Teleperformance SE (TEP) Earnings Call Transcript & Summary

Hello, and welcome to the Teleperformance First Quarter 2025 revenue. My name is George, and I'll be a coordinator for today's event. Please note, this conference is being recorded. [Operator Instructions] Please also note the disclaimer on Page 2. The conference will be hosted by Mr. Olivier Rigaudy, Deputy CEO and Group CFO; and Mr. Thomas Mackenbrock, Deputy CEO. I'd like to hand the call over to Mr. Thomas Mackenbrock. Please go ahead, sir.

Thank you, and good evening, everybody, also from my side. It's a pleasure to be with you and share with my dear friend Olivier, our Q1 results. Unfortunately, we cannot be in the same room today as I'm traveling in Asia, but we'll manage nevertheless. As you can see and as you probably have read, we are very pleased with our Q1 results. And I think it's important to start with the 4 main messages. Number one, as you can see, we reported 2.8% growth for the first quarter. And on a like-for-like basis, it's 1.6%, respectively, 2.6%, if you adjust for the Visa Application contract that was not renewed as we explained in February. This is, in particular, strong if you compare to 2024, which was a leap year. I think we referenced to this also in February, where we had one working day less. What in particular, excites me is our very strong momentum across the board for core services. On a global level, we are growing 2.3% like-for-like. If you look, for instance, at EMEA, Asia or Africa, that region, we are growing close to 4%. And there are a lot of, let's say, positive momentum in the business. That's why, as we indicated in February, we've also seen an acceleration of that growth throughout the year. Specialized Services, we are very pleased that we have completed the acquisition of ZP in February this year. And with ZP together, we are reporting growth of north of 10%. On a like-for-like basis, obviously, as we lost the Visa business, it is smaller. Second point, Majorel integration as well as the reorganization of TP France is well on track. We will report over EUR 20 million to EUR 30 million synergies this year that comes on top to the reported EUR 94 million of last year, and we submitted the voluntary plan to the French authorities. Thirdly, as you remember, we announced in February a new AI partnership program, the idea is to build in open ecosystem with leading AI companies around the world, really trying to find the best of breed companies and work with them and collaborate with them when it comes to further enhancing their product and their go-to-market. After Sanas, which was an accent translation tool that we use to enhance our human colleagues around the world. We are very excited to have 2 agentic AI companies, not part of this partnership program. As you'll remember, we have this notion about human augmented by AI and AI. And as we are the orchestrate and integrator of human AI-led services, we're very pleased to have Ema that is an horizontal AI agentic AI company and Parloa who's an agentic AI company focusing on customer services as part of our group. Fourth point, given all this good news, we are very happy to confirm our financial objectives, and Olivier will share later a few more details. Let's look now at these different elements in a bit more detail. As you can see on the next page, our core service, as I said, are really in good shape. And just now in India, India remains a key driver for our growth momentum, but also the U.K., the Middle East, Egypt, South Africa, Turkey, Latin America. So really across the board, very strong momentum. As you can see, EMEA APAC, our business segment 3.8% like-for-like. Americas we see in the actual U.S. some degrowth and some the acceleration, but overall, still plus 0.8% for that business segment. Specialized Services with ZP together, close to 11%. If we adjust now on a like-for-like basis, without the loss of the visa renewal, we had close to 4% and including the visa renewal service, as indicated, if you do the math, minus around 2.4%. In particular, when it comes to language line, as we indicated, we have a very close eye on this volatile environment in the U.S., and we are managing this quite closely, but do expect, obviously, for the further course of the year, in particular, in the second half, some further acceleration of the growth. Let's move I think best shoring, nearshoring, no surprise there. We see more momentum in particular and multilingual hubs and offshore location. ZP together, we announced end of February that we got the approvals and completed the acquisition. We are very happy to report that now the integration process is well underway. Synergies program is launch, obviously, for IT reporting cash management. Olivier was a few weeks ago also on the ground to kick off all the synergy work streams. So there, we are in a good shape. And also important to note, as we're now reporting the numbers for the first 2 months, it's really well in line with our business plan, and we are very happy to have the whole ZP family part of the TP Group. Let's move on. Here, as you remember, we are an orchestrate and integrator of 4 things: managing, emotional intelligence with our colleagues around the [ world ], and we continue to invest in their skills and upskilling to drive know-how on the AI side as well as the EI, the emotional intelligence side to create deeper human connections. We continue to focus on process excellence because that's the core