Earnings Transcript for TLPFF - Q3 Fiscal Year 2024

Operator: Hello! And welcome to the Teleperformance 2024 Third Quarter Revenue. My name is George, and I'll be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be in the listen-only mode [Operator Instructions]. The conference will be hosted by Mr. Olivier Rigaudy, Deputy CEO and Group CFO; and Mr. Thomas Mackenbrock, Deputy CEO. I'd like to have a call over to Mr. Rigaudy. Please go ahead, sir.

Olivier Rigaudy : Thank you, George. Good evening, good day to everybody. I know you are from a different place in the world. I'm really happy to present today with Thomas the Q3 figure for 2024 and our nine-month figure. So, I'm going to, not to bother you with a disclaimer, but I just wanted to, I would say, make it clear that disclaimers are available. What is the agenda today? The agenda will be the following. Thomas, who has joined us six weeks ago, is going to give some pre-remarks on the highlight, give some information on the business performance, and I will finish with the financial performance, and together we'll be ready for answering all your questions. Thomas, it's up to you.

Thomas Mackenbrock : Thanks, Olivier. And good evening, everyone, also from my side. A warm welcome to our quarterly update. As Olivier said, it's really great to be back, and I'm looking forward to walk you through the updates on the business side and financial sides in the next hour or so. As I've been now back for six weeks within TP and traveled quite extensively across Europe, North America, and especially Asia, I can really say after all these meetings and visits that the entire TP team is fully energized and committed in achieving our goals and driving the future development of the business. Yes, the opportunities and challenges are real, but I do believe and I'm very confident that TP is operating from a place of strength and quality. We have built a very resilient global delivery platform backed by incredible people around the world and advanced tech capabilities and deep expertise. This position, and you will see this now in the following chart, will allow us to be really a net beneficiary in this changing world. I have to say what again and again really impressed me was this incredible enthusiasm that I've seen both from our teams internally and our clients. Inside the company, and you will see this later also in some examples, is that we are really embracing change and new technology, not just in theory, but actually on the ground and in the operations every day. On the client side, I have to say after these last weeks that every conversation I've had so far has reinforced the notion that our clients see us as a trusted and reliable partner in their transformation journey, one that can support them not just on their efficiency but also on their quality at the same time. As we move forward, we will continue to leverage vendor consolidation. I feel confident that we are in a good spot to deliver even more complex solutions across the entire value chain. And finally, we had also several conversations with our investors, and I had the chance to connect with many of them during our recent road shows in the U.K. and the U.S., and we're taking your feedback to our heart. Trust us, we will continue to build a leading company in the tech-enabled B2B services space, and change has been a constant for us over the last 46 years and will continue to be so in the future. What does this mean now to our real numbers? And to give you some highlight of what has happened in Q3, 2024. We have seen accelerated growth momentum year-over-year in Q3, with 3% pro forma growth and a reported growth of almost 27%. What's important to note is that we have seen gains across every operating region, our core services, really supported by growth in our key verticals, whether this is banking, retail, technology, or travel, and we also have seen a sustained momentum in our specialized services. The Majorel integration is well on track and in line with our expectation. It's really great to see the teams working together, and we will provide more details about the integration process and the synergies when we publish our annual numbers, as this is just a quarterly update. As you have also seen in our press release at the end of August, the new governance is now in place, and on a personal note, I have to say that the collaboration with Moulay Hafid and Daniel is really outstanding and it's really a joy to work with them together. Last but not least, our guidance. You see me smiling today. We're very happy to confirm our guidance for ‘24. Our pro forma growth will be around 2% to 4%. We see margin enhancement and really a sustained enhancement and growth of our net free cash flow. More details will be provided later by Olivier. So, that's essentially the highlights for Q3. Before we dive into the details, let me give you some high-level overview, which I think is important to understand what makes us unique. As I said before, we are a digitally integrated B2B services company. We are a transformation partner for more than 1,400 clients worldwide, working directly on the ground to make an impact where it matters most. What's important is that we bring four key elements together that drive these positive business impacts; people, process, technology, and expertise. We are really one of the few truly global large-scale B2B delivery platforms with nearly 500,000 talented team members around the world, and we are proud to bid this talent deeply in our client work. Secondly, process excellence. Delivering results demand process excellence, and for decades this has been a defining strength of our company. The methodologies, the programs of TOPS, BEST & TOPS, ensure that we deliver this progress around our clients in all verticals. Thirdly, technology. Technology