Teleperformance SE Aktie

Welcome to TP 2026 First Half Results Conference Call. [Operator Instructions]

Now I will hand the conference over to Jorge Amar, CEO. Please go ahead.

Excellent. Good morning, good afternoon, good evening from wherever you are joining us. Welcome to the Q2 and the first half results update call for TP. Today, I'm joined again by our Interim CFO, Benoit Gabelle.

And without further ado, I will jump straight into the key messages for today. And of course, we will be happy to take the questions at the end of the presentation.

So with that, as always, our remarks in terms of the representation of our financial figures. And with that, I'll go straight into the key highlights for us.

So we are very excited given the results that we come today to share with you. So the first one, it is the sequential improvement quarter-over-quarter on our like-for-like revenue, going from minus 2.2% in Q1, where I last talked to you all to minus 1.2% in the second quarter. And we're going to dive deeper in a little bit around the Trust & Safety vertical that I also started updating you all in the last call.

Without that, we are happy to report that we would be growing at a 1.7% like-for-like, especially in our Core Services division at a 2.3%. And there, you see also some of the key numbers that Benoit will go in more detail in a bit when it comes to the performance of both Core Services and Specialized Services.

We're also happy to report that our EBITA number is stable first half versus first half of last year, mostly through the actions that we have started executing in terms of our SG&A control, our internal AI efficiencies program that I will update a little bit more in a few slides.

We're also happy to report that our net free cash flow before restructuring costs is above what it was last year in the same period of time, raising at around EUR 299 million. I will give a little bit more update later when it comes to the -- our detailed transformation plan, but we're happy to report the growth that we are seeing already in some of our specific verticals that we are focusing on: AI, data services, data notation, data labeling, the same with some of our outcome-based type of lines of business, mostly a Revenue-as-a-Service.

And we're seeing the commercial momentum that is building up, not only of our human workforce, but also of our hybrid workforce powered by PT.ai (sic) [ TP.ai ] and the entire set of solutions that we are building.

We are confirming our guidance for 2026 and we are also updating our target for our savings plan in terms of efficiencies, both from SG&A, internal AI and many other actions that we are taking, increasing the savings rate from EUR 100 million plus that we told you the last time to somewhere between EUR 150 million and EUR 170 million. And of course, the corresponding impact on some of our restructuring costs increasing to around EUR 120 million to EUR 140 million.

If I dive deeper for a second into Core Services, I told you about the sequential improvement and the momentum that we are seeing in some of our verticals. We're seeing tremendous traction in the market when it comes to our AI-powered solutions. We are seeing them with our tech clients, with our banking clients, with our retail clients.

So we're really seeing the momentum that everything that the team is building and working on is getting. The same on the work that we are doing in our Revenue-as-a-Service vertical. We are now partnering with many of the AI companies and technology companies that are trusting on us the development of their small and medium business, their mid-market strategy, where we have unique expertise that we have developed over the years and where we are investing some of our AI capabilities and team behind that.

And the same, I always get this question, but we continue to see healthy growth in our Care line of business that, as you know, represents still more than 50% of our revenues, and we continue to see that on the back of vendor consolidation that we continue to see in the market on the back of our strong delivery and operational capabilities. So more to come and unpack as I later give you more details on where we are.

If I now switch quickly to Specialized Services. There, you have the number of like-for-like growth for the first half, but I would like to focus on the 2 other columns. The first one is the impact on the revenue, excluding the impact of our onetime hit on our Visa contract that was not renewed for TLS, which shows the minus 1.7%.

But most importantly, and you will see it now as Benoit walk us through the profitability numbers, we have seen an increased profitability in Specialized Services coming from an internal synergies plan that we have put between Specialized and the Core Services.

So our Specialized Services unit, mostly LanguageLine Solutions is leveraging some of our people in the Core Services. And as such, we need to report the net revenue numbers.

But if we were to express them in gross, we're seeing actual growth in the first half for Specialized Services on the back of the strength of our solution, the strength that we are seeing mostly in our health care, public safety and financial services verticals within the interpretation and translation vertical business, some of the AI solutions that we're already deploying when it comes to exactly this type of activity.

And we're also very, very happy to see TLS reporting growth mostly in Q2. And we have also been awarded a significant contract for the TLS operation. So congratulations to our TLS team that has worked so hard over the last few months to return to growth and get TLS back in a path of profitability.

So with that, I'm going to pass it on to Benoit to walk us through the specific numbers, and then I will give you a little bit more of the strategic update. So Benoit, all yours.

Thank you, Jorge. Good morning, good afternoon, good evening for everyone. We will start by looking in more details into the revenues for this year.

As you said, we reported minus 4.5% growth for our revenues. The biggest part of that reduction comes from a currency effect, but the impact is significantly smaller in Q2 compared to Q1. The driver for that variation is essentially linked with the variation of USD against euro and INR against euro.

Now if we focus more on the performance of the operations, as you said, we have a minus 1.7% like-for-like revenue growth between H1 '25 and H1 '26. The biggest part of impacting our revenue is effectively coming from Trust & Safety because when we exclude the Trust & Safety for the reasons that you mentioned and that you will elaborate further after, we would be growing at group level at plus 1.7% for the H1.

Then we have a small impact that we already discussed at the end of Q1, linked with our variation of perimeter, essentially the acquisition of ZP last year that came -- started to be consolidated in February. And then the disposal of our TP Russia subsidiary at the end of the year.

If we focus more into the breakdown between Core Services and Specialized Services, we see that for Core Services, the growth has been minus 1.3% like-for-like with a significant sequential improvement in Q2 compared to Q1 from minus 1.7% in Q1 to minus 1% in Q2, and we expect that to continue in the coming quarters.

This is mostly driven by what you said, AI-powered solutions, some back office and also our sales collection business, which are value-driven. If we now look at the growth of Core Services stand-alone without the impact of Trust & Safety, the growth would have been of plus 2.3%, effectively demonstrating what you said, which is a very good growth of our Care business and of our business lines of the future.

Specialized Services, I think you said most of the important aspects that drive the revenue. Important to note on the technical point that you made about the impact of our synergies. We are effectively starting to build further synergies between Specialized Services and Core Services, meaning we transfer from external parties some delivery into our operations and we recognize the revenues.

We allocate the revenues where the operations are delivered. So even though this is revenues coming for LLS towards the client of LLS and part of the business of LLS, the share of revenues that is delivered and supported by the Core Services, that additional part is reported in Core Services.

Now if we look more at the breakdown by business line, you said it, the Care part of the business is 56% of the total. It is still growing at a very good pace, single digit, but good pace and good growth.

The business line that is impacted the most still is Trust & Safety and now represents only 6% of our total revenues. We will see later on during the year also an improvement on Specialized Services linked with the return to growth, mostly of LLS plus the good news you mentioned on TLS.

Now if we look at our portfolio by industry, still very well balanced with financial services and insurance growing at a fast pace together with FMCG. FMCG is close to retail type of businesses.

And we see media, entertainment & gaming, which is still a very large part of our portfolio because they represent clients that we have several businesses with, but which is the most impacted by our Trust & Safety business and the decrease that we see in that business.

If we now look into more detail at the evolution of our EBITDA margin, we are excited and happy to report that we maintained the same level of EBITDA margin at the end of H1 '26 compared to H1 '25. And as you said, Jorge, this is thanks mostly to the plan that we have put in place to adjust our cost base to meet exactly the client needs plus adopt AI wherever we can in our operations.

And that also pays off on Specialized Services, notably the benefit of the synergies that have been implemented with a massive increase of the EBITDA margin of more than 3% enhancement. So all in all, EBITA -- recurring EBITA reports at 13.6%, and we expect it to continue to deliver a good outcome in the second half of the year.

Now if we look deeper into our P&L, I will not comment again the first items, revenue, EBITDA, EBITA that again reports relatively flat numbers. The operating profit itself has been impacted by EUR 100 million from the restructuring costs that had implemented in H1 2026.

You mentioned that we are increasing and going deeper into our transformation plan. And so the investment we made in H1 has been massive, EUR 109 million and is expected to continue, though at a lower pace in H2 to reach EUR 120 million to EUR 140 million. That investment accounts for the variance -- the biggest part of the variance between the operating profit in '26 and '25. There are other pluses and minuses, of course.

One of the gain that we see and that we hope will continue to generate benefits by the end of the year and in the subsequent years as we keep driving and steering and realigning the structure of the group is the reduction of our tax rate. And we will see that later on when we talk about the free cash flow, we have continued to reduce our cash tax impact in our operations.

Net profit, EUR 216 million, compared to EUR 249 million in 2025. So relatively close, the decrease being mostly explained by the restructuring costs, but other positive impact as well, notably the gain that we have on the tax charge.

Now looking at the free cash flow. We see that the cash flow from the activities after lease payments, interest paid and taxes is decreasing. The big part of the decrease is coming from the nonrecurring cash-outs, EUR 56 million in H1 2026.

But we also benefited from positive impact, notably a better discipline in our management of working capital plus in H1 2025, we had some one-off impacts on our free cash flow that impacted on working capital.

So you see an improvement of close to EUR 100 million, which is a mix of both, some onetime effects in '25 for a small part and then a significant part that is linked with the improvement of the operations and the financial discipline of the group around the -- I mean, part of it is coming from some of the initiatives we are implementing in terms of tools, management and so on, facilitated notably by AI.

We also reduced our net capital expenditure to adapt to the footprint and the new way of delivering of the group. We have a continuous -- we have continued on a journey of rationalizing our CapEx linked with the trajectory of the group -- the trajectory of the growth of the group and making sure that we invest every single euro where this is aligned with the transformation plan and our delivery model for the future.

All in all, we are very happy to report close to EUR 300 million of net free cash flow, excluding the restructuring plans, which is a significant increase compared to H1 2025. And same as last year and what we mentioned in Q1, we expect the cash flow generation to increase in H2 compared to H1.

I will conclude with 2 slides on our balance sheet. Our balance sheet is one of the strongest balance sheet in the industry with a relatively low debt leverage ratio. We are on a journey to continue to reduce that level of debt.

And effectively, we will see the benefit of that by year-end. You see that in H1, despite the payment of a significant dividend to our shareholders, close to 54% of payout ratio, we maintain a level of debt that is stable.

Part of the increase is coming from the lease. So it's the debt that is accounted for under IFRS 16. And another component is coming as an accounting consequence of the refinancing we performed at the end of May to extend the duration -- the average duration of our debt.

You've probably seen because we released some information in this respect. We issued EUR 1.2 billion dual tranche bonds with close to 6-year maturity for EUR 700 million and close to 9-year maturity for EUR 500 million at an average cost of 5%, which is, I would say, an amazing achievement in the industry with the trend that we see from our competitors, clearly showing the trust that our, I would say, bond investors place into the group and its ability to generate free cash flows in the future.

The outcome of this refinancing, I mean, some of the proceeds were used to repay some of the bonds that were coming to maturity in the coming months and some other components were used to repay our facilities with some banks.

We now have an average cost of debt of 4.28%, a slight increase compared to where we were at the same time last year. And post refinancing, our gross debt average duration is now of 4.5 years, a 50% increase compared to the 3 years that we had when we launched the refinancing.

With that, I'll hand over to you, Jorge, to talk about the 2026 outlook and the strategic update.

Excellent. Thank you, Benoit. And hopefully, with all the details, you can see the early beginnings of the transformation and the impact of what we're driving.

Now it's been roughly 4 months since I joined as the CEO, and I'm excited to present these results where we're seeing, of course, in many areas, and I will walk you through more a little bit now, but we're seeing all the areas, but we're seeing also the progress in some of our SG&A in our internal AI efficiencies and the discipline in the cost control that we have put in place.

I think with this, I reiterated -- we reiterate the guidance towards the end of the year with all the different components of it on the revenue between 0% to 2%, a stable margin that we were able to achieve in the first half and the same on the free cash flow generation. And of course, we have updated our numbers when it comes to the impact of the efficiency plan and of course, the corresponding restructuring cost.

Last time I talked to you, I also started putting forward a little bit more detail into the strategic update and the transformation that we are driving as an executive team for TP. And I talked about these 3 building blocks, to continue evolving our Core Services into what is the next evolution of it in a world of AI, where we have more of the hybrid workforce deployed in our clients of human and agentic, where we have more and more our fees, our compensation tied to the results that we drive in that regard.

The second one is all the verticals and the lines of businesses where we are generating revenue for our clients, for instance, so sales, collections, some of the back-office activities. And then also more and more how we are growing in what I call the AI value chain, of course, data notation, data labeling, training of LLMs, SLMs and all the different opportunities that we are seeing as a result of the implementation of AI at scale in a number of organizations.

I think in that regard, we're excited for how our TP.ai set of solutions continue to have traction in the market. There, you see that we're now above almost 1,100 projects that we have implemented with some level of AI in our clients.

Of course, some of them are related to our tools that are helping our agents be better, faster, more efficient, sell more, collect more, but also some of the solutions that we are seeing when it comes to our vertical solutions, and I'll walk you through now in a detail, but our vertical solutions in our Connect suite and the same on the Grow set of tools.

One of the verticals that we are seeing a lot of traction is health care. And here, you can see an example of what we are able to achieve when we deploy the hybrid workforce with our clients, where we bring, of course, our know-how, our processes, our data, our AI tools, some of them developed by us, some of them with our partners, and we bring the humans, the best humans in the industry to come together not only to do what was done today.

And that's what you see there in terms of not only the offering, but the customer journey behind it, where we are bringing some of the activities that are done today in a much faster or more efficient way, but we are also helping our clients do things that they wish they could have done before.

And now with the combination of the human and the AI, the hybrid workforce, they are able to do. And they are able to improve the patient journey in this case for health care in a way that probably they couldn't before.

So of course, we're proud of the results, but most importantly, we are proud of the type of evolution of our business model that we're driving and the kind of deals that we are able to establish with our clients where they leverage TP not only for just humans, but for the entire set of expertise, processes, data, AI solutions and humans together.

The same we're seeing in one of the largest U.S. financial institutions where we see there some of the impact on the revenue that we're seeing even this year on the second half of the year. And on this case, it's very similar. We're bringing the agentic automation. We're bringing the analytics. We're bringing human oversight on the AI flows that we are implementing.

And of course, we're able to turn these vertical solutions into AI and the possibility of AI into our clients. And this was, in this case, a deal where we were able not only to work and get this kind of work with our clients, but also differentiate ourselves substantially from our competitors that we're not able to offer this combined set of solutions when it comes to AI and human.

Of course, I'm sure you're going to ask me, Jorge, you have minus 2%, minus 1.2%. You're still guiding to 0% to 2%. How do you have the confidence that you are going to get to those numbers? And that's a little bit of what I tried to cover on this slide, which is these are just examples. And these are just examples to show you the depth of the vertical expertise that we want to build and that we are building at TP.

But also some of the changes that we have done from a people, from an offer perspective, from tools, from processes that are strengthening our commercial organization, both in Core Services and in Specialized Services. And this is what leads us to say that we feel comfortable restating and making sure that we say -- that we will achieve our guidance by the end of the year.

And of course, that comes on the back of some win rate improvement that we're seeing, the increased pipeline that we're seeing and of course, the bookings that we're getting from some of our clients.

So with all this in mind, hopefully, I'm able to convey some of the things that we're really excited about because we are working hard. Of course, there's a lot more to do, but we are working hard on the evolution of the business model, on the implementation of a hybrid workforce, on the vertical approach for some of our core sectors where we have the trust and the pleasure of serving some of the leading financial institutions, health care institutions, tech institutions. So our vertical expertise continues to differentiate us in the market.

