Teleperformance SE (TEP) Earnings Call Transcript & Summary

Ladies and gentlemen, good afternoon. I'm delighted to welcome you to this combined general meeting, which I'm chairing as the Chairman of the Board. Thank you for being here this afternoon. I'd like to specify that this general meeting is being broadcast live from our Internet website, and I would like to greet all of the shareholders who are in remote mode. I'm delighted to welcome here all of the members of the Board of Directors who are here with us this afternoon. We also have here this afternoon, Mr. Varun Bery and Mr. Bhupender Singh, who have been nominated as members of the Board, and this has been put to you today. We have KPMG and Deloitte for -- as auditors, they have been asked to attend and they are present. PricewaterhouseCoopers, whose nomination is being put to you to be appointed as auditors are also here. Ronald Parker has verified all of the operations of signing in and will verify that the general meeting is conducted properly without irregularities and that the voting proceeds smoothly. I would ask you to switch off your telephones, please. And I suggest that we begin with the preliminary formalities for opening the session, which is to set up the bureau and the formal formalities. We have the Deputy Director General here. We will be presenting to you the salient figures for 2022, the annual results of 2022 and the performance on the stock markets. Madam Clémentine Gauthier, who is in charge of CSR and ESG matters, we'll be presenting the group's approach when it comes to environmental and social governance, the achievements of 2022 and initiatives taken. Mr. Patrick Thomas, who is a special member of the Board, will be giving a report on governance and remuneration policy. And the auditors will give us a summary of their report, and then we will be delighted to answer any questions before submitting to you resolutions for voting. I would like to say that on the website, there is a broadcast. And those who are attending remotely can ask questions as of now, and their questions will be answered later on during the general meeting. And I now suggest that we officially opened the meeting and that we set up the bureau of the meeting. We have a provisional quorum, which is 73.75%. Some shareholders are still coming in. Welcome to those who are coming in just now and we will inform you of the final quorum before voting the resolutions. For the bureau as tellers, I would call up the shareholders who hold the most shares on their own behalf or others, Mrs. Christine Ernult and Mr. Laurent KOSKAS. I would suggest that we designate as the Secretary of the meeting, Ms. Sonia Cheurfa. The combined general meeting is thus regularly constituted and can proceed in the regular manner, and I declare open our general meeting and give the floor to Mrs. Sonia Cheurfa for the legal information.

Thank you. You are meeting as is the first convening as of the -- it was in the annual bulletin in keeping with the legal requirements, all of the documents that have been submitted to you have been made available to the shareholders at the headquarters or on the Internet side of Teleperformance. We have the resolutions, the legal provisions that have been mentioned, the letter from the auditors, the universal report 2022 at the annual accounts and report, voting procedures, whether on-site or remotely. I would like to specify that shareholders who so requested have received all of the documents that they wish to do so and have been able to consult them also at the head office. We have 22 resolutions of an extraordinary nature, 18 of an ordinary nature, you have the full statement of these resolutions in the documents. They relate to the consolidated and social accounts of the exercise that the last year. The dividends approval of information as set out in Article L.22-10 of the Code of Commerce. Matters relating to remuneration 2022 of the CEO and the Deputy Director General, the remuneration policy of members of the Board at the Deputy Director General for 2023 and also the CEO, the renewal of the mandate for 3 members of the Board, an appointment of 2 others, appointment of PriceCooperwaterhouse as an auditor, and the renewal of the mandate of Deloitte as auditor. And then some financial authorizations are put to you that for the buyback of shares and the cancellations of those shares and delegating powers to the Board to increase capital -- share capital.