was always an integral part of our delivery solutions, but it is not a standalone product. It is something that we embed in our processes that allow us to augment and enhance our operations, and we have built an AI-enabled suite of several TP applications that allow us to deliver better results for our clients. And fourthly, domain expertise. Our clients, and we see this in particular now for many years, but also in particular in this year, as you will see in a second, look for increasingly specialized complex services, and we believe providing this kind of complex service with our deep client relationships is something that will continue to thrive the business going forward. Let's take a look now what happened along this four dimension in Q3. We have continued to invest in our people, setting up a global firm-wide up-skilling program in AI on the technology side, but also in EI, on the emotional side. By the end of October, we have completed more than 44,000 training programs on both dimensions with our experts around the world, and we will continue to roll out this program in the coming month. Second, processes. The well-established process excellence programs within TP of TOPS & BEST have been updated to include elements of AI and EI in these process excellence programs. The first pilot countries have implemented this. We are refining now the feedback, and we will roll out these programs in the coming month for the rest of the organization. This is something that shows how we hone our process capabilities, embedding new services along the way. Technology. In Q3 alone, we have launched and implemented more than 160 new AI projects for more than 130 clients. This is a significant upgrade to our developments, what we have seen in the first half of this year, and we continue to invest in this element. In fact, our AI applications are increasingly built on a cloud-based architecture that would allow us to implement them as Microservices in our client operations. And lastly, domain expertise. What's interesting to see is that in particular in complex back-office-related solution, we also saw in the first nine months of this year double-digit growth, and we will continue to build on this momentum that we see in this vertically integrated end-to-end solutions. How does this performance look now on the development in the different regions? The acceleration and growth year-over-year in Q3 is across EMEA and APEC, as well as across the Americas. As you can see here, for the Q3, we have grown in EMEA, APEC close to 3%, 2.8% to be precise. And also in the Americas, where we see some challenges in the first half of the year, we are back to positive growth of 0.3%. And as you might remember, in our half-year numbers, we saw Americas down by minus 1.7%. This growth is true in particularly for our strong offshore locations, like in India, Africa, but also Latin America, as well in our multilingual hubs in EMEA, as well as also in the UK. Same story is true with specialized services. We see there a sustained growth momentum, pretty much in line what we've seen in the first half of this year, around 11% to 12%. And we see some cross-selling activities also between the different specialized services lines that we have in place. Second topic, and we talked about this before, how do we see the vertical development? And here, obviously, a big advantage of Teleperformance is a broad, diversified client portfolio. We see a strong development, in particular, across banking, financial services, retail, technology, travel and automotive. So, it's a wide range of clients who support that momentum. And this is true for EMEA and APEC, as well as the Americas. Same element, the resiliency of the businesses, our broad business lines. As I said before, we see very strong growth momentum, in particular, in specialized services, as well as in our BPO solutions. This is true in EMEA and APEC, in particular, but also in India, where we have a very strong capability in more vertically integrated solution. Our Care element, which is a little bit more than 50% of our business portfolio, has grown in the first nine months in line with our overall growth. To give you, as I now spoke about it a bit, what does it mean to build a more complex service landscape for our clients, we brought for this presentation one case example, as I visited the operation in India and the Philippines a few weeks ago. And I think it really shows, as a good example, how we are able to combine domain expertise, strong client partnership, with our process now on tech capabilities. This is a large client in the banking space. We have been working with that client now for more than 18 years. Started historically on the traditional front office line in the retail sector, but over the years have expanded our business scope with that client to 14 business lines, and expanded our geographical scope from one location now to providing services also out of Asia and the Americas. What's interesting is that our process excellence has basically allowed us to gain a broader scope, not just focusing on the front office, but also on complex back office tasks, and provide today an end-to-end customer lifecycle management across accounts, loans, payments, and fraud management. We have also successfully embedded several digital solutions on our process landscape with that client, leading to better outcomes for the clients by enhancing our colleagues with the right tool set, starting from training over operations, knowledge management, and analytics. And this combination of our four elements have really yielded to significant growth in the last years that we also hopefully continue in the future. So, with that, I now hand over to Olivier to talk a little bit about our financial performance. Olivier, over to you.

