SOURCE: SR Teleperformance

March 16, 2006 13:01 ET

SR Teleperformance: 2005 Financial Results: Achievements Exceeded the Objectives Announced in November 2005

Paris -- (MARKET WIRE) -- March 16, 2006 -- Strong Growth and Increase in Profitability Ratios

turnover: 1,195.8 Million Euros +25.5%(*)

INCOME FROM OPERATIONS: 106.1 Million Euros +37.8%(*)

NET INCOME, GROUP SHARE(*): 57.2 Million Euros +38.5%(*) before profit from discontinued operations

(*) versus 2004

The SR.Teleperformance Supervisory Board met on March 16th, 2006 and examined the consolidated accounts for the year 2005, which highlighted the following:

- Turnover, based on published data, was EUR 1,195.8 million versus EUR 952.9 million at December 31st, 2004, increasing by 25.5%. On a comparable basis (excluding foreign exchange and scope of consolidation effects), the turnover increased by 12.9%;

- Income from operations amounted to EUR 106.1 million, versus EUR 77 million at

December 31st, 2004, increasing by 37.8%. The Operating Margin Rate significantly increased, reaching 8.9%, versus 8.1% at December 31st, 2004;

- Net Income, Group Share, excluding profit from discontinued operations, amounted to EUR 57.2 million, versus EUR 41.3 million at December 31st, 2004, representing an increase close to 39% and exceeding the EUR 56 million objective announced last November.

In total, the Net Income, Group Share, amounted to EUR 58.2 million, including EUR 1 million profit from discontinued operations;

- 20% increase in dividends, which distribution will be submitted in the next General Shareholders' Meeting (EUR 0.30 per share);

- Confirmed growth outlook in terms of turnover and results for the year 2006.

+-------------------------+------------+--------------------+
|Summary of Consolidated  |  31/12/2005|31/12/2004 excl. IAS|
|Accounts (in Millions of |            |32/39               |
|Euros)                   |            |                    |
+-------------------------+------------+--------------------+
|Turnover                 |     1,195.8|               952.9|
+-------------------------+------------+--------------------+
|EBITDA                   |       158.6|               117.8|
+-------------------------+------------+--------------------+
|Rate                     |       13.3%|               12.3%|
+-------------------------+------------+--------------------+
|Income from Operations   |       106.1|                77.0|
+-------------------------+------------+--------------------+
|Operating Margin         |        8.9%|                8.1%|
+-------------------------+------------+--------------------+
|Financial Result         |       -12.2|                -8.4|
+-------------------------+------------+--------------------+
|Tax Expense              |       -33.1|               -23.7|
+-------------------------+------------+--------------------+
|Net Income Before Profit |        60.8|                44.9|
|from Discontinued        |            |                    |
|Operations               |            |                    |
+-------------------------+------------+--------------------+
|Including Group Share    |        57.2|                41.3|
+-------------------------+------------+--------------------+
|Net Profit from          |         1.5|                10.1|
|Discontinued Operations  |            |                    |
+-------------------------+------------+--------------------+
|Net Income               |        62.3|                55.0|
+-------------------------+------------+--------------------+
|Including Group Share    |        58.2|                51.1|
+-------------------------+------------+--------------------+
SR.Teleperformance's financial structure was modified as follows:
+-------------------------+----------+----------+
|Consolidated Financial   |30/12/2005|31/12/2004|
|Structure                |          |          |
+-------------------------+----------+----------+
|(in Millions of Euros)   |          |          |
+-------------------------+----------+----------+
|Cash Flow                |     120.5|      92.0|
+-------------------------+----------+----------+
|Change in Working Capital|     -17.8|     -37.6|
|Requirements             |          |          |
+-------------------------+----------+----------+
|Net Cash Flow generated  |     102.7|      54.4|
|by operations            |          |          |
+-------------------------+----------+----------+
|Net Capital Expenditures |     -47.5|     -36.6|
|(excl. capital leases)** |          |          |
+-------------------------+----------+----------+
|Free Cash Flow           |      55.2|      17.8|
+-------------------------+----------+----------+
|Net Financial Investments|      -8.0|     -65.9|
|(Shareholders’ Equity)   |          |          |
+-------------------------+----------+----------+
|Total Consolidated       |     440.7|     350.5|
|Shareholders’ Equity     |          |          |
+-------------------------+----------+----------+
|Consolidated             |     426.7|     336.7|
|Shareholders’ Equity,    |          |          |
|Group Share              |          |          |
+-------------------------+----------+----------+
|Gross Financial          |     330.4|     263.9|
|Indebtedness             |          |          |
+-------------------------+----------+----------+
|Cash Assets (excluding   |     151.8|     129.5|
|bank credits)            |          |          |
+-------------------------+----------+----------+
|Net Financial            |     178.6|     134.4|
|Indebtedness*            |          |          |
+-------------------------+----------+----------+
|* including minority     |      56.4|          |
|interest purchase        |          |          |
|commitments:             |          |          |
+-------------------------+----------+----------+
**pursuant to the IFRS, it does not include investments such as capital leases, amounting to EUR 6.3 million in 2005.