of -- really of the DNA of TP, now for over 40 years, to best-in-class of managing processes as at scale and how to implement now all the new possibilities with AI in our process excellence. So there we are also fully on track with the global rollout. Thirdly, technology. We continue our internal transformation. We just did a review of the last 3 days in India on all the tools and AI micro services that are implemented on a continuous basis in our client operation, how do we use our tools to augment for more efficiency, more quality, our day-to-day operations, and we will continue to drive this internal transformation. And secondly, on the partnership side, I will say a few months later, we are very happy to have these 2 new companies on board. And fourthly, domain expertise. We will move into more and more verticalized BPO operations. We see sustained growth in our non-voice activities, whether this is back office, BPO, analytics, trust and safety, consulting services, so that's really great to see and we want to build on this. So we're investing in people, know-how, solutions on the verticals we really see promising like BFSI or for instance, finance and accounting services that we want to expand further. If we now turn the page and see on TP AI, as presented in February, we have these 3 growth factors: one, AI data services. This is one area where we particularly pay attention. We won 3 new client contracts. So that's great to see on AI data services. And we also investing here in data services capabilities to really hone our know-how for how to train and to be a good operator and partner for the AI companies when it comes to data quality. TP Infinity, our more consulting technology-led arm. We see wins across analytics, technology consulting. I'm personally quite excited about the wins in analytics. We really have a great know-how to implement analytics in our existing operations, and we want to drive that capability that exists, that's part of TP also for broader use cases outside of our existing operation. Second comment here, we continue to invest on technology capabilities, so how to integrate IT-as-a-service, technology-as-a-service. We have done this successfully in particular in the Middle East, and we are expanding this know-how also now to the U.S. market. And for TP AI solution, you remember it's our own solution that we use for micro service in our operations, is working with our partner ecosystem, and we continue to do so in building a more targeted ecosystem with AI companies that we want to create win-win [ solution ] in orchestrating human and AI. Sanas was February. We continue to invest. Now we have Ema and Parloa, and we have some more in the pipeline. And hopefully, we can share with you over the following months. Let's take a look at Ema first. So Ema is a company that was founded by Surojit and Souvik a few years ago in San Francisco. I can tell you when I met first Surojit in Silicon Valley, I was amazed. I cannot say differently, it's -- I feel very privileged to work with him together. He really built an absolutely amazing horizontal agenetic AI platform. You have to see this that he's building libraries and know-how to drive universal AI employees that can automate enterprise workflows in an agenetic manner. I mean, Surojit has worked very successfully as coin-based at Google, I think he has more than 40 patents on his own, U.S. patents for this. So it's an absolute pleasure to work with him. We're super excited to drive these partnerships where we are an exclusive go-to-market partner and integrator for more than 400 clients globally for Ema. We also have the right to invest in Ema in the next financing round, and we want to collaborate very closely with them to really orchestrate our know-how on processes in humans for back offices, with this digital transformation agentic AI approach. I think it's an area for us that's really strategically important. Back office where we have grown. I shared this in November and February, double-digit last year, and we want to drive this transformational change on back-office BPO with Ema together. So more to share at our Capital Markets Day in 2 months, but I'm very, very happy to have the whole Ema team part of our extended family on board, and we'll be excited what we can do together. Let's move on. So that's Ema. Parloa is a different story. It's also an agentic AI company, a little bit older. It's also now more than 300 people. It was founded by Malte and Stefan in Berlin. They further expanded. So it's a very strong European footprint, and they focus on agentic AI solution for the customer services part. So for the front office part, we really see, of course, given the TP's positioning in the worldwide market, a lot of opportunities also again, blending agentic AI solution and our BPO front office expertise together, packages and go jointly to market with them. We also have the right to invest in their next financing round. And I do believe this will be a quite winning combination given our scale and footprint in distribution now how to implement and then coupling with our core services and their agentic tools and capabilities. So that's, I think, both great examples in addition to the family. And I'm very, very happy to share with you as we move forward more success stories hopefully on this partnership that makes me quite exciting. So this on highlights strategy. Now let's take a closer look at our financial numbers, Olivier, over to you.