Olivier Rigaudy : Thank you, Thomas. I'm going to enter much more in detail in the figures that have been presented to you by Thomas. So let's go on. If you look at the figure, of course, the first thing is that we are reporting close to 27% growth in the Q3, in line with what we have seen in nine months. What is interesting is a 3% growth like-for-like for the quarter. More interesting is that this 3%, which is exactly on track of what we were thinking, telling to the market, is a trend. I'm sure you remember that in Q1, we are just growing at 0.9%, in Q2 at 2.4%, and now we are 3%, showing this acceleration that was weighted all along the year. Let's go much more in detail in the figures themselves. I just wanted to highlight two points on this slide. Of course, we are bridging the figure of last year to the – of this year sorry. Of course, you have the Majorel impact that is for the nine months. Two things are interesting. The currency effect of EUR 112 million, that is negative by EUR 112 million, and of course, the pro forma growth, which is EUR 155 million ahead of last year. If you take the currency effect, you will discover that the impact in the Q3 has been more important than it has been in the first half. As an example, we were having a Q3 impact of EUR 77 million negative, which is mostly due to two major currency, which are the Egyptian pound and the Turkish lira. Beyond this figure, which are difficult, of course, to predict, it ring a bell, gives some clues. It gives information that Teleperformance is aggressively moving more offshore, including in Egypt and in Turkey, beyond India, that is already existing, and Philippines and Colombia. So this is a real change. On the pro forma growth, what is interesting is that, of course, we are growing by 2.1%, EUR 155 million. But more interestingly, I'm sure you remember that in H1, we were growing at EUR 83 million. So we have grown in the quarter more than the first half. Not exactly more, but close to. We were growing at EUR 83 million for the first half, and we are growing at EUR 72 million in the quarter, showing this trend that has been explained by Thomas of the acceleration. This is shown here. Again, the acceleration in revenue growth is exactly as expected, and we are going to confirm we already did the full year outlook of 2024, between 2% and 4%. That gives some credibility to this guidance trend. Let's move now on how this growth is made in the nine months. First of all, nothing changed dramatically, in fact, that the growth is driven always in Q3 and for the nine months by specialized service and EMEA in APAC. But what is interesting is that the core service, which was negative in Q1, minus 0.9%, growing by 1.1% in Q2, is now growing at 1.6%, showing this trend that has been explained by Thomas a minute ago. And this is true either for the Americas and for EMEA and APAC. While in the meantime, specialized service continuing its growth at a double-digit figure since the beginning of the year. This is the main story that you have to keep in mind. Specialized service delivers a double-digit figure of growth, while Americas and EMEA and APAC are now growing back again significantly in Q3. So that leads us to what we are going to tell about the market for the end of the year. We are absolutely confirming our pro forma annual growth between 2% and 4%. We are also confirming EBITDA margin improvement by 10 to 20 basis points on the pro forma basis before non-recurring items. We are absolutely confident that we will have a sustained growth in net free cash flow, which is a key issue for such a company. We do believe that we have a very robust balance sheet with leverage which will be less than 2x EBITDA. And lastly, for those who are interested, we have continued to buy back some shares, meaning that we are today at 167 million, nearly 3% of the shares that have been bought since the beginning of the year, of which 50 million in Q3, showing roughly a EUR 400 million return to capital to shareholders since the beginning of the year. So now I turn back to Thomas, and we will be ready to take questions after.

Thomas Mackenbrock : As you see, our whole organization is mobilized to deliver our results, and we are very happy to reiterate our guidance with confidence. The industry still presents challenges, obviously, but also opportunities, but we believe there is a clear flight to quality, and we at TP are a net beneficiary of this trend due to our size, global footprint, capabilities, and breadth of service. We want to take advantage of vendor consolidation and will remain disciplined on prices while continuing to adapt and enhance our global delivery model. We have built, as Olivier just said, a highly cash-generative model, and we will continue to invest in technology and people to embrace more complex engagement and to be really a reliable partner for the client transformation and an AI enabler embedded in the processes that we deliver. The integration of Majorel is on track, and on a personal note, I can see that I'm very delighted how the former Majorel colleagues work together with the TP colleagues around the world to make our business stronger. We are very happy to take your questions and are open for the Q&A section.

