Teleperformance SE (TEP) Earnings Call Transcript & Summary

Hello, and welcome to the Teleperformance First Quarter 2023 Revenue Call. My name is Jess, and I'll be your coordinator for today's event. [Operator Instructions] I will now hand over to your host, Quy Nguyen, Head of Investor Relations at Teleperformance, to begin today's call. Thank you.

Yes. Good morning. Good evening, everyone. And thank you all for your presence today. Financial press release related to the first quarter of 2023 revenue has been published today at 5:45 p.m. Paris Time. Slides of the presentations are available on Teleperformance website in the Financial Publications page of the Investor Relations section. As usual, the presentation will be followed by a Q&A session. A replay of the conference call and the webcast will be available straight after the presentation. Connection details are mentioned in the invitation to the first quarter presentation. Today's presentation contains forward-looking statements that address our expected future performance and that, by their nature, address matters that are uncertain. These expectations are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a detailed description of these factors and uncertainties, please refer to the Risk and Control section in our 2022 Universal Registration Document available on Teleperformance website. Now I'll let the floor to Bhupender Singh, President of Transformation, Teleperformance, and Olivier Rigaudy, CFO and Deputy CEO of Teleperformance. Thank you.

Thank you, Quy, and hello, everyone. I'll start the presentation by giving the highlights of quarter 1 and also our updated outlook for full year, and then I'll hand over to Olivier after that, to give us more detailed information on the quarter 1. Can you go to the next slide, please? Yes. So in an uncertain start to the year globally, TP has had a solid start, and we have delivered 8.6% like-for-like growth, excluding COVID contracts. Including COVID contracts, it's somewhat lower. And as expected, we have seen some slowdown in the digital commerce sectors, but as TP is much more diversified that slowdown has been compensated by strong momentum in some of the sectors, including social media, financial services, travel and the government agencies, excluding COVID contract. Other thing that we have seen is, we have seen an acceleration for offshore activities, and that has had dual impact. On one hand, it has lowered our revenue. The impact within first quarter is about negative 6 points on growth. But conversely, it has also improved our profit margins. The other highlight for this quarter is the positive impact we've had both on our Specialized Services, TLS business and the Core, [ D.I.B.S. ] business because of opening of China. And most of you would have read about the agreement we have signed with Colombia a few days back. And hopefully, that puts an end to that chapter. Next slide, please. Coming to the full year, we expect this growth to continue for the rest of the year also. Having said that, given the uncertain environment, we have seen some slowdown in decisions. We've actually got some big wins in the last 2 weeks. But overall, we have seen some slowdown in decisions. And we don't know how long this uncertainty will continue. So it's difficult to give a precise number. And hence, we are giving a range of 8% to 10% for like-for-like growth, excluding the COVID contracts, and that translates to around 7% growth rate, including the COVID contracts. What we have greater control over and are more confident about is our bottom line, our EBITDA margin. And we are raising the target for that to 16% compared to 15.5% of last year and 15.7% that we had previously guided. And this is driven by 2 positive dynamics. One is business mix, so our specialized services and higher profit offshoring businesses are growing faster than the average and hence, that's contributing to this growth; and second, our operating efficiencies, especially in the Core business, are kicking in. As a result of that, we have a fair degree of confidence that even at the lower end of our revenue guidance, we should be able to meet or exceed our earnings estimate for the year. We continue to pursue acquisitions to build our Cube. So whether that's for adjacent lines of business, especially the digital services or domain expertise, especially in the health care vertical, or to build out complementary geographies. And we continue to build out and deploy our AI in general and more specifically GPT capabilities. And I'll talk about that in a moment. Next slide, please. Yes. So many of you have asked us about GPT and what's the impact on TP because of that. So we thought we'll address that upfront. As we have mentioned before, over the past few years, TP has been working on AI, and specifically on open AI for GPT, we actually have had an application layer connect since 2021. And we have got multiple use cases today. And we have also developed our own product called TP GPT based on this. This is a bit of crystal gazing because the reality is no one knows the answer as of today. Just a couple of weeks back, there was an analyst report that talked about 30% impact on volume automation or cannibalization over the 5 years. There are some which say, 20% in 3 years. So this is our best estimate basis what we have seen, not only in GPT, but also how we have seen the industry develop because this is not new. We have seen this first with RPA, then with machine learning, then with conversational AI and now generate AI, like GPT. So in that sense, this is our best estimate as of today. And we expect that somewhere around 20% to 30% of our current volumes will get automated because of this over the next 3 years or so. We have anywhere seen about 5% to 7% volume automation because of RPA, machine learning and other AI over the past 2 years. So there is somewhat of an acceleration versus what you have seen, but not dramatically different from what we have seen earlier. There are activities that are easy to automate and which have, to some extent, already been automated, and then there are activities which are relatively difficult to automate. In addition, as TP has always believed in embracing new technologies, it also creates new opportunities for us, and it creates opportunities for us in 3 areas. One, it actually is a great enabler for Teleperformance's value proposition. And I'll illustrate that with an example on the next slide. Second, it optimizes or it can be used to optimize our own operations. We've already started this for our help desk for HR and IT. And then soon, we will be using it for other internal functions, like recruitment, training, QA, knowledge management, workforce management. And then also it offers an opportunity to be a new service line, either to support our clients in GPT implementation or to educate machines and computers on AI. If you go to the next slide, please. Now this is an example how we are leveraging GPT to enable our value proposition. And I've deliberately taken a CX example because traditional CX still accounts for about 50% of our business. So the first one is a standard call flow that you see in an entirely human manner. So you start with the greetings and authentication, there is an intent discovery, understanding what the customer's request is, then bases that request, our agent has to have knowledge of the clients' processes systems to be able to address that request. And finally, there is the confirmation. Sometimes it may be regulatory need, requirement or sometimes just to make sure that the customers' needs are met. And post that, there is a wrap up, where the agent has to write notes in the client systems. Now at each stage of this, GPT can actually help us both reduce the time that is needed and also simplify the activities. So in an intent discovery basis, the text and the screens GPT can actually summarize to our agent, what the customer may be looking for. In fulfillment, our agent doesn't need to have detailed knowledge of clients' processes and systems. The GPT can actually help identify the right resolution. And then on confirmation and wrap up, many of these activities can be done in an automated manner. So what's the net result. The net result is that we save about 40% time because the agent doesn't need to have detailed knowledge of clients' processes systems, the training time and learning curve is much faster. And again, because the person doesn't have to manually toggle through different systems and other things, it reduces the number of errors because the handle time is less, the end customer experience is much better. So simpler, faster, better. And that's what we are seeing, and that's what we will continue to use to enable our operations to be done faster. And with that, I'll hand over to Olivier.