Thank you, Thomas. Good evening, everyone. I'm happy to share the good figure with you. Just going to start with the first slide just to show that growth is on track. I just wanted to stay a minute on this slide, the growth reported is 2.8%. As you can see, the like-for-like growth is 1.6%. I just wanted to highlight the fact that in this first quarter, we benefited from the dollar, which was stronger than it is today, which is $1.05 versus $1.09 last year and it's clearly not exactly at this level today because we are at 1.13 to make it simple. But I just wanted to highlight that the figure in Q1 benefited from higher dollars than what we are going to have along the year, probably. And this 1.6% like-for-like growth is, of course, higher than the consensus, which was 1.1%. Let's move to the next slide to see what happened precisely in the growth. As mentioned earlier on, the currency effect is negative by EUR 6 million. In fact, it's a mix of a positive one coming from the U.S. dollar, roughly EUR 25 million. That is offset by the Egyptian lira, Brazilian real and Colombian pesos and others. But just to show that's finally, on the first quarter, there is limited impact, but it will be probably different in the second part of the year. Being on that, we have a change in scope of consolidation of EUR 36 million which is, as you -- mentioned by Thomas a minute ago was consolidation of ZP activity over 2 months, which have been consolidated early February, and you have this growth of like-for-like growth of EUR 42 million, which is mostly coming from the core service. I'm going to give you much more detail in a minute. That's where we are. Next slide please. Here is a revenue by activity split across core service and specialized service. As mentioned, you have a core service that is a growth of core service, which is 2.3%, significantly ahead of the forecast, mostly driven by -- mentioned by Thomas a minute ago by Europe, Middle East and especially Africa and Asia Pacific. The Specialized Service, no, please, stay on the previous slide, please, thank you. The Specialized Service is growing by 10.7%, including the 2 months of ZP that I mentioned, which is 2.4%, if you avoid -- if you take out this impact, knowing that beyond that, if you take out the famous nonrenewal of the contract in U.K., the growth would have been close to 4%. Next slide, please. Just I just wanted to come back to the performance by vertical. And what you can see is that there is a significant growth in government, travel, hospitality and media entertainment and gaming. It has been also effectively happening in the multilingual hub, including Egypt, but also in Asia Pacific. And as you can see, the diversified client portfolio help us to swallow any bump that we might have. Next slide, please. Performance by business lines. This is very interesting that -- to see that care is still 54% of the business and growing in line with the overall growth. But what we are seeing is that the growth is also happening significantly in BPO, other nonvoice service across the region, whether it's trust and safety, whether it's back office BPO or in other stuff. So obviously, [ the part is ] not care, is growing faster than care that is online. That's what I just wanted to let you know. So overall, a good performance. And if we move to the outlook, please, next slide. We continue to see a volatile economic environment. I'm not there to comment that on what you read in the paper everyday. But we have a positive market dynamic supported by ongoing offshore and automation trends that we are benefiting from. We also benefit from the continued [ vendor ] consolidation, and we continue to deliver -- to announce or accelerate growth between 2% and 4% like-for-like growth and 3% and 5%, if you exclude the -- this payments contract in U.K. Margin will grow by 0 to 10 basis points along the year, and we will continue to generate a strong free cash flow around EUR 1 billion before nonrecurring item and continue to decrease our ratio of net debt to recurring EBITDA. That is the figure. I'm leaving the speech, hand over to Thomas to much more in detail, so back to you for follow-up.

Look, as we shared and discussed with many of our investors and with you in the call, they have been sort of the request to better understand what is our strategy in the [ age ] of AI? What are we doing to implement AI in our business process services, in our Specialized Services, what our unique offerings on the AI side and what role do we want to play in this AI ecosystem. And secondly, what is sort of a midterm outlook in this world of change in AI for TP in the next years ahead. And for that, as indicated before, we will reserve and we organized this Capital Markets Day on June 18 in New York. The idea is really to guide you through these questions that you have been asking in more detail to share with you use cases, but we have done, how we implement our strategy, what we're seeing. As you see, we gave a little teaser at the end of February. We have executed now more on the AI partnership side, but there's many more to share with you, and we're really excited and looking forward to welcome many of you either physically in New York. It will be in the Rockefeller Center or either online via live stream. So very much excited to see you all there and there we can share a little bit more detail and have a dialogue on these topics. With that, we are open for Q&A and looking forward to all your questions.

