On the other hand, with the revenue generating the first one, as you know from our numbers, we have roughly 8% to 9% of our revenue in Tech & Expert Service, which we would expect, obviously, to enhance further through the complementary data as said earlier.

Yes. The only thing that I may have is don't forget that we have our big brain factory in India. We have developed -- we have a strong presence in India, not only to deliver customer experience service, but we have a center of excellence team, developer -- IT developers, data analysts, Six Sigma process in the center of excellence that exist, that we are already even before the deal expanding specifically in several places, but I am thinking right now, specifically in Hyderabad. And clearly, the whole family is going to take advantage of that.

We will now take the next question from Anton Baudry from HSBC.

I would have a first question about the deal itself. We see the first time since a long time that you -- finally you buy an asset in your core business. Would you say that this deal is a difference in the current environment? When did you begin to negotiate this deal? Was it a competitive deal? This is my first question.

Yes. As you can imagine, I'm not going to give you the whereabouts of our negotiation. But clearly, no, it's not a defensive deal. We have nothing to do to be defensive that Teleperformance. It's an offensive deal. It's a real offensive deal. It's somehow and -- but I like your comparison with the second time we do something significant in our core business. The first time was obviously INTELENET in India. And somehow, yes -- of course, they are different, but somehow, you can expect a transformative power in this deal. These are super open deal. This is Teleperformance at its best when we are expanding our melting pot culture with people who are like us and when the team is stronger, bigger to take care of the market.

And my second question is about the management structure when the acquisition will be closed. Do you have an idea of the new management structure of the group?

Clearly, first, again, we are constrained by law, and we did not have the legal possibility to even discuss that. Now I'm going to tell you my feeling, the management structure -- when this is going to happen, the management structure of the new family as usual, will integrate the best of the best of the 2 components.

Okay. I see that the group [ NDC ] is not on this call. Is it a sign of something? Or...

Bhupender, Bhupender. Come on, tell him, Bhupender. I told you. I wanted him to present. He is here. Unfortunately, the computer is small and Bhupender told us no, we cannot present for and so on. But he is here, of course.

Okay. And I have a last question. Would it possible to know the interest rate that you target to finance this deal?

Let's take a figure around 4.5%.

The next question comes from Oscar Val Mas from JPMorgan.

The first one, I think, going back on the previous question, just on the background of the deal. So just to check, have you been able to do due diligence on the Majorel business? And specifically in content moderation, have you been able to look at their business? That's the first question. Then the second question is, I guess, from a Teleperformance point of view, you were talking about M&A yesterday in kind of different end markets. Is there still the ambition to do more M&A? Or are you kind of closed for now? And then I guess the final question maybe for Thomas. So if we look at the growth in margin outlook, Teleperformance is seeing -- is talking about margin expansion. Majorel, the outlook is just for some margin pressure. Should we think about the deal being an opportunity to lead to more offshoring or to improve the cost base at Majorel?

Maybe you want to answer first, and then I will answer to the part...

Sure. As I know Oscar very well. He's a very -- tentative answer, so you think you, already gave the answer to your question. I think, one aspect, as you rightly said, learning from each other and benefiting once the deal is closed from the enhanced scope and scale, offshore delivery, global network, but also capabilities to come together is clearly one of the rationales also from our perspective. Now and obviously, combining the different strengths and the different scopes allows us also to improve margin. Obviously, then this is more thinking on a stand-alone basis, but on a combined basis, through a combination of both assets. So there, Oscar, we already gave the answer to your question.