Thank you, Bhupi. Good morning, good afternoon to all. I'm going to give you much more detail on the Q1 figures. Next slide, please. Here is a standard slide that you are used to see around this last 2 years. So just to break down what are the different pies of the growth of the sales. Of course, we had a currency effect that was negative this quarter, mainly driven by the Colombian peso, the Egyptian pound that dramatically reduce its value and to a lesser extent, the Indian rupee, despite the potential still positive impact from a stronger U.S. dollar. We still have a significant impact of COVID support, around EUR 131 million this quarter, which is a big stuff. And we have a small effect of consolidation due to PSG Global Solutions less than EUR 20 million. And the like-for-like growth is EUR 168 million, which is 8.6% as shown as presented a minute ago. Let's go much more in detail of the different zone to answer the business. Please, next slide. Here is a presentation of the classical presentation. Now you remember that we are following the business in 3 dimensions for Core Service, North America and APAC, LatAm, and Europe and EMEA. As you can see, the core Service and D.I.B.S. is growing at 7.3% like-for-like, excluding COVID support contract. This, of course, I'll come back later on that, include all the offshorization of some contracts that have been done notably from North America to Philippine and to a lesser extent to India. That's the reason why the growth of like-for-like of North America is 0.8% while LatAm is still growing at 7% in this [indiscernible] come back a minute to that, and Europe is still growing fast. As you can see, Specialized Services continue to drive significant growth, close to 20%, 17% to be precise, of course, driven fed by 2 things: the continued recovery of TLScontact. And I'm sure for those who are traveling, you are seeing so many people in the plane or in the airport that is going to continue all along the year and of course, a steady development of LanguageLine Solution as we are used to. Next side, please. So North America and APAC. So the growth is modest 0.8%. Of course, we had, as mentioned earlier on, a continued acceleration of growth in offshore activity in India and Philippines to clearly the detriment of the U.S. domestic activity. This, as explained earlier on, has an impact on the sales figure, but -- which is negative, but of course, has a positive impact on our margin because the margin that we are, I would say, delivering in this country are significantly higher than what we have in domestic countries. We continue to have a sustained growth in Asia-Pacific. Asia-Pacific is still small, but we have a rapid recovery of business in China. And we have new contracts that are going -- that just started, there have been a little delay, as mentioned by Bhupi, but we'll come back. We just signed recently a significant contract in the BFSI sector. Next side, please. Please, next slide. LatAm, here we are. Of course, significant growth, again, 7% growth. As you probably remember, we had a high basis of [ comparison ] in this region for the last 2 or 3 years. As I told you before, very robust growth in travel, social media, online entertainment and financial service sector. We had a particularly strong growth in Colombia and Peru, despite what you heard about Colombia over the last months, but we are developing very quickly in this country, where we are much more limited growth is in Mexico offshore segment, partially hit by the level of the Mexican pesos and partially by the fact that people decided to move to other regions, like Philippines and India. Next slide, please. Europe, Europe, of course, has been impacted by the COVID. Most -- all of the EUR 131 million were reported last year in Europe. So if you take that out, we are growing at close to 14%. We -- what we observed in the sustained growth in multilevel activity, which are significant to the region. We have Greece, we have Portugal, we have Spain, that all of them are growing and specifically Greece is growing fast. And we developed also, as you know, since now the beginning of the year, U.K. is part of the EMEA again. And we have very significant growth in U.K. for financial service and administration, and also in Germany, notably for nearshore activity in South of Europe, notably Turkey, and other country in the back end. Next slide, please. And to finish, you have the Specialized Services, as I told you, close to 20% growth, 17% growth, very good recovery in TLScontact business activity, of course, just at the start of the reopening of China, but we are going to see that probably much more in the second part of the year, specifically in spring and summer. And we continue to have a sustained growth of LanguageLine Solutions. We have better Q1. Sometimes, we have easier Q1 than other regions. We have continued, I would say, approach to switch up, ramping up of video versus purely OPI, over the phone interpretation, and we have growth in global solutions. As a whole, as you can see, Specialized Service continued to deliver significant growth, good margin in an [indiscernible] month, which have been clearly [ worse than ] over the last month. That's what we can tell, but next slide, please. Just to -- about the first quarter, we are, of course, available, Bhupender and myself, to answer your question that you're probably having.