Thank you very much. Right. First of all, let's take stock a little bit of the situation of the group. Some more than 400,000 in the workforce, about 50% in homeworking, 91 countries, more than 300 languages, 1,200 clients, 170 markets, that's the geography. We are the world leader for client and this is an experience outsourcing. And our ambition for the coming years is to become an unrivaled global leader for business services, which integrate digital. What about 2022? We had strong growth plus 12.5% like-for-like. That's excluding the impact of the COVID-related activity. 5.7% like-for-like, it has been understood that EUR 500 million have been wiped off the books. They related to COVID contracts. And 14.6% increase the published data. This is the strongest result we've ever had. EBITDA growth 18.4% to 1.750 billion. That's margin of revenue of 21.5%, and that's up 80 basis points compared to the previous year. Growth of EBITDA is 17.8%, EUR 1.2 billion, which gives us a 15.5% margin. That's up 40 basis points as compared to the previous year. And finally, the net income for -- attributable to the owners is up 15.8%. Growth of dividend per share is up 16.7%, and the dividend that we are suggesting per share is EUR 3.85. Available cash flow is strong, more than EUR 700 million, and we have confirmation of rating by Standard & Poor's is BBB. That's for the rating of our debt. We had 2 acquisitions. First of all, October 2022 -- sorry, speaker corrects this, 1 acquisition. It was 2 the previous year. One, it was in October where we acquired PSG Global Solutions in the U.S. PSG Global Solutions is one of the leaders in recruitment process outsourcing. This involves a lot of software. It's basically a digital solution. In acquiring PSG Global Solutions, we have strengthened range of high value-added specialized services, which generally means that we can increase our bottom line. And it also means that we strengthen our position in a very robust sector even in times of crisis, which is the health sector in the U.S., very strong sector. And with 400,000 workforce and high staff turnover on the front line. It helps us improve our own internal recruitment process. In 2022, as previous years, our ESG commitments have been strongly stated and demonstrated. It's essential that this be understood in the light of what I'm about to say. About 50% of our workforce homeworking, it's gradually falling, but it will probably flatten out between 35% and 40%. We were awarded the best employer certification in 64 countries, that represents 97% of our workforce. And finally, there was unfortunate controversy that hit us very hard, and we responded swiftly and with great transparency. So that we could demonstrate the reality that was not that of the controversy. And let's talk about this a little bit. In the last quarter of 2022, there was a rumor going around in the media and social media relating to our content moderation business, which is, of course, a central business. It protects people, children, families from a harmful content out there on social media, and it related to the Teleperformance working conditions in the U.S. and Colombia. There were 2 articles and there was a tweet from the Vice Minister of Labor of the new government appointed in Colombia. That was butterfly-wing effect. There's a song actually about that, and it led to Black Thursday for Teleperformance. So with a 38% drop in our shares in just one day. What was our response? We launched a series of measures. First of all, we had a share buyback program of EUR 150 million. Then we decided to put an end to the most offensive segments of content moderation. We did that pending clarification of the issues. And above all, we carried out a whole series of audits. We had an external audit in the U.S. We then had an external audit that was carried out by Bureau Veritas in the 7 main countries where we did this kind of content moderation. We asked them to make sure that we were compliant with the 26000 ISO standard, which relates to environmental and social responsibility. And in all cases, we came through with flying colors. And then of course, we organized a series of meetings with the new Colombian government, both at local level and national level. I went myself to Bogotá and I met the Vice Minister of the Economy, for instance. And I explained very clearly what I thought about these rumors. We signed global agreement with the Union Federation, unique Global Union that had to be done. As I said, it was a global agreement, which actually just confirmed an agreement that we had already signed in 2011 when we signed up to the UN Global Compact. We had an open doors policy. We had an open doors operation for investors in many countries, U.S. and Colombia, of course, but also Portugal and Greece, in India, in Albania. And investors were invited and many of them turned up to see for themselves. And we asked for an independent study be carried out by the Korn Ferry consultancy firm about how our employees who are working in content moderation felt about their work for Teleperformance. The outcome of this was that worker satisfaction was higher than the average of the benchmark, which was 800 firms by double digits higher. The 800 companies were in the Korn Ferry benchmark base. In the light of all of this, we decided that there was no reason for us to shoot ourselves in the foot and be at a disadvantage compared to our global rivals And we decided to move back into all of content moderation with the full range of content moderation business activities. So what is the strategy? What are our financial objectives? It looks a bit complex. There's a lot to read up here. Our strategy is cube. What does this cube mean? Well, it means we divide our reality into specific parts so as to better penetrate. First of all, you have a vertical analysis of our activities by sector, business sector, bank, health, high tech, digital and so on. Then we divide up expertise by business service line. This can be service clients, sales, debt collection, back office, content moderation and so on. And then, as you know, we have different geographies. We have local expertise, and the cube has made more dynamic because of our digital transformation teams, TAP, as we call them, technology, analytics and process, which design specific solutions for our clients in local markets. And this means that although the world is changing very fast, we are able to understand and make the most of the changes that are under placed to build the world of the future. And basically, I've tried to summarize what you have up here on the slide. Turning now to our financial objectives for 2023. Well, obviously, 2023 is today, difficult to define overall given changing perceptions from month to month, week to week, depending on the Fed, depending on the banking crisis, war uncoupling between China, U.S., there are great many moving parts. But I would say that we're solid and the fact that this year, once again, we'll deliver organic growth that will be of the order of 10%. Will it be 9%? Will it be 10%? Will it be 11%? Totaling capable of telling you, but it will be of that order. Now bearing in mind, there will be a decline in the COVID assistance contract. That's the end of over EUR 200 million, having deducted COVID contracts should allow us to achieve growth of above 7%. Our margin, this is a key point. Our EBITDA margin will be higher in 2023 to what it was in 2022. So saying that, please use that and commit it to memory. And we will, of course, continue our targeted acquisitions. M&A, as you know, I mean, just can't be dictated to have a successful acquisition is one that creates value. It's an acquisition that fits in fully over the long term. And for an acquisition, generally, you need to be to have the same opinion at the same time. We believe that, that will happen during the course of this year. And so far, as currently, we're holding talks on a number of deals. For 2025, nothing's changed as compared to last year, if only -- well, if only is that we're ahead of plan. We're ahead of our work plan. And our road map is EUR 10 billion like-for-like top line revenue and EBITDA margin reaching 16%. Next acquisitions will come to add EUR 1 billion or EUR 2 billion to that. So as I see it, that's basically what I wanted to say to you. And now you're going to enter into the details of the financials with the master of figures. Over to you, sir.

