Latest news with #DanielJulien
CNBC
09-07-2025
- Business
- CNBC
AI rollout rattles Teleperformance, but some say the stock could double
When CEO Daniel Julien took the stage in New York for a pivotal investors' relations day in June, he knew the stakes were high. Julien's company, the French outsourcing giant Teleperformance , had lost more than 75% of its value from its 2022 high. He was tasked with convincing his audience — investors and Wall Street analysts — that they had misunderstood the business. He, and other Teleperformance executives, spent the next three and a half hours explaining that AI was integral to the future of Teleperformance, citing "AI" more than 75 times. Teleperformance operates call centers and other business process outsourcing services. It is one of the largest employers in the world with nearly 500,000 workers worldwide. Julien's plan was detailed, and the targets were ambitious, yet the market's verdict was swift and brutal. Shares in the outsourcing firm tumbled 14% following the June 18 Capital Markets Day, when the company laid out its new AI-centric strategy. In the days that followed, the slide continued, wiping out nearly a fifth of the company's value. TEP-FR 1Y mountain The sell-off highlighted the market's doubts over the firm's future in an automated world, despite Julien's best efforts, even as a big acquisition in the sector suggested a premium for the very skills Teleperformance offers. Investment banks say that generative AI could pose both a major threat and opportunity for Teleperformance — a company built on the labor of hundreds of thousands of call-center agents. Executives at the CAC 40 company detailed plans to grow its core business with AI, setting long-term financial targets. The company is targeting 4% to 6% annual revenue growth by 2028, an adjusted profit margin of approximately 15.5%, and a cumulative net free cash flow (FCF) of approximately 3 billion euros ($3.5 billion) between 2026 and 2028. The company also earmarked roughly 1.5 billion euros for dividends and buybacks, another 600 million euros for AI-related investments, and the rest for paying down debt. The bear case For Wall Street's bears, the plan did little to reassure them about a business model under siege. Investors are worried about the deflationary pressure of AI. As automated systems handle more customer interactions, the value of traditional human-led services, particularly those in lower-cost offshore locations, comes under pressure. This is already starting to show. In 2024, the company's "Core Services" division saw its adjusted profit margin fall by 10% year-over-year, excluding one-time gains and expenses, on just 1.4% growth. "Into 2025 and beyond we are sceptical the company can meet consensus expectations as deflation from offshoring will likely persist, with automation-related deflation only set to accelerate," said JPMorgan analyst Sylvia Barker in a note to clients on July 7. Barker sees the stock rising just 3% to 91 euros by the end of next year. The 'Buy' side Bullish analysts, however, say that the sell-off is a significant overreaction, creating a compelling investment opportunity. For them, the market has priced in a worst-case scenario that ignores the company's ability to pivot and its financial strength. The 47-year-old company, founded by Julien, doubled its sales to more than 10 billion euros in 2024. It's also sitting on more than a billion euros of cash in its bank account, according to FactSet data, that it can deploy at will. Analysts at Berenberg, who have a Buy rating on Teleperformance, say it is "materially undervalued at 4x EBITDA," an adjusted profit metric. Bank of America, also with a Buy rating, called its valuation "attractive" and pointed to a shareholder-friendly capital return policy. Even some of the more cautious analysts acknowledge the low valuation. Nearly everyone, however, pointed to the lack of near-term guidance amid the start of heavy investments in AI as the reason behind the share tumble. "In our view, this is due to the company emphasising its heavy opex and capex investment in AI in the short term, alongside its hockey-stick trajectory growth to FY 2028," said Berenberg analyst Carl Raynsford in a note to clients on June 20. Raynsford — one of the most bullish analysts who expects the stock to more than double to 190 euros over the next 12 months — said the company's target of 3 billion euros of free cash flow by 2028 looks "overly cautious." These analysts believe the market is misinterpreting the company's AI investments. "We like the strategy," said Simona Sarli, analyst at Bank of America. "The company aims to expand into higher-growth back-office solutions and reposition its Customer Experience offering to high-value-added tasks via targeted AI investments." Peer review Adding to the complexity is a puzzling inconsistency in how the market is treating Teleperformance compared to its peers. Analysts at RBC Capital Markets highlighted that investors are "rewarding" Concentrix , a Nasdaq-listed peer, for its AI strategy, while writing off Teleperformance's equivalent as an "exercise in value destruction." RBC noted that Concentrix is up nearly 40% year-to-date, while Teleperformance is up just 8%, in line with France's CAC 40 index. TEP-FR CNXC YTD line They also point to a survey commissioned by Concentrix that showed that 