[Operator Instructions] The first question comes from the line of Suhasini Varanasi from Goldman Sachs.

I have two, please. The change in the revenue guidance in a little over 3 months suggests that maybe the trends have changed a lot faster than you had anticipated. Can you please let us know the level of caution baked into the new revenue growth outlook for the year, i.e., what assumptions have you made around client decision-making, for example, or to put it other way how much of the growth outlook reflects business that has already been won versus growth that you still need to win? And the second question is on the 2025 outlook. There hasn't been an update in this release, given the trends around AI or offshoring. And obviously, the margin is coming in a little bit better than expected. Should we expect an update on this at the second quarter results?

You take the first. I'll take the second.

Yes. Okay, I'll do that. In fact, I was thinking of taking the second one first. Suhasini, on the 2025 outlook, no change. We are well underway. So we can give you an update now. We don't need to wait for second quarter. It's perfectly -- there's no change there. On the 8% to 10% guidance for the full year and our confidence there. So no doubt, there has been some increase in uncertainty in the market, especially post the SVB crash. While we were not directly impacted, but we did see a certain degree of delays in decision-making by clients across multiple sectors. And we saw that through most of February, March, and early April also in the last couple of weeks, some of these decisions and these are big, huge decisions that were pending for months have been taken. And now we don't know whether this is the start of other decisions also. Our pipeline is strong, but we are saying. So that's why we are being somewhat more cautious. Rather than giving a strong number, we are giving a range there. I think that's the best we can say at this stage.