I also want to spend a minute talking about Trust & Safety. As we explained and we went through in our presentation earlier, we are seeing increased softness that is coming in Trust & Safety. And this is happening mostly for 2 reasons.

The first one is, of course, the application of AI into the automation of what I call the simple content moderation and Trust & Safety activities. And we are also seeing the use of translation tools that are helping some of our clients move volume from some onshore locations to offshore locations when it comes to content moderation. So we are rethinking what does Trust & Safety look like in the future, what does content moderation look like in the future.

Of course, the easy volume will probably continue on its way of automation, but what is going to be left for human review will require the next level of scrutiny, the next level of training. And this one is a vertical that we care deeply, not only for its role in society, also for the role that it has and the value that we place on our employees that are doing this type of work day in, day out.

And therefore, that's why we believe so firmly that this vertical will continue to transform itself, where it will require a different set of skills, where it will require a human controlling some of what the AI algorithms are moderating right now, and that's where we're making investments with the appointment of a new Head of Trust & Safety that has a lot of experience coming from our clients and some of the technology investments that we're doing on that side.

On the other side, what is driving the growth? And here, you have some of the more specifics around it. Sales, I told you about this one. We are conducting a lot of work in this space. We continue to see high single-digit growth in this vertical.

It's not only because of the trust of the clients that we have, but most importantly, the set of solutions that we have developed on our TP.ai Grow set of tools when it comes to helping our agents be better at selling with dynamic scripting and with a number of other capabilities that we are investing on.

And that is what is really driving that. The same for back office, particularly in our banking and financial services vertical, where we continue to expand more and more our presence in our clients and doing more and more of the hybrid workforce deployment.

And last but not least, because it's the one that is growing the fastest, is all the work that we're doing with our clients when it comes to Data Services. This is a really, really interesting space.

It is a fast-growing segment of the market, and we're happy to say that we are seeing that growth also for TP, not only for the market. And we are making the investments needed to continue this growth and to not only grow at the rate of the market, but exceed it.

Of course, all this is what gives us confidence on the long-term financial ambitions that I, of course, present here before I get the questions when it comes to margin, when it comes to growth and the leverage ratio that I know is one of the questions that I typically get when it comes to capital allocation.

So with that, I think we've covered everything. Before I open it up to questions, I also wanted to take a moment to say that we are very proud to announce that we are upgrading our commitment to our employees.

As you know, we had a global framework with UNI that expired. And today, I'm happy to announce that on the back of the great work that we were able to do together, we're taking that to the next level with the double commitment that we are making on our employees, the commitment of establishing employee boards in every one of our operations, in most of our operations before the end of the year.

And these employee boards will report directly in a consultative manner to our sustainability committee in the Board. So we're very excited to lead the industry into this new wave when it comes to responsibility of taking care of our employees that are the ones that are taking that call day in, day out, that are doing the content moderation, that are doing the interpretation and translation.

We thank them for their hard work, and we want them to know that we are upgrading our commitment to them. And hopefully, each of them will see in their own operation their representatives on these employee boards and that hopefully, we can find ways to continue working not only on the wellness, on the health and safety of our employees, but the commitment on the upskilling that we need to do across the industry in this regard.

So with that in mind, we're very excited about it. I can go on and on with it. But I want to make sure that we have time for the Q&A. So with that, I will open it up to everyone.

[Operator Instructions] The next question comes from Karl Green from RBC Capital Markets.

A couple of questions from me. Just in terms of the incremental savings that you're targeting, that EUR 50 million to EUR 70 million extra. Could you just elaborate a little bit more on where that's coming from, how you're going to deliver it? And I think probably most importantly, what proportion of that is likely to be retained and accretive to margin rather than reinvested? That's the first question.

The second question is just in light of the good margin performance and stabilization in Specialized Services, any further thoughts about strategic options for that division overall, including divestments, please?

Excellent. Karl, great questions. I'll start with the incremental savings and where it's coming from. It is coming from a number of different places. Of course, our SG&A line, where we have been doing a lot of work when it comes to making TP more efficient, leaner, less bureaucratic. We're implementing AI on a number of our own processes when it comes to either finance, HR and some of our other support functions.

On the other side, the other part where we are seeing the benefits is applying AI to our core operations. So if you happen to have a change of heart and want to apply to any of our operations in Portugal, in Greece, in Colombia and in many other countries where we have deployed our AI recruiting solution, where we are conducting the prescreening interviews of our agents with AI, where we're seeing tremendous results, not only when it comes to the increasing number of applications of people that are coming to TP, also on the data that we are able to gather and help us better allocate those individuals to the right campaign and the right line of business and also from an employee experience perspective, accelerate the time to offer that we are seeing.

So some of those solutions, recruiting, I can talk about quality assurance, I can talk about workforce management and every function that we do in our operation. That's the other part where we are seeing the benefits, and we are accelerating the deployment of those tools.

So with that in mind, that's where we are seeing the benefit, and that's why we are so excited that we believe we can achieve that EUR 150 million to EUR 170 million in run rate savings for our transformation.

And then when it comes to the stabilization of specialized and the strategic portfolio, I continue running on behalf of the Board, the strategic portfolio review. I will give updates when it's the right time just to know that it continues, that we're making good progress. And hopefully, I can share more news with you soon.

The next question comes from Victoria Chang from JPMorgan.

My first question is on the restructuring costs of the Future Forward plan again. Where do you plan to allocate the increased costs? Is that on headcount in specific regions? And can you give a bit more color on how that is planned to be allocated?

And my second question is on North America Core Services. Can we confirm whether the inclusion of TP Infinity and AllianceOne announced in 1Q made any difference to the organic growth rate in 2Q, please?

And then just the third one also on Specialized Services. Are you seeing an underlying sequential improvement in 2Q versus 1Q? Because I previously remember 1Q growth, excluding the TLS contract was minus 1%. So given the growth in 2Q, is that an underlying sequential improvement? Or is there adjustments that we need to be aware of?

Of course. You want me to take the one on restructuring costs? So no, thank you for your question. I will not give the details of the allocation, but most of the costs are linked with severance payments linked with employees.

And given the nature of the legislation in both regions, Americas and EMEA, most of the costs are linked with EMEA operations. So that is for that component.

On AllianceOne, I think the combination of the business that was made at the end of last year, I mean, starting in January, was to revive the growth and benefit from the synergies of the collection business.

We had already some components in core in the U.S. with what we have seen at AllianceOne. We don't see any material impact apart from the one that were disclosed in the pro forma numbers that have been shown.

And we see, in fact, good benefit from that synergy plan also because we had some, I would say, dual functions that were not necessarily needed. And the combination of the portfolio is now helping to generate new solutions faster, notably the Fab Collect solution that is being deployed.

And then, Victoria, your last question on specialized on the sequential improvement. Yes, we are happy to report that we are seeing that sequential improvement on specialized across a number of the different companies that are part of the Specialized Services on LLS, on ZP Better Together, on TLS, on Health Advocate and PSG.

So yes, we're seeing that improvement. It's not just a matter of the restating of the Visa contract, but we are seeing the improvement. And we're seeing that not only in the figures, we're seeing that in the units. We're seeing the increase of the sessions that we're doing when it comes to interpretation in the hospital systems in the U.S.

We're seeing more hospital systems that are trusting on LLS to perform this type of activity to them. So we are seeing, again, not only the numbers, but the fundamentals of LLS and the other companies of specialized improve.

And on TLS, we were also happy to see that the impact because there was a question you had on -- in Q1, the impact of the war is nominal, not to say we are exceeding what we were expecting for TLS. So it's a very resilient business.

The next question comes from Virginia Montorsi from BofA.

Just 2 questions on my side. One, I just wanted to follow up on the question on the underlying growth of Specialized Services because if the Specialized Services ex-TLS contract loss went from minus 1% to minus 1.7% Q1 to Q2, and then you mentioned a sequential improvement across a lot of your businesses, what is then driving the sequential slowdown Q1 into Q2? I might be missing something. So apologies if the question is silly.

And then the second question I had is we've seen OpenAI just a couple of days ago announcing their present customer services offering. How do you think about your competitive positioning as opposed to them? And where do you think you've got the competitive advantage versus that type of offering?

Great. I will let the finance geek tell you the numbers. And then I'll take the OpenAI one.

Yes. No, what drives the move, and this is why also we now report a different sets of data. The impact of the onetime TLS was only on Q1. We have no longer any impact in Q2. What comes in Q2 and impact is the reallocation of revenues that we mentioned.

So this is a key driver. By the end of the year, we are -- I will not disclose exactly the amount now, but we are moving from third-party suppliers, pretty large amounts of revenues that we internalize. And so that leads to this transfer of revenues that is impacting.

So it's accelerating slightly the growth on the Core side because Core has such a large base that it's almost invisible. But on the Specialized side, we are effectively moving more than EUR 15 million of revenues in H1, and we anticipate that to further increase in H2.

And I think the additional component of that is the increase on the profitability that you can see of Specialized Services, not only that, but a lot of the actions that we're taking in Specialized, but that is what's underneath also some of the above 300 basis points of improvement in the profitability of Specialized Services.

So it's a combination of both. So you see a little bit that nominal impact on the reporting figures for Specialized. But of course, that is -- that's why I was talking about the minutes and the hospital chains and what we are seeing from the fundamentals of the business and the profitability behind it.

To your second question on OpenAI Presence. And on this one, I would say, first of all, we look at not only that, but many of the other technologies that are out there in the market. We monitor them, we try them, we test them. We evaluate them not only ourselves, but we do that with our clients.

And we monitor this space very closely. As of right now, OpenAI Presence is still in limited deployment when it comes. So we will continue to see its performance, its cost. I'm getting a lot of questions from our clients on what is the true cost of AI particularly when it comes to voice solutions. And maybe I'll spend a minute on this.

What we are seeing more and more is that some of these solutions, the compute cost that they require, given the latency requirements, given the low tolerance for hallucination, require a very expensive AI build. And that is, at least in all my conversations with clients across different sectors, that is becoming more and more an element of, I wouldn't call it concern, but it's an element to monitor.

And they are coming to us to help us think through that, think through what is the best allocation of the resources. And of course, we'll continue monitoring some of these AI solutions, but not only on just what the technology can do, the ability to scale, the cost and the risks that come with that. So we believe that is our sweet spot. That is where we win. That is where TP makes a difference, and we can bring all that together to our clients.

[Operator Instructions] The next question comes from Ben Wild from Deutsche Bank.

I've got 3 questions, please. The first question is on the -- or the first 2 questions are on free cash flow. You have an additional EUR 30 million of cost savings for this year, but you've kept the free cash flow guide -- adjusted free cash flow guide unchanged. Why is that benefit not flowing through to adjusted free cash flow for this year?

Secondly, you've also announced an additional EUR 50 million of restructuring costs and total restructuring costs for this year will be EUR 120 million to EUR 140 million. Is it right that those costs will be cash costs this year?

So if I look at your unadjusted free cash flow guide, it implies a midpoint of around EUR 700 million versus the EUR 870 million that you delivered last year. Just trying to understand if I'm missing anything here.

And then a final question, looking forward structurally. To what extent do you think these nonrecurring severance costs are truly nonrecurring? And would you expect an ongoing level of severance in the business going forward?

So on the savings from the free cash flow not flowing this year, no, I think a big part of the savings are effectively expected to flow this year. When we say that we will report and typically in the EUR 56 million that you -- that we have already expensed in H1, part of that amount that is expensed is not linked with specifically this year.

It's the end of the restructuring that we had from the onetime nonrecurring free cash flow that were disclosed at the end of '25 and related to the plans that we had started to launch already in prior years, notably the plan for France, which is the biggest component.

So in this year, we have an impact of free cash flow that is linked mostly with the plan that we are implementing, but also from the end of the tail of the restructuring that were disclosed in 2025 and that started to impact in 2025 and will continue in this year.

So the same thing, and we are obviously, as you know, some of those restructuring and we consider them onetime because they represent significant plans which are negotiated in some specific countries.

And as you know, we need to go through regulatory approvals, negotiations with the unions, negotiation with individual employees. And so the pace at which we can effectively implement fluctuates quite a lot depending on the level of, I would say, discussion and sometimes litigation that we have when we implement those cash flows.

So this is why we want to remain cautious on our free cash flow target. Whether we will expense EUR 120 million to EUR 140 million this year is hard to tell, but we will certainly be above EUR 100 million for the sum of the nonrecurring free cash flow. Yes.

I think you covered a lot of the points.

The next question comes from Suhasini Varanasi from Goldman Sachs.

Apologies, I might have missed this, but I just want to understand the reason why margins declined in Americas. I can see that the strength in Europe, EMEA, I can also see the strength in Specialized Services. Was it down to Trust & Safety?

Is that the reason why it was a little bit weaker in Americas? And I just wanted to get a sense from you, given what you've talked about on the pipeline, et cetera, do you feel comfortable talking about, let's say, an inflection to positive organic growth in the third quarter?

Yes. So on the drop in Americas that you could see here, I would say most of that is -- of course, there's a portion on Trust & Safety, but the other part that has impacted is some of the macroeconomic conditions in the countries that are part of the Americas region, most notably Colombia, where we have seen a continuous appreciation of the Colombian peso against the U.S. dollar. And as you know, a part of the work that we do there is for our U.S. clients.

So we are in the process of working through with them either to find alternative geographies or to adjust the costs of the services that we provide. So that, I would say, as you know, Colombia has had a strong appreciation of their currency and at the same time, has had changes in the minimum salary conditions of the country. The same we have seen in other countries of the region.

So those 2 effects are the ones that are driving the impact on the Americas region. And we control everything that we can control. Some of these we cannot control, but we are working through some mitigating actions in that regard.

For instance, how can we rebalance our portfolio in Latin America from Colombia to other countries where we are seeing more stability in the macroeconomic conditions. And hopefully, our clients accept that, and we work with them very closely to make that happen. So that's, I would say, the reason behind the margin results that you saw in the Americas region.

And then when it comes to the organic growth, we're not ready here to tell you what are the specific numbers. Of course, we remain confident on achieving the guidance. And given these 2 sequential quarters of improvement, you can then assume what are the numbers that we are expecting for Q3 and Q4 later on this year.

There are no further questions at this time. So I hand the conference back to Mr. Amar for any closing remarks.

Excellent. Well, thank you for your questions and for the detailed precision that you always bring and you keep us honest. We're excited. We're excited because we're starting to see the different elements of the transformation that we have put in place start to pay off.

And hopefully, today was one of the many different proof points that we can bring to you to show you the evolution of TP, the TP that we want to build for the future of a hybrid workforce of opportunity AI, a TP that is thinking about how to be the partner of trust for our clients when it comes to deploying a number of these solutions, a TP that is committed to our employees, and I cannot stress this enough.

We're committed to our employees. We're committed to improving the working conditions of the people that make TP happen day in, day out. And hopefully, we can work with them and any other institutions that want to join us in this commitment to our employees. And hopefully, we can build a better future.

So with that, thank you again. Looking forward to our next communication in roughly 3 months. Thank you very much for joining us.

Welcome to TP First Quarter 2026 Revenue Conference Call. [Operator Instructions] Now I will hand the conference over to Jorge Amar, CEO. Please go ahead.

Excellent. Good morning, good afternoon, good evening from wherever you are joining us, and thank you for being with us in the TP Q1 2026 Revenue Update Call. My name is Jorge Amar. And as of March 16, I have the honor of being the CEO of the TP Group. Today, I'm joined by Benoit Gabelle, our Interim Chief Financial Officer and he will walk us in a bit through the more detailed numbers for today.