Good afternoon. Indeed, we're now going to dive deeper into the financials for 2022 that were reported a few weeks back before discussing these figures, I'd like to say 3 things. First thing is that we probably achieved in 2022, our best year ever. It's a group growing strongly. These results are good. As regards growth, good in terms of profitability, also good in terms of cash flow generation. There are a few companies that can align these 3 factors. It's been our credo now for some 15 years. So let's look briefly at the financials for '22. As Daniel said EUR 8.154 billion revenue, 14.6% growth. The dollar, their organic growth, 5.7%. But of course, that incorporate significant drop of COVID-related contracts. We exclude those contracts. Growth comes in at 12.5%. Very few companies that are growing at that pace. There's sustained growth for many years, there's added profitability, 180 basis points, 0.8%. That's significant. It's the LEAP -- highest LEAP in terms of margin the group's achieved over the past 15 years, and it's no accident. And if we take the other items of the P&L, we have the same growth rates between 18%, 15%. Net income per share, pretty significant in a world that's more disrupted nowadays than it was previously. Let's go through the revenue growth analysis. There are a number of events that occurred this year to complicate. It's reading positive ForEx linked to the rising dollar that have escaped you during the course of '22. And then organic growth, 5.7%. As split, there are 2 major items and negative items that Daniel mentioned earlier. The last versus last year over EUR 500 million in revenue linked to COVID contracts signed in Europe and notably in the U.K. and that are disappearing well or at least disappeared for a large part in '22 over and above the EUR 514 million in revenue, we were able to add 937 million new contracts, new volumes generated organically about EUR 1 billion. That's pretty significant worth on the scoring. EUR 2.937 million [indiscernible] , of course, the effects of M&A in part last year, and there's a lag effect, and it's EUR 265 million additional on revenue in 2022 to reach EUR 8.154 million. Turning now to the figures by geography. I'm not going to swamp you with figures. What's interesting is when we look at the table, we see whatever the zones, North America, ASPAC, in English-speaking world, we got LatAm, essentially South America, Europe that now combines Iberia, the U.K. previously across the 2 other zones. Look at the figures. The change comparable, excluding COVID-related contracts because it heralds the actual recurring business of the group. We have very high figures across the board, specialized services, close on 19% growth achieved there. So high growth across the board. Another key point is the marked recovery of visa preparation that suffered hugely last year with the border closures and is regaining volume in '22, and that will continue even more this year. So this improved revenues, improved profitability. And this is also very striking across geographies, core services, the central segment of our activity up North America up sharply. LatAm faring well. Europe, slightly down owing to the loss of these famous COVID-related contracts that were very present in '21. But all in all, core service business, very similar to last year's level. Specialized Services continue to grow at a high level following the recovery in the TLS business that I mentioned earlier. What else on the P&L, as you can see, 2 significant development cost growth of our operating income, 40 basis points and one-offs for the most part, noncash items leading to increase in EBIT, 14.4% increase, very satisfactory level this year. To wrap up on the P&L, just 2 things to stress. Firstly, as you can see net income up close on 15.8% and 2 items to be cited. Firstly, stability of the financial expense against a backdrop of rising interest rates. We managed to maintain the financial expense pretty much flat. And the group, I don't know, if we need to welcome that or not, but pays a lot of taxes, high tax bill. That's good because we're supporting all the communities in which we operate. So pretty high tax rate in '22. Net income, up plus 16%, and we'll come to the dividend in a couple of minutes. To this growth and profitable growth, we have cash flow up coming at EUR 700 million, 2 points noteworthy for the past year. The first is, of course, the resumption of the natural of CapEx previous year last year. On the back of COVID, we'd sharply slowed our CapEx because working from home and we returned to high levels, more recurring levels, as I speak. Another important point that wait but won't wait next year on change in working cap for about EUR 90 million. More than there are some one-offs there that came to reduce our free cash flow generation linked to the lag in a number of expenses that we -- COVID-related last year. So that's reassuring, does show that '23, all other things being equal, should see an improvement of those items. A word on our financial structure. It's important that debt net is broadly unchanged year-on-year where in the meantime, EUR 300 million investment in new acquisitions and paid out some dividends and bought back some shares. So the group was capable with its business and cash to serve a dividend, buy back shares and make positions that will allow us to grow in the out years to keep pace with the and also grow our earnings debt is totally is bearable. We tend to convey our debt to EBITDA, we have a ratio of 1.5x net debt-to-EBITDA ratio. If we take the -- recurring takes us 1.5 years of business to reimburse our debt all other things being equal. So that's fully satisfactory in line with the group's ability to bear such gearing. The dividend is pretty self-evident here. We've maintained the dividend, the payout ratio of 35%. Dividend growth is, of course, linked to earnings growth and every likelihood, those items will continue in '23. A final point I wanted to -- on value share. It's a question that's often put to us. People have some broad figures in mind. We have just over EUR 1.1 billion -- EUR 8.1 billion in revenue, EUR 5.4 billion return to employees, either in the form of employees or payroll cost, EUR 1.3 billion to our suppliers, billion that is. Governments, EUR 291 million, taxes, shareholders, EUR 340 million. It's slightly higher this year because you have the dividend, but also the share buybacks, the lenders, EUR 62 million. So we see clearly how the value is shared out across the various stakeholders, the various players. And It comes at no surprise that our people constitute the alpha and omega of our main spending. Just a word on -- maybe just before the share price performance that Daniel referred to earlier, be very frank, year '22 is not really the best year we've ever experienced. We see in October or rather November, the impact that we suffered from. There's no denying. It's the reality. But over and above '22 is to look over the longer period. Dividend 10 years, if we look where really -- we really quids after the rain, the sunshine. Coming weeks and months, we should be able to see a return to a more satisfactory share price level. I'm going to hand over now to Clémentine Gauthier, who's going to say a few words about our CSR initiative in the various areas in which we operate. Thank you.