And if I can add, probably what was not totally expected at this level is the level of the offshorization that we have lived in this quarter because if you take the 0.6 that has moved mostly from U.S. domestic to Philippine, we would have been at 9.2% in terms of growth. I preferred to be at 8.6% with a higher margin than to be at 9.2% with a lower margin, let's call it this way. So this is exactly what happened because I believe there is a lot of clients that are asking us given this global environment to move much more offshore and quicker than what we expected at the beginning of the year.

Next question comes from the line of Simona Sarli from Bank of America.

So I will take one by one. So again, if you could provide a little bit more color on the new guidance that you're providing. So is the cut to your growth guidance entirely related to more offshoring? Or is there also an element, for example, of potential impact on volumes in content moderation or slowdown in your digital clients. So if you could please comment on that. And then I will continue with the other questions.

Yes, Simona. So more offshoring definitely, that only we have quantified it for Q1, 0.6. So there is an impact because of that. And again, it has a negative impact on revenues, but has a positive impact on the margins. Content moderation, no, we have not seen any slowdown. That business continues to grow. And in terms of other areas, again, yes, there is some slowdown in volumes from the digital commerce and those type of companies. But we are seeing compensation by sectors like travel, by banking financial services. So some other sectors are compensating for that. And that's where TPs diversified nature and resilience comes in.

Okay. And then can you please provide a little bit more color on what is underpinning the upgrade to your margin guidance? So you just said that more offshoring was effectively a headwind of 60 bps to your organic growth. So if I do like a back of [indiscernible] calculation, that should explain only like 10 bps upgrade to your margin guidance. So what are really the moving parts that are guiding for this 30 basis points upgrade?

So first of all, we are speaking of the Q1. You may -- I do believe you made your computation on Q1. So I don't know where we will be in terms offshore at the end of the year. That's the reason why we spoke about 8% to 10%. So that's the first point. Second point, you understood that TLS and the Specialized Service -- TLS, notably is, I would say, growing fast, and it's going to be part of the story that we know. And we have also a good development in other [ offshored ] region. I was thinking to Turkey, I was thinking into Egypt and to a lesser extent from South Africa for U.K. So all of that explains this upgrade in margin. Maybe we might say that our margin was also -- target is also helped by the consolidation of PSG that I'm sure you remember that is going to happen for the full year in 2023.

And then please, 1 more question. So you have been talking about, over the past few years, seeing roughly 5% to 7% of your volumes being automated. So what has been the impact on prices that you have experienced? And now considering that you are expecting an acceleration in terms of automation of your volumes to 20% to 30%, what again would be the potential impact here on prices and your discussions with clients? And lastly...

The 20% is for a 3-year period.

Yes. Yes, that's correct. Yes.

Just to be clear, it's not a huge [indiscernible]. We are speaking of 1% or 2% additional potential change in per year.

Sure. But how is that impacting prices? And how that has impacted prices historically?

[indiscernible] 4% or 5%.

Yes. So Simona, the pricing, to some extent, has not been dramatically impacted because of 2 reasons. One is that, in many cases, we have moved to more of a transaction pricing. And because of that, you've not seen a deterioration in kind of in our margins and because we have continued to grow, get more business from these clients. So you've not seen a big impact of this. You've only seen the net impact. The second thing is that a lot of automation over the past few years, we've also leveraged to be able to take care of the inflationary wage pressures. So if I put it in simple terms, if we, let's say, have a requirement or we have been processing for a client work worth 100 people. Now if we were to give all the inflation-related increase and pass that on to our client, then it's kind of a lose-lose situation for both us and the client because they also need to compete in the marketplace. So what we've been able to do is that we have been able to leverage automation to be able to keep the net unit cost for the customer for processing a given work to be at a similar level. So that's what we have been doing. And hence, you've not seen a big change in the pricing.