Before we begin, I just want to say that I look forward to these communications with the investor community. I've had the pleasure of talking to many of you over my first few weeks in the role and your conversations are always very energizing. They keep us very honest. They help us sharpen our perspectives. So thank you for your engagement. Thank you for your perspective, and thank you for the questions that I'm sure will be very vigorous as always.

So with that, we have a very structured agenda for today. I will walk us quickly through some of the key highlights of the Q1. I will then hand it over to Benoit for a more detailed update and the walk through the revenue numbers. And then I will just share with you some of the interesting things that I've been hearing by talking to our clients, our partners, our employees, the investor community and just go through that in a little bit more detail. So you can know what to expect for the rest of 2026. After that, I will open it up for questions, as always. And I'm sure we already know that you have a few and we are ready to take them.

So with that, let me get us into the quick -- the key highlights of Q1. So we start with as we had anticipated in our last series of conversations mostly after our annual results that we were expecting a softer Q1, which is exactly what has played out. So the overall revenue of the group came down at EUR 2.433 billion that is a minus 2.2% in a like-for-like basis, minus 6.9% as reported. What you see there from a Core Services perspective is that, indeed, the revenue came down at minus 1.7% like-for-like, reported minus 6.4%.

What we are seeing on the Core Services on one side is a number of our vertical, both from a back office perspective, data labeling, data services perspective, that continues with tremendous double-digit growth and you will see a little bit more in detail in a few minutes. On the other side, the headwinds that we are experiencing are mostly 3. So let me describe them a little bit more in detail for you.

The first one is we see and we experience increased offshoring, which in many ways, translates in good growth for some of our delivery locations, but of course, with the corresponding pressure on the top line at an overall level. We also continue to see the trend that we had started experiencing a few quarters ago on the automation of trust and safety. And we continuously monitor this space as we have seen some developments mostly in the U.S. for this particular line of business.

And last but not least, we have seen that the current geopolitical environment has delayed the ramp-up of some of the contracts that we were expecting in Q1. So the combination of those 3 things are driving the results that we report today. We know them. We don't minimize them, but we know exactly what they are, and we are working for each of them in more detail.

When it comes to specialized services, revenue for Q1 is down minus 5.5%, reported is minus 9.9%. It's around EUR 332 million. And on this case, in particular, what we see is two effects. The first one is we continue to operate against a very high basis of comparison for LLS considering that some of the elements that have impacted this particular company of the group started developing at the end of Q1 2025 in the U.S.

On the other side, this is the last quarter that we will see the high basis of comparison for TLScontact, our visa processing business due to the loss of a contract that we experienced around Q1 last year. So those are the two elements that are explaining the softness in specialized services.

I will get into a little bit more detail later on what we are seeing also not only on the numbers from a revenue perspective, but the momentum that we're getting in the acceleration of our 2026 plan for the Future Forward transformation. We're having a lot of very interesting conversations with clients that are looking for a reliable transformative partner into their operations, and I will elaborate a little bit more into that.

We continue to see great traction of our TP.ai FAB solutions, mostly in some of the new deals that we are getting pretty much every deal that we are winning today has a component of this, and I'll expand that in a little bit more detail later. We have also made some changes in our AI leadership. So we are very happy to announce that we have a new Chief AI Officer for the group. His name is Andreas Braun, and I will describe his profile later on. And we're also reporting that our efficiencies program that we had already reported and highlighted to the investor community continues to be very well on track which leads us to confirming our 2026 targets. This is just a quick summary. We will get into more details now. So I'll pass it on to Benoit, so he can walk us through the revenue breakdown in the next few slides. Benoit?

Thank you, Jorge, and good morning, good afternoon and good evening to everyone. We'll now look into more detail on the Q1 '26 revenue. You will see in the press release the detail of the numbers that we are showing now. Jorge, you mentioned the reported decrease of minus 6.9% overall for the group and a like-for-like negative growth of 2.2%. I just want to give some details about the impact of the acceleration of our TP Future Forward plan, where we have decided to combine all our collection business activities from core plus AllianceOne into one single management to accelerate on synergies and business efficiencies. So that leads us to transferring the AllianceOne revenues from specialized services to Americas region starting this year.

Smaller impact, TP Infinity was mostly present in Europe in the past, so was reported in EMEA and APAC, and we have seen a growth in the U.S. in the past year. We expect still a good growth for this year. And so we have taken a stance to report the Americas part of TP Infinity into Americas region.

Now moving more on the detail of the absolute numbers. So we had a revenue of EUR 2.6 billion in Q1 '25. As you mentioned, Jorge, the biggest part of the decrease that we have observed in Q1 is linked with the effects with an impact of EUR 141 million on our top line. Now talking more about the like-for-like comparison, EUR 55 million less of revenues, minus 2.2%, which includes almost nonmaterial hyperinflation impact of plus 0.1% linked with our operations in Argentina and in Turkey, and we have a perimeter effect linked with the entry into the consolidation of ZP, which was reported only for 2 months in Q1 2025 and is reported 3 months this year and Agents Only, a business that we acquired in June '25 and which has reported revenues this quarter, whereas it was not present in the group in Q1 2025.

Now moving on to the detail of the revenue by activities. You see that the balance in terms of revenues between Americas, EMEA region and Specialized Services have not moved very significantly compared to last year. We have 2% less for Americas balancing with Specialized Services in EMEA and APAC. This is also linked with the impact of FX because Americas is mostly reported in USD. The revenue for Core Services, minus 1.7% like-for-like. This is hiding, unfortunately, the good news that you mentioned, Jorge, and acceleration of our back office and AI-powered solutions offering with good growth. And this was effectively hidden because of the soft start of the year linked with, like you said, offshore delivery, big increase of our activity in India, in Egypt, in South Africa, which are already very large operations, but still growing very fast.

We also see the impact of trust and safety, which is automated as we expected or as we anticipated, which is being automated and which we are closely, rebalanced, like you said, with our AI offering, but not completely offset yet. And a slower-than-expected ramp-up for some of the large contracts linked with the geopolitical turmoil and some clients taking more time for decisions.

Specialized Services, minus 5.5% like-for-like. Jorge, you mentioned that Q1 '25 was the last time when the TLS contract that was lost was still in effect. Restated for that impact, we would be at minus 1% like-for-like. Still, this is not in line with what we would like to see and the big difference is linked with the high comparison basis for LLS in Q1 2025. But we have seen, and that was a good news especially in March, a good sequential improvement of the revenue growth throughout the quarter, which is giving good hopes for the coming month, depending on how the policy in the U.S. will evolve.

Now if we look more at the breakdown by business line, we still see a good growth in Care, which is most of our Core Services business. We have seen, like I said earlier, very strong traction on AI-powered solutions on back office and also to some extent, on sales, which we know is a good business in terms of margin and reliance over time I will not repeat again the impact of the trust and safety, which has moved from 8% of the group revenue last year in Q1 to 6% this year.

Moving on to the view by vertical. What we like and I think is a key differentiator of TP compared to some smaller competitors is the very diversified portfolio that we have with clients operating from almost all major verticals. This was particularly true, I mean, in terms of benefits to be present, notably in financial services and insurance as well as FMCG for Q1 2026, where we have experienced double-digit growth and that we see continuing during the year. This helps offsetting the lower activity in the automotive industry, energy and utilities and the media and entertainment. Media and entertainment being the vertical where you will find most of the trust and safety business.

With that, Jorge, I hand over to you for an outlook on the months to come.

Excellent. Thank you, Benoit. And as, of course, you see and you can feel from our tone, we're definitely not where we want to be in terms of the revenue that we are reporting to you, but this was anticipated. And this was already what we were seeing and what we had communicated to the investor community in the last time that we were able to chat, which was just a few weeks ago as I was being -- as I was appointed the CEO. But with this, let me also turn on the other side, what to expect for the rest of 2026. And as I continue my tour of talking to, again, a number of our clients, our partners, our employees, start sharing back with you what I'm hearing and how that can inform some of the movements and some of the actions that we will take in 2026.

I think this one is just a quick reminder, and I think probably Thomas and Olivier shared a version of this in their last set of communications around the direction of travel as part of our Future Forward strategy, which has a component around how do we reimagine and evolve our core service, mostly because what we are hearing from clients is the need of a partner that is a stable partner that they can trust on and that they can work on some of their own bigger, more transformational ideas.

So that's a big component and that we continue working on as we also see that many of our partners are starting and have started the discussions around vendor consolidation and TP is at the center of that conversation as well, and we're very well positioned in that space.

The second pillar is around all the work that we are doing to migrate more and more of our revenue to an outcome-based arrangement. We continue to see very strong performance and growth in our sales and revenue as a service line of business, the same we're seeing in collections, the same we're seeing in a number of vertical back-office solutions. And all that gives us a lot of hope of the potential that those lines of businesses have.

And last but not least, AI is also opening up a new series of opportunities, LLM and SLM model training, how do we do more data labeling, data annotation. So how do we become much more relevant in that space that it's opening up a new set of opportunities in what I call the AI value chain. Of course, doing that, it doesn't happen by accident. This means that we need to take a number of actions when it comes to reshaping our operating model, our processes, our talent, our skills and capabilities, our partnerships. And all that is what you will start seeing more and more, and I look forward to sharing more of the details as I go through this transformation.

I've also taken the time to talk to many of our top clients and thank you for the trust, the candid feedback and the very open conversation on that. What I've heard is on one side, a number of our clients are in this transformational moment. They are thinking about how to leverage AI and other technologies into their own operation. And to do that, they need that reliable partner. They need that partner that knows the inner workings of many of these organizations and know their processes, their data. And that's what makes us being very, very well positioned, uniquely positioned in that space. A number of our clients are coming to us not only with a conversation about what I call, efficiency AI, which is doing exactly what you're doing today with fewer resources.

A number of the conversations that I've had are around what I call opportunity AI, which is everything that you wish you could do that you're not doing today because of cost, because of limitations, because of time to process and we're engaging in those conversations. And that's incredibly exciting because of the opportunities that we can unlock together is just the opportunity is massive.

I've also heard a real concern from a number of the leaders in our space about what is the cost of technology. One thing is to execute a small proof of concept with just a few things here and there. But when you start scaling that up and when you start looking at what is the overall profile of cost, that remains a point of concern as they are seeing how quickly some of those costs can increase and vis-a-vis some of the human activities, how to balance it all.

And last but not least, from a technology perspective, we continue to see the emergence of a number of different AI players with very unique and very distinct capabilities. I think we're also encouraged by some of the developments in this space, considering just how easy it has become for many companies to develop some of these solutions and the same for us that we're partnering with our clients in doing that. And therefore, we believe that being what I call tech agnostic, but in a way, means being able to quickly react and be very agile in partnering with our clients on their technology solutions remains something that we are focused on.

I already teased it out that we are hearing more and more this notion of being more of a transformational partner that is just not only delivering headcount, but is delivering a true re-imagination of a process, a true reinvention of how to treat customers, how to handle some of the concerns that our customers have and they are turning to us, they're outsourcing partners to be a key element in that. And that is, of course, something that you cannot do with a multitude of vendors and we are hearing more and more, and I've been in many conversations on this around how to drive vendor consolidation. And therefore, they want to be with a partner that is not only reliable that they can trust that they have been with. As you know, our average tenure of relationship is over 13 years. But they want to be also with a partner that has the financial strength and stability to be that partner long term.

So that is all that I've heard from our clients and something that will definitely inform more and more the type of actions that we drive internally. On the other side, I've already made some decisions when it comes to aligning our business and getting it closer to our clients. Our management teams are fully committed to delivering that and to accelerate the transformation, and we are seeing very, very promising early results that I really look forward to sharing more with you in the coming calls.

We have also made some changes to our IT and AI operating model. And as such, we are very happy to announce the appointment of Andreas Braun as our new Chief AI Officer for the group, that he will be joining us as of Monday. And so on that, just a quick few words on Andreas. Andreas, we're very, very happy he's joining us, and he will own our mission to scale our AI capabilities, scaling them from a client-facing perspective, scaling them internally as we turn some of the internal things that we're doing also into some business opportunities for us and to work with that partner ecosystem that we have. And thank you for all the multiple AI companies that have reached out over the last few weeks to talk and to have -- and to share ideas with us.

Andreas comes most recently from BCG X, Boston Consulting Group. Before that, he was with Microsoft. Before that, Allianz, before that with Accenture. And I think his profile is very unique, is very unique because he's not approaching AI only from a technology perspective, he also approached it from a business building perspective. So that is what gets us really, really excited and we really look forward to working with him over the next few years.

On top of Andreas, we will also have a team of very experienced practitioners and AI professionals that are joining us as well in the next few weeks, and we will share more with you as we finalize the revamp of this organization.

Now what are they inheriting? Well, they are inheriting a very robust set of solutions that we have been able to create in TP.ai FAB. We are very happy to announce and to report that we're roughly -- we have over 550 client AI projects live today in Q1 2026. You can see there that we have seen an acceleration in the momentum in Q1 with over 50-plus deals that we have won in this space, and this gives us a lot of hope in terms of we see the traction.

This is not just a technology marker, this is a real business driver because we are being able to win business, we're being able to secure business from our clients given the strength of some of these solutions. So maybe let me bring that to reality and to life a little bit more. And here, we have an example, and this is a client. It's a large financial institution that we serve in India and they came to us with a clear exam question of like, hey, help me manage my customer interactions. And help me manage them with your human workforce, help me manage it with your hybrid workforce, so TP.ai FAB Connect, our Agentic [ AI ] solution.

So we were able to deeply partner with them. And what gets me really excited and why I wanted to highlight this example with all of you is we're not only a tech provider, we're not only a human provider, we're bringing the interconnection and the feedback loop between the Agentic workforce and the human workforce. On top of that, we were able to partner with them into embedding the solutions from just not only the contact center technology, but also getting into their core banking system and their architecture. And with that, we were also able to bring some of our expertise on back-office solutions for banking and financial services, which is starting to become much more relevant. In a world where the technology is becoming more and more a commodity, the expertise and not just the -- I say I had expertise, but the real expertise of process excellence, process reengineering, understanding the limitations on the system, understanding the functionalities and everything that can be possible for our clients becomes essential.

So therefore, this solution, being able to, again, bring the Agentic workforce, the human workforce, the deep understanding and expertise in this particular vertical allowed us to not only secure this client, but also drive some vendor consolidation in this space, which is what gets me really, really excited about it. And that's why I also wanted to share just to bring to life that some of the numbers that we see in this slide are translating into these business opportunities.

So with that, what you see here is our commitment to the 2026 guidance on a group like-for-like revenue of roughly 0% to 2% even in the current market context, the same delivering the guidance on stable margin at 14.6%. The same on the free cash flow of EUR 800 million to EUR 850 million excluding, of course, nonrecurring items that we have highlighted already, and you see below in that slide of roughly EUR 70 million to EUR 90 million of restructuring costs expected in 2026. And we see a softer H1 but a true acceleration on the second half of the year, given the pipeline that we are seeing, given the conversations we're having with clients, given the momentum that we have seen in our Specialized Services division that continues to accelerate month-over-month. So all this gives us the confidence on these numbers.

And last, I briefly touched it at the beginning of our call, we are also very pleased with the development of our Future Forward efficiency program that is not only driving efficiencies from just a pure procurement space, for instance, but that is really helping us retool how we do work, how we go to clients, how do we contract, how do we price. A number of things that I've heard very loud and clear that our clients want us to make progress on. And that is -- we're seeing the performance, we're seeing the delivery, we're seeing the actions happen.

So all of these for 2026 and then, of course, as we have already communicated our long-term guidance that you see here in this slide that we've covered many, many times before.