Thank you very much. I'm going to be talking about CSR. Teleperformance has long been very actively involved in CSR. Our aim is to have to create value for all of our stakeholders. We have 4 key commitments. First of all, we want to be one of the preferred employers on the market. This is part of our strategic objective. So we want to maintain best practice in all of our geographies, and we are very closely interested in getting the best employer certification as we have been by Best Workplace Institute. We are also a multicultural group, and we want to promote diversity and equality in all forms. The aim is to make sure that we have more women in roles of leadership in the group. And we also have made commitment to fight climate change. We have ambitious climate pledges, which have been validated by the science-based tactic Institute. And another part of our DNA is to give back to local communities. We want to be a force of good. As Daniel just said, we have signed the UN Global Compact. We signed this in 2011, and we have undertaken to promote principles and sustainable development goals. 2022 was for us the opportunity to take a new look at responsibilities and materiality matrix. And we've done this in light of commitments with the various stakeholders. And this has helped us to prioritize the impacts and reassert our CSR commitments. So I'm now going to share with you some of key results, which illustrate our advance. First of all, more than 97% of our workforce who work in a workplace environment that's been certified as a Great Place to Work. Our employees actually gave us a very high trust index, 79%. That was on the basis of more than 200,000 replies. More than 63 million hours of training have been provided in 2022. We've got internal promotion that's very good, 63% of supervisory manager or director positions have been recruited from internal -- within the company. We recruited 125,000 people for their first job experience in 2022. This shows the impact we can have in geographies and people's lives. In terms of parity, we're doing well. We've got 48% of women in managerial positions. We have renewed our global certification of ISO 27701 and 26000 for the group as a whole, which shows that for data security and data protection aligned with best standards. All of our CSR commitments in line with that. And we've got a reinforced due diligence procedure for all of our suppliers throughout the group. Environmentally speaking, we continue to reduce our carbon emissions. In 2022, our Scope 1 and Scope 2 per employee emissions were reduced by 9%, and that's a 49% reduction compared to 2019 because the number of energy efficiency initiatives have been taken. And also, we have invested heavily in renewable energy, which represents 28% of our total energy consumption. In terms of charities, we collected more than EUR 11 million in donations for vulnerable communities and emergency aid and our workforce gave 99,000 hours of voluntary work in 2022 alone, in particular to help the victims in Ukraine. I'd now briefly like to come back to our high-touch strategy, which is at the core of this approach. At every level of life cycle, we help to promote the well-being of our employees, and this begins with talent recruitment. We've invested in new programs and initiatives. So from the very time they are recruited, supporting them throughout with training and career development, and we have programs to commit to enhancing the well-being of our workforce. We have many satisfaction service. I talked about the Great Place to Work, but we also have internal surveys. And we have saved teams. Whenever anybody hands in the resignation, they conduct an interview to try and understand why they're leaving to understand this and try and make corrective action and keep them, if at all possible. So we work for recruitment, wellbeing and attrition and talent retention. A key event this year, at the beginning of the year, January 2023 was the OECD, National Contact Point published its communicate on the follow-up of recommendations relating to the specific circumstance opened in April 2020 relating to the way in which we handled COVID-19. The National Contact Point congratulated Teleperformance's companies for following recommendation and being -- having conducted due diligence noted that our practices are in line with the OECD guidelines. So the procedure is now closed. It also in February 2023 invited Teleperformance to attend the OECD Ministerial Conference on Responsible Business Management and provide feedback about our experience outside agency, MSCI and Sustainalytics have closed the controversy related to the specific circumstance. A key development Daniel mentioned in the preamble is that on the 1st of December 2022, we signed a global agreement with Unique Global Union, which relates to mutual commitments relating to freedom of association, social dialogue and health and safety at the workplace. At the beginning of March of this year, we had the global alliance between Teleperformance and UNI. This was an on-site event, which brought together representatives and affiliates from all geographies in the presence of Christy Hoffman, the Secretary General of UNI Global, but also Olivier Rigaudy, who is our Deputy Director General. Now let's talk about our climate-related strategy. We made major pledges since 2008 with the Citizen of the Planet commitments. Our strategy and approach is supervised by the Board. And we have the CSR Committee of the Board that does this. Their key and firm commitments made, we have undertaken to reduce all 3 scopes of our carbon emissions, and this as set out by the Science Based Targets initiative. We have a climate pledge of 400 companies involved in this. We've all committed to net zero in 2040. How can we do this? Our impact is related mainly to energy consumption. We have many actions, initiatives and programs relating to enhancing energy efficiency. We're also trying to use more renewable energy out of the total energy mix. 28% in 2022 as compared to 11% in 2019. We use digital transformation levers, for instance, digital compass and we try and use methods from the circular economy, working with our suppliers with electronics, recycling and reusing such hardware. Part of this climate strategy is to involve our stakeholders, the workforce, of course, by training. We have campaigns that are intended to heighten awareness, but also increasingly, partnerships with our key clients and suppliers. We also take part in restoration and biodiversity campaign. So we have 1 tree planted partnership with them, planting 500,000 trees. Our environmental reporting is aligned with the highest standards, GRI, for instance, or TCFD. And then in terms of our societal action, we feel it's very important to give back to local communities and territories. So we have ambitious goals to do this. We work very closely with impact sourcing, which provide -- is intended to give a formal job to people who find it hard to get employment. Unqualified young people, people living in poverty, long-term unemployed, disabled people or refugees for instance. There's a very good positive impact right across the value chain from this policy. The impact of this is increased fourfold in social terms. We have Citizen of the World a charity since 2006. So that has undertaken partnerships with NGOs throughout the world and various associations. We signed a partnership with UNICEF last year. In 2022, we collected EUR 11 million in donations more than EUR 62 million since the beginning of the Citizen of the World program, nearly 99,000 hours of voluntary work and 600,000 children benefited from educational programs, thanks to our work in charities.

Thank you. I'll now ask Mr. Patrick Thomas, who's the Lead Director to give us a presentation on governance and remuneration policy.

Ladies and gentlemen, good afternoon. As Lead Director, I'm going to present you a summary on the governance of Teleperformance. I have the pointer here, seems to be working. Report on corporate governance is to be found in the universal registration document for 22, Starting on Page 77, sets out the governance and items of compensation awarded to corporate officers, including those who are going to be subject to of -- I'm going to summarize. The Board is currently comprised to -- go back. How do we press the other button? Red. So the Board currently comprised 16 members, 2 directors representing employees, 8 women, 8 men, 8 nationalities represented. The Board, it's 9 independents out of 16, experienced professionals recognized operating in very diverse areas, also very international in nature in '22. The Board met 10 occasions and a 5-day seminar devoted to the strategic review. Attendance rate, 96%. Three group committees are comprised essentially of independent directors, chaired by an independent director. 12 meetings during the year, 97% attendance rate. You've got a specific description of the Board and each of its committees in the annual report reference document. So your meeting is asked to vote on the renewal of 2 Board members that renew -- top left and -- on 2 new directors and renew the term 3 to maintain an independent experience and very international Board after a positive vote on Resolutions 11 to 25 taken into account the loss of the independent status in Madewell still be comprised of 8 men, 8 women with a high degree of independence and nationality. I'd like to thank Mr. Bob Paszczak and Mr. Stephen Winningham for whose terms are expiring at the end of this meeting for their very vital cooperation and the work of this Board for some 12 years now. This is regarding general management, it revolves around executive committee, management committee. This governance structures once again demonstrated in '22, its agility, its effectiveness in addressing the various challenges faced by the group. We're now going to turn to the remuneration of corporate officers. I would summarize items per paining implementation of '22 remuneration policy voted by your general meeting for -- and the remuneration policy proposed for '23 in respect to the implementation of remuneration for '22. And under the ex-post global vote, the philosophy is set out in the background documents to your meeting. The vote on the fifth resolution aims at approving all the information pertaining to the 2022 remuneration policy of all corporate officers, directors, CEO and Deputy CEO. As regards, the vote on the remuneration 2022, the CEO items paid or allocated were done so in accordance with the remuneration adopted by your meeting on the 14th of April last year. As you can see on screen, fixed remuneration and variable if the targets to reach the total remains unchanged since 2013. It's very constant to which has added variable long-term remuneration share-based and noncompete clause. That's the sixth resolution put to your vote in order to secure its approval regarding the '22 remuneration of Deputy CEO, well, it's pretty much the same thing. But not quite so well paid, but it's precisely the same system, and that will be the subject of Resolution #7. As regards to the eighth resolution, it concerns the remuneration policy applicable to directors. It's unchanged as compared to that approved last year. Total annual package approved by your meeting following principles you. It's fixed pay linked to sitting on the Board, community-specific fixed remuneration linked to the position of Lead Director variable compensation, lump sum amounts linked to attendance and geographical distance and no remuneration for directors is given for a director who receives remuneration in respect of an employment contract of the group notably the Chairman and CEO details, both on fixed and variable firm in the corporate governance report. Resolution #9. Vote to approve remuneration for '23 applicable to Chairman, CEO, unchanged annual is expressed as a maximum amount, not a target amount and no additional remuneration is granted in effect of outperformance. Annual variable remuneration is subject to financial, nonfinancial criteria based on priorities identified by the group. The criteria and levels of attainment for variable and long-term compensation as set out in the corporate governance report ditto for the tenth resolution that concerns the Deputy CEO. Precisely same system applies with exactly the same criteria. Thanks for your attention. That's it from me. Thank you. Over now to Mr. [indiscernible] from KPMG statutory auditors of your company.