85% of large companies expect to increase their outsourcing budgets over the next two to three years, with the "majority of that increase expected to be net new investments in supporting their AI agenda." Scotiabank echoed the sentiment on the sector. "Based on our ongoing discussions with global [customer experience (CX)] companies, we believe that, contrary to investor concerns, the revenue landscape for CX companies is not shrinking," said Scotiabank's Divya Goyal in a note to clients. "Instead, it is transitioning, with outsourcing on the rise. This propensity for outsourcing grows as new technologies are introduced into the market, ultimately benefiting established CX players." Capgemini's WNS acquisition Just as investors were weighing Teleperformance's AI strategy, the corporate M & A market delivered a powerful data point. On July 7, French IT consulting giant Capgemini announced it was acquiring WNS , a major player in the business process outsourcing (BPO) space, for $3.3 billion in cash. Capgemini has agreed to pay a 17% premium to the prior day's close at a valuation of 15 times forward earnings —a multiple nearly three times that of Teleperformance, analysts at TD Cowen pointed out. Crucially, the rationale for the premium price was WNS's perceived value in an AI-driven world, according to the analysts. "The deal counters certain market participants' bear thesis on BPM," said Bryan Bergin, TD Cowen's analyst. "Perception of BPO has been materially hampered amid the rise of GenAI/Agentic tech due to fears of cannibalization, though this has not yet happened broadly in practice yet." A 'show-me' story Caught between conflicting signals, many on Wall Street have adopted a wait-and-see approach, as captured by one analyst who said Teleperformance had become a "show-me story." "[Teleperformance's (TP)] new growth strategy needs to prove that AI can drive enough growth and sustainable new revenue streams to offset headwinds from the outright automation of some services, and accelerated deflation on others," said UBS analyst Nicole Manion in a note to clients. "While we note that TP has proven exactly this through previous tech shifts, the current rate of change means that it appears a much less certain outcome this time around," Manion added. Similarly, Bank of America's Sarli says the company has failed to buckle up investors who could be in for a rollercoaster ride over the next few years. "We don't doubt the merits and potential of the new strategy," Sarli said in a note to clients on June 24. "But we think management failed to reassure investors on whether progress to its 2028 financial targets will be linear or ... follow a year of transition in 2026, with the risk of potentially softer growth and margins than in 2025." Teleperformance did not respond to a request for comment from CNBC.
Business Wire
19-06-2025
- Business
- Business Wire
TP Introduces ‘Future Forward' Strategy to Accelerate Transformation and Growth
PARIS--(BUSINESS WIRE)--Regulatory News: TP (Paris:TEP), a global leader in digital business services, unveils 'Future Forward,' its new strategic plan at a Capital Markets Day in New York City. 'Future Forward' is TP's strategic initiative to become a next-generation, AI-enabled company. This encompasses fusing cutting-edge technology with human expertise to expand growth and deliver long-term value. By intelligently orchestrating AI with human empathy, judgement and expertise, TP aims to create competitive advantages for its clients through digital integrated business services. TP is launching FAB (Foundational AI Backbone), a proprietary AI orchestration platform designed to seamlessly integrate artificial intelligence, human expertise, and automation at scale. FAB will underpin TP's three pillar growth strategy: growing the core business with AI: leveraging technology and AI to deliver enhanced client outcomes, strengthen value propositions, and accelerate growth. extending vertical plays: expanding industry-specific solutions, end-to-end AI-enabled offerings and scaling specialized services globally. unlocking new opportunities in AI: accelerating growth in markets across the AI value chain, focusing on data services, technology, consulting, and digital marketing. TP plans to significantly invest over the next three years to accelerate AI deployment supported by a strengthened leadership structure to drive execution. Together, these initiatives position TP to harness the full potential of its human and technological capabilities, expanding the Group's total addressable market, including new markets, scaling high-margin business models and delivering meaningful value to clients. Daniel Julien, Founder and CEO of TP, commented: ' TP's growth story has always been shaped by bold pivots at key moments of industry disruption. With each wave of change, we have adapted, transformed and won. We have consistently demonstrated our ability to lead through transformation, setting the pace in a market where we continue to outperform. With our new strategic plan, rooted in a powerful human-AI hybrid approach and a resilient business model powered by exceptional AI-ready teams and reinforced governance, we are well-positioned to achieve ambitious yet realistic financial goals and deliver long-term value for our shareholders.' Thomas Mackenbrock, Deputy CEO of TP, added: 'TP is a global leader in