So with that, and before we open it up for questions that I'm sure you have many and we'll be here to answer them with Benoit. Again, I don't want to say that we're happy with the results, but this is what we anticipated coming in. But hopefully, what you take away from this is that I'm now on the ground, talking to our clients, talking to our team members, talking to our partners, and making sure that we make the right pivots to deliver on the guidance of 2026 and the same on the long-term guidance.

With that, we'll turn it now to questions from the audience and we're ready. Thank you.

[Operator Instructions] The next question comes from Remi Grenu from Morgan Stanley.

I've got three on my side. The first one is on Core Services momentum. So I think you're flagging the geopolitical uncertainty. Can you give us a little bit more flavor on the level of activity in March versus the rest of the quarter. Just want to understand if there has been a deterioration since the beginning of the Middle East situation. And how you would expect Q2 to look like if we put together this macro uncertainty, the offshoring and the overall pipeline for contracts. So that's for Core Services.

The second question is on LLS. I think you're a little bit more positive in the press release saying that the momentum has improved through the quarter. Just want to understand if it is just March being better on the back of the easier comp base? Or are you seeing a daily pickup in volume of activity that would make you more confident on that part of the business?

And the third one is on the transformative deals and the outsourcing from clients. I think you were as well referring to a few of these deals back at the full year results presentation saying a few hundreds of millions of euros, potentially larger deals, transformative, et cetera. Can you just make an update on pipeline and if you expect these to come through at some point?

Excellent. Thank you, Remi. And maybe the answer to question 1 and question 3 are related in a way. Definitely, we continue to hear, and we continue in conversations with many of our clients for these large transformative deals. The ones that we knew at the last time we chatted are still there, and we continue talking to our clients as they go through their own internal changes, they go through some uncertainty in terms of deciding to move ahead given the geopolitical environment, particularly with rates going up and down from a financing perspective. So that has been a little bit correlated.

Just to finish on your first question on what are we expecting? Yes, we did see a slower ramp-up, particularly in EMEA that you see that in the results as well, we saw a slower ramp-up of some of the contracts towards February and March. And of course, that we hope that now in April, May and June, we see a pickup on that. But given the situation, it would be too adventurous for me to say with full certainty that, that is going to be the case. But that is something that we continue monitoring. And hopefully, some of the macroeconomic situations get better for all of us. And that at the same time, that impacts the business. So those are the 2 sides of the coin. So that's why I think your question 1 and 3 are interrelated.

On the question on LLS. Definitely, we see momentum. So March over March is better, but we have seen that momentum growing all throughout the quarter. So every month was a little bit better, not only than the previous year, it was a little bit better than the last month, and we continue to see activity picked up in that space. We've also had some wins of large hospital systems and other type of clients in the space of LLS. And that gives us the confidence that we see the strength building up on LLS in particular, but that is what we're seeing there.

The next question comes from Nicole Manion from UBS.

I also have three, please. Just the first one around your comments about monitoring the space on content moderation. Could you maybe sort of spell out a bit what you mean there? Are you sort of assessing your position in this part of the market?

Then the second question, just on offshoring. Obviously, you've been seeing very strong demand for offshore for the last few years now. But obviously, that means that base is moving higher all the time. Has the rate of growth in offshore sort of still been accelerating at this point? Or are you seeing kind of any plateauing or moderation at this stage?

And then finally, I appreciate this is a sales update, but can see you've reiterated the guide on restructuring of EUR 70 million to EUR 90 million, I think at the time of the full year update. So as of end of February, you talked about EUR 56 million in costs year-to-date that have sort of been committed. Just wanted to ask about why these costs are so front loaded? And if there's any sort of risk to the upside on that restructuring amount given the ongoing change around AI, obviously, a new Chief AI officer in the group and so on. Any detail there would be really helpful.

Great. Thank you, Nicole. So let me start with content moderation. Look, definitely, we're seeing the continuation of the trend of automation in this space. We're also seeing and monitoring very closely some of the developments in the U.S. with regards to content moderation and the role that social networks are having in lives and livelihoods in that space. So that is the space that we're constantly monitoring.

In my conversations with some of our clients in this space, they are telling us that, of course, as a result of some of the developments that we've seen in the United States, they are getting increased regulatory pressure. And as such, how do they balance their human moderation vis-a-vis their AI moderation? And that is a space that we continue to have a conversation with them in ways that are not only, hey, of course, there's automation that can go and continue in that space. But at the same time, how do you get the human in the loop in that space, given some of the developments that we have seen, given the effects that content moderation can have, what is the impact for their own operations.

So we're very, very active in these discussions with our clients. And again, we are seeing a little bit more of the pressure for them in this space. So definitely, that is what we're monitoring. And of course, we will continue to assess that space. The second question was on?

Offshoring is accelerating or not.

We are seeing a higher rate of offshoring in Q1 in that space, probably a little bit higher than what it was before. The rates -- we continue to see very healthy growth for our India operation, as Benoit said, South Africa, Egypt, so I'm not seeing particularly a big pressure on the pricing side in that space, but we continue to see very healthy growth in some of those operations for us.

And then the last one was on the restructuring costs. Yes, I think, Benoit, you can confirm with me. It was EUR 56 million.

Yes. EUR 56 million was corresponding to what was announced at the time we released our numbers. And your question was why is it front-loaded? The answer is it's better to restructure and get the savings on a full year basis. So effectively, the plan has been set so as to invest as much as we can early in the year and so that we expect to see the benefits on our margin by year-end, and this was factored in our EBITDA projection for 2026.

Exactly. So that -- hopefully, it answers your point on the restructuring. And as a reminder, also, all our -- most of our AI expenses also flow through our P&L as OpEx. So in terms of any CapEx or restructuring costs that we need to do that, we can manage it within our OpEx guidance.

The next question comes from Suhasini Varanasi from Goldman Sachs.

Just a few from me, please. You've done some reclassification of activities. Can you remind us when TP Infinity was recognized previously? And will you be giving us the margin reclassification? It will be helpful to have the quarterly revenue numbers, but maybe just the margin data as well, that would be helpful.

Second question is you've had some time to think about business. As you think about transforming that, do you see scope to unlock value through maybe some divestments, disposals, et cetera? I would love to get some color there.

And then I think the last one just to get some clarity on the guidance again. I think you indicated that you still expect a soft first half, an improvement in second half of the year. So does this mean that we should expect declines overall in first half?

It was a little bit hard to hear you at the beginning. So let me make sure that we got the question right. And I think the question was if we're going to give also the margin breakdown for some of the reclassification that we completed in Q1. Is that correct?

Correct. And just the rationale behind it, please.

Yes. No. So on the rationale for the reclassification of TP Infinity, like I said, on TP Infinity was one single unit of our core service reported mostly in EMEA because 90% of the revenues were from EMEA and managed in EMEA. We expanded our operations in the U.S. starting last year. You have the breakdown. You see that it's around EUR 3 million per quarter. You have the breakdown of revenues in the press release. And because this is growing, we expect it to effectively be reported separately and it reports under America with core services in America now starting in January of this year. So this is why we align it.

I don't think we will disclose separately the margin on this business because, for us, it's one of the component of the business. So it will still be reported as part of core services for the moment unless that becomes a very material part of the business and with a different dynamic, but it's not the case yet.

Exactly. I think your second question was a quick update on the portfolio. It's a strategic portfolio review. So with that, what I can tell you is that, that exercise if you remember, with some of you that I've discussed a few weeks ago, we have the mandate from the Board to conduct that strategic portfolio review. The portfolio review is in full swing, and we are already deep into the analysis that, that has. And before someone else asks me, I will put it out there. Of course, some of the decisions that we make in that space will have implications on some of the capital allocation decisions.

So we are looking into that space all as a block. And I will come back to the investor community when I have more news to report in that space, but it is ongoing. We are looking -- we have discussed with a number of partners, and we are having very, very interesting conversations of different ways to unlock value, but nothing firm that I can report as of right now. So I will come back to you on that one.

And I think I'm missing one question, right?

Was the soft H1 and whether we expect a growth in H1 compared to the overall guidance.

So we are expecting a softer H1 as we said, and we're working day in, day out with our teams and definitely an acceleration of our growth to hit our guidance in the second half. So with that, you can make the estimates of where we are going to be in the second quarter of the year with a softer start and then the recovery on the -- the upswing, not the recovery, the upswing on the second half.

So just to clarify, so you don't expect the inflection of growth to happen in the second quarter. It's more a second half weighting.

Yes. We see an acceleration of the momentum of all the actions that we're putting in place. But of course, we expect them to materialize as expected on the second half.

[Operator Instructions] The next question comes from Karl Green from RBC Capital Markets.

The first question is just about the outsourcing dynamics, which I think you said in your narrative, clients are regarding as a core strategic lever. And just in terms of that particular point, could you drill down a little bit and explain what they're thinking at the moment, whether it is a core strategic lever because they're thinking more about the offshoring or it is that technology integration? And linked to that, have you had many instances of clients who have gone away and tried to implement and integrate AI solutions themselves. And it's not worked out quite as well as they would have hoped and then come to you for support and realize that they can't go it alone. That's probably two parts to one question there.

And then just the second question, much more straightforwardly. Just in terms of the trust and safety business, just how far off peak are the activities in both the Americas and Europe. I mean it seems that Europe isn't quite as far down the automation process at the Americas. But just to get a sense as to basically how much further either of those businesses have potentially got to fall, please?

Yes. So let me start with the partner and the strategic discussions that we're seeing there. The clients are coming to us, and they are saying, like, hey, definitely AI is going to reshape some of the processes that we're doing, some of the operations that we have. We certainly cannot do that with a multitude of partners. We want to do that with a few strategic partners that get us, like that's were a quote that I heard from one client that's like, you guys get us. You guys have been with us for so many years. You know our processes. You know our data, you know the kind of things that we need to do and the kind of things that we don't want to do with our clients. So we want to partner with you. And we want to partner in these deals where they see outsourcing as a strategic lever because in many cases, we are one of the primary partners for them. In other cases, they see the strength of our offers vis-a-vis some of our competitors in this space that we're able to offer both the reliability, the security, the global reach, the set of AI solutions that we have.

So they are coming to us and saying, like, hey, it would be too expensive for me to do it internally or it would be too complicated for me to do some of these things internally. I want to do that with a reduced number of partners that are more strategic and that are there for us. So that's a dynamic that we are seeing. As part of those conversations we've had and I've had a few of the partners, our clients telling us, okay, we tried these AI solution. We tried this knowledge management system. We tried this Agentic voicebot. And we really didn't get the uplift or the reduction that we were hoping. We would really benefit from having your expertise in our processes, your expertise into what you do and help us drive a little bit more.

And again, a little bit of the conversation in that space is not only on, let's do the same with fewer humans and this is the part that excites me the most. It's like, hey, help me do things that I cannot do today. Help me make sure that I reach out proactively to clients when I know I'm going to have an issue. Help me do collections in a very different way than what I'm doing today. So these are the kind of conversations that we are having. So it is not only about like, hey, help me implement the tool. It's helping me unlock the value that comes with the tool. Of course, there's a technology component, but of course, there's a process expertise. Of course, there is a knowledge of the strategy and the objectives that organization wants to drive.

And that's the most exciting part, particularly in a world, and I'll emphasize it again, in a world where we are seeing that the technology is becoming much more accessible and that a lot of the technology that is out there in the market is more and more of a commodity. And therefore, the true differentiation comes from the people that know their business versus the people that just have a technology capability. So that is the space and the conversations that we're having.

If I go to your other question on trust and safety, the reason we are seeing it more in Americas for just a simple reason. I think a number of the LLMs are better trained in English than in some of the other languages where we perform some of the content moderation and trust and safety activities. And therefore, we see more impact first there. It doesn't mean that it will not get to some of the other languages, but that is what we are seeing. And again, it's a space that we see already the evolution given some of the developments in the U.S. in that space and the increased regulatory pressure that some of our clients are getting.

So we will continue to monitor that. We will continue to make the investments on getting into the real high value-added activities without -- within trust and safety, but that is a little bit of what explains the delta between Americas and EMEA and APAC.

The next question comes from Ben Wild from Deutsche Bank.

Two questions, please. The first one is hopefully a simple one. Can you help us understand roughly what the unit price differentials are between onshore voice, offshore voice and AI solutions within Core Services today?

And then a second question just on the free cash flow. There's a comment in the press release that FCF will be H2 weighted this year. We've already discussed the H2 weighting to growth and also the H1 weighting to nonrecurring restructuring cost items, but are there any other specific items that mean FCF will be H2 weighted and what kind of split between H1 FCF and H2 FCF would you expect?

Yes. The price differential, I think this you can also get from multiple sources in terms of what we see in the delta on price, 20%, 30% or even depending on the geography, up to 50% difference from a unit of a cost per minute if we can still use that metric in an AI-enabled world. But that is just to give you a rough sense of the onshore versus offshore.

The AI solutions, look, we are partnering with many companies, and each of them has a very different way of pricing it. Some of them are pricing also per minute. We are seeing some of those prices per minute be at parity or higher than some of our prices at offshore locations, mostly and even in some onshore location is getting close. But we are seeing that. So we see the price per minute. We see the price per token or consumption. And there are a very few selected number of partners that we're really excited about that they are partnering with us on per resolution or per outcome basis. So it's hard to say it's x percent cheaper or not because the basis for comparison on that are different given the way that they are pricing it.

Again, in the places where we see a price per minute, we see that is getting closer and closer to some of the offshore prices that we can get. And if on top of that, you get some of the very interesting developments that we are seeing right now on translation for certain parts of the business, then it starts to become a more complicated equation to solve in that space. But that is just to give you a sense a little bit of the dynamics that we're seeing from a pricing perspective. Benoit, do you want to comment on the restructuring costs?

Yes. But normally, we don't comment on that for Q1. But effectively, we have incurred big part of the restructuring costs in Q1. We will continue to do so in the coming months. When it comes to the balance of the free cash flow, as we mentioned in the press release, we expect to have broadly the same type of allocation that we have seen last year. I mean, net of those restructuring costs, which is a slow free cash flow in H1 and most of it coming in H2 with the same type of seasonality and roughly the same percentages.

There are no further questions at this time. So I hand the conference back to Mr. Amar for any closing remarks.

Excellent. Well, thank you for the questions. I was expecting them to be very vigorous as always, and I'm sure you will have a few more over the next few days, and we remain at your disposal to answer any additional clarifying questions.

Again, we're reporting a Q1 that is first, as anticipated; and second, not where we want to be. But I want you all to have the confidence that we are working very, very hard day in, day out since I took over as CEO to get us on the right track, to accelerate the transformation and to be able to report and I really look forward to coming to these calls to report some of the progress that we are seeing that we are already working on that we're executing throughout the company from a revenue perspective, from an AI perspective and now welcoming Andreas to the group and also from a cost and profitability perspective. So more to come.

I look forward to sharing some of those updates with you. And with that, we will see you at the end of the first half in our next call. Thank you very much.

Welcome to TP 2025 Annual Results Conference Call. [Operator Instructions].

Now I will hand the conference over to Thomas Mackenbrock, Deputy CEO. Please go ahead.

Good evening, everybody, and welcome to our 2025 results presentation. And as you have probably seen, we have a lot of news to share. As always, with me in the room is Olivier Rigaudy, my dear colleague and CFO of the group. And we have a special guest today, Jorge Amar, our incoming new CEO for the group who will present and introduce himself later today.

But let's first have a look at the agenda for today's call and what we will cover in the next 50, 60 minutes or so. First, I will give you an update on the key highlights of 2025, provide a strategy update of where we stand today with the implementation of our future forward plan and an outlook for the future. Olivier, as always, will cover in detail the financial results. And at the end, we have ample space for Q&A.