Then on this topic, you know what. As usual, and when you make [ Majorel ] it's the same thing. You -- each part want to bring the best on the common table. And we have -- each of us has some characteristics that the other doesn't have necessarily and we are going to take advantage of that. Having said that, again, we respect the law, and the law is extremely strict in the process. We are 2 public companies. So we have the possibility to make the due diligence on publicly available data. But you know what, honestly, we know Majorel as a competitor for a long time. And we know exactly what is that we know -- I mean our internal intelligence team based in India, by the way knows now pretty exactly the position of our competitors in the different key clients and so on. So on trust and safety, I want to tell you something. Specifically on trust and safety, our major clients are highly congratulatory. They are extremely happy without any exception. That's the information. Now the question about do it -- is it over and whatever. First, as long as we are alive, nothing is over. You know us, we are, at the same time, cautious but offensive. Clearly, we are going to spend our time to make sure that our common integration is the smoothest and the most successful possible. We don't think it's going to be difficult because we share so much the same business culture that we think is going to be pretty easy. Now Olivier told you. Okay. We are at the end of 2023. What is the leverage of the group after closing, 1.8x EBITDA. We are far from being super leveraged. So what does it mean. Of course, we are going to continue to make acquisitions. Of course, we are looking at additional capacity, talent and so on. We are building a measure. Why do I say that? Because in 2023, at the end of 2023, we will be around USD 12 billion revenue with a very, very healthy business model. This is just the base, the platform to build to have a new 4-year plan and to build a major business service company for the world.

We will now take the next question from Nicole Manion from UBS.

I know this has already been touched on, but I just wanted to sort of follow up on it because you obviously haven't actively pursued deals of other global contact centers for, I guess, nearly a decade now, focusing instead on what you can do in Specialized Services. What actually has changed in your thinking? Is it the kind of recent M&A that we've seen in the space and that consolidation and the desire to still be #1 in terms of scale? Or is it something else? Anything you can add, that will be really useful.

First, clearly we have not changed anything in our strategy. The fact that in this specific case, we are not in what we call the niche market specialized service. First might be explained by the size of Majorel, which is not exactly a niche player. When we acquired several years ago INTELENET, different proportion but it was not neither a niche player. So it's not because we are building our specialized service and niche services. That at the same time, we do not take care of the expansion, the [ LC ] expansion of our core services. And the recent deal that we made in November 22, so December, January, February, March, April. So 5 months ago was in the Specialized Services. So the next deal that we will make, I don't know when, 2023, maybe? It depends on the opportunity. To make a deal, you need to be too exactly like in Majorel. So will be or will not be in the Specialized Services. Everybody knows our interest for, yes, the niche market, but everybody knows also our interest for the digital solutions. In fact, we have been building super capacities internally. But if we find externally, we will be happy to take advantage of them. We have been building internally GPT solutions to help our customer associates to deliver faster, smarter services. By the way, we use it. It's used for several years, way before everybody got the frenzy of that. It's in use at Teleperformance for several years with some of our clients. So what do I want to say. No, there is no change in strategy. And this is, again, an open-sealed deal because Majorel is strong in places where Teleperformance is not strong. Teleperformance is strong in places where Majorel is not strong. It presents a lot of advantage to be together.

We will now take the next question from Anvesh Agrawal from Morgan Stanley.

If I can ask my questions one by one, please. First, obviously, have you had a chance to discuss the deal with the unions given you probably need to take some cost out at a future date? And we obviously had a lot of issues with the union recently. So wondering if you had to have any interaction and what the reactions are? That's the first one if you can answer.

First, I may respectfully disagree with the fact that we had a lot of issues with the unions. I agree with you that there has been a lot of noise being made on that. But in fact there was a few elements that needed to be adjusted. We signed a global agreement with the unions early December, and since then, I think our relationship is very, very transparent and positive. If I may say, we even have in the Board of Teleperformance, a representative of the European global council of the [ urban water council ], excuse me. I can tell you that this deal has been voted at the absolute unanimity in the Board of Teleperformance, including by the representant of the workers of Teleperformance. Then, there might be a misconception in the global agreement that we signed with UNI Global. The global agreement that we signed with UNI Global was to facilitate the possibility to associate of the worker, which in fact, was not an issue with us because we had signed the UN Global Compact in 2011. And to find a mechanism to resolve our issues rather than to go to a public confrontation. It was not at all on any inflation factor because the labor negotiations remain labor negotiation country per country. And by the way and to finish, whether Majorel or Teleperformance, we have a strong presence in Europe, where the [ unitization ] percentage is higher than in other places of the world. For Teleperformance, for Majorel, I would be unable to tell you, but I mean 40% of the countries where we are, we have union representants and so on. But everything goes much better than the noise of the press. It seems that sometimes it's good to say bad things because it has some businesses, but life is not as black and white as you perceive it. So I really don't think that the unions will have any negative perspective on that, and I can tell you the representative of the workers that Teleperformance have a very positive perception of this.