[Operator Instructions] Our very first question today will come from Will Kirkness of Bernstein.

I've got 2, please. Firstly, can you just talk a little bit about the language line slowdown? I think you might see something similar maybe back in 2017. So if you could just give any more context on it and maybe any visibility on a rebound, that would be useful? And then secondly, just on the investments in the AI. So I think Sanas was maybe EUR 13 million and then Ema and Parloa were combined EUR 25 million. I just wondered if -- how we can think about how that sort of flows out, what ownership you take, whether they're scope to move beyond those initial numbers? And then when we think about that EUR 100 million in aggregate, can that grow? And then what are the implications, I suppose, traditional M&A and/or shareholder returns?

So let me start with the first one. I think you hinted to it. We saw a similar dynamic under the first Trump administration. There is a lot of uncertainty, I would say, in the market. It's less driven by regulatory change. So the language access regulation in the U.S. is in place, but we see, in particular, for the Spanish-speaking community that is obviously a relevant user for our LanguageLine services in the U.S. Some -- how can I say this, hesitation to have access to public services, whether this is on the health care side or governmental side. And this is a significant portion that we see on this slower development within LanguageLine Solutions, it's still growing, obviously. But let's say, some hesitation in demand. It's, of course, very hard to predict how the environment changes there in the next month. We saw a rebound under -- in 2017, and the team expects something similar for this year. So that's why we are more optimistic for the second half of the year, but we have to remain very vigilant and of course, to monitor this very closely where the dialogue with the team quite closely because obviously, as you said rightly, it has been a slowdown in the growth compared to last year, but growing and managed really by, I would say, one of the best industry teams there is when it comes to interpreting solutions. Second question was on AI partnership. So as we said, we started with this partnership, and I can tell you the feedback and response we have seen from partners around the world and from AI companies is very, very encouraging, it's very positive. We work with many partners because we believe we want to put the best technology solution in place for our clients. So we are not bound to anyone, but we really see the value of collaborating closely with targeted companies where we really can create win-win situations. There are -- you've seen we have entered into augmenting our humans with [indiscernible] translation. We now have 2 partnerships on the agentic side, one on the front office customer experience services side, the other one a bit more on the back office side, horizontal AI. We also see in discussing vertical AI applications because AI needs to be often specific addressed through a certain vertical need. So think about that we are exploring the opportunities on that side. But we want to always build the best-in-class solution for our clients containing AI and, let's say, of human-led BPO. We're working on this plan. I would say, for this year, we have earmarked the EUR 100 million. It's too early to say how this will develop in the years after, but we're working on making progress and, of course, have to deliver also on the promises we see. As you see in the charts, the next financing runs for both companies have not been completed. I think it's a very positive side that we are allowed on the cap table because, as you can imagine, this is often highly contested. But as we move forward and as they will do their financing rounds, then obviously, if they share it, you will know the valuations. But it's less so about the actual equity stake, but more the arrangement that we have to really allow us to orchestrate their solutions with our capabilities, with our go-to-market or managed service capabilities to really bring it to life, because I do believe TP is one of the best partners to scale AI solutions that in the market. And I think this scaling the AI solution, bringing them to life on an enterprise level is a huge value proposition that we have. Sorry for the long answer.

Okay. Yes, that's very helpful. And just a follow-up then. So in terms of more around capital allocation, is that a case of wait for the 18th of June Capital Markets Day?

Yes. I think for this year, as you've seen, we have done the acquisition of ZP. We, of course, increased our dividend for this year and we have earmarked, as you remember, for over EUR 1 billion free cash flow up to EUR 100 million this year. But going forward on the capital application, we'll share, and we're working on it for the Capital Markets Day for sure.

We'll now go to Karl Green of RBC Capital Markets.

Just 2 questions from me. Following up from Will's question just on the trends in our clear that, that's -- you're expecting a second half pickup. If a second half pickup doesn't materialize, what would the potential impact be on your 0 to 10 basis points guidance for the group overall? Just trying to get a sense as to how important the LLS recovery is going to be in terms of hitting that guidance. That's my first question. And then the second question, just on the core and dips. That was a good performance in the first quarter as you've identified. Could you just give us some flavor as to how that's broken down between new logo wins, new account wins versus that kind of ongoing deflation and offshoring impacts, which you sort of wrapped together, that would be very helpful.