Let's look at the key highlights, and let's focus first on the financial aspect and then talk about in a second step about some of the strategy and governance changes we're seeing. 2025 has been a turbulent year for the world and for our industry, but we as TP have delivered solid results. And as you have seen in our press release, we have met all our updated 2025 objectives.

If you see on the group revenue, we are reporting again a bit over EUR 10 billion in net revenue, and we have grown on a like-for-like basis, excluding the hyperinflation effect of 1.3%. If you exclude that 1% on a reported basis, given the weak U.S. dollar minus 0.7%. It's particularly noteworthy, and we talked about this in our Q3, our H1 and our Q1 presentation that our Core Services are a stable growth momentum and a stable growth anchor for the group, with reported 2.7% like-for-like growth, which is remarkable in this environment, while at the same time, our Specialized Services division faced some unique challenges last year.

On the profitability, again, we delivered our updated 2025 guidance. We have reported an EBITDA of almost EUR 1.5 billion, with a margin of 14.8%, excluding the currency effect, which means on a reported basis, 14.6% and this also translates into a very healthy net free cash flow. If you exclude the nonrecurrence of over EUR 900 million, and we had a record cash flow generation in the second half of the year with more than EUR 640 million. So we are quite proud about the results in 2025.

And when we look at 2026, we provide the following guidance. For this year, we expect a growth rate again between 0% and 2%. But given how we started into the year and how we ended last year and given some of the uncertainty, in particular, in the core onshore market, the U.S. and Continental Europe, we anticipate for Q1 a revenue development, which will below the annual guidance.

Secondly, and you will see later in detail some of the measures we are implementing. We also expect a stable EBITDA margin, which means 14.6% on a reported basis that assumes a dollar of $1.20. The net free cash flow generation is expected to be this year slightly below last year, given the strong euro. And so we see here a range between EUR 800 million and EUR 850 million excluding the nonrecurring items. In our proposal, we just had the Board meeting this afternoon to the annual shareholders assembly at the end of May is to increase the dividend from EUR 4.20 to EUR 4.50 per share. That's on the financial side.

Let's take a look at some of the governance and strategy updates. So we are very happy sort of to announce the long-awaited process of our governance change. The Chairman Moulay Hafid, Daniel the founder and CEO and myself has recommended to the Board and the Board sort of followed that recommendation to appoint Jorge Amar, who is a very world-renowned AI expert and leader of McKinsey's global customer service practice, to be the new CEO of the group. He will start officially March 16. I've known Jorge for quite some time, and I'm very excited that he steps into this role.

This also means naturally that Daniel, myself and Olivier will step down a day before. Daniel will also step down from the Board of Directors. And we also, at the same moment to really make sort of the governance renewal complete also co-opting to the Board for new members. One will be Jorge starting middle of March, sort of stepping into the role of Daniel. Myself, also, I will continue to support the group that is very close to my heart but then in a different role as a Board member and 2 very exciting new Board members who have been co-opted and are then up for the approval by the shareholders' assembly at the end of May, one lady from Qatar and one lady from South Africa, which I'll explain later her qualifications.

So that's really, I think, quite exciting news. I have been many discussions over the last years, when will this happen? I do believe we have there the right team on the start, and I'm excited sort of to support this group in this new role and particularly Jorge in his new task.

Then Future Forward. We launched this initiative last summer, you saw in Q3 a quick update. We are now in full swing and 2026 will be the first full year of implementation. We have really mobilized the organization with hundreds of different initiatives. And as I explained and hinted towards in our Q3 presentation, we are working strong on essentially 3 levers. We want to accelerate the growth. We want to drive efficiency also leveraging AI, and we want to transform the company and we are making sort of good steps on all 3 elements.

And on the internal AI efficiency, we are starting a program as we speak that will drive efficiency savings for the group targeted to be over EUR 100 million in 2026. We have launched more than 500 AI projects last year and expected to scale further with our TP.ai strategy, and we are also happy to share that also under the new governance, we are launching a comprehensive strategic portfolio review of the group. So a lot to be discussed.

Let's quickly look at the highlight numbers. I think no surprises here for the audience, of course, happy to answer more questions, but we see the strong Core Services that we saw throughout the year. There has been a little bit of weaker momentum in Q4 that we anticipated in our November presentation what for me particular positive is to see the momentum in the Americas. As you remember, it was a bit negative before, but we have seen an excellent development in India as well as Latin America. And given the strong momentum, we are reporting growth of 1.4% like-for-like in the Americas.

In EMEA, again, very strong with close to 4% in 2025. We have seen great momentum in the U.K., South Africa, Egypt, APAC as well, sub-Saharan countries. So they're across the Board a very strong momentum, while also a bit subdued in Q4.

Specialized Services, on the other hand, you know the challenges on the nonrenewable of the significant Visa contract and the market environment for our Specialized Services in the U.S. So from that perspective, minus -- a bit more than minus 9% like-for-like growth. If you adjust for the effect of the Visa services contract, we have as indicated and as expected, a slight positive like-for-like growth for Specialized Services. But important to note, yes, the momentum has been reduced but given all the measures we have taken last year, we have proven to maintain a strong profitability. There's only a slight decrease of this highly attractive business.

Second comment, again, in times of uncertainty, having a broad client portfolio is key and giving our broad exposure to multiple different industries has been and will be a strength of TP. For 2025, we continue to see strong momentum in public sector, fast-moving consumer goods and strategically very important, the strong sector of financial services and insurance. This is really has been sort of supporting the growth last year, we saw a bit of lower activity, automotive and energy utilities last year.

Also, the portfolio we talked about a lot, TP is not a company that stands still. Over the years, always have been able to develop new business lines and build out -- building on its capabilities, new services line, along with our articulated future forward plan. And you remember the presentations last year, we have seen strong growth momentum in AI data services, and we call this out for the first time. We have seen very strong high single-digit growth in sales, which is 7% of the group and which is a critical factor to provide Revenue as a Service for our clients. And also very strong momentum, double digit actually in our back office and BPO-related task, which is important to sort of have an end-to-end service chain for our clients.

Trust and safety. As indicated, we saw some revenue decrease. There is some automation happen on our client side. And care overall, broadly in line with the overall Core Services growth, so also a healthy development but changing the way we operate for our clients.

Now a quick update to our 2 new executive managers. Jorge Amar, as I said, very happy, I got to know him very closely really now for quite some time. He has been working with the group for quite some time. But Jorge, why don't you introduce yourself to the audience and to our investors.

Thank you very much, Thomas, and thank you for the warm welcome into the group. Today is not the day to speak at length as I will officially become the group CEO starting March 16. But as a quick introduction, Jorge Amar, I was born in Argentina, but most of my professional career has been in the U.S. where I worked with some of the largest companies in topics around customer experience and service operations. And in particular, over the last few years on the topic of artificial intelligence. Not only from a technology perspective, but also how to think about consumer and employee adoption. So all these feels like the right combination of things that are leading me now to be very proud in joining the group. So again, more to come starting March 16, but very, very excited to join the group.

So I think not just Jorge is excited, the entire group is excited. I think it will be a great addition for the company. And as he indicated, he brings 3 key components that are critical for the group; first, a deep understanding how AI works in enterprise environments which is absolutely critical for our journey ahead; secondly, he has a strong proximity to existing and potential clients of TP, understanding their needs, understanding their environment, having these relationships, which I think is super critical also for our path in the future; and thirdly, obviously, given his background, he has a strong analytical mind and sort of will shape the strategic path for TP in the years ahead.

I can also -- he's not with us today, but also can only praise our new interim CFO, Benoît Gabelle, has been a Deputy CFO for TP for some years now. Before he was advising the group, he was a partner at EY, is an absolutely excellent person. We are very excited that he will sort of step up into this new role and will support Jorge from the financial side.

Also, as I said, it's not just the executive management team, but also the Board has renewed and has co-opted today for new members, 3 of them immediately. Sheikha Hanadi bint Nasser Al Thani, a very renowned Qatari entrepreneur, investor and business leader. We are very excited that she brings her expertise, her network into the board realm for TP. She has strong expertise when it comes to investment and the investment in capital markets.

Secondly, Ingrid Johnson, she's South African lady, also with a broad understanding about capital markets investment but also the banking insurance space where she led several companies. So quite excited for that sort of additional expertise on the Board as well.

Jorge Amar will join middle of March. And as I said, I'm very dedicated to the group, and I'm excited to continue the journey with the group in this new role as well. Of course, all of these cooptations are subject to the shareholders' approval at the meeting at the end of May.

Now let's look at the numbers, and Olivier will guide us through.

Thank you, Thomas. Good evening, everyone. I'm happy to present to you the 2025 figure. As mentioned by Thomas, I do believe that -- we do believe that we have delivered a very good year despite this global challenging business environment. As you can see here, you have the full P&L. But before commenting in detail, I just wanted to highlight 3 topics.

The first one that was unexpected when the year started. The macro environment has been difficult all along the year and the growth at different market was probably lower than we expected. Secondly, we have the FX environment that was not really exactly what was supposed to be to happen. For you -- I remember that we start the year with a dollar that was at EUR 1.03 and finish it at EUR 1.17. So it has been a global wash all along the year, especially in the H2, we will come back in a minute to that. That was not exactly the plan. And lastly, the impact of the Trump administration policy on our major business of Specialized Services, I was thinking, of course, of LLS has also an expected impact on the growth that we were supposed to deliver this year.

But beyond that, beyond -- despite that, we have been able to post a sales figure of EUR 10.2 billion, 1.3% like-for-like growth, excluding impair inflation. And EBITDA, which is above EUR 2 billion and EBIT before nonrecurring items close to EUR 1.5 billion, EUR 1.485 billion aiming to 14.6% growth rate -- sorry, to sales versus 15% last year. I'll come back to explain where I come from the difference.

Finally, the net profit -- the operating profit is roughly equal to last year. We will see why. We have been able to reduce tax charge significantly, and our net profit is roughly the same than last year. As you can see, this is a 40 basis point difference in EBITDA margin, which -- of which 20% -- half of it is coming from the FX.

Let's have a look to the figure of sales first. The first thing to tell is that, of course, when you start to have a look to the figure of last year, you start with 10 -- also EUR 10.3 billion and you have a currency effect of EUR 362 million, of which EUR 240 million came in the second part of the year. So you had a 50% increase of the negative impact in the second part of the year that was significant.

So when you start to look at the precise figure the way they have been built, you have also, of course, a change in scope of consolidation which is a consolidation of ZP better together. You remember that we bought this company last year, and we consolidated early February 2025. And we are also a small company called Agents Only that came on board early July 2025. So you have a positive impact of scope of EUR 196 million covering the decrease of Specialized Service, EUR 132 million that was mentioned by Thomas a minute ago, of which most of it is coming from this U.K. contracts that we have not been able to renew last year. That has a big impact on our sales, EUR 140 million to be precise.

And beyond that, the Core Service business -- the Core Service activity have been able to grow by close to 3%, 2.7%, which I believe is beyond the market figures that we will get in some weeks from now, showing that this group has been able to continue to deliver significant growth in different markets. It was mentioned by Thomas in U.K., in different sector, in public sector, in banking where we are able to match the demand of the client.

Let's have a look to what happened specifically in this year. When you look the FX environment, things are clear. You have all our currency in which the group operates have been degraded versus last year. So it has an impact. Of course, the dollar, but not only the dollar, the Indian rupee, the Philippine pesos, Sterling, everywhere. So we are facing a situation where we have been able -- we have not been able to cover, of course, all the translation effect that has a final impact on our mix of margin. This is an adverse FX environment in 2025. That was effectively significantly higher than people who are waiting.

If we look now to the result by, I would say, by sector or by zone and by activity. I would say -- I would -- I'll add 2 points. The first one is a strong EBITDA margin improvement that we have been able to do in Specialized Services in H2. You remember that in Q1, specifically, but also in H1, LLS has been hit by this Trump effect, if I may say. But the group has been able to react quickly and to adjust this cost quickly to match the global demand. So the demand is flat versus the volume is flat in Specialized Services, notably in LLS but we have been able to recover significantly the margin, and we have just a small negative effect for the full year that is going to be positive next year, again with LLS given the measures that has been taken all along the year 2025.

When it comes to Core Service, there are 2 issues to be -- to have in mind. Of course, the FX impact, which is -- I just mentioned it very significant. And the group decided to put some money, some investment in AI and IT technology that has been, I would say, spend notably in holding, as we can see on this table to support the future growth that was absolutely needed for the future.

So all in all, the result in margin are not dramatic if you look at it. They are much more -- they're positive. If you look what happened, you have versus last year, an impact of Specialized Services that is roughly neutral. Of course, we have lost 70 basis points with the TLScontact impact, notably the UKVI -- the U.K. contract, sorry. That has been covered by 2 things. One is the acquisition of ZP that came on time, and that has been made on time accordingly and also by the mix effect linked to the work that has been done all along the year with LLS to improve the margin. So all of that, meaning that the cost on the Specialized Services impact on the margin is neutral and has been -- and we have been able to swallow all the impact of the TLScontact that we lost.

Beyond that, you have the 20 basis points that are linked to the FX roughly. And you have the 15 basis points, which are the costs related to AI, notably spend in holding, as I mentioned earlier on. So I do believe this delivery of EBITDA margin is really good and shows how the group has been able to adapt to this global environment, either in terms of demand for LLS or either in terms of adverse FX condition across the board.

If we now move to the other part of the result, what we can say is that the amortization of intangible assets are flat versus last year and the nonrecurring items are a little bit better than last year. You remember that last year, we had a significant amount of money that was spent to deliver the synergy from Majorel. Of course, this year is significantly less. But we have been able to -- we have been obliged to get out of some country, of course, Russia, that was one of the actions that we did all along the year, but also 2 other countries like Guyana and Trinidad, where we wanted to get out.

Besides that, we have been careful on the impairment of some assets, notably on PSG which is recruiting activity that we bought 4 years ago. And where we are really, I would say, cautious on the future market for 2026. And we thought it was clear, better to be cautious and to impair at least EUR 60 million -- EUR 67 million for this business. It doesn't that mean that the business is not good, but we are very, very careful here. I remind you that this impairment of goodwill has, of course, no impact on cash.

So the operating profit is roughly flat, EUR 1.55 billion versus EUR 1.82 billion last year. And when you look what's happening on the final part of the P&L, we have been able to maintain our net financial charge at the same level despite the fact that we have an outstanding debt that was increased in the year. But of course, last year, you remember, we had a very, very positive hedge impact coming from the devaluation of the Egyptian pound that didn't happen again this year. The impact of this hedge was EUR 50 million that is not happening again. So besides that, we are flat in finance cost.

What is interesting is that we have now finished -- mostly finished the integration of Majorel, and we have been able to reduce significantly the tax rate -- the accounting tax rate. The impact is EUR 56 million improvement in 2025 versus '24. And we are still more things to come and the full year effect of the decisions that we took and implement in 2024 and 2026. That's the reason why we believe that in 2026, our tax rate will be below 30%.

Beyond that, very few things to tell that we are roughly at EUR 500 million at net profit level versus EUR 523 million last year. Remember, we impaired EUR 67 million from PSG, that has a big impact on the net profit.

More interestingly, and it as was mentioned by Thomas a minute ago, is a strong free cash flow generation. You remember that was a question about our ability to deliver free cash flow for the full year following the performance of H1 that was hit by some one-offs that were, I would say, exceptional. We have been able to deliver the best cash flows that we ever had in the H2 -- in the second part of the year in 2025, EUR 642 million versus EUR 636 million for the following year -- for the previous year, sorry.