Okay. That's very clear. The second question I had, I appreciate you cannot give a lot of details around the synergies, but you did mention a few things in the release around internal efficiencies and scale. But at least can you give us like what would be the biggest bucket within the synergies that you're targeting? Is it taking the head cost headcount out? Or is it property? If you can give us some color on that, I think that would be very useful.

We have three targets, of course, [ enduring ] cost and management costs at some country level or some site level that is -- we are looking to that. This is an issue potentially. The second stuff is, of course, IT, whether it's infrastructure, procurement or licensing. And lastly, there are some other costs on the fact that there are some costs of miscellaneous, I'm speaking of the size of the group. Of course, obviously, the list -- the cost of listing of Majorel is going to disappear. Of course, we will be bigger to speak for some platform provider, whether it's IT, whether it's insurance, whether it's management. So there are different topics on which we believe that this EUR 100 million to EUR 150 million savings target seems clearly achievable.

Which is good because it doesn't depend on one source, yes, was different buckets, different countries, different cost items. .

Now, in fact, the process that will be done will be clearly a benchmark of the that will be done when we will be legally allowed to do it, will be a benchmark about the 2 companies and whether it's external contract or internal organization and so on and optimization. But let's be clear, if you take the global group together, we are going to be in SG&A, what, above EUR 2 billion. And when we speak about EUR 100 million, we will be about EUR 100 million and EUR 150 million, EUR 125 million, more or less, we will be around 5% of synergies. 5% of synergies coming from different angles, I mean, IT, premises -- yes, procurement, negotiation power with multiple stakeholders, disappearance of some double cost will make it pretty easy.

Yes. That is very super clear. And then finally, just sort of on the digital capabilities that you're going to get with this acquisition. I think at the beginning of the presentation, Daniel, you mentioned that the combined business has about $100 million of digital expert services revenue. That is sort of not even 1% of the combined growth. So just wondering like where really you're getting the digital capability. I can appreciate the expansion in the new geographies that comes in, but the digital capability part is still slightly less clear. If you can expand on that.

Yes. I like your question because it's a true question. I mean it's a question -- it's a fundamental question. First, and it's very interesting because Majorel has been more focused to clearly market its digital capacities in the market. And they generate a certain amount of revenue with their digital capacities. For Teleperformance, we have been much more focused at utilizing our digital capabilities internally to help us to sell more or to deliver better. It doesn't mean that we have not sold our solutions on the market, but it has been almost a anecdotic. Finally, even when we consider this anecdotic approach and majority, it makes something like EUR 100 million. It's not a lot, I agree. I totally agree with you. Clearly, it's -- and this is where Teleperformance is going to take advantage of the expertise of Majorel, because clearly, we are going to develop a strong -- and this is our next step, a strong digital arm, digital service arm and this is going to be done by the launch that is in process of many of the best practices of Teleperformance as a service, which should become an additional line of business for Teleperformance to serve the in-house market. So the combination of the digital consulting of Majorel and of the TP as a service or TP inside because that being inside, a reference to a famous sentence 20 years ago. And then, clearly, if I connect your question to a precedent question, there are a lot of changes that the next external move expansion of Teleperformance will be focused on that. And then there is something which is very important for you to have in mind when we come to our business model. Is that the digital -- the direct digital revenue that we generate from the digital consulting service is totally disproportionate in size, so very little versus the enabling that this digital service generates for our core business. So it's like the -- if you take a weapon, it's like the spearhead of the weapon, the mass in the size is really disproportionate versus the weapon, but it is critical.

And if I may add just one point because digital is often -- deceased everything and nothing. Here, we're just talking about the digital consulting and transformation services, but what we consider also digital is, for instance, our marketing solutions. Our consumer engagement platforms, our digital solutions for the banking and insurance industry. And these are revenue streams that are outside the numbers Daniel mentioned earlier. So if you look at the entire digital solution spectrum, it goes way above the EUR 100 million.

Yes. We'll take the next question from Suhasini Varanasi from Goldman Sachs.

Most of the questions have been answered. Just a couple left, please. To issue the equity to fund the deal, do you still need the shareholder approval? Or has it been given already, please?