Olivier, go ahead.

Yes, I'm going to take the first question. Of course, we are following that very precisely, because of the mix. So what we are going to do, and we have already started to do it just to be on the safe side, on the cost, whether it's direct or SG&A overhead. So we are following that precisely to be able to deliver the growth, the margin that we have announced. As far as we know, we are seeing some good -- better momentum in terms of contract sales in LLS. It's not totally finished, but we do believe that there are reasonable chance that we will continue to grow at a higher speed in H2. But that's, of course, during this uncertainty period, we are taking all the measures to control the cost and to make sure that we are able to deliver the guidance that we announced to the market. Second question for you.

Can you hear me?

Thomas, you take the second question?

Sure. So when you look where we see growth, it's in particular, as indicated before, is media, government, fast-moving consumer goods as well and travel and hospitality. And as you know, our business is always about ramping up over time. So it's a mix of global that we have won this year and also the growth with existing clients. As you remember, we have shared last year that we have continued and expanded our investment in our business development activities. And I think it's a good healthy mix of new logos won. And existing clients that we have sort of business developed further in their expansion. So it's a healthy mix really across the logos. And if I look the ramp down for the year, as I said, I'm quite optimistic also for the second half.

We'll now move to Ben Wild of Deutsche Bank.

Just [indiscernible] revenue update call today. But I have a few questions. On the margin guide that you've reiterated today, Olivier, firstly, in terms of the cost flexibility that you've just described, if I go back to July last year, I think you said on one of these calls that you believe that the group could deliver significantly more than the initial EUR 150 million of Majorel synergy benefits. Since then, you've retained that EUR 150 million target, where do we stand with respect to Majorel synergies? And do you now think that EUR 150 million is the absolute ceiling? Second question is on FX and the impact on the profitability of the group. There's obviously been some fairly strong FX moves in the last few weeks. Just a question on how you think about the impact of the weaker dollar on the margin. And then thirdly, with LLS, I think at the beginning of March, there was an executive order, the kind of English-only executive order, what gives you confidence that there will be an H2 recovery in LLS. And how are your clients responding to the regulatory change that has come through in March?

Okay. About synergy, you remember that we delivered EUR 94 million -- EUR 94 million of synergy last year. We said to the market that we will deliver between EUR 20 million or EUR 30 million more this year, mostly geared on the second part of the year for a major reason because this is something that is coming from mostly the IT and telephony costs that were linked to a contracts that are going to finish by the end of June 2025. So we are able -- we will be able to deliver these savings on a -- not on a full year basis, but closely 6 months in 2025. So that is absolutely key. So EUR 150 million, I'll come back later on when -- in H1 at the end of Q2 with a precise figure. But at that time, it will be clearer. But what I can tell you is that most of the synergy has been launched. And of course, we [ arrest ] them on a timely basis, given the contracts that have been done, and especially on IT, but also on site on certain sites that are -- I would say, following some contracts that are absolutely -- we cannot get out before for the timing. That's the first point. And I think there are 2 issues. One is a transaction, one is the translation. Clearly, here, we are speaking mostly of the translation impact. It's not exactly the same story to book a dollar at $1.05 in Q1 and $1.13 as it stands today, figures, that's for sure. So in terms of business, we made our budget at the level, which is not very far from the $1.13, but clearly, clearly, we will have an impact on our sales and on our cancellation impact of the FX, clearly. So we are following that very precisely. So far, we have not been so much in quarter 1, in Q1, as you understood. And that's one, I wanted to highlight it in the second part of the year, in the next quarter to come. So this will be probably -- if it continues, this will have a negative translation impact. No doubt either on sale and either on margin. Difficult to tell where we are going to learn. Frankly, if you know that, I would be happy to share it. On the transaction part, most of our, I would say, covered hedge have been done either in September, October, November, until early January. So the transaction impact should be not dramatic. Of course, there are ups and downs, but the main impact would be translation. On the fact that the H2 of LLS will be better, of course, by nature, we don't know when is the H2. So we have a budget. We have a pattern that as we followed in 2017 that is clearly showing a recovery after the executive order. Just wanted to be clear on the executive order, the executive order is not a bad of the language in English at all. There are plenty of other rules that supersede that. So this is not -- this is not bad. It's much more a global mood that doesn't help, but legally and people are still bound by their local stuff. So what we see is that new volume coming. [ Video ] is doing well. We see some -- as I mentioned earlier on, some contracts have been about to be signed with LLS. So we are, of course, monitoring the situation very closely. But this is something that we do believe that we can manage as of today. But of course, we will update the market as soon -- we'll have more information about it or more visibility.