We did that because we manage strongly the working capital management or strongly working capital as expected. But we did that without cutting in the CapEx. And that is absolutely key. We continue to invest reasonably, but clearly, in some place where the demand is rising, notably India, South Africa, where the market is asking for size and for volume. So we increased our CapEx to 2.4% sales -- to the sales this year.

So at the end of the day, the free cash flow is at EUR 900 million, EUR 901 million. Keeping in mind that we have to pay, of course, remember that we have the French restructuring plan, voluntary restructuring plan that was partially paid in 2025 for EUR 25 million out of the EUR 31 million that are shown here. And of course, will continue to be paid in 2026. So as a whole, strong free cash flow generation, I know it was a concern about the market, but the company continued to deliver strong free cash flow, and will continue to deliver strong free cash flow.

If we now move to the situation of the group in terms of balance sheet. As you can see, we have been able to stabilize the debt roughly at 2x -- below 2x net debt to EBITDA while returning to the shareholder 42% of the free cash flow through dividend and share buyback and continuing to invest in business. I just mentioned it a minute ago, but also acquiring ZP and establishing some AI partnerships that are going to be promised -- promise for the future.

So all in all, we continue to have a strong balance sheet while continuing to develop the business. And when you look at the indebtness, there is no reason to be afraid. We are BBB rating -- Standards -- S&P. We are the -- we have launched -- I remember you that we launched early last year, a bond of EUR 500 million that has been easily covered by the market. And we have a debt that is, I would say, balanced between the financing source and by nature of rate.

To be clear, the group has the ability to reach -- to have access to lately between EUR 3 billion and EUR 4 billion easily through commercial paper, through some medium-term bond or banking facility. So the average cost of the debt is below 4%. We have an average maturity, which is around 3 years and we are absolutely confident about the ability to continue to finance and support the business and the growth of the business in the future.

That's what I wanted to tell you. I'm holding back to Thomas for the strategic part.

Thanks, Olivier, and thank you also because this will be your last presentation to present in your results after 16 years with the company. So a big thank you on behalf, I think, of the entire Board, the entire organization for these wonderful sort of decisive action over the last 16 years.

Thank you.

Let's look, and -- I'm in the interest of time, quickly as an update on Future Forward that you see where we stand and what will be continued. So as I said, the value creation office for Future Forward is in place, hundreds of initiatives activating. I brought for today's presentation, as promised last time, 4 examples, to give you a little bit of a flavor where do we stand and what is happening and to have a little bit more tangible view on these growth levers, transformation levers as well as efficiency levers.

Internal AI, we talked about, we see 3 big levers on driving change in the organization, of course, leveraging AI in everything we do internally when it comes to recruiting, training, workforce management, supervisor quality, but all corporate function, if you will, and AI adoption allows us to reach another level of quality, but also efficiency. Hand-in-hand with this internal AI transformation goes the cost optimization addressing structural changes through delayering automation on our SG&A and our overhead parts as well as on our direct costs as well. There are many, many plans in place now that are being implemented and they allow us to drive the savings that you see below.

And thirdly, that is part obviously of the new leadership role with Jorge to find a simplified organizational redesign and to choose some lever there to have a more agile, leaner organization. Overall, for all of these 3 levers, the current expectation is that this will be delivered above EUR 100 million run rate savings, and we expect a onetime cost this year, of course, on depending negotiation of some of the levers between EUR 70 million and EUR 90 million. These plans are already in action.

If you look at our annual results, you see that in January, February, we have the first measures amount with a corresponding cost of EUR 56 million. So it is happening. It's being implemented, and it will be continued seamlessly also by Jorge in the future. So this is on track and in execution.

Second one, transformation. All of you remember this chart what I presented in Q3 that we as TP, believe AI is not a piece of software that is being sold. It is an incremental part of our operating fabric to drive outcomes for our clients. This is true on the functional side, so industry agnostic, and we have made good progress on some of our functional solutions, as you see later, as well as of the industry solution side. You need to orchestrate like we do today with TOPS and BEST, the human dimension, you need to orchestrate the AI dimension as well that it really can unfold this ROI and impact for our enterprise clients because otherwise, it's just a nice demo, but not really something delivering value.

For this, we have started, as you remember, at our Capital Markets Day, our Q3 presentation TPI fab, our foundational backbone, we've launched more than 500 AI projects this year, integrating what we have done in the past into our new solutions suite in really driving impact for our clients. The biggest impact because there we had a head start in the past is augmenting with AI, our existing human delivery engine. There, we have seen more than 270 projects last year of doing this human augmentation but we also started to see some traction on FAB Connect, which is basically orchestrating human and agentic AI; FAB Growth, enabling with AI revenue as a service for our client; and FAB Collect, agentic AI collection where we see a lot of potential. This is a journey that will basically carry on the next years ahead but the foundation is laid, we are continued to developing.

And the examples are real. Wherever you look, whatever new proposal you have, whatever new win you have for a client, AI is part of our offering is attached and ingrained what we do today, whether this is for a leading health care insurance company in the U.S. where we build an AI-based tool that allows faster access to the knowledge base. We won a client last year in Asia, it's a large bank, where we integrated human customer support with agentic AI customers on board to manage high-volume cases. And at the same times, this orchestration between human AI and agentic AI was the winning case that the client entrusted their most treasured valuable resource, their clients to us with our FAB Connect solution.

We have won a large telco company in Latin America, where we do agentic AI collection. So we can be earlier on in the building cycle, reach out with an agentic collection tool and then hand over in complex cases to a human. And this is an example, again, where is the value add for TP. We are knowing which AI technology is available in the market, depending on the situation, depending on the client need to plug it in our processes. But as we work with dozens of different telcos in different countries, we work on many different debt collection services. We have the data now how do you orchestrate the process to unfold the power of the AI. And we've seen great results after the implementation actually quite recently when I visited the client.

And lastly, FAB Growth. 7% of our business today is sales. There, we are not a cost center, but a revenue engine for our clients, and it's obvious, but it's hard to implement how AI augments our humans to drive better sales for our clients. We have started working for many high-tech companies in that felt with really incredible success. And I see there's really a great momentum combining the human power of sales with the tools of AI.

Maybe in the interest of time, just a quick sneak preview, and I'm sure you will see in the next years more from Jorge and the team. I really believe if you think about and sort of cut through all the noise in AI, finding the right recipe, how you orchestrate in a world where AI is ubiquitous, the human power with the AI power is key. It's not just about load balancing. This call is done by AI, this by a human. It's about understanding where hallucination happen, how do you design the data flow, where does AI play a role for better outcomes and maybe a human how do you manage this handover.

We're investing quite a lot right now of building this tool, including in a responsible control center that can detect hallucination, accuracy problems, false answers, defines the right guardrails and really configures outcomes for the client. TP is not a company that is selling AI solution. We are a company that drives outcomes for our clients and managing the orchestration of an operating machine. And the operating machine has a human hand and an AI hand or AI leg and doing this orchestration in the right way is key in the future because our clients don't want to see a demo or buy a tool like in a software, they want to see an enterprise process managed with a measurable impact. And that's, I think, the role for TP, you will see more in the future, but it's on the move. It's being developed, it's being deployed in client places, and I think we're all around the table are quite excited about it.

Then many of you asked what is happening? How -- can you show us more concrete examples for sales? I talked about it, 7% of the group, EUR 700 million in sales. We do B2B2C and B2B2B sales. Starting with high-tech clients. We invested last year and the team built it out to not just focus on high-tech block, fast-moving consumer goods, banking, telco with really some good traction. We've seen high single-digit growth last year. We expect nothing less this year from the team, and you see it's again, this blend of human talent with AI.

And the same is true with data services for AI. We called it out now it's 2% of the group. I think we all wish it will be a higher number but we see double-digit growth with the team. It's a market that is growing. It has moved from general data labeling and notation based on general knowledge to way more specific needs, way more specific expertise for clients, really combining domain expertise on certain subject area experts and bring it again for enterprises to life and having enterprise solution for medical companies, for car companies, for banking companies and combining on our know-how is quite critical. We won their 5 new clients. And again, the expectation for this year is at least to continue the growth momentum we've seen in 2025. And with this, I think these 2 examples, it shows you how the portfolio of TP is changing over time.

Last but not least, outlook. As you all know, the world is uncertain. Our market is uncertain. If you look at last year numbers, we expect a growth more or less in the same range, 0% to 2%. Based on how the year ended and started into the year, we expect Q1 to be a bit softer and to be below that guidance range. EBITDA margin with all the measures remained stable at 14.6%. Of course, assuming no major fluctuation on the FX side.

Cash flow, again, EUR 800 million to EUR 850 million, excluding the nonrecurring cash-outs. This is due to if you look at this year's numbers, which is a bit higher, due to the stronger euro versus the dollar and dollar correlated currencies because if you think about India, Philippines, LatAm, the U.S., of course, where cash is generated and translated to euro, the amounts might be lower given the current FX environment and the AI efficiency program that I talked before.

Overall, I would say TP is in a position of strength. We'll remain in a position of strength but needs to transform. Olivier, myself and I know also, Daniel, are quite excited about the future. We're stepping down, knowing the company in good sense with Jorge and are looking forward to any questions from the group.

I think you have seen this. This is the proposal for the dividend. Of course, for our investors is important it's being up for approval. May 21 in the general assembly. It's an increase of 7%, if I remember well, to EUR 4.50 the share, which is an increase and in line, obviously, obviously, with the position of TP wherein -- and the midterm guidance, there's no change there.

With this -- sorry, for that, open for Q&A, and I'm sure there are many.

[Operator Instructions] The next question comes from Suhasini Varanasi from Goldman Sachs.

First of all, a lot of changes, just trying to make my way through all of that. But maybe 3 questions, just to keep it short. When we think about the guidance for 2026, especially on the top line, can you help us understand your assumptions in Core Services and Specialized Services here and the implications that you're seeing on margins as well?

The second question is on the strategic portfolio review that you have announced. I see that you've taken a few impairments below the line in the last couple of years. Is that mainly in Specialized Services that you are directing with portfolio review? Or does it also encompass Core Services?

And it's interesting to see some of the color that you have talked about on Fab deployment. And it's good to see the benefits as well. Is it possible to help us understand the impact on contracted revenues and profits, margins, et cetera, as a result of deploying all of these AI solutions?

Okay. Let me start and then I hand over to Olivier for some of the impairment and financial topics. First one on FAB AI. If you look at the markets, Suhasini, I can -- I think it's too early to say what is the impact for the group. We are there in the beginning. It's part of the solutioning more and more. The question of, of course, how do you price some of these AI solution, how do you price some of the benefits. As we move forward, as we said in the past, there are some ideas to make this more tangible, but it's too early to tell what is the impact because we are also investing in the solution at the same time in terms of margin or not and in terms of pricing model in the future.

But you see there is traction, there's interest from the client. Every new offer that we have has a Fab solution inside. And let's say, I would be positive to see in the next 9 months, some more traction granularity that provides you also some facts that you can put in the model what the impact might be.

Strategic portfolio review, as also discussed in the past, of course, there's always the question on certain Specialized Services assets, but there is a clean sheet. Jorge Amar has the mandate for the Board to review the entire portfolio of the group. To be very clear, and as we put in the press release, including divestitures as well as including M&A. So both options are open. As I said here, he has a very strategic mind. I think many of our analysts has looked at the group, and he has a blank sheet from the Board also today to do a thorough review on the portfolio of the group.

Guidance, 0% to 2%. What was the question? We see a weakness -- we don't -- as you know, we don't give a guidance for Specialized Services and Core. I think the story of 2 tails that we have seen in the past that the Core shows higher growth momentum than Specialized Service is also true for 2026. I think that's fair to say. We have invested, as you know, in business development and AI capabilities on our Core Services, and we do expect a successive increasing momentum on our Core Services throughout the year, but we don't give different guidance.

Maybe on the impairment, Olivier?

On the impairment, so of course, we are going to continue to look at business plan for all the business. There is no, I would say, decision that has been made for 2026, as you can imagine. So we are going to look that very precisely. We will be very, very careful as we have always been in our business. But so far today, we have no specific reason to change what we have done in 2025. What we've done in 2025 was just to be on the safe side on PSG and to a lesser extent, on Health Advocate. That's it. It's not a big amount compared to the balance sheet of the group where we have EUR 4 billion of goodwill and EUR 2 billion of intangible assets. But we saw that in accordance with auditor, it was more careful to take this stance.

It was great working with you, Thomas and Olivier over the years. Wish you all the best for the future.

The next question comes from Remi Grenu from Morgan Stanley.

A few questions on my side as well. So the first one is on the organic growth guidance. Can you help us understand what you mean with a softer performance expected in Q1 based on any details on current trading discussion with clients? How should we expect that organic growth in Q1 versus the 0% to 2% for the full year?

The second one is on your cost saving plan. So EUR 70 million to EUR 90 million of restructuring costs this year. But can you help us understand the net impact if we integrate the savings that you expect to generate as soon as 2026? And overall, a discussion on the payback that you expect on the EUR 70 million to EUR 90 million you're investing in restructuring?

And the last one is probably a bit of a broader question, a lot to impact from the announcement tonight. So what do you think are the top priority for the group? Is it about first setting the right perimeter to do the divestment and potential M&A of delivering on the cost saving program, detailing the capital allocation, there's still a little bit of an uncertainty there? So just want to understand in your mind, what's the top priority in which order to understand when things are going to materialize?

So I would start and hand over to Olivier, but I would ask for forgiveness that as we speak today, Jorge is still employed by McKinsey & Company. He will start with the group on March 16. We will be then available, myself and him, to go and talk to investors, obviously. But till then, he cannot speak for the group. And so I try to cover your question.

First, guidance, yes, as we indicated in the press release, we expect based on the start of the year, we see, in particular, weakness in onshore markets. There is an increasing momentum for offshore and certain uncertainty with some clients to be below the guidance range, meaning below 0% for Q1. To be very clear, there's also the weakness with Specialized Services, but we expect for the group to be below 1% and then in continued and sustained improvement throughout the year to reach the guidance range.

Second, on cost impact, we do -- I think we also stipulate this in the press release, of course, subject to negotiation with the employee representations subject to the implementation of some of our internal initiative measures, D&I deployment, et cetera. But we expect from the EUR 100 million plus savings this year, around EUR 50 million to materialize. And Olivier can give you more details what's the net effect will be for this year also on the cash side. But we expect from the EUR 100 million plus EUR 50 million to realize this year.

And then you talked about capital allocation. I think also there, we had the discussion today in the Board. It is noted very well the request from our shareholders or for some shareholders who reached out to have an increased capital allocation by the group, and it will be considered going forward, obviously in strong collaboration with the management.

And in terms of priorities, the good thing with TP, as you know, all of the things that you mentioned at the same time. So yes, of course, there is a strong focus on the existing business. There will be a strong focus on the transformation of the group. There will be, at the same time, that's why articulate a strong focus on the portfolio review. I do believe we act from a position of strength giving the situation we are in, but there is a moment of transformation for the group that is clear, and there will be not the luxury to focus only on one thing.

Olivier?

Just to comment on the saving plan. Of course, the impact in 2026 will at best neutral. We have launched all these savings plan early this year, notably in domestic market in Europe. And we do believe that depending on what size at what speed this plan will be developing. We do believe that it will be neutral at best in 2026. And I'm sure you have noticed that we have announced flat margin in 2026 versus last -- versus 2025. That shows that we are reasonably confident that to deliver these savings. Of course, the main positive impact will be seen much more in '27 and onwards in 2026. All the job of the team today is just to make sure that we have no negative impact in 2026, which I believe we will be able to do.

Next question, please.

The next question comes from Karl Green from RBC.