And then sorry, just a follow-up on content moderation. Could you comment why you have decided to go back into highly egregious since announcing the exit in November?

Yes. I think, Simona, we have gone through this quite a few times. And the reality is we did look at all the different stakeholders, whether it was our employees, whether it was our clients, whether it is for the wider society. And we thought that it was best to actually continue doing this activity.

And all the audits were positive, as you can remember, and everybody was okay on this decision.

The next question comes from the line of Anvesh Agrawal from Morgan Stanley.

If I can also ask my questions one by one, and I got 3, please. First, Bhupender, I think you talked about some operational efficiencies that are helping the margins this year. Can you talk that about a little bit more detail? Is that some sort of internal cost-saving program or automation effort? What are those, please?

Yes, it's a combination of 3 things, Anvesh. One, just the operating leverage is coming in. As we are growing, we don't need to increase our SG&A by that level. So even if we do not reduce, we get more for the same. Number two, as I talked about, we are leveraging automation for our internal activities, whether it's [indiscernible] and other things. So that's coming in. Number three, that is there, but it's not making a big impact. In fact, it's somewhat negative in 2023 is that we are accelerating our shared services in lower-cost locations. It is a negative impact in 2023. It's not a positive impact, but that's something that you will see the positive impact in future years.

That's very useful. And then just sort of very interesting comments around the 20% to 30% volume automation over the next 3 years. I think the big debate is, will you still be able to keep those volumes, also provide in a different way, or there's a risk that clients would sort of in-house those activities. I think that's kind of -- if you could provide some comment would be useful. So of the 5% to 7% volume that were automated over the last 4 years, have they gone in-house? Or were you able to keep them? And if so, like what's going to be your view there?

Yes. So Anvesh, to some extent, there is a bit of crystal gazing on that 20%, 30% and also the long-term future scenarios. What I can tell you based on the experience that we've had so far is it does drive a certain degree of vendor consolidation. So when we started this journey 5, 6 years back, the client we have had 6 suppliers, 6 partners, they may have brought it down to 4. Over time, it may go down to 2. So that's kind of what we expect in the -- at least in the next 2 to 3 years. Very long term. We don't know.

But this 20% to 30% is just effectively, sorry, an assumption that is unclear. What is important is to see that this is something that we are leading for the last 4 or 5 years by 5%. So in terms of dramatic change, we wanted just to show that. And finally, the group has been able, despite this global trend, not only to grow without COVID, of course. So this is exactly what we are seeing because you are going to be more and more complex, more and more accurate and more and more demanding for our client, and it drives consolidation as rupee was just raising the point.

And maybe just sort of finally continuing the topic, again, sorry. If we sort of think about a contract, which was, let's say, 100% voice 5 years back and today, let's say, 60%-40% voice and non-voice. Are you able to make the absolute amount of profit you were making on that contract 5 years back today as well? Or I mean presumably the mix will change, the gross margin might change, but there is more operational efficiencies. But when we just think about the absolute profit, are the profits still same on a contract where the mix has changed from voice to sort of voice to nonvoice?

I'm not sure you are comparing April to April because the products that you are selling 4 or 5 years ago has nothing [indiscernible] to what we are doing today, maybe...

Yes, yes. I think that's -- the reason I was a bit thinking through it is, it's difficult, Anvesh, because the product itself has changed. So -- and we also don't measure it that way. So one particular contract, when you say a particular line of business, maybe it has because of automation and other things, the margin may have increased, the absolute profit may have, to some extent, come down, but that has been more than compensated by additional lines of business, additional products and additional activities that we may be doing for that customer. So it's a bit more complicated than that.

Products are not fixed. For the time, product are not fixed. We were not delivering the same product at 5 years ago or 4 years ago, even 3 years ago.

The next question that comes from the line of Antonin Baudry from HSBC.

It possible to know how you position the performance in Q1 within your full year guidance? Do you think with the ramp-up of the big contract you just announced that the Q1 will be the lower quarter -- the weaker quarter of the year? What is your visibility about Q2, Q3 and Q4? And which kind or reason of growth should we expect during the year?