Yes. Maybe to add because sometimes there's a misunderstanding what the executive order does. So even today, more than 30 states already have lost in place that designate English as their official language. So it's not that this is something completely new. What the executive order does, as Olivier said, it [ resins ] an order that was signed by Bill Clinton some time ago for language assistant to individuals with limited English. And yes, federal agencies have now greater discretion how to apply the respective laws. But language service agencies can remain their policies. In some cases, of course, necessary if you're in a hospital and you want to do this. And what we see is more a demand-driven, less regulatory-driven change that people simply don't show up, and if you read the news, I think there's -- you can understand why. It remains one of the focus areas for the group. Of course, LanguageLine is only a part of Specialized Services, which is a part, [ 15% ] of the overall business. So we also have to put it into perspective. But obviously, as we said in February, as I said in every investor meeting, we remain super vigilant on this topic because this needs to be managed. And it's a bit outside of our control as this is a demand curve we have to observe in the market.

And sorry, I forgot to mention on your first question. You remember that we mentioned the French reorganization plan that we provided for last year that is underway. And we do believe that we have good progress there. And we believe that beyond the agreement of the local representative, we will get final approval, hopefully, in the coming weeks from the French state. And we believe that we could be able to deliver this plan starting early second part of the year, we don't know exactly yet today, but that should also help to deliver margin. .

Just a final follow-up, if you don't mind. Are you willing to give an idea of roughly what level LLS growth is in Q1, please?

Mid single digit.

We will now move to Remi Grenu of Morgan Stanley.

I've got 2 remaining. So the first one is if there is any update on the ongoing transition for the CEO position and anything you would like to share with us. The second thing is on LLS. It seems to me that the ICE agency in the U.S. is developing some own AI tool for live translation. So wondering if you -- you're doing any work for that government agencies and whether you expect any impact from that kind of internally developed tool by U.S. government agencies on LLS?

So on your 2 questions, first of all, thank you for them. The transition, as we said, it really works -- I cannot stress this enough, very, very harmoniously with Daniel, the new Chairman, Olivier, it's a pleasure to work with them. We haven't said any time. There are so many things to be done. So it's not a lack of work, and it works really -- it works very collaboratively and I think also very effectively for the organization right. With regard to the AI tool from the ICE agency, I have to confess, I haven't heard about it. So we are not involved in developing it, but it's not something that has sort of -- that has come up in our discussions. We are happy to go and come back to you on this one to share further details. But we're working with multiple. Obviously, we're working with multiple institutions. I mean, also government institution on various fronts. And of course, we are experimenting and working and piloting also with AI tools for this interpretation services. So happy to come back to you on this one with a more detailed answer.

Yes, yes. And just to follow up on that, within the 14%, I think you are doing with governments, within LLS, but the ICE represents a large part of that? Or is it highly diversified that 14%?

Not that. I'm going to check, but for me, it's very mostly... .

It is also the -- yes. because, obviously, also the structure of ICE, is quite moving, but we'll come back to you on that one.

Our next question, this comes from Nicole Manion of UBS.

Just one left on -- just on the AI piece you mentioned -- just on the AI piece, I think you mentioned that...

We can't hear you. At least, I can't hear you.

Yes, I can. Go ahead. Go ahead.

Okay?

Yes. It's okay for me.

Okay. Okay. Yes, just on the AI piece. I think you mentioned 80 projects launched in Q1, which sounds like your own initiatives, and then obviously, you have these partnerships running adjacent. I mean I guess this will be a big topic for the upcoming [ CMD ] does this sort of signal kind of a shift to sort of more of a partnership approach rather than making your own investments in AI technology and so on? Or do you still intend to kind of have a hybrid approach there? Just trying to think about how we should think about the balance of those investments between kind of your own restructuring, minority investments and so on. Any color that would be great.