Thank you. Chairman. Ladies and gentlemen, I'm pleased to present to you on behalf of the statutory auditors the reports that we've drawn up in respect of FY 2022. Here we are. I can get the pointer to work. Not as adept as the Lead Director on that. So I'm pleased to present the reports that we've drawn up in respect of FY '22. Said reports cover the annual financials, consolidated financials, related party agreements as well as transactions, the share capital. As regards the first report -- rather, first 2 reports on the annual and consolidated financials, we certified that the financials afference here in respect of the applicable baseline and faithfully reflect the assets and financials of the group at year-end. The key audit matters on which we focus, particularly concerned the consolidated financial statement assessing the goodwill and booking the acquisition of centre that happened at the end of '21 and the acquisition price was allocated in a normal traditional manner in 2022. And so those 2 items were key audit matters given the significance of the weight of these assets on the balance sheet of your company on the one hand and assessments that management went undertake in order to assess a number of assumptions between to the financial trajectory, the discount rate or the long-term growth rate. We also focused specifically in the annual finalizations on the valuation of participation holdings, and we also issued a technical observation regarding the transcription on the European electronic format of the annexes of your company. It's totally technical that concerns all the marketplace issuers. With regards to our report on related party agreements, we bring to your attention the fact that we have been informed of no related party agreement concluded and signed during the past year. We've been informed of no agreement already approved by your meeting and that continued to be implemented during the course of 2022. Regarding our report on share capital increases, we've drawn up 2 reports. The first in respect of Resolution 19. The second in respect of resolution that concerns the reduction of share capital by the cancellation of shares. The authorization for the issuance of ordinary shares and/or securities giving access to capital order to pay for contributions in kind. So in respect to the first report, no comments to make. In respect of the second, neither. We'll just issue a supplementary report if that delegation is used by your Board. Lastly, we've issued one of the auditors, KPMG, issued as an independent third party. In respect of the consolidated nonfinancial statement, we have no comments to make on that. FY 2022 is the last fiscal year during which we had pleasure our statutory auditors to work. The group for 36 years, we've been statutory auditors of the group. It's a very pleasurable experience. We'd like to welcome because we can't be renewed. We'd like to take this opportunity to welcome PwC whose appointment is put to your vote this year, and I'd like to thank the Chairman, I'd like to thank the Management Committee Board members and shareholders for the loyalty and the trust they placed in us for the past 36 years. Thank you.

Thank you, on behalf of the Board. I think it's we who owe you a vote thanks for the excellent support extended by you and by KPMG, very valuable. And thanks to you for that. We like the cooperation to be of a similar nature with the auditor that will follow in your footsteps. Having said that, we're now going to move to questions from shareholders. Before giving the floor to the room opening it up, I'd like to say that we've received 10 written questions from one shareholder of the company. The answers were supplied by your company are to be found on the Teleperformance website under the Item General Meeting. For questions put via the website now, there will be provided transfer from the control unit, maybe -- there is a microphone doing the rounds in the room for people who would like to ask a question.

Mr. Julien, Mr. Rigaudy have responded very well to the controversy you mentioned. You really responded. I kept -- followed this very closely. And I saw you on television. You weren't able to completely reassure the market. It was very hard to do so, but you were very responsive, and I think you did everything that was required, but there was a 42% drop in shares on the market. Do you have an idea how that happened? Minus 40% in a single day. That's a huge amount. Was there an investigation carried out? And do you know how that happened? I have another question. 50% homeworking seems not very much, given the business lines that you have where you can work from home. So it doesn't seem so very much. And then geopolitical level, there's a lot of talk at the moment of national sovereignty, which runs counter to your structure. You're very open, you're global, you share everything. Do you think that Teleperformance is going to be affected by this sort of local inward-looking approach increasingly adopted by governments and countries? Is that not creating difficulties for you given your strategy?

Thank you very much indeed for those questions. Hard to answer any one of those questions really. Your first question relating to the homeworking rates, it's really customer driven to a large extent. It's not due to technical reasons in terms of platforms or technical possibilities, we couldn't easily have 80% or 90% of people working from home. But these are strategic choices driven by our clients. Sometimes we could even describe them as ideological choices of the vision of what a workplace is. That's how our clients see it. Our approach is that homeworking has huge benefits for everybody. That's our stand. It's great for the planet because it leads to less pollution. It has lots of benefits for employees, especially if they live in large conurbation, they may have 2 hours commuting or more a day. It's exhausting, it's not at all productive. And fundamentally for our clients, given the systems we've set up for homeworking, you get the same productivity levels, both in terms of quantity and quality. So we advocate homeworking. But that being said, choices vary, and they vary depending on the sector. In some areas, data is very sensitive in banking, for instance, if you're dealing with highly confidential processes. And this is the situation we have, which is largely client-driven. Regarding the Black Thursday incident, and I remember it well, I was in New York for a roadshow, and I was working out at 4 in the morning and I literally fell out of bed. I mean I wasn't expecting it at all. There was a bolt from the blue. Obviously, there was a rumor going around. And it's not a coincidence that it was going around. It was instrumentalized. What I'm saying today is -- I'm not pointing and accusing a finger at anybody. But when we grasped the scale of the psychological damage, I addressed personally the various stakeholders. And I said to some of them. Well, you've gone way too far. You got what you wanted, but you've gone way too far. We need to reach an agreement. Who sold? I'm binational, I have both citizen chips. Who sold? Well, mainly French CSR funds, who bought mainly a more conventional American funds that are less susceptible respond less to certain facets of business activity. The facts are that currently, French shareholders hold 13% of the company, if I'm not mistaken, and international shareholdings represent 87%, and 2/3 of that in English-speaking countries. Then your last point on the geopolitical situation. If you were to ask me whether I'm delighted to see the unfolding of the current geopolitical situation, the answer is absolutely not. I'm delighted that I am of a generation that launched globalization. And there are way more positive features of that, the negative ones. It has lifted hundreds of millions of people out of unbearable poverty. In our countries, when I say our countries, I mean Europe or the U.S., we have benefited from huge affluence, vast array of goods at very low cost. The whole world has become wealthier, thanks to globalization. But currently we're, I think, at the historical crossroads. And this is well analyzed in book by Ray Dalio, when global power is on the rise and another global power sees its domination contested and dwindling, what happens typically is that they are almost bound to disagree. What about us? The advantage -- well, I don't know if it's an advantage, but the fact is that the way Teleperformance has been set up is that it's a truly international group. And as such -- you don't -- it's not run by French people alone or by Americans. We have our CEOs in the various countries are Indian, Chinese, Brazilian, Mexican and so on and so forth. And that cushions the effect of the current trends on local businesses. But for large multinational companies, clearly, tensions between countries are going to generate unstable business environment. On the other hand, Chinese multinational companies are going to export their business to many other geographies. We've been present in China for many years now. We have, amongst our client base, Chinese clients, and we're going to try and adapt to the changing environment as best we can. That's -- what else can I say.