Operator: Thank you very much, sir [Operator Instructions]. Our first question will be coming from Will Kirkness calling from Bernstein. Please go ahead.

Will Kirkness : Afternoon. Thanks for taking my question. I've got three, please. Firstly, just on the exit rate, can you give us any help on how sort of September or October's looked and confidence in Q4 being above 3%? Secondly, was there any impact on organic growth and hyperinflation? And then lastly, I just wondered if you'd be able to talk about that 3% like-for-like growth in terms of gross wins versus churn. If you go back to the FY’23 presentation, you'd hopefully shown I think it was 13% gross wins at the time offset by 8% churn that delivered you 5% for the year. I just wondered if you could do a similar exercise for Q3. Thank you.

Thomas Mackenbrock : So, let me start maybe with the trends that we see for Q4 and then I hand over to Olivier. So as you know, Q4 is in our industry typically the strongest quarter and the ultimate lending this year will essentially depend how the business will develop in November, December as we have seen typically stronger demand around the year-end festivities. I would say we're very confident in our corridor. The ultimate lending will depend on essentially the demand in November and December.

Olivier Rigaudy : As far as hyperinflation is concerned, there is very few impact in Q3. In fact, it was a little negative versus last year, but nothing material. And we'll see what will happen at the end of the year. As you know, it's always difficult to predict because it's a mix of inflation rate and exchange rate so it's difficult to predict. But I suspect there will be no big impact in Q4 to-date. As far as the breakdown of the churn versus newbies and I think it's better to wait until the end of the year to give you much more information about that. Because the nine months are interesting, but what is much more interesting is to have a view on the full year and we'll do that at the full year result end of February.

Will Kirkness : Okay, Thanks very much.

Thomas Mackenbrock : What we can say through – yeah so maybe that’s helpful as a data point that we see our pipeline for new business. At this point in time stronger than as it was a year ago. So, yes there is some volatility in that market. But overall we are looking at a stronger pipeline as of today compared to the same situation a year ago.

Will Kirkness : Okay. That’s helpful. Thank you.

Thomas Mackenbrock: Thank you.

Operator: We will now mow move to Suhasini Varanasi of Goldman Sachs. Please go ahead. Your line is open.

Suhasini Varanasi : Good evening, Olivier and Thomas. And Thomas, it's good to speak to you again. Just a couple from me, please. Just to clarify from the previous question, do you still expect an improvement in organic growth versus Q3 levels in Q4? The second question is on core services and DIBS. While it has shown improvement versus Q2, it's probably a little bit slower than consensus expectations. So just wanted to check, are you happy with the level of improvement here? How are conversations with clients evolving? What are the major push backs that you're seeing so far? And the last one is just on the run rate of synergies. Is it possible to give some color on what the run rate of synergies achieved so far from the Majorel integration? Thank you.

Thomas Mackenbrock : So, if you do the math, as we will end up reconfirming the guidance, it will really depend how November, December end up with the final calculation for our Q3 growth rate. You see me sitting here confidently, but Suhasini, as we know each other for quite some time, I always want to be prudent and not promise that I don't know yet. And we will know in eight weeks from now how ultimately the year has ended, and then we're very happy to share that with you. So, please bear with us on that one. But I think we see a good momentum in the business, and it will ultimately depend on more macro demand in November, December, how ultimately Q4 will end. Second question on general trends in the industry, yes. What we really saw in last month is a demand or a continued demand for efficiency that also leads to stronger demand in offshore locations, even moving from onshore locations to more offshore locations. This has obviously, as you know, an impact on our top-line development, and we see this trend continuing. If you look at our geographical development, as I mentioned before, we saw strong growth demand, in particular in India for the U.S. market, for instance. But this means, on the other hand, or in Africa, that our onshore demand in U.S. domestics as well as in continental Europe is in a more -- doesn't -- has the same growth momentum. So that has a certain dampening effect on our top-line and also has obviously some ramp-down and ramp-up costs. Secondly, what I think is also fair to say that on new businesses, we typically see smaller deal sizes. Yes, there is new business coming in, but the very large deals we might have seen in previous years are not something that we have witnessed in the last month.