We don't need shareholder approval.

And do you anticipate any concerns around antitrust maybe in specific countries where you have high market share? I'm guessing the answer is no, but just wanted to clarify.

No, no. The answer is no.

We will now take the next question from Ben Wild from Deutsche Bank.

Three questions from me. We've spoken a lot already about digital capabilities. I just wanted to discuss from the conversation yesterday, where you mentioned the idea that 20% to 30% of volumes could be automated over the coming years. Can you just explain how this deal will help you to navigate this disruption in the industry?

I think that it's not the deal in itself that it will help us to navigate. It's a combination of smartness and efficiency that we will provide to our clients that will help us to navigate. If I give you an example of something that happened 2 weeks ago. Our team had a presentation with transformation team of a major European bank. And we focused mostly on our digital solutions, obviously, for the bank and on our GPT product with the TPIP layer providing the security, and the result of the meeting was first that the people were extremely impressed by the level of maturity and advance, somehow that we had versus what they were expecting. It happened that same night, I had a dinner with the CEO of this major European bank. Where was the Head of Transformation and the comment that the Head of Transformation made was, "Wow, Daniel, if the market knew what you have in Teleperformance in terms of digital solutions, your multiple would be doubled." Yes, it's an anecdote, but it's a true anecdote. There were witnesses there and this is the answer to how we are going to navigate because we are already navigating.

And if I may, the 20% to 30% that we disclosed yesterday during the earnings call during the sales call was just to show that every year for the last 10 years in a row or 5 years in a row, I don't know, everything is moving each year, meaning that the product that we are developing, that we are selling, that we are proposing to a client has nothing to compare that what we were selling 5 years ago. So it's an ongoing process. Chat GPT [ all that stuff ] now come on live on the screen on your mind. That was exactly happening before with automation with the [ road mobity ] process automation, with all that stuff that you are not even thinking to it.

There is a saying in the university is that when you are a doctor, when you finish your courses, half of what you have learned is already obsolete because things change fast. It doesn't change the fact that you are a doctor, that you have updated your knowledge and that we'll have to continue to update and transform your knowledge. This is what we are. We are a company in permanent motion because we serve the most of [indiscernible] -- sorry, because we serve the most sophisticated companies of the world.

And maybe, [ Jack ], because of the beauty, if you look at the past, technology has really allowed, I think, our industry in general to move up, to get more complex, to face new challenges, how to integrate technology in the BPO services, how to augment our human talent better, how to develop new services. So it's not either or, but it's both and technology was really the transponder that allowed us also to develop these services that we offer today, combining both.

Things are not fixed. Things are not moving. That's something which is important to understand.

If I may just ask one more final question. Specifically on Majorel, which is a business that was publicly listed in 2021 and publicly engaged with M&A discussions with a competitor last summer. But just interested, you've mentioned consistently on the call that nothing has changed, but what has triggered your interest in the company today versus opportunities potentially in the past.

So really, the beauty of the beauty of the life -- and again, I'm sorry, I'm almost an old man. And when I say almost, it's because you understand, this -- what -- you are a bachelor, you decide to be a bachelor because you prefer to have different dates and so on. And one day, you are introduced to somebody who matches exactly your values, your sense of purpose, your vision. Maybe you could have many this person a year ago, 2 years before, maybe you were ready, maybe you were not ready, maybe you were focused on something else. This is the life. This is the beauty of the life. And even with the -- even with the smartest computer, we are never going to change the fact that the life is also made by the fact to be with the right people at the right time, with common and right expectations. I know that I don't answer to your question was why it was not last year. But because last year, I was doing something else. That's it. And there too. If I may. But I complete turn your question for your life when you make a decision this year and not the year before.

As there are no further questions, I would like to hand back over to Mr. Julien for any closing remarks.

Now, first, I thank you very much for your presence and for your questions that were very interesting and gave us the opportunity to better explain this deal. I really hope that the market is understanding. Sometimes the market doesn't understand long-term strategy, sometimes it understands immediately. We will see -- what we are sure is that our strategy is a winning strategy. And by the way, by the way, extraordinarily happy also to welcome in our top shareholders, former major shareholders of Majorel because they are people that we highly appreciate also. Thank you very much.

That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.