EuroBusiness Media (EBM): Teleperformance, the world's leading provider of outsourced CRM and contact center services, reports its full-year results for 2012. Daniel Julien, welcome. You are the Chairman and CEO of Teleperformance. What are your comments on your 2012 results?
Daniel Julien: 2012 has been a strong year for Teleperformance. Our organic growth has been +6.9%, which is significantly above our initial forecast. And the reason why is thanks to the dynamics of our Latin market and specifically South America and specifically Brazil. We had an excellent year in Brazil, we had a very good year in Spain and also in the English world we had an excellent year in the UK. So these three geographies together have been the driver to help us to deliver a much better year 2012 than we were expecting.
EBM: What is your update and outlook on profitability improvement in your European operations?
Daniel Julien: The European operation is the most difficult part that we have to deal with in the world. But in 2012 and coming to 2013 we had significant improvements, specifically in Spain, where we are now in a profitable situation, specifically in the UK, where we were very dynamic and our P&L is very healthy, solid. Germany also is coming back to breakeven. So the only issue that remains and that is improving, but slowly, is France, where we need still 2 or 3 years to fix it.
EBM: Telecoms operators have been a big growth driver historically. What are the new sectors that are most promising for your business?
Daniel Julien: First, the telecom operators, and I would say everything that is related to the concept of mobility - with the smartphone, with the tablet, with the Google glasses if you want -, is going to continue to be a strong driver for growth. New tech products are always a good driver for the development of our business. But then you see the growth in every sector, I would say the finance sector, the utility sector, government, transportation, so we have pretty good perspectives ahead of us.
EBM: What are the trends that you see towards more externalization of call centers?
Daniel Julien: We are going to have a positive trend in the coming years ahead. Because on one hand, our clients need to make savings, they need to be more efficient with managing their customer experience, and on the other hand, the large outsourcers, like Teleperformance of course, are much more professional, very reliable in their technology, in their practice and in the KPI that they deliver. The next five years are going to see significant organic growth.
EBM: What are your views on your competitive environment? How do you position yourselves in order to win contracts against new entrants?
Daniel Julien: If you mean new entrants, if you mean lower cost countries, I would say Teleperformance has its network all over the world. So for example, if we serve the US market, we serve the US market domestically of course, but we serve it also near shore, from Mexico, Salvador and so on, we serve it offshore, I mean from India or the Philippines. So we have the full range of geographies to serve our clients. So there is no specific issue.
EBM: Some recent large contracts bolstered your revenue figures in Q3 and Q4 of last year. How long will this continue to contribute to your figures, and should we expect other large deals to come in on top of this in 2013?
Daniel Julien: The first point is that our clients stay with us right now on average 12 years. So it means that the last contract that you have seen at the end of last year will continue in 2013, 2014 and so on. Second, we have a very strong business development team all over the world that continues to work every day, so we are going to continue to sign large contracts in the different geographies in 2013 and we expect to continue to have organic growth.
EBM: What is your outlook and guidance for 2013?
Daniel Julien: Organic growth +3 to +5% and again, improvement of our operational result and we think that our EBITA will be between 9.3% to 9.5%, showing again an improvement of the business model.
EBM: You have a strong cash position, how do you intend to use your cash and what is your shareholder return policy? Will you use cash to make acquisitions, or to increase dividends, or to buy back shares?
Daniel Julien: If we find the perfect target, we are going to make acquisitions, because our role is to be a consolidator as a leader of the market. But if we do not find the perfect target, we are going to use our cash either to buy back some of our shares, at the right price, or to increase the distribution of dividends. Generally, we are pretty balanced doing a little bit of everything.
EBM: What is your acquisition strategy today? What countries, segments or target sizes are you looking at?
Daniel Julien: The most interesting segment for us is still the US market, because the US market is 50% of the worldwide market. Now, the segments that we are most interested in are the segments in which we still are not strong enough. For example, in the USA we are very interested by the Healthcare vertical, because over the next four years, with the Obama Care, we are going to see a lot of need for outsourcing and optimisation of the efficiency of the vertical. Then, we are specifically interested by the geographies in which the laws are flexible. We cannot invest today in geographies where the labour regulations are extremely difficult, because the nature of outsourcing is to be able to deal with the peaks and the valleys of the business and if the frame of the labour law is too rigid, it doesn’t work.
EBM: Daniel Julien, Chairman and CEO of Teleperformance, thank you very much.
Daniel Julien: Thank you very much.