Olivier Rigaudy : Maybe I can tell a word on the synergy. Nothing new since we issue our Q or H1 result, except that I said at that time that we were working on additional synergy. We are still working on it, and we hope to be able to make it clear in the coming weeks. Anyway, we will make a clear point at the end of the year, early March, end of February, when we will announce the result.

Suhasini Varanasi : Thank you.

Operator: Thank you very much for your questions, ma'am? We will now move to Edimi Grenouille calling from Morgan Stanley. Please go ahead, sir.

Edimi Grenouille: Yes, good evening, and thanks for taking my question. Just a few on my side. So, Thomas, you've talked about vendor consolidation a few times during your introductory remarks, so I just wanted to pick your brain on what you think could be the opportunity there if the market has experienced any shift recently in that sense? And if you believe that that consolidation is likely to accelerate? And what's the kind of timeframe for that to materialize? If there is any specific discussion with clients which makes you more confident on that? So that's the first thing. Maybe the second thing, the second question, which is linked a little bit with that same theme, but it's on the commercial pipeline. So interested in understanding where these new contracts that you're seeing are coming from, if this is coming from competitors for the first time at sourcing, grow from vendor consolidation as just discussed, so that would be interesting as well. And the last one is on the previous comments you made on 2025, saying that you expect the momentum next year to be better than 2024. So, just wanted to make sure you're sticking to that comment, and if you've got any more visibility on that or any more confidence on what could be the level of organic growth next year.

Thomas Mackenbrock : Okay, so many questions. Let's start with the easy one. So we're not providing any guidance for 2025. As always, we will do this when we announce our full-year results at the end of February. What I can tell you today, and we are still in the midst of the process, of our budget process for next year and of gathering all the data, that based on today, our pipeline for new business is stronger than a year ago. That is one indicator how next year will develop, but it's not the full indicator, and I really try always in my exchanges to be prudent and diligent, so let us do our work in the next weeks and months, and then we will give you a clearer picture at the end of February how we see 2025 developing and landing when we provide the guidance. Yes, there is a lot of movement in the markets. As I said, vendor consolidation is one trend, more off-shoring is one trend, and supporting clients with technology and process know-how is one trend. Yes, we have some price pressure, even though we, as one of the leading players in the industry, we believe more in quality than giving discounts. We see automation, but on the other hand, also demand for new areas. That's what I gave the examples for the back-office related tasks. We believe net-net we will be a beneficiary, because there is, and that's I really believe, and that's not a new trend, a flight to quality. Vendor consolidation is not something that is just happening this year. It's a trend I think that's been going on now for several years. And as we are one of the leading players, I think we have been known for quality for many, many years. We have now a very complete global delivery platform. We have super-engaged colleagues and teams that really try to drive technology into our processes day-in and day-out. So I see a lot of energy and enthusiasm, and this quality that we see in our delivery is something that is also thankfully recognized by clients that we believe in this, delivering good service, good quality, good technology solution. We can drive that momentum in a difficult market in some areas. We are not seeing the same growth rates that we saw during the COVID years, but we believe if we are focused on the business, we continue to see this momentum that has also been witnessed now in Q3. So that's why it's not a clear-cut answer to your question, but I really do believe, if we focus on the core ingredients of our business, we have the right momentum as being one of the leading players in our space. And I also do believe by broadening our scope, so not just focusing on CX, but on more back-office related, one-office related complex tasks. We see a lot of positive growth opportunities in the future, because the capabilities that we have shown with our client, and that's why I brought the case example, it's amazing to see how you can have a real impact with client and grow with the client if you excel on the operations, and that, I really believe there's plenty of opportunity out there, if we excel on the delivery and driving impact for the clients, that this opens up a much broader space to deliver our services. Any follow-up questions? Sorry, I was a little bit…

Edimi Grenouille: Long question, long answer. Thank you very much.

Thomas Mackenbrock: Thank you.

Operator: Thank you very much, sir. We will now move to Antonin Baudry of HSBC. Please go ahead.