Mr. Julien, Laurent, Tini, I'm a shareholder. I'm delighted to see you in flesh and blood and not just on Boursorama or in video conferences and the like. Congratulations of everything you've done since the beginning when you founded Teleperformance, you're a self-made man. Now I've got a number of questions for you.

It started very nice, lots of flattery and then...

I follow closely this year. I live in Morocco. I see your platforms there, the people working for them. And when I was a student, when I started out, I worked for Teleperformance in the 15th district of Paris. You must have seen me. I used to pop in regularly at the time. I never took the lift. I used to take the stairs, and I used to bump into people. Well, let's get to my question. GPT-5 will be coming along at the end of the year with unbelievable artificial intelligence. You've benefited from globalization, telecoms, Internet and the like. What changes are you expecting for Teleperformance? Talk about metaverse, productivity gains in the future. I haven't heard Teleperformance mentioned about that. I know that you are active on the metaverse. So what are the productivity gains you're affecting, if you were to forecast this? I'm interested in that to thinking about future profits. And then I'd like to talk about the share. I see competitors -- your competitors, [indiscernible] for instance, '24, '26, '22, the PER.

No. That's not correct. Those figures aren't correct. Is it 2023?

'15 or '16.

Well, they're at '24 and '26. Yes, well, let's get on with the question.

Okay. Maybe I got that slightly wrong, but they haven't budged. They haven't got trees to plant and not worried about CO2. It seems to me that you've lost 46% as compared to the top rate. Tech values in the U.S. have recovered. You're considered to be a fairly defensive tech value, but you're still way down. What's the impact of that -- the takeover bids at the moment? Are you not a target by sector business? Haven't you become a target? For instance, Concentric has carried out takeover. You -- so that's -- I mean it could happen. The world is changing very fast. You know that well. And then what about the -- in the CAC 40, you've recent arrival and it seems to me that there's a problem with liquidity. You're not planning to do a split like Dassault system. When I see the rate up EUR 5 in a couple of minutes and then it loses EUR 10. I mean it shifts all the time. That's because you haven't got enough liquidity. That's my viewpoint. I see the ups and downs. It's very volatile. Those are my questions.

I'm going to try and answer some of those questions. There's a lot in there, but I'm not going to try and answer everything, but there's a lot there. First of all, GPT. Great. Here, I've got it here. GPT-4, now nobody can answer your question. Nobody in the world can answer your question. Walls of the largest bank in the world or the people at Google don't know. Will artificial intelligence, which becomes very widespread? Will it make humans obsolete? It's the fundamental question, isn't it? Or will these building blocks of artificial intelligence be used by humans to enhance their abilities and capacities and value creation and transform in a positive way the world? For us at a modest level, well, everybody talks about this because everybody launches the open AI test with the pilot operation, but we use this technology before the test started in a number of Teleperformance products. We have this technology, and it's already integrated into some of our products because we get e-mails and then we can use GPT to synthesize this and then synthesize the reply. It may be integrated into translation and interpretation apps. You can go from Hindi to English via, I don't know, some other language. There are huge opportunities, and they are also huge risks. And that's why this is not going to be used outright as is. You have to have an overlay, which provides some degree of protection. People are not going to feed their codes straight into GPT. In our copyright Teleperformance, we have an overlay to be able to use it on ChatGPT. Now the other point is that with robotic process automation, we've been seeing technical developments for years now, and we've been transforming our business all the time. When I started out, it was just basic old-style business, but now we manage very complex processes from A to Z, which include artificial intelligence and also human intervention because humans can show empathy, can understand context for all kinds of reasons. People like to talk to another human being. If they do their job well, people say, "Oh, it's great talking to you. Thank you so much." They don't -- not going to say the same thing to the machine. Fundamentally, the underlying question is the it or the bit as [indiscernible] said. Are we just part of a code digital? And then we have across the board, artificial intelligence, and we're obsolete within 5 years, is that the case? Or is it that we are a continuous function rather than a discrete function? I think we are. And because of that, we use discrete functions in order to enhance our performance. Well, I've split self-indulgent what I'm saying that I'm fascinated by this subject, but I think that artificial intelligence of this type can help us to be more sophisticated and provide better service to businesses. Are they going to be -- is there going to be an impact? 15% to 20% of the business we're doing now will probably no longer be done by humans, but by ChatGPT. But we ourselves would also -- have also by then advanced a lot and be offering new business services that have become possible. Regarding a final point on this, perhaps, there's a major issue, which is regulation, legislation for ethical reasons, for security reasons, that's needed. Of all the people in the room here, probably the one who is the least happy about the share rate is me. We were subject to very bad controversy rumor. Why did we respond? Well, because we had nothing to hide. With Olivier, we met the boss of a large French bank. And he said to me, "Well, Daniel, that happened to us as well in the past." And it takes a while for things to go back to normal. Even if you have demonstrated very clearly that it was unfounded. It's going to take something else. Another trigger to help you to get back on track. I think it's safe to say that the triggers are already around. We have them up our sleeve, if you will. And this brings me back in line with your question. I don't want to be over hasty about this, but still I'm not convinced today that we are a target for private equity or takeover bids. There is a tag price even now, which is like EUR 15 billion. And if we will target, it would go up to EUR 20 billion, EUR 22 billion. I don't see many people who are going to make a bid of that type. On the other hand, you mentioned an acquisition that was made by one of our competitors who bought up [indiscernible]. And if they make a go of that, it's not going to be straightforward. That will just bring them up to the same level as we're at in terms of scale and business. And it's going to take them a while. So I don't think they're going to get there quickly. It's going to be tough. I don't think you need to have any concerns about this. We're not sort of resting on our laurels and half asleep. But when we do M&A, it has to be meaningful. It has to make sense. It's not just a financial operation. We need to have shared values with the management of the company that we want to bring on board. We don't want a cultural war in the group. There has to be fundamental agreements as regards to the main clients, and it also has to generate value. We've done it in the past. And it will happen again in 2023 or 2024, probably 2023 rather than 2024, in my opinion. I mean I don't know this. It's just my opinion. Metaverse is not -- because we're talking about ChatGPT, metaverse is dead, even if they're scaling back spending. But what you're going to see this year? It's going to be a bit hard for everybody. Everybody is going to be scaling back a bit. And it's probably not going to be a great year of -- not going to be a boom year, but the metaverse has a Trojan horse, and its Trojan Horse is digital gaming. It's gaming. The gaming sector at the moment is twice as large as Hollywood, a conventional form of entertainment. There's a whole virtual economy with NFTs. You buy loads of virtual stuff. I mean, when you say you not me necessarily, but people who -- between 15 and 30 to date are avid gamers. They spend hours and hours gaming. And then if artificial intelligence increases productivity and generates more free time, what are people going to do with all that free time? And they're not going to go to the gym. They're going to be in virtual world in second life. So I think that metaverse has got a future. And what we know with the content moderation for social media is that the virtual world is just as horrible as the real world. There are thieves, there are murderers, there are rapists, they're all out there, and you need a police. You need a police force. You need someone to regulate. And that's what we can do. We can do it with Avatars. And we've known how to do this for the last 10 years. I'll wind up on that.