I.- THE GROUP'S Activity IN 2005

The consolidated turnover achieved in 2005 was EUR 1,195.8 million, based on published data, versus EUR 952.9 million in 2004, increasing by more than 25%.

After deduction of the scope of consolidation and foreign exchange effects, the Group's annual consolidated turnover, on a comparable basis, increased by 12.9%. These results, exceeding the objectives announced, reflect the Group's strong dynamic growth over the 4th quarter, with an organic growth rate exceeding 13%.

In 2005, SR.Teleperformance did not complete any significant acquisition that may have impacted the Group's 2005 turnover, except for the acquisition of Techmar last October. The consolidation of MCCI, the Canadian company acquired in December 2005, was effective as of December 31st, 2005.

The scope of consolidation effect exclusively resulted from external growth transactions completed in 2004 in the following regions:

NAFTA: CallTech (end of May 2004) and Voice FX (beginning of the 2nd semester 2004)

Europe: MM Group UK (end of May 2004)

France: Infomobile (beginning of the 2nd semester 2004)

Other: Teleperformance Brazil (end of the 2nd semester 2004).

The geographical distribution of the Group's turnover was as follows:

+--------+----------+----------+
|  (in %)|  31/12/05|  31/12/04|
+--------+----------+----------+
|  NAFTA |      40.0|      41.4|
+--------+----------+----------+
|  Europe|      48.6|      51.9|
+--------+----------+----------+
|  Other |      11.4|       6.7|
+--------+----------+----------+
|  Total |       100|       100|
+--------+----------+----------+
+--------+----------+----------+
II.- Profitability

In 2005, the income from operations increased faster than the turnover and amounted to EUR 106.1 million, versus EUR 77 million in 2004, i.e., an increase of 37.8%.

The operating margin rate was 8.9%, versus 8.1% in 2004.

This result was impacted by EUR 5.7 million as a consequence of the impairment loss applied to the residual goodwill related to the U.S. subsidiary Noble Systems.

The EBITDA was EUR 158.6 million, representing 13.3% of the turnover versus 12.3% at December 31st, 2004.

Net financing expenses increased by EUR 3.8 million, amounting to EUR 12.2 million, versus EUR 8.4 million in 2004.

It is essential to underline that the impact of the 1st implementation of the IAS 32/39 (OCEANE and commitments to minority shareholders) represented an annual financing expense of EUR 3.7 million.

The corporate tax amounted to EUR 33.1 million versus EUR 23.7 million in 2004. The average tax rate was 35.3% versus 34.5% at December 31st, 2004. This rate was impacted by the consolidation adjustments related to the 1st implementation of the IAS 32/39 (OCEANE, interest rate swap, financing expenses related to minority interest purchase commitments), which are not liable for tax relief.

Considering these elements, the average tax rate was 34%.

As a consequence, the net income, before profit from discontinued operations, amounted to EUR 60.8 million, versus EUR 44.9 million in 2004.

As Group Share, it amounted to EUR 57.2 million versus EUR 41.3 million in 2004, increasing by +38.5%.

The Group's net income from discontinued operations amounting to EUR 1.5 million, including EUR 1 million as Group Share, corresponded to the net capital gains from the sale of Design Board (Packaging, Design) and Businessfil (legal information over the phone), finalized at the end of the 1st semester 2005.

Considering the net income from discontinued operations, the Group's net income amounted to EUR 62,3 million, including EUR 58.2 million as Group Share.

III.- FINANCIAL STRUCTURE

Total shareholder's equity amounted to EUR 440.7 million, including EUR 426.7 million as Group Share.

At December 31st, 2005, the Group's net indebtedness was EUR 177.8 million versus EUR 134.4 million at December 31st, 2004, increasing by EUR 43.4 million.

The debt resulting from the commitments to minority shareholders estimated at EUR 38 million at January 1st, 2005 amounted to EUR 56.4 million at December 31st, 2005. This increase was mainly related to the foreign exchange effect applied to debts stated in foreign currencies.

Excluding the IAS 32/39 effect, the Group's net indebtedness would reach EUR 127.1 million at December 31st, 2005 versus EUR 134.4 million at December 31st 2004.