I appreciate Jorge can't speak on behalf of the company or anything to do with Teleperformance, but would it be possible for him to give any kind of broad view around the market potentially just in terms of how he potentially thinks about outsourcing unfolding organic consolidation in the market? That would be the first potential question.

And then just in terms of more sort of technical questions. I think, Olivier, that you mentioned that the margin guidance does include an assumed negative impact from further U.S. dollar depreciation year-on-year. I just wondered if you could very simply just quantify roughly how many basis points of FX headwind are embedded in that flat margin guidance or stable margin guidance?

And then a final, again, margin question would be just, again, you've indicated that you would expect the specialized services margin to improve further in '26. Any kind of quantification around that would be really helpful?

Let's start with the market, Jorge.

Excellent. I'll start with the market with just an overall expert view, not at all speaking on behalf of Teleperformance, as I mentioned before, and Thomas reiterated, I will be officially with the company starting March 16. But if I look at the market and what we are seeing today in terms of trends, there's definitely a component of the rise of the hybrid workforce. And this means just having AI and humans interacting together. Sometimes AI managing end-to-end interactions and many times AI augmenting the humans to deliver a better customer experience. So I would put that on the table as one big element that we're seeing because it informs some of the other implications.

The second one that I see is, there are many companies out there right now offering their AI solutions. And some people talk about an AI bubble. Some people talk about like, hey, what is going to happen with all these companies. And I am confident that the companies that will win in that space will be the companies that have some sort of differentiation, not only from a technology perspective but also from a data perspective and the ability to integrate the solution vis-a-vis the humans.

If we play forward the movie and we believe that in the doomsday scenario, customer care will become just a bunch of models that are owned by a software company. That is highly unlikely, and we would see then many companies returning to some sort of differentiation in their customer experience strategy that involves a combination of both AI and human. And I think that, that part is something that we will need to continue tracking and seeing how it unfolds.

And then I think a little bit over your question was going is in this space, in this market, how do we see outsourcing versus moving more operations in-house? And look, right now, the market, the data that we have from external analysts is showing a slight increase in terms of outsourcing. We still believe roughly that 65%, 66% of the capacity is still in-house. So there is still ample space for growth when it comes to outsourcing. And I think that companies will be looking more and more for partners that can deliver not only on the geographic footprint but also on some of the technology solutions, the risk and compliance, the data security as they continue to do that. So that's hopefully as much as I can share right now, but a little bit on the perspective on the market.

Coming on the margin and the impact on dollar on 2026. I must confess it's a little more complex than the pure dollar because as mentioned by Thomas a minute ago, it's not only the dollar, it's dollar linked -- currently linked to the dollar, including Indian rupee, Philippine pesos and the mix of this currency versus the previous year. So what is difficult today is to predict this mix. So today, we have not a huge impact on the dollar, on the guidance on the dollar and linked -- currency linked to dollar impact in 2026 margin. There is a limited impact depending, of course, of the mix that might change. So we will update you. Probably people will be after me will update you about that because it's too early to tell.

On the margin on Specialized Service, what we can say is that I'm not waiting a big change versus 2025, except that we'll probably be better in Q1 versus last year. You remember that in Q1 last year, we have been, I must say, amazed by the impact of the reduction of the growth that we were waiting for. So now we are absolutely ready to do that. So we will be able to pass on this Q1 that was difficult last year in terms of margin. So probably a little bit better in margin in Specialized Service, everything equal, which is not going to happen, I'm sure.

But maybe as a reference, as we also indicated in our press release and the presentation, the EBITDA margin or the stable EBITDA margin guidance assumes a EUR 1.20 dollar exchange rate.

What I would say is that, of course, there are uncertainties, and you understood that. But what I would draw as a lesson from 2025 is the ability of this group across the board across a different division, across a different country to adjust quickly. Of course, it's not -- it's easier in some geographies than in others. We have been able to adjust it of course, easily in U.S., easily in India, easily in Philippines. It's more complex in domestic European market than other markets.

But what you have to keep in mind that decisions are taken quickly. They are made thoroughly quickly and implement quickly in the country, and I'm convinced that the company will continue to deliver such a reaction in case of issues or specific topic. This is something that I want to highlight because we have systems that enable us to detect quickly what's happening on the field and to react if needed, as quick as possible. Of course, there are limits to adjust, but the company is able to do so.

Maybe one last quick question in the interest of time, if there's any.

The next question comes from Nicole Manion from UBS.

I do have a few, but I'll try to be quick. The first one is just on the revenue outlook actually. So sorry to kind of go back there. But given the Visa exit should be fully annualized at least for the most part and your comments about Q1 and the growth outlook in general, the implication there is probably that the LLS situation is still deteriorating. So any kind of detail on that you can give will be great.

Secondly, just on Trust & Safety, which I think was 8% of group revenue this year. That's down from, I think, 10% in the presentation last year, which obviously is a bit of a significant drop year-over-year. I know we've all seen the headlines about some of the companies in that space maybe scaling back some of the services. But I wonder if you could maybe talk about whether it is that that's driving the step down in your numbers or whether it's AI disruption or anything else?

And then finally, just a very quick one on the onetime costs. You've indicated EUR 70 million to EUR 90 million for '26. But then you've talked about EUR 56 million of costs so far from measures that were launched starting January. Is that correct to think about that EUR 56 million as sort of relative to that EUR 70 million to EUR 90 million guide? Because obviously, that's already quite a significant chunk of that budget. So it's quite front-end weighted, if that's the case.

Okay. Let's get started. So yes, the announcement and as you see in our annual results of the EUR 56 million, all the announced social plans already today. So these are sort of earmarked in our annual results and is part of the EUR 70 million to EUR 90 million.

On second question, Trust & Safety, we do see effects, as you rightly said, for some of our clients, and it's also linked to increased automation and NI improvements in that space. So as I indicated before, there is some automation happening with this we called out a bit now what is really data services in that category. Remember, it was split between other and Trust & Safety, but it is also automation that we see in the Trust & Safety space, and that's why it's reducing. On revenue development and LLS. So we don't call out, in particular, the development on LLS or revenue. But if you look in the news and the situation in the U.S., I think you have an idea that it was not such an easy start for LLS this year.

Anything to add, Olivier?

No, no. But it's far from being a collapse. Just to be clear. Of course, what's happening on the political stuff doesn't help. On top of that, the weather did help as well, but we are not in a disaster mode far from it. I just wanted to mention it.

I see there is one last question. Maybe we squeeze that in, even though we are a little bit over the time.

From Deutsche Bank.

The next question comes from Ben Wild from Deutsche Bank.

I've got 2 questions, please. The first is on the guidance and particularly the gap between your adjusted EBIT and your FCF guide. So the guide obviously implies adjusted EBIT close to flat or modestly up before FX and your FCF guide implies free cash flow down 9% year-on-year. Can you help us understand what's going on in '26 that the results in that differential? Is there working capital reversal or any other one-off effect in '25 that reverses next year on the free cash flow?

The second question, just very, very broadly, your valuation is implying an existential trajectory for the group over the midterm. I suppose, very simply, you talked about the investment opportunities and potential divestments. But more broadly, how do you think about the relative returns of deploying capital organically in the group through OpEx and CapEx, inorganically through M&A versus returning the significant cash that you generate to your shareholders?

So I'll start with the second part and then hand over to Olivier.

No, there is nothing either in terms of working cap or CapEx or tax to be paid. I just wanted to say that we know that a significant part of our cash flow is coming from Americas. Of course, there is a lag between the EBIT and the cash items. So this is mostly the lag between the working cap that is balance sheet as of today that will be paid in 2026. So the same for the tax. But there is no specific impact we might say that we are careful as always and there is uncertainties that lead us to -- just to be on the safe side on top of that.

And the question was on...

Valuation.

So as we -- I think, at this point in time, with the new CEO coming in, I cannot say more than what we have written in the press release. The Board has acknowledged the request from shareholders also for an increased return, and we look into this. So at this point, I've asked for your understanding, I don't want to preempt any decisions being made by the new management on that front.

Olivier, if I may just quickly follow up on the FCF as a clarification point. Does the adjusted FCF include the nonrecurring restructuring costs that you've talked about in the release today or?

Yes, of course.

And then I thank you also, everybody, for your attention and your interest. I'm sure there are more questions in the weeks ahead. We're looking forward to answer them. Again, welcome to the group, Jorge. It's a pleasure to have you on board, and thank you, Olivier, for all the time, and thank you for your interest and continued support of the company. Thank you very much.

Thank you to all.

Thank you.

Welcome to TP Third Quarter 2025 Revenue Conference Call. [Operator Instructions] Now I will hand the conference over to the speakers, Thomas Mackenbrock, Deputy CEO; and Olivier Rigaudy, Deputy CEO and Group CFO. Please go ahead.

Thank you, and a warm welcome from our side. Olivier and myself are very happy to present to you our Q3 numbers. Let's have a start. I will give you a short update on the key highlights. Olivier will deep dive on the composition of our Q3 and 9-month revenue, and then we provide also some further explanation on the outlook that we're currently seeing.

Let's have a look at the key highlights. So here, 3 messages. First of all, the group is resilient, and we have demonstrated in Q3 the resilience that we have shown in the first half of the year. It is very simple. We have grown in Q3 1.5% like-for-like, which is exactly the same number that we have delivered for the first 9 months of this year, 1.5% like-for-like growth. And also in the first 6 months, if you remember, the growth was 1.5% like-for-like. So we are now at EUR 7.6 billion.

We have, and that's the second metric, also in Q3, a story of 2 tails. Our Core business, our Core BPO business is growing healthy and demonstrates strong momentum also in Q3. You see the numbers here. We are close to 4% growth in Q3, which leads to growth of more than 3% for the first 9 months. We continue to see strong momentum in EMEA, APAC and which is very positive to note in Q3 is a ramp-up and acceleration of the momentum in the Americas. You see this year in the first half year, we were less than 1% growth, and we have now demonstrated with the team, in particular with the strong performance in India and LatAm, but also an improvement in our U.S. domestic market to go back there of a growth rate of more than 2% in Q3.

We see on top of that for our core BPO services, double-digit growth in back office-related task as well as in all our AI-enabled solutions, including AI data services. So we are in this part, fully on track with the execution of our strategy.

On the other hand, Specialized Services. We talked about this in depth in our half year numbers. There, we see a different picture. As you can see, on a like-for-like basis, if we exclude the famous nonrenewal of our Visa application contract, the growth is at 2.6%. But if you adjust and if you see the number on a true like-for-like basis, we are down at minus 8.7%. And if you just look at Q3, it's down by minus 12%. We are doing a bunch of measures of addressing this. It is a highly volatile U.S. market that the Specialized Services team is facing, but they have implemented strong measures to protect profitability, and there, we are on a good path.

Third message is beyond the numbers. We are making good progress on executing our strategy, Future Forward that we presented end of June. We have set up now an institutionalized group value creation office that will focus and is focusing and supporting all our management teams across the world on 3 things: one, accelerating growth; [indiscernible]; three, driving efficiencies and to accelerate the transformation.

We are working hard on expanding our AI solutions portfolio, and I will give you later a sneak preview on the current status and more is to follow in the months ahead. And we are continuing to leveraging any in our own operation and see there are opportunities to drive process excellence as well as enhanced efficiencies.

Based on the current momentum and the latest forecast and also the volatile development in the world, we also have to adjust our financial objectives for 2025. We don't see an acceleration in Q4 that would have allowed us to reach the 2% guidance on the revenue growth side. And thereby, we're seeing now a growth for the year between 1% and 2%, a recurring EBITDA margin between 14.7% and 15% at constant exchange rates and a cash flow generation that is a bit lower at around EUR 900 million, excluding nonrecurring items.

Let's have a look at the different elements. If we start on the business side, as you can see here, the split, Specialized Services and the Core business, 15%, 85% is unchanged. What is interesting to note is the strong performance of almost 5% of our core BPO business in EMEA-APAC. This is true for a number of regions. I just highlight here a few. The U.K., our sub-Saharan Africa, APAC, our multilingual hubs, Egypt, Turkey, the Middle East really demonstrate strong performance, and we are seeing there good momentum across a number of verticals.

In the Americas, as I said, it's important to note the acceleration that we've seen in Q3. We see strong momentum in India, even moving businesses -- more businesses for our Indian operation as well as in LatAm on the domestic side as well as on the new and offshore side.

Specialized Services, as mentioned before, is impacted negatively here in the 9 months by a bit more than 8% like-for-like growth. But we see really as a resilience in LanguageLine on the profitability side, even though we see remaining challenges for the rest of the year.

To put this into perspective and particular on the BPO businesses where we spent last time a lot of discussing the different elements of growth, you can see here over the last 2 years, a continuous momentum of the business, and we see this really as a strength in our ability to adapt our business portfolio to the changing environment.

Strategy. As announced in June, our Capital Markets Day, we're in full force of implementing TP Future Forward, building a better TP for the future, enhancing our capabilities on transformation, driving efficiencies and accelerating growth for selected areas.

On the transformation side, as I said before, a few updates. We are growing double digit in these key areas: technology, consulting, back-office solution, AI data services in particular. We have launched more than 400 new AI projects in the first 9 months of this year, of which more than 150 in Q3. The whole transformation teams are busy in developing, implementing on client side, while at the same time, we are investing in our FAB solution, our foundational AI backbone solution, and we focus on driving outcomes for the clients. And that means driving industry-specific AI solutions built on our deep domain expertise and our close proximity to our clients. And on the other hand, we're building horizontal functional solution that address specific needs of our clients.

On the other side, on the flip side, if you will, this is client faces, but on the internal side, we also have launched several projects to enhance the usage of AI in TP's internal processes. As you can imagine, core processes like talent acquisition, training, coaching, workforce management, quality management are benefiting from an enhanced use of AI. And we started their company-wide program to accelerate the adoption. In parallel and closely linked to that, we do a thorough review of TP's processes and structures and see how we can, with an accelerated AI adoption, drive efficiencies for the future while at the same time, improving our operational excellence.

As promised to give you a quick sneak preview what is happening on the AI acceleration side. So this is the picture we discussed end of June, building our framework and orchestration platform for AI solution. It's really how will TP look like. And it's a combination of Agentic AI driving outcomes while combining it with the human ingenuity and the human competence that we have in the organization. And we believe we will be successful if we drive tangible outcomes for the clients. So it's not an abstract concept, but we're building and are deploying AI solution on our client operation that drive these outcomes.

For us, it's a question about being close to the client and having specific solution that works in enterprise environments. And as you can see, we have structured it in 2 dimensions: dimension one, how do we provide AI competence for functional needs; dimension 2, how do we drive point solutions with AI for industry-specific needs.

As we speak today, because TP has a rich portfolio already of AI micro services that already are built upon these FAB solutions, and we're enhancing those, have more than 400 live deployments of FAB solutions in place with our clients, and we are now honing and developing further these solutions as we move forward. And as this is really the future of TP, we will present now on a regular basis the progress along these different solution suites.

To give you maybe one example, what is live today and where we spent already a lot of efforts over the last years, it's now our new platform, FAB Assist, which combines a whole set of AI solutions TP has developed over the last 2 years. It's about augmenting human talent with AI when it comes to knowledge management, coaching, real-time feedback, quality, accent neutralization, language translation, decision support and expected action. And this is live today in practice with more than 190 clients, driving real outcomes every day for our clients.

Another sneak preview is FAB Collect. As you know, we do provide for many clients around the world collection services with human. Starting in the summer, we have developed a hybrid solution, combining human talent with Agentic AI to drive better outcomes on the collection process. I'm very proud to announce that we have already deployed now 3 client solution with FAB Collect, which is an autonomous AI voice agent for early collections, driving, of course, all the benefits also in collection services, and we have great plans to accelerate FAB Collect and the other solution as we move forward.