Okay. Let's return to more mundane matters. Liquidity, don't quite agree with you, especially when you look at the numbers on Teleperformance, EUR 40 million unchanged every day. We ranked 30th in the CAC 40. I watch that really closely. So we're 30th well ahead a number of other stocks and the CAC 40 benchmark. What's happening? There's probably liquidity, but it's not a liquidity you're talking. You're talking about volatility. Volatility has skyrocketed with 2 things, uncertainty that we referred to early, political, economic, interest rates, not a week passes by before. The Fed is going to up it what, 50, 25 bps, et cetera. We just don't know, generates a huge amount of volatility. It's not last for anyone volatility. We try and regulate the share price as much as possible following the legislative principles that are imposed. We follow, we work on that. But I don't think it's liquidity that poses a problem. As to a share split into 2-4 or 6, I mean I got real doubts about that. We did a number of studies on loads of splits done over the past few years. We don't arrive at improved liquidity, thanks to a split. So I hope to return to higher levels. We mention -- maybe we'll address this further. We'll look at the split possibility in due course, maybe. Yes, that's off mic, sorry. Well, yes, when you look at what happened with Bouygues and all those sort of studies and you don't change liquidity. Look at Hermes, almost at EUR 2,000 a share. Look at LVMH, EUR 900. These are the most traded stocks on the CAC 40 today. Of course, I prefer to be at EUR 400, no denying.

Okay. Well, I think we really kind of answered. We've done the rounds there. We can move to another question, if you don't mind.

Yes. I represent the Association of French Shareholders. Question on inflation. Sharply rising inflation across. What's the impact for Teleperformance?

We manage normally where -- we're managing it in 3 ways. First off by integrating price adjustment factors in our contracts with the clients. Secondly, because our clients facing their own constraints by factoring in more digital in order to improve productivity and to manage -- to preserve the business model. And the third thing we do, and let's not forget, it's that worldwide, we have markets and production areas. Our markets are, well, leading market far and away is the U.S. Our second largest market is Europe and followed while we got a bit of China, a bit of Brazil, et cetera. So our production areas, and that's essentially India, the Philippines, Egypt, North Africa, LatAm and less and less, of course, because it costs too much. Less and less, obviously, the U.S, France, Germany, et cetera. And what's actually happening on contracts are generally in a strong currency, be it in dollar or the euro, our production areas are in weak currencies. And so the devaluation or depreciation of the currency in production areas makes it possible to cover a significant portion of the inflation. Well, it's not always the case. There are aberrations. But Mexico, we were in a bit of a bind because like the Americans, the Americans and the Chinese are really in a face off. I mean a lot of things are coming back to Mexico. And the Mexican peso is strong. And so there, well, it brings us to be a bit fleet footed. We're very present in Latin America, making sure that instead of being in the big cities, we're developing more of the work at home model in less costly areas. Mexico is like France. Whether you're in Paris or in Ongole or somewhere else in France, I mean, the cost of living is not the same.

I've got a question. I'm a bit surprised by your answer for the falling share price. You seem to know the people who acted now. Have you filed a complaint? Is there an SEC investigation or the French authorities? Because -- is it commercial? Are they competitors, peers who launched? Is it kind of foul play with hedge funds, et cetera, short sellers? I mean we're bearing the brunt of that, and we're regulated. I failed to understand that you haven't kind of filed a more robust response. I've got about the scale of the fall. A lot of funds, say, Article 9, so-called and buy companies that are virtues in ESG. ESG, Teleperformance was very much bought, almost overbought by this fund soon as the controversy interrupted, they all sold and that amplified, therefore. So I've got another comment about pay levels. Your salaries in dollars and the CEO in franks -- in euros rather. So we're in a company, French law company.