Good question, Antonin, thank you to raise it. This is clearly -- as you know, Q2 is not the highest quarter of the year, clearly. What we are seeing is, as was mentioned by Bhupi a minute ago, that we have significant control notably in BFSI that are going to start at the end of Q2. We know exactly -- don't know exactly when because we just signed them. So it's difficult to tell you that. Clearly, Q3 and Q4 will be much more [ gained ] with this contract than Q2. That's what we see. But as a whole, we do believe that we are going to have a guidance that will be around this 8.10% that we just explained you. It's difficult to tell you. It's the first time that we give such a large guidance. It's because it's unclear even for us. So what we do is that we know where we could be at the lowest point, but we could be at a higher point. And the idea for us is just to manage as much as we can our margin to be -- to confirm to show that Teleperformance is a resilient business. Whatever the global condition are and we know they are difficult to read, whether it's a macroeconomic or geopolitic, but Teleperformance is there to deliver this margin. That's what I can tell you.

I would have a second question on artificial intelligence, on how we can consider that in the trend, of course, on margins? Is it the same as offshoring finally for you on your clients, a way to decrease cost at a higher margin, that means a lower level of revenues for higher margin? Or is it a liability, total liability [indiscernible] what you are doing for clients currently?

Yes. From a modeling perspective, I think it is not dissimilar from, let's say, the offshoring or, let's say, unit cost may come down 20%, 30%, but -- unit price may come down by 20% to 30%, but your costs are going down by 50%. So there is a margin improvement for you, and there's a margin for lower cost for the client.

And if I may -- I'm sorry, if I may, it's a competitive advantage. I'm not sure that all our competitors are able to deliver such product. And given the size and given the footprint of Teleperformance, the ability to deliver such product on a high level, on a large scale is helping dramatically the growth of Teleperformance. This is something which is sometimes a bit forgotten, but that's something which is absolutely key to understand is the dynamics that we are seeing as we speak.

The next question comes from the line of David Cerdan from Kepler.

Just one question. If we look at your presentation, I would like you to further comment what you -- what is -- what do you mean by as a new service line to support GPT implementation in client environment? Can you give some example of what you could do or what you are doing? And do you think that Chat GPT and some new or some other artificial intelligence service provider could be your client as those guys would have a large basis of clients?

Yes, David. So we are discussing with some of the providers of this platform to be their implementation partner. So yes, that's kind of -- that's one of the things. But in terms of what does implementation partnership need, so there are upfront design activities, so solution design. Where is this capability most relevant? First prioritizing that. Second, once you prioritize design the process flows, the different links and connectivity. Number three, quality assurance and quality control, and then ongoing implementation and refinement of that. So these things, there are not that many companies have the experience of actually deploying this. Everyone talks about it, but we actually deploy to drive real benefit, as I described, 40% reduction in the average 100, 90% improvement in accuracy levels. So leveraging that actual practical experience to deploy that in client situations is what we are looking at and which is not very dissimilar for some of the other digital services that we have done in the recent past.

The next question comes from the line of Nicole Manion from UBS.

You actually got 2 quick ones. Firstly, on this offshoring trend as I think it's actually started to emerge a bit from sort of Q2, Q3 onwards last year. So should we expect that to be less of a drag as you move through the year? Or has it picked up to such an extent so far this year that you do still sort of see a similar type of headwinds? That's the first question.

Yes. I don't know whether it's a headwind or tailwind because that's the main question at the end of the day. Making oil, making sales that doesn't bring value or making smaller sales that bring value is probably something that makes sense to us. Frankly, the level of offshoring of Teleperformance has dramatically improved over the -- increased over the last year. So having much more offshore delivering, much more results, I would say, I don't see that as a headwind, frankly, because at the end of the day, what matters is much more a habit figure or EPS figures and much more potential 0.6% or 0.8% or 0.4%. That may change on the sales figure. That is the point. What I would just highlight because this is what Teleperformance is doing over the last year, not only we grow -- not only we grow, but we are able to deliver better margin. Take the figure over the last years, we have constantly increased our margin as a percentage and as the volume. This is going to continue in 2023, while [indiscernible] higher cash. So the fact that to be a big, big, I would say, animal across the world helps to do that. And this is one of the strengths of Teleperformance, to have different options to move from Mexico, to move from Colombia to move to India, Philippine or Turkey or Egypt or South Africa or U.K. is no doubt, a big chance for Teleperformance and for its clients. So I'm not seeing that this way. So that's the way I can answer. I don't know if...