Antonin Baudry: Yes, good evening, everyone, and thank you to squeeze me in, and thank you very much for this detailed presentation. Two questions

Thomas Mackenbrock: Let me take the first two and then hand over to Olivier. So, to be honest, I don't like to comment on competitors. We focus on our own business. We believe if we provide good quality delivery and service and provide benefits to our clients, then the business will thrive. That's what we focus on. We will see how we end in Q4, but that's the only focus that we have, and I see the momentum in the business, no, full stop. On the effect on automation and AI in the future, yes, it will have an effect. Obviously, that's why we need to change. But if you look back this year, the actual impact on automation, and we try to assess this with the teams and taking samples for the first nine months, it is not as big as you might think. So yes, automation exists. It's also been nothing new in our business, and it continuously drives efficiency in our operation. But of, I would say, equal importance is for instance, the trend to offshore locations to drive also efficiencies that have a negative impact on revenue. The same thing if you drive sort of pricing in some areas. Driven to automation has also an impact. So it's not that we see massive impacts on our revenue due to AI and automation at this point in time. Not beyond what we have seen before, and equally important I would say, than some of the geo relocation in the business operation. For our midterm guidance, I think it's too early to say, but Olivier.

Olivier Rigaudy: Maybe, of course, it's too early to say, to tell, and probably a decision has not been made. But what is more interesting is to see whether we'll be above the market, and probably we'll make also a guidance if we decide to make one, to see versus the market much more than in real term. So it's too early to make the decision, but this is probably something that might be the solution for next year also.

Antonin Baudry: Thank you.

Operator: Thank you very much. We'll now move to Karl Green of RBC Capital Markets. Please go ahead.

Karl Green : Yes, thank you very much. Good evening to you. I've got three questions. Firstly, just in terms of the strong growth you've referred to in LanguageLine Solutions within specialized services. Just thinking about the margin as we move through the second half. I mean obviously, there's a lot of moving parts within specialized services, and I think you've been seeing good operating leverage historically from the recovery in TLS contact. But just thinking about that skew towards LanguageLine Solutions. Does that suggest that in the second half we should be looking for kind of similar rates of margin expansion to what we saw in the first half within that particular division? That's my first question. I'll probably take them one at a time.

Olivier Rigaudy: Okay. No, what we see is of course language line solutions continue to deliver very good figures, either in terms of sales and either in terms of margin, and we do believe that in the second half LLS, we’ll deliver the same type of margin that it delivered last year.

Karl Green : Okay, that's helpful. The second question, just on the – again Olivier, you talked about the expansion in Turkey and Egypt and how that had led to a greater FX drag on the top line. Again, just a very basic question here, so I understand what's going on in terms of the commercial structure. When you're seeing the offshoring, how many of the new contracts are getting remunerated in local currencies rather than, say, for example, having a German client where you've been billing them in euros, but your cost base is in Turkish lira. And again, you deal with the hedging, the transactional hedging behind the scenes. But in terms of the expansion of the offshoring arrangements, are you seeing more of the invoicing in those local currencies, which would explain the greater FX hit? I'm just kind of struggling with the impact on FX versus just general deflation around offshoring.

A - Olivier Rigaudy: If I may, it's a complex question. As always, in FX you have two issues. One is translation, one is transaction. What I just wanted to highlight in this Q3, is the fact that probably most of you have not imagined that such an impact could happen in Q3 on the translation figures, which is the case. I'm not too sure it changed dramatically versus the previous year or on the invoicing stuff, but part of the story has moved to this country as a whole. So the main story is, of course the transaction, and that is much more complex to predict, but of course most of the time it’s helping the margin for the group, yes.

Karl Green : Okay, okay. And then lastly, I just wondered if you've had over the last few days any opportunity to look at any of the policy suggestions from the Trump camp. I seem to recall back in 2016, there were suggestions that a border adjustment tax on services might be applied to some cross-border services such as CX. I mean, have there been? I mean, I've certainly not spotted any from where I'm sitting, but have you guys encountered any suggestions or policy proposals which would give you sort of cause for nervousness?

A - Olivier Rigaudy: It's too early. So I think, no. Frankly, it's too early to comment on that. No, what maybe could be highlighted, because we saw again today the drop in the European market while the U.S. market was climbing. I just wanted to highlight that close to 50% of our business is coming from the U.S. market, and it seems curious to see that our stock will be down in Europe because we are listed in Europe, while half of our business, close to half of our business is coming from U.S. Just a point I just wanted to make.

Karl Green : Okay. Thanks very much.

Operator: Thank you very much there. Our next question will be coming from Nicole Manion of UBS. Please go ahead.