So it was like you're presenting the accounts in dollars. I don't know. No, I'm not paid in euros, I'm paid in dollars. Sorry, if I may, let me just say one thing you need to know, which is over 50% of the market, this company is American. And you need to know one other thing -- one further point. 70% of the revenue of this company is generated with U.S. multinationals. So just bear that in mind. So if your Chairman was in France, I don't think you'd have the global leader of outsourcing because if you're far from your markets, then you're very unlikely to become a global leader. Just a word. Of course, we've been in contact with the French securities regulator, the AMF, it won't have escaped you, the famous Black Thursday, we suspended the share price. We were in contact with the AMF Euronext. We followed events closely. I mean there's no suit to be filed. I mean, for something -- if there's any foul play, you've got to find some specifics. What happened? You stressed it yourself. A number of people sold massively the Article 9 simply on the rumor. And then after a certain level, you triggered automatic levels, trading thresholds, a number of companies of companies that have mechanical protections that are triggered. That's why the group -- well, started by blocking the fall. There are a few CAC 40 companies that suspended trading in the middle of session. We suspended trading at 11, 10, 2, half hours after opening. It wasn't done at drop of a hat. As you'll appreciate, we thought we found nothing extraordinary on to what people there were short sellers. In a second phase, not initially, we found nothing, and you can't file a suit. File a suit against who? The people are allowed to sell. You can't prevent people from selling their shares. Good luck, good luck to you, if you want to sue the prayers, so people who propagate rumors.

I'm an individual shareholder. When we look at your financials, there's EUR 8 billion in revenue. Out of 1,200 clients, that EUR 7 million on average per client. What's your independence in terms of your largest?

Well, that's very easy. I can give you the answer immediately. Our #1 client, that's about 5% of revenue, give or take. We got some mega clients. Our top 20 probably represents about 30% of our revenue. Our top 100 clients probably represents about 60% of our revenue in our sector were the most diversified company in the market. Risk, we are the most diversified in our market. The risk, the cost is always a risk. But yes, like an ad agency, an advertising, think of an advertising. It always has a risk. Find company, find me a company today that has such diversification of its revenue, a B2B company. B2B, there aren't many. It's less risky than it was 10, 20 or even 30, 40 years ago. And we've derisked it constantly. We cited a few companies that were front page news. I mean their concentration is very higher, considerably higher than ours. Well, no further questions. No Internet questions. Okay. Let's -- thank you for your questions. Let's vote on the resolutions. Over to Madam Sonia Cheurfa.

Thank you. Before voting, let me tell you that the definitive quorum is 73.76% of shares voting rights. I'd like to remind you that dual voting right applies to those who have held shares for more than 4 years. You vote on the majority of votes expressed for ordinary resolutions. That's Resolutions 1 to 18 and a 2/3 majority for the extraordinary Resolutions 19 to 22. We suggest that we have an electronic vote. We have electronic voting devices. If you want to vote for, 1. If you want to vote against, use 2. And if you wish to abstain, use 3. The first resolution is the approval of the statutory financial statements for the year ended 31st of December 2022. You can now vote. [Voting]

Vote is ended. Resolution is adopted. Second resolution, approval of the consolidated financial statements for the year ended 31st of December 2022. The vote has started. [Voting]

Voting has ended. Adopted. The third resolution is the dividends. The coupon will be detached on the 23rd of April and payment, 25th of April, appropriation of 2022 results determined a dividend amount and payment date, voting has started. [Voting]

Voting has ended. Adopted. Fourth resolution. The purpose is approval of the special report of the statutory auditors on regulated agreements and commitments and acknowledgment of the absence of new agreements. Voting has started. [Voting]

Voting has ended. Adopted. Fifth resolution. Approval of the information referred to in Paragraph 1 of Article L. 22-10-9 of the French Commercial Code for all of the company's corporate officers. Voting has started. [Voting]

Ended. Adopted. Sixth resolution of the ordinary type, approval of the fixed variable and sectional elements comprising the total remuneration and benefits of all kind paid in the 2022 financial year or granted in respect of 2022 financial year to Mr. Daniel Julien, Chairman and Chief Executive Officer. Voting has started. [Voting]

Ended. It's adopted. Seventh resolution, the approval of the fixed variable exceptional elements comprising total remuneration and benefits of all kind paid in 2022 FY or granted in respect of the same FY to Mr. Olivier Rigaudy, Deputy Chief Executive Officer. Voting has started. [Voting]

Ended. It's adopted. Eighth resolution, approval of the remuneration policy for directors for 2023. Opened. [Voting]

Ended. Adopted. Nine, approval of the remuneration policy for the Chairman and Chief Executive Officer for 2023. Opened. [Voting]

Closed. Adopted. 10, ordinary resolution, approval of the remuneration policy for the Deputy CEO for 2023. Opened. [Voting]

Closed. Adopted. 11, renewal of the term of office of Ms. Christobel Selecky for a 3-year term as director. Opened. [Voting]

Closed. Adopted. 12, this is the renewal of the term of office as Director of Ms. Angela Maria Sierra-Moreno a 3-year period. Opened. [Voting]

Closed. Adopted. 13th resolution, renewal of the term of office as Director, Mr. Jean Guez, for a 2-year period. Opened. [Voting]

Closed. Adopted. 14, we have here the appointment of Mr. Varun Berry as a Director for a 3-year period. The voting is open. [Voting]

And closed. It's approved. 15th ordinary resolution, the appointment of Mr. Bhupender Singh as a Director for a 3-year period. Opened. [Voting]

Closed. Also Adopted. 16, we have the appointment of PricewaterhouseCoopers Audit SAS to replace KPMG Audit IS statutory auditor for 6 financial year period. Voting is open. [Voting]

Closed. Adopted. 17 now, renewal of the term of office of Deloitte & Associés as statutory auditor for 6 financial years. Opened. [Voting]

Closed. Adopted. 18, authorization to be given to the Board of Directors to allow the company to repurchase its own shares pursuant to the provisions of Article L.22-10-62 of the French commercial code. Voting is open. [Voting]

And closed. That's also adopted. Moving on with 2 extraordinary resolutions, 19. Authorization to be given to the Board of Directors to cancel the shares repurchased by the company, and the voting is open. [Voting]

And closed. That's also adopted. We now move on to the 20th resolution. It's an extraordinary revolution. The purpose is to delegate authority to the Board of Directors to increase the share capital by capitalization of reserves, profits and/or premiums. Voting opened. [Voting]

And closed. That's also adopted. We're moving on to the 21st extraordinary resolution, delegation to be given to the Board of Directors to increase share capital by issuing ordinary shares and/or securities giving access to capital in order to pay for contributions in kind of shares or securities giving access to capital. Voting is open. [Voting]

Closed. Adopted. And then we have one final resolution, 22. The purpose of which is to give powers for formalities that follow on from the general meeting. Voting is open. [Voting]

Closed. Adopted.

Great. We have nothing left on the agenda, and I declare the general meeting closed. And once again, thanking you for your presence and participation. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]