Yes. That's very helpful. I was just thinking about just the headwind on revenue growth. I understand that it's accretive on the margin. And just one final quick question. Could you perhaps update on the balance of growth you're seeing across new versus existing clients? Historically, obviously, you've been very good at driving both. I was just thinking about your comments around some people delaying bigger decisions maybe and whether or not you're seeing that more on, say, the new client side than existing? Or is there anything you're seeing there really would be very helpful.

I don't think we have the exact numbers right now. The delays in decision-making, what we were referring to were more on the new clients. It's much more -- if I may, bigger client, bigger sales and probably the fact that Teleperformance has grown over the year enables to catch, of course, longer, more complex deal, different language, different offshore, different delivery center, different issues that make such these are big, longer to close. But they are -- we are not speaking of small deals. We are speaking of big deals. That's the reason probably that we are seeing today. And to a certain extent, it shows how Teleperformance is, given its size and given its landscape, is more and more, I would say, able to capture the different element of growth across the world and across Cube strategy that we just mentioned a minute ago. Maybe we can take a last question. I don't know if there are so many to left...

2 questions.

Let's do the last 2 questions.

The next question comes from the line of Benjamin Wall from Deutsche Bank.

Just one for me, and it's on capital allocation. In the past, you have made the comment that you would not acquire a target on a higher multiple than yourselves, given the current multiple. Is that still the case? And separately, what is holding you back from a large share buyback following the one at the end of last year?

Share buyback. This is not today, as we speak, the policy. Clearly, I am not able to comment on the stock price, given the low level. I must confess that we could consider it. But this is not -- the decision has not been made yet. Why? Because we are operating in a sector that is growing where Teleperformance is growing and need to have fire power to take advantage of this global environment. We do believe that the global environment that we are living will probably open new opportunities, and we are stick -- and we'll try to stick to capital allocation rules, which are not going to buy a company at higher multiples than us.

Yes. So yes, we have always been disciplined, and we intend to maintain that discipline to buy companies around our multiple and it's true. The current share price is creating some constraints to that. For the right asset, we may need to be a bit more aggressive, but at this stage, fortunately, not only our share price kind of fortunately, unfortunately, whatever, but even the global market, the valuations are down. So we continue to look and evaluate opportunities where it may not be -- the valuation may not be crazy.

And just on AI and GPT, would you consider inorganic investment in that area to continue to build out our capabilities?

Yes. So that is part of our Cube strategy. The line of business includes digital services, and AI implementation, AI capabilities is part of that. It's a big thing. So the answer is yes.

The final question that comes from the line of Marc Van'T Sant from Citi.

It's just also with reference to GPT and AI. I just wanted to ask you. So you flag a slight acceleration in terms of automation in volumes. But on a net basis, do you see it as a net positive or negative if you also take into account the opportunities that you talk about? What's your feeling? I know it's crystal ball stuff, but do you see it as an opportunity on a net basis?

Yes. Marc, we see it as a positive, as an opportunity more than a risk for 2 reasons. One, just our culture of embracing new developments. So that I think does help us. And number two, the experience over the last 5, 6 years, a lot of these [ doomsday ] scenarios have been painted in the past also. But every time these opportunities if you embrace them well, they actually become truly opportunities as opposed to risk.

Because it creates new needs, new features, new product, new whatever. So -- and if Teleperformance has shown, in the past, the ability to say that. We have to thank you. And I hope you understood everything. As a final remark, I just wanted to let you know that Teleperformance is not only growing, but delivering improved margins that I believe you understood that. And I'm sure we will see again together quickly. Thank you. Bye-bye.

Bye-bye.

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