digital business services with a strong track record. To build on this foundation and strengthen our long-term leadership, we are accelerating the transformation of the Group by harnessing the full potential of artificial and human intelligence. Our new strategic plan 'Future Forward', is designed to strengthen our core services portfolio, extend our vertical plays and capture new opportunities along the AI value chain. Our goal is clear: accelerate growth, expand margins and generate substantial cash flow to support strategic investments and return value to shareholders. This is the TP of tomorrow: the preferred AI-enabled strategic partner, creating relentless competitive advantage for our clients.' Expanding capabilities through strategic partnerships and acquisitions TP is expanding its AI capabilities through strategic partnerships and acquisitions. The Group has launched an AI partnership program with planned investments of up to €100 million in 2025. This initiative has already led to collaborations with leading AI pioneers: Sanas, a real-time speech understanding company; Parloa, a leading AI agent management platform for customer service, and; Ema, a cutting-edge agentic AI platform. TP also announced today the acquisition of 'Agents Only', an AI-enabled crowdsourcing platform for on-demand highly skilled domain experts across the world. 'Agents Only' provides a flexible talent infrastructure for the AI era, sourcing and managing thousands of AI-literate annotators, data scientists, and domain specialists. This acquisition will enhance TP's access to certified professionals at scale, accelerating project delivery and improving service quality across data labeling, data annotation, and generative AI support activities. 'Agents Only' and other new AI solutions will be seamlessly integrated into the FAB platform to ensure scalability and speed to market. For additional information on the acquisition of Agents Only, please refer to the press release issued today, June 18, 2025, which can be found here. TP and Carnegie Mellon University forge alliance to accelerate applied research for AI -Human augmentation TP is joining forces with Carnegie Mellon University's world-renowned School of Computer Science to accelerate AI research and innovation. To highlight this collaboration, Professor Martial Hebert, Dean of the School of Computer Science at CMU, is joining TP executives for a fireside chat at the Group's Capital Markets Day, offering his perspective on the evolving landscape of AI. Medium-term outlook for 2028 TP announces the following financial objectives for the next three years (2026-2028): Returning to sustained mid-single digit like-for-like 1 revenue yearly growth with 4-6% in 2028 Recurring EBITA margin at ~15.5% in 2028, expected post AI transformation Generating cumulative net free cash flow of ~€3 billion including organic AI efforts incurred over 2026-2028 Capital allocation priorities over the period are as follows: Investing ~20% of the net free cash flow to accelerate investments in AI and transformation, including strategic partnerships and selective bolt-on acquisitions Further strengthening TP's balance sheet with high financial flexibility and targeting net debt leverage ratio of 1.2x EBITDA in 2028 Returning to shareholders ~50% of the net free cash flow or ~€1.5 billion, through dividends (dividend policy maintained) and share buybacks 1 At constant scope and exchange rates Capital Markets Day 2025 details At TP's Capital Markets Day, CEO Daniel Julien, Deputy CEO Thomas Mackenbrock and members of the management team will present the Group's strategic priorities and medium-term financial outlook. An AI technology showcase, featuring TP's AI solutions and TP's AI partners solutions, will be presented at the event for in-person attendees. The event begins at 9:00 am ET / 3:00 pm CET and can be viewed virtually here All the documentation related to the CMD is available on the Group's website ( Investor days: Events and publications | TP -------------------------- Disclaimer All forward-looking statements are based on TP management's present expectations of future events and 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 Factors' section of our Universal Registration Document, available at TP undertakes no obligation to publicly update or revise any of these forward-looking statements. Indicative investor calendar Capital Markets Day: June 18, 2025 First-Half 2025 Results: July 31, 2025 Third-Quarter 2025 Revenue: November 5, 2025 ABOUT TELEPERFORMANCE GROUP Teleperformance (TEP – ISIN: FR0000051807 – Reuters: - Bloomberg: TEP FP), is a global leader in digital business services which consistently seeks to blend the best of advanced technology with human empathy to deliver enhanced customer care that is simpler, faster, and safer for the world's biggest brands and their customers. The Group's comprehensive, AI-powered service portfolio ranges from front office customer care to back-office functions, including operations consulting and high-value digital transformation services. It also offers a range of specialized services such as collections, interpreting and localization, visa and consular services, and recruitment process outsourcing services. The teams of multilingual, inspired, and passionate experts and advisors, spread in close to 100 countries, as well as the Group's local presence allows it to be a force of good in supporting communities, clients, and the environment. In 2024, Teleperformance reported consolidated revenue of €10,280 million (US$11 billion) and net profit of €523 million. Teleperformance shares are traded on the Euronext Paris market, Compartment A, and are eligible for the deferred settlement service. They are included in the following indices: CAC 40, STOXX 600, S&P Europe 350, MSCI Global Standard and Euronext Tech Leaders. In the area of corporate social responsibility, Teleperformance shares are included in the CAC 40 ESG since September 2022, the Euronext Vigeo Euro 120 index since 2015, the MSCI Europe ESG Leaders index since 2019, the FTSE4Good index since 2018 and the S&P Global 1200 ESG index since 2017. For more information:
Yahoo
18-06-2025
- Business
- Yahoo
TP Introduces ‘Future Forward' Strategy to Accelerate Transformation and Growth
'Future Forward': a new strategic plan to transform TP, bringing together human expertise with technology to expand total addressable market and create new business opportunities Launches FAB: an integrated technology platform to safely orchestrate AI, human experts and technology at scale Acquires "Agents Only" to strengthen position in next-generation AI data services throughon-demand AI-enabled crowdsourcing platform TP and Carnegie Mellon University forge alliance to accelerate applied research for AI-Human augmentation Provides robust medium-term outlook (2026-2028), targeting growth and increase in profitability net of AI investment, strong net free cash flow generation of ~€3 billion, a solid financial structure, and significant return of ~€1.5 billion to shareholders or ~50% of net free cash flow TP hosts Capital Markets Day in New York City today at 9:00 AM ET / 3:00 PM CET PARIS, June 18, 2025--(BUSINESS WIRE)--Regulatory News: TP (Paris:TEP), a global leader in digital business services, unveils 'Future Forward,' its new strategic plan at a Capital Markets Day in New York City. 'Future Forward' is TP's strategic initiative to become a next-generation, AI-enabled company. This encompasses fusing cutting-edge technology with human expertise to expand growth and deliver long-term value. By intelligently orchestrating AI with human empathy, judgement and expertise, TP aims to create competitive advantages for its clients through digital integrated business services. TP is launching FAB (Foundational AI Backbone), a proprietary AI orchestration platform designed to seamlessly integrate artificial intelligence, human expertise, and automation at scale. FAB will underpin TP's three pillar growth strategy: growing the core business with AI: leveraging technology and AI to deliver enhanced client outcomes, strengthen value propositions, and accelerate growth. extending vertical plays: expanding industry-specific solutions, end-to-end AI-enabled offerings and scaling specialized services globally. unlocking new opportunities in AI: accelerating growth in markets across the AI value chain, focusing on data services, technology, consulting, and digital marketing. TP plans to significantly invest over the next three years to accelerate AI deployment supported by a strengthened leadership structure to drive execution. Together, these initiatives position TP to harness the full potential of its human and technological capabilities, expanding the Group's total addressable market, including new markets, scaling high-margin business models and delivering meaningful value to clients. Daniel Julien, Founder and CEO of TP, commented: "TP's growth story has always been shaped by bold pivots at key moments of industry disruption. With each wave of change, we have adapted, transformed and won. We have consistently demonstrated our ability to lead through transformation, setting the pace in a market where we continue to outperform. With our new strategic plan, rooted in a powerful human-AI hybrid approach and a resilient business model powered by exceptional AI-ready teams and reinforced governance, we are well-positioned to achieve ambitious yet realistic financial goals and deliver long-term value for our shareholders." Thomas Mackenbrock, Deputy CEO of TP, added: "TP is a global leader in digital business services with a strong track record. To build on this foundation and strengthen our long-term leadership, we are accelerating the transformation of the Group by harnessing the full potential of artificial and human intelligence. Our new strategic plan 'Future Forward', is designed to strengthen our core services portfolio, extend our vertical plays and capture new opportunities along the AI value chain. Our goal is clear: accelerate growth, expand margins and generate substantial cash flow to support strategic investments and return value to shareholders. This is the TP of tomorrow: the preferred AI-enabled strategic partner, creating relentless competitive advantage for our clients." Expanding capabilities through strategic partnerships and acquisitions TP is expanding its AI capabilities through strategic partnerships and acquisitions. The Group has launched an AI partnership program with planned investments of up to €100 million in 2025. This initiative has already led to collaborations with leading AI pioneers: Sanas, a real-time speech understanding company; Parloa, a leading AI agent management platform for customer