Yes. The question of [ Mike and built ], it's not either or it's both. To be honest, we have such a great suite of AI application solutions internally at TP, some of it's developed, some of the sort of used market technology and customized. We have this under the umbrella of TP Micro services from agent assist, simultaneous translation tools, knowledge tools, quality assurance and analytics support. So it's really a great suite of tools. It's not one mega tool, which we also don't, but really target it to the specific needs, and we continue to deploy this. So that's the homework we have to do. I think there's still ample of space driving more transformation in our operations, and that's the tools that we use. But if you see really some of the cutting-edge technologies, and that's I must say, we're really privileged to work with both companies or with all 3 companies, no further, that's something that we don't have to that extent in-house in certain use cases. And there, I think providing an open ecosystem and working them with them closely makes complete sense. I think there really, if you look at it, we will share more details, having their partner approach is something that augments our capabilities. I think we have a lot of things that we can provide when it comes to the, as I said, scaling side, integrating the human element to it. And that gives us, I do believe, a competitive edge going to our slides and offering the full breadth of our own services as well as our partner services with our partners and even other companies.

Ladies and gentlemen, due to time constraints, we have only -- time for one question and the last question will be coming from Mr. Laurent Gelebart of BNP Exane.

Actually, I will have 2 questions. So the first one relates to the large volatility we have been seeing in the market. Last time we saw that quite in the U.S. with the failure of regional banks, and this led so much our clients to postpone our outsourcing decision. So how do you see the pipeline of new business developing? And do you see some clients being hesitating going forward and what they are going to do. That's one. And the second one relates to ForEx. Olivier, can you share with us the kind of sensitivity on the [ translation ] ForEx, i.e., for EUR 0.01 of euro appreciation versus the dollar, what would be the impact in terms of bps for the overall margin, if you can?

You start, Thomas, or...

Yes, please you start, then I'll answer the customer, sure.

No. I'm going just to depend, but roughly, depending on the level, but beyond our market beyond our budget, EUR 0.01 might have an impact of EUR 20 million in sales. That does impact.

In terms of profitability?

I have to check again. I'll let you know later. But significantly less, as you can imagine.

But it's true difficult to predict where we are going to land and prepared to be on the safe side. But in terms of sales, yes, it's EUR 20 million a [indiscernible] budget, which is not so far from the present rate as we speak. We have been hopefully careful in doing our budget. But the year is not over far from it.

And to your first question, Laurent, so there, I do believe it's really the strength of TP comes into play. If you look at our broad client portfolio, you see all kinds of behavior. Some clients, as you said, maybe wait and see. They are a little bit unsure what will develop and they maybe postpone a certain decision. Other clients want to know given the macro environment do have more cost saving and accelerated. We really see across the board, some are affected negatively by the tariff and certain ramp-ups are delayed. Some others see more opportunity to drive more offshoring. It's across the board. And I think that's the strength of the resiliency of TP, having this broad geographical exposure and this broad client exposure across different verticals. If you look at the growth of the different segments, it's different than what you've seen last year. And I think that's the ability sort of to mitigate that risk is something that we feel quite strongly in a world that gets more and more volatile, almost by the week, that we are a little bit of a haven of stability, yes, we see also volatility. And yes, LanguageLine, as I said, had some challenges still growing. But on the other hand, the core business that makes us quite excited is growing faster. So last year, as you remember, it was almost the opposite in the beginning of the year. I wasn't there, but in Q1, we said, "Oh, the core business was not growing, but Specialized Services growing." The strength of TP is to have this broad mix across geos, across verticals and across different lines of business that gives this overall stability. And there, yes, I'm not happy. I can tell you with the development of LanguageLine. On the other hand, I'm super excited to see how we're growing in certain verticals. And yes, there are some clients who do have a wait and see and where we are in ongoing discussion to do this. So yes, we have to manage this volatility, but from a position of relative strength in an ocean of volatility.

And we are seeing the cost service growing again at a better speed probably higher than people expected, and this is something that should be noted.

I'm happy to -- I think it's the last. But we're happy to share, again, as we move along, we have now end of April, the first quarter is over, where it will be in 5 weeks or 6 weeks from now on the Capital Markets Day. Of course, we will then present an update where we stand and really looking forward to continue the dialogue with all of you.