So this is it, the sneak preview. I now hand over to my dear friend, Olivier, who will provide some further details on the numbers. Over to you, Olivier.

Thank you, Thomas. Hello, everyone. I'm really happy to present you the figure of the Q3 and the 9 months. So let's start with this first figure. So as you can see, Q3 is a good quarter. We have announced a growth of 1.5%, which was significantly above what the market was waiting today. So we are in a growth mode, and we are going to see how it's going to be built.

Clearly, we have a positive momentum in Core Services all along the period, which is noticeable, while having a volatile business environment in the U.S., which has impacted interpretation and also recruitment process outsourcing activity. Let's go in detail to understand what happened in the 9 months.

As you can see here on the slide, you have the impact of the different, I would say, events that had an impact on the 9 months figure. Of course, the first one is the currency effect, which is significantly high and higher than that we have known over the last months. EUR 225 million. I'm sure you remember that in the first half -- in the second quarter of the year, we had already a first impact.

In Q3, we had an impact of close -- more than EUR 100 million -- EUR 104 million, which is, of course, mostly linked to dollar for EUR 50 million, but also from some other currency, including Indian rupee and to a lesser extent, Colombian pesos and Turkish lira. If you take out this EUR 225 million currency effect with a limited impact of hyperinflation, as you can see, which is negative by 0.1%, we had a like-for-like growth, which is EUR 108 million, mostly coming from Core Services. I'll come back in a minute to that. And of course, the change in scope and consolidation, which is mostly driven by ZP acquisition that was consolidated early 2025, February 1st -- 1st of February 2025 and to a lesser extent, Agents Only that came in the group in June last year -- this year.

Of course, this EUR 108 million growth is split in 2, as mentioned by Thomas. There is a significant growth coming from the Core Services, which is roughly EUR 200 million, I'll come back later on; and the negative impact from the Specialized Services, which is mostly due to the nonrenewal of the significant Visa application contract in U.S. -- in U.K., sorry. Of course, this is a global picture.

Let's go in detail on the figure. As you can see, you have here laid out on this slide, the revenue by activity for the quarter and for the 9 months. What we see, and I just wanted to highlight 2 points. The growth of the Core Services, plus 3.9% in Q3, which is clearly the most -- higher figures that we achieved over the last quarters, driven not only by the growth in Europe, which is renewed some times, 5.1%, but also with the growth that is coming back in Americas, 2.4%. Of course, the impact of the Specialized Services is minus 12.3%, which if you exclude this [indiscernible] contract, is still positive at 1.7%. You have also for the 9 months, the figures that are shown here, plus 1% for Americas and minus 8.7% for Specialized Services, but Core services is growing at 3.2%.

So if I want to summarize this quarter is what we see is a continuous growth of the Core Services, mostly driven by Europe -- continuing Europe performance, but also by the fact that Americas are back on track in terms of growth.

Now if you want to look where does come from this growth, of course, the fact that TP benefit from -- enjoy a diversified client portfolio is also really a strength and adds a value. We had a very good momentum this quarter, but since the beginning of the year in the public sector, in the media and entertainment and gaming and to a lesser extent, in FMCG and travel and hospitality. So when you look at this broad vertical approach, it helps the group to be resilient, what could happen.

And as mentioned by Thomas a minute ago, if you look where we are, care is always 54 -- as before, 55% of the business. But what we see is a growth of BPO, back-office service solution and the trust and safety and technical support solution. So we have a double-digit growth in back-office BPO solution and AI-powered solution everywhere across the region, and we have a care that is roughly at the same level that we had before.

So that are the figure for the Q3 and for the 9 months. So I hand it over to Thomas to give you an updated approach on the target for the full year.

Sure. So as discussed before, we have updated our objectives because we are a bit cautious for Q4. And the reasons are threefold. Number one, we don't expect a stronger rebound of our Specialized Services business in Q4. Yes, there's the effect of the UKVI where Q2 and Q3 have been the biggest impact, but we don't expect that the other businesses are growing more than anticipated before.

Second effect, the strong performance of our Core Services that you've seen throughout this year, we don't believe that this will overcompensate the weakness in our Specialized Services in Q4. We see in really this volatile environment, some cautiousness from our clients based on the latest business forecast. And thereby, we don't see that this can accelerate more than anticipated this weakness.

And thirdly, even from a macro environment, as you can see almost every day in the news, we had yesterday a hurricane in the Philippines that impacted our sites. We had 4 weeks ago, an earthquake in the Philippines. We had a hurricane in Jamaica that impacted our operations in Jamaica. We have the U.S. government shutdown that obviously impacts also our government services operation in the U.S., but also general consumer sentiment.

So we are a bit cautious when it comes to Q4. It's still very much sort of in line in terms of range, what we have delivered for the first 9 months of this year, but we want to give here this warning, and this impacts also our EBITDA guidance and to some extent, the net free cash flow guidance.

In context, and many of you know this, Q4 is always typically the strongest month of the year for our BPO operations, but it's also the most volatile quarter of the year that gives a little bit of uncertainty as we have for many clients, their peak period in this period. And this will ultimately land how we then deliver now November, December in the numbers. If you look at a quarterly revenue of EUR 2.5 billion, you see also the magnitude we are operating. Lastly, and just as a reminder, our financial ambitions, as we highlighted in our strategy in June are unchanged.

With this, I would open the floor for Q&A, and I'm sure you have many questions that we are happy to answer.

[Operator Instructions]

The next question comes from Remi Grenu from Morgan Stanley.

Three questions on my side, please. So the first one would be on your revised margin guidance. So can you first explain what has changed between July and now to explain that 30 bps downgrade at the midpoint? If there is any competitive or pricing pressure or if it's only in the context of what you were saying about expectations for Q4? It would be great also to have an idea of what you expect will be the FX impact. We need to add to that constant currency guidance at current level of FX, so we can kind of make the forecast on the back of that.

The second question is on the downgrade to free cash flow generation as well. Is it purely about lower organic growth and margin guidance? Or is there also some drivers within CapEx intensity or working capital that we need to have in mind and which would have changed?

And then the third one, I think you're referring to some kind of strategic review in the press release. So -- and that -- you will announce the conclusions from that in February. So just wanted to have your initial thoughts on what could be included in that plan? Is it about a review of the perimeter, cost cutting, headcount reduction? What are basically the options you're looking at?

Sure. You want to go ahead first with the cash flow and EBITDA?

Yes. Let's go with the revised guidance, which is mostly due to the fact that we are cautious, as our clients are cautious for the next 3 months to go. So there is nothing major difference from that, except this one. That's the first point. FX impact, we don't see something very different that we had in the first half, something between 20 to 30 basis points. It's difficult to tell today, but that's probably the magnitude of the topic.

As far as cash flow is concerned, I would say for a group like us, which is so big, it's challenging to forecast on a monthly basis the cash flow, specifically with our global footprint. You may remember that in the first half, we published a first half year that was down versus previous year on the back of a few one-off effects. We are catching up this effect and resuming a solid path of cash flow generation.

I do believe that since July -- I'm sure that since July, we have made significant progress in cash flow and specifically in the last 2 months, specifically on working cap and also on CapEx. So I'm quite confident. But on the back of the slight revision of our revenue and recurring EBITDA margin guidance, we want to be on the safe side, and we are, of course, cautious on that. It's around. It could be a little more, a little less, difficult to predict EUR 20 million to EUR 30 million on the cash flow of EUR 1 billion.

Remember that we have EUR 2.5 billion, I would say, account receivable on the balance sheet and missing EUR 20 million payment or EUR 10 million payment, it's difficult to predict at this level. So we are on a cautious approach, but we should be delivering the figures that Thomas mentioned a minute ago.

To answer your last question regarding transformation, we're building a future company that is the best possible partner for our clients on the transformation side, while at the same time, using the same competence and focus on driving transformation of our internal processes. As we outlined in our strategy, the second part of the coin, how do we drive transformation internally is critical. You've seen probably many news also from our industry and competitors, how they are adopting AI to drive efficiency, and we do the same process.

We look step by step, process by process, structure by structure, how we can be better set up for the future and driving this with AI adoption, but not just that, but also rethinking how we operate. We do this process now. And once we've completed it, we will present the finding at the end of February. But this is very common. I mean, if you just look in the news as some of the announcements. For all our process, our principle is to be client #1. So if we use AI to drive better outcomes, we also have to do it for ourselves.

Okay. Understood. Just one more question to follow up on that. On the capital allocation, given the share price performance -- the recent share price performance, are you thinking about or considering potentially shifting a little bit the capital allocation? And what about like increasing the level of share buyback? I think there was a change in wording in that sense with the H1 duplication. So any update on the thought process around that?

No. As we said before, this is being discussed on the TP Board level. And once the decision is being made, will be announced. To be honest, Q3 would not be the right timing, but once we have the cash flow numbers then in February.

Anyway, it's much more a 2026 decision than a 2025 one.

The next question comes from Suhasini Varanasi from Goldman Sachs.

Just one for me, please, as a follow-up to the previous one on margins. Can you please help us understand what you've assumed in the EBIT margin by division in the new outlook for the year? Now you did 12.4% margins in Core Services last year, Specialized Services was 30%. It fell a little bit in Specialized Services in the first half, but improved maybe. So how do you think about the progress in the second half of the year and for the full year? Are you expecting further deterioration in Specialized Services and maybe further modest expansion in Core Services?

Difficult to tell today. We expect, of course, a better -- a little bit better margin on the Specialized as a percentage. There is a mix effect that will have an impact because we have less business coming versus the total coming from Specialized Services. And we are going to see that in a much more precise way. But this is -- depends -- what is difficult is to predict exactly the FX impact on the Core Services where it's much more important, but probably it's where we could have an impact there. That's what I can tell you. But I won't give you precise figure at this stage. It's too early to tell.

The next question comes from Karl Green from RBC Capital Markets.

Just 2 remaining questions from me. Firstly, could you just elaborate a little bit more about the recruitment process outsourcing trends and how that's tracked through the year? And then what measures -- I mean you've indicated there's been a change of CEO for that division. What measures specifically you think could get that back to a better place in 2026? And then secondly, just in terms of the Majorel integration and the synergies flowing from that, I mean, clearly, very difficult to track in the Q3 revenue update. But just any kind of color as to what's going on there and how come that's not really sufficient to offset the mix pressures on the margin that you've outlined just before?

Start with recruiting?

Recruiting. We saw, of course, that the activity of outsourcing recruitment has been, in U.S., was under pressure. And of course, it has an impact in the second part of the year. So all the decisions that will be made has been already made to reduce the cost as much as we can to cover that. There are plenty of new initiatives that are made to offer new product. I'm thinking to a product that use AI to automate the AI process recruitment that seems to be promising. It's just starting as we speak. It's too early to give you good precise announcement and figures on it, but it seems that it's well, I would say, recognized by the market and it starts to be better. So that is the first one.

On the Majorel integration, I must say that most of the integration has been done, whether it's organic organization and merger process orientation and everything has been done, and we are -- this is behind us. There are still minor costs to be incurred in 2025 in the second part of the year, but most of it is done as we speak.

What's interesting is to note that PSG also undergoes a transformation in itself. And of course, the core recruiting services business is under pressure this year, but they have also built AI solution that address that need. Olivier mentioned it, Anna AI is exactly the solution. And when I look at the pipeline, I'm, I would say, cautiously optimistic for next year. But of course, it doesn't help with the numbers this year. So there is a headwind, unfortunately, also when it comes to the results this year on the existing business of PSG, but they're also building a new business for the future.

And when it comes to Majorel, really from an operational standpoint, the integration is over. There was some on the IT side that has happened, but it's really sort of focusing now on the future. And we will, of course, share the detailed breakdown on the EBITDA development in our full year numbers.

Okay. That's helpful. So just to clarify then, I think, Olivier, you said that the Specialized Services, that you'd expect the margins to be a little bit better year-on-year because of the cost measures you take, particularly in LLS. So just to clarify, the group margin downgrade is essentially purely a function of the mix away from Specialized Services towards Core Services?

Mostly, yes.

The next question comes from Will Kirkness from Bernstein.

Two questions, please. Firstly, I just wondered if you could just talk about Core Services and whether you're seeing any change in trends with regard to gross wins versus the outsourcing or automation headwinds? And then secondly, just on pricing, are you seeing any headwinds or difficult conversations with customers as you bring in AI either as your own solutions or in terms of processes that make things more efficient? Essentially, are they looking to take some share of AI efficiencies?

So the core trends in the Core BPO services are unchanged. As you said, automation and AI is happening, has happened in the past, and we see this every day in the business. So there's no change there. You also see a push for efficiency. And I would say it's less so on the pricing side -- of course, this also exists, but it's more on the geo-shoring side. So we see clients that look for more efficiencies, in particular, global clients, and they ask then for a different delivery location.

So we have this trend. So we see the volume stays in the business, but it moves from a, let's say, mid-priced or higher-priced location to a lower-priced location. That has, of course, a deflationary impact on our revenue, but has at least in percentage a positive impact on the margin. It depends a little bit on the location and the transition cost.

But we see this push. There's definitely a push for efficiency from -- in particularly our global international clients, and we expect to continue this in the future. That explains also to some extent, this very strong momentum that we see in India because India is a massive delivery location when it comes to efficient solution as well as back-office solution and integrated tech solution. The trends that we see and that also remains the case is really also continuous consolidation that clients want to work with reliable and strong partners. And I think there, we, as TP are very well positioned also going forward.

Did that answer your question?

Yes. There's just a question on pricing, whether customers are pushing back on sharing some of the efficiency gains around...

That's actually an interesting field. So we do have for our AI solution, a full spectrum of pricing. When it comes to AI, it's fascinating to see. I think the market, even if the -- if you look at pure AI solution player tech companies, there's a whole spectrum of gain share models, not gain share models, bundling it with existing BPO, not existing BPO. You see it's evolving. We do believe there's an opportunity to push for more gains share models, and that's why we see in the future that we invest in the business to drive outcomes or efficiencies and share the gain share.

But it's a very fluid concept. So everybody is experimenting what's the right price on token. Do you mimic also with AI solution, a human-based pricing that is linked to time and material. Do you drive it on outcomes? We see it's changing. There's also a higher willingness for clients to discuss different pricing models. We have, in fact, invested in capabilities in a new pricing team that drives exactly this new pricing model, and it will ultimately define also the BPO services industry in the next years, how this pricing will evolve. But we see it on the positive side. I think this discussion and to move away from input-based pricing to more to output price pricing is definitely an opportunity and AI helps here massively because the dynamics change.

The next question comes from Nicole Manion from UBS.

Just one left for me, please. Just on the Visa contract loss actually, it looks like that's sort of evolved in line with what you guided to in Q3. But I remember you had some impact, I think, in Q4 of last year. So just if you could remind us a little bit of the moving parts and the expectations around the annualization of that, essentially, that would be helpful.

There is still an impact for this contract of roughly EUR 20 million in Q4, negative, of course.

Other questions?

There are no further questions at this time. So I hand the conference back to Mr. Mackenbrock for any closing remarks.

It was a pleasure to be with you again. We are looking forward to present our full year results in February. As we said, we are content with the development, in particular, of our core businesses in the first 3 quarters of this year. Also in Q2, I think they did a great job of overcompensating some of the weaknesses we see in Specialized Services. We remain cautious but vigilant for Q4 and trust us that we will drive the outcomes as much as possible to present you not just the numbers for 2025 next year, but also the update on the strategic plan and the guidance for '26 end of February next year.

Thank you, ladies and gentlemen. You can now disconnect from the call.