Nicole Manion: Hi. Good afternoon. Thanks for taking my question. I just wanted to ask about the AI projects that you mentioned in your remarks. I think you said 160 new AI projects for more than 130 clients. How should we sort of think about that? Obviously, that sounds like quite a big number. Are these sort of additional services that you are launching within clients? Are you automating stuff that you already provide? Yeah, I mean, how dilutive and what sort of penetration in the clients where you are launching these projects that you are seeing? Just any more detail on those points would be really helpful. Thank you.

Thomas Mackenbrock: Hi, Nicole. So we're still trying to figure out what's a good metric to show the AI impact on our business. The number of projects is something that we obviously consistently track, and it gives you an indication how the – if there's an acceleration of adoption. And yes, we see that. So we have deployed more projects, AI, in particular Gen AI projects in Q3 of this year than in the first six months of the year. So there's an acceleration. Typically, and as I tried to explain before, it's not a standalone product, but we always try to embed an AI solution in our existing operations, working together with the client and this is what we currently see. There's a momentum, relative speaking, to our client base that there's more willingness to try out things, to do a pile of products to implement an NI [ph] solution. To your question, to what is that, the penetration in the market, so give us a little bit more time, because some cases, as we have sort of hundreds of projects now underway, how to then measure the impact? But I see that we are now beyond the experimenting status, but actually seeing in real life, and you see the impact either in more efficiency, better quality, higher customer satisfaction, depending on which AI solution is being implemented. And we will provide also beginning of the year, an update on our AI solution space. As I said, we're upgrading them now to be based on micro services. That could be quite interesting to make it more tangible, how we actually deploy the AI solution in our clients' operations. So there, bear with us a bit, but I would say the message is, we see an acceleration in interest in implementation relative to the first half year.

Nicole Manion: That's it. Thank you.

Operator: Thank you, Ms. Manion. We will now move to Ben Wild of Deutsche Bank. Please go ahead. Your line is open, sir.

Ben Wild : Hi. Good evening, everyone. Thank you. Three questions, please. At H1, there were two very clear messages that you conveyed. First, you were seeing signs of recovery in retail and tech, and you were driving good growth from new contract wins. Correct me if I'm wrong, but this quarter it feels as though your comments on these two themes are slightly more muted sequentially. Do you feel as confident on the outlook as you did three months ago? And then a couple of questions on governance please. In specialized services, the management team has been reshuffled, with Scott Klein leaving LanguageLine Solutions. What's the rationale for this change and the kind of impact within the group? And then secondly, Thomas, you obviously left the group earlier in the year and rejoined six weeks ago. Can you give us any color on that journey? How you see your new role within the group and your initial view having come back into the business? Thank you.

Thomas Mackenbrock: Okay, let me start with the last one and then hand over to Olivier. And Scott Klein is still leading specialized services to avoid there any confusion. So he's still the CEO of specialized services. Yes, when I came back, and obviously it's an offer as being now the deputy CEO of the company, I couldn't say no to, and it's been really excited to be back. I see a lot of positive excitement in the company, meeting old colleagues and new colleagues. And I would say it this way, if I would not be confident about the future prospects of the business, I wouldn't have come back. So I really enjoyed immensely the work and the collaboration with the team around the world over the last six weeks. It's been a tremendous pleasure. I see there's a lot of movement. Yes, the integration has made some steps forward, and we're really there on a good track. But I see the company as a whole really on a path of change and transformation. Obviously working with the clients, but also transformation itself, and it's really exciting to be part of it. Again, nothing as said, so I'm really looking positive into the future. And we will be obviously in five years a different company than to now, and to work together on that journey is something that really excites me. Scott Klein, so he's still President of Specialized Services.

Olivier Rigaudy: Just to be clear on Scott, Scott is now heading the whole Specialized Services as he did before, but he's gaining more importance and more – he's working on synergy between the different brands and different companies. He's taking the lead of the whole department, having somebody taking care only on LanguageLine Solutions. So it's not changing. He's not leaving the company by far. On H1, of course, we were waiting an improvement in Q3, so we delivered it. As always, we would have preferred to make much more, but it's a very good figure as far as I'm seeing from the competition. And I do believe that somewhere the question is whether we are going to be, no guidance figure. And I think you have understood that there will be no guidance figure for the full year, no doubt.