service, and; Ema, a cutting-edge agentic AI platform. TP also announced today the acquisition of "Agents Only", an AI-enabled crowdsourcing platform for on-demand highly skilled domain experts across the world."Agents Only" provides a flexible talent infrastructure for the AI era, sourcing and managing thousands of AI-literate annotators, data scientists, and domain specialists. This acquisition will enhance TP's access to certified professionals at scale, accelerating project delivery and improving service quality across data labeling, data annotation, and generative AI support activities. "Agents Only" and other new AI solutions will be seamlessly integrated into the FAB platform to ensure scalability and speed to additional information on the acquisition of Agents Only, please refer to the press release issued today, June 18, 2025, which can be found here. TP and Carnegie Mellon University forge alliance to accelerate applied research for AI -Human augmentation TP is joining forces with Carnegie Mellon University's world-renowned School of Computer Science to accelerate AI research and innovation. To highlight this collaboration, Professor Martial Hebert, Dean of the School of Computer Science at CMU, is joining TP executives for a fireside chat at the Group's Capital Markets Day, offering his perspective on the evolving landscape of AI. Medium-term outlook for 2028 TP announces the following financial objectives for the next three years (2026-2028): Returning to sustained mid-single digit like-for-like1 revenue yearly growth with 4-6% in 2028 Recurring EBITA margin at ~15.5% in 2028, expected post AI transformation Generating cumulative net free cash flow of ~€3 billion including organic AI efforts incurred over 2026-2028 Capital allocation priorities over the period are as follows: Investing ~20% of the net free cash flow to accelerate investments in AI and transformation, including strategic partnerships and selective bolt-on acquisitions Further strengthening TP's balance sheet with high financial flexibility and targeting net debt leverage ratio of 1.2x EBITDA in 2028 Returning to shareholders ~50% of the net free cash flow or ~€1.5 billion, through dividends (dividend policy maintained) and share buybacks 1 At constant scope and exchange rates Capital Markets Day 2025 details At TP's Capital Markets Day, CEO Daniel Julien, Deputy CEO Thomas Mackenbrock and members of the management team will present the Group's strategic priorities and medium-term financial outlook. An AI technology showcase, featuring TP's AI solutions and TP's AI partners solutions, will be presented at the event for in-person event begins at 9:00 am ET / 3:00 pm CET and can be viewed virtually here All the documentation related to the CMD is available on the Group's website ( days: Events and publications | TP -------------------------- Disclaimer All forward-looking statements are based on TP management's present expectations of future events and 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 Factors" section of our Universal Registration Document, available at TP undertakes no obligation to publicly update or revise any of these forward-looking statements. Indicative investor calendar Capital Markets Day: June 18, 2025First-Half 2025 Results: July 31, 2025Third-Quarter 2025 Revenue: November 5, 2025 ABOUT TELEPERFORMANCE GROUP Teleperformance (TEP – ISIN: FR0000051807 – Reuters: - Bloomberg: TEP FP), is a global leader in digital business services which consistently seeks to blend the best of advanced technology with human empathy to deliver enhanced customer care that is simpler, faster, and safer for the world's biggest brands and their customers. The Group's comprehensive, AI-powered service portfolio ranges from front office customer care to back-office functions, including operations consulting and high-value digital transformation services. It also offers a range of specialized services such as collections, interpreting and localization, visa and consular services, and recruitment process outsourcing services. The teams of multilingual, inspired, and passionate experts and advisors, spread in close to 100 countries, as well as the Group's local presence allows it to be a force of good in supporting communities, clients, and the environment. In 2024, Teleperformance reported consolidated revenue of €10,280 million (US$11 billion) and net profit of €523 million. Teleperformance shares are traded on the Euronext Paris market, Compartment A, and are eligible for the deferred settlement service. They are included in the following indices: CAC 40, STOXX 600, S&P Europe 350, MSCI Global Standard and Euronext Tech Leaders. In the area of corporate social responsibility, Teleperformance shares are included in the CAC 40 ESG since September 2022, the Euronext Vigeo Euro 120 index since 2015, the MSCI Europe ESG Leaders index since 2019, the FTSE4Good index since 2018 and the S&P Global 1200 ESG index since 2017. For more information: View source version on Contacts FINANCIAL ANALYSTS AND INVESTORS Investor relations and financialcommunication departmentTP GroupTel: +33 1 53 83 59 15investor@ PRESS RELATIONS Europe Karine Allouis – Laurent PoinsotIMAGE7Tel: +33 1 53 70 74 70teleperformance@ PRESS RELATIONS Americas and Asia-Pacific Nicole MillerTP GroupTel: +1 629-899-0675tppublicaffairs@ Sign in to access your portfolio