Ben Wild : Thank you.

Operator: Thank you very much there. We'll be moving now to Oliver Davies [ph] – well, he's an analyst. It's just simply Mr. Oliver Davies. Your line is open, sir.

Unidentified Analyst: Yes, good afternoon. A couple for me. I guess, firstly in terms of the pipeline increase, is that being driven more by vendor consolidation bids or is that coming from new clients? And I guess within those, has there been any kind of noticeable trends in the competitors for those bids and I guess your success rate? And then secondly, you mentioned customer care grew in line with the group. BPO was double digits. So I guess, where are the kind of weaker spots overall? Thanks.

A - Thomas Mackenbrock: So let's start with the last question. Obviously, if we look on the page, let me see if I can move back there. So care is very much in line with the group. Back office is growing where we see some and on the technical support side. So these are the two verticals where we are subpar on the growth momentum compared to the other verticals. With regard to the pipeline, this is a new business pipeline. So it has nothing to do with our current business. It only talks about new business lines with new clients or new businesses with new clients. That's why I'm referring to it. And this also has something to do that we strengthened our business development capabilities and resources a few months ago. So we're ramping up the other resources, and really investing in building out our business development capabilities. Not just focusing on classical CX, but also on related business areas like back office related work. Let's take two other questions.

Operator: Sure.

Thomas Mackenbrock: Next, please.

Operator: I am sorry about that. I just thought you were still answering. One moment please, sir. The next question today will be coming from Simona Sarli of Bank of America. Please go ahead.

Simona Sarli: Yes, good evening, and thanks for taking my question. Just a couple of them left. So first of all, a follow-up to the share buyback program. So you have indicated Olivier, that since the beginning of the year, you have returned overall between dividends and share buyback more than EUR 400 million. If I remember correctly, there was a commitment to return two-thirds of the free cash flow generated in 2024, which potentially could still leave room for like EUR 200 million more. So is there any plan to announce an incremental share buyback on the back of that? And then secondly, as a follow-up to what Thomas just mentioned around the two verticals, that they are subpar versus the group. Can you provide a little bit more color on what is driving the weakness in technical assistance and trust and safety? Thank you.

Olivier Rigaudy: I'm taking the share buyback, your question, leaving the other. If I remember properly, what we brought up to two-thirds, I'm not sure we brought two-thirds, to be precise. So we are at EUR 400 million. We are going to finish the program until the end of the year. Decision has not been made as of today, of what will be the allocation of the capital for 2025. This is a topic of discussion, of course with the Board that is ongoing, and we will come shortly to you on this topic, at least at the latest in February at the time of the results.

Thomas Mackenbrock: With regard to the development on the trust and safety side, we do see an effect on automation, what we alluded to before. Obviously, in some areas we see an advancement of automation that has driven some of our business on the trust and safety side. And for the technical support side, it's just the business development. So we focus on other areas that has an impact on our growth momentum in that horizontal business line.

Olivier Rigaudy: Let's take the final question.

Thomas Mackenbrock: Please, go ahead.

Operator: Yes, sir. Our last question for the conference will be coming from David Serdar [ph] of Kpler. Please go ahead.

Unidentified Analyst: Okay. Good evening, gentlemen. So, most of the questions have been answered. Just a very basic question. So the higher end of your guidance is quite impossible. Do you think that the plus 4% for 2024 is still an achievable objective? Thank you very much.

Olivier Rigaudy: As said before, we have confirmed the guidance, and we're very confident on that one. Where we will ultimately land, will really depend on November, December. And typically, if you look at past Q4 quarters, that has been the month where we see the highest growth, and it will ultimately depend how will Black Friday, how will the Christmas season develop, where we will ultimately land on this business. So this depends more on macro demands or end customer demands for the clients that we serve, than our own doing. So bear with us, and we will provide an update very soon, once we have this month locked in. But the business is going full throttle. We have to see where we end. So let's bear with us a few more weeks and months. Thank you so much for your interest, for all the interesting questions. Looking forward to see you soon, and for me end of February, at least. At least, if there's anything in the meantime, please reach out to our IR department, and thank you very much in your interest in TP.

Thomas Mackenbrock: Thank you. Good night to all. Thank you. Bye-bye.

Olivier Rigaudy: Thank you, and bye-bye.