The evolution of the Group's net financial indebtedness (in Millions of Euros) was as follows:

+-------------------------+--------+
|Net Financial            |  -134.4|
|Indebtedness at January  |        |
|1st, 2005                |        |
+-------------------------+--------+
|Impact of the IAS 32/39  |   -31.0|
|at January 1st, 2005     |        |
+-------------------------+--------+
|Minority Interest        |     -38|
|Purchase Commitments     |        |
+-------------------------+--------+
|OCEANE equity component  |      +7|
+-------------------------+--------+
|After Adjustment of the  |  -165.4|
|Net Financial            |        |
|Indebtedness at January  |        |
|1st, 2005                |        |
+-------------------------+--------+
|Free Cash Flow           |   +54.1|
+-------------------------+--------+
|Net payments related to  |    -8.0|
|the acquisition of       |        |
|investments in affiliates|        |
+-------------------------+--------+
|Net impact from the scope|   -20.6|
|of consolidation effects |        |
+-------------------------+--------+
|.Acquired companies’     |   -18.7|
|indebtedness             |        |
+-------------------------+--------+
|.Sold companies’ cash    |    -1.9|
|assets                   |        |
+-------------------------+--------+
|Dividends distributed    |    -5.6|
+-------------------------+--------+
|Impact of the IAS 32/39  |        |
|on the 2005 financial    |        |
|year                     |        |
+-------------------------+--------+
|(OCEANE and commitments  |   -13.2|
|to minority shareholders)|        |
+-------------------------+--------+
|Conversion difference    |   -15.2|
+-------------------------+--------+
|Other (including leasing |   - 4.7|
|and swaps)               |        |
+-------------------------+--------+
|Net Financial            |  -178.6|
|Indebtedness at December |        |
|31st, 2005               |        |
+-------------------------+--------+
IV.- DIVIDENDS IN 2005 < > = EUR 0.30 per share

During the next General Shareholders' Meeting on June 1st, 2006, the Board of Directors will suggest to increase the amount of the dividend to EUR 0.30 per share, an increase of +20%.

V.- OUTLOOK FOR 2006: Growth Confirmed

Based on published data, the turnover should increase by 8% approximately.

As for the net income, Group Share, it should increase by nearly 10%, confirming therefore the improvement of operating margins, as noticed since 2004.

Like every year, these objectives will be refined and detailed in May 2006 during the financial press conference.

ANNEX

IAS 32/39 impact on the structure of the 2005 Balance Sheet and Income Statement

The standards have been applied since January 1st, 2005, without comparative data for 2004.

They mainly concern the following:

1/ The OCEANE

Accounting the convertible bond (OCEANE) under IFRS requires to present shareholders' equity and debts as separate items and to record a charge related to the amortization of the equity component over the residual loan duration.

The impact of the implementation of these standards on the consolidated accounts may be summarized as follows:

+-------------------------+--------------------+---------------+---------+
|in Millions of Euros     |   Balance Sheet    |               | Result  |
+-------------------------+--------------------+---------------+---------+
|                         |Shareholders’ Equity|Financial Debts|Financing|
+-------------------------+--------------------+---------------+---------+
|                         |                    |               | Expenses|
+-------------------------+--------------------+---------------+---------+
|Amount at January 1st,   |                +7,1|           -7,1|         |
|2005                     |                    |               |         |
+-------------------------+--------------------+---------------+---------+
|Amortization of the      |                    |           +2,2|     -2,2|
|equity component         |                    |               |         |
+-------------------------+--------------------+---------------+---------+
|Amount at December 31st, |                +7,1|           -4,9|     -2,2|
|2005                     |                    |               |         |
+-------------------------+--------------------+---------------+---------+
2/ The Interest Rate Swaps

Derivative financial instruments are measured to their fair value at January 1st, 2005 and assessed at every closing period.

3/ Minority Interest Purchase Commitments

SR.Teleperformance has granted minority shareholders of certain subsidiaries commitments to purchase their holdings. These commitments may be firm or conditional. The following accounting treatment has been applied, on the basis of current IFRS, noting that an IFRIC interpretation is expected to be issued:

* At the time of initial recognition (i.e., January 1st, 2005), the purchase commitment is recognized as financial liability, measured to the fair value of the exercise price. The difference between the fair value and the amount of purchased shareholders' equity is recognized as goodwill (a different method compared to the method used at

June 30th, 2005, which consisted in deducting the amount of the debt from shareholders' equity);

* At December 31st, 2005, the debt was re-assessed based on forecasts on the date the purchase option is expected to be exercised. The variation of the debt was recognized as goodwill;

* Taking into account the part related to the purchase commitments in the net income, Group Share;

* Accounting a financing expense calculated based on the fair value at December 31st, 2005 by applying a no-risk interest rate adapted to the characteristics of the transaction.

Moreover, the dividends paid to minority shareholders covered by purchase commitments are recognized as financing expenses, except for the purchase commitments which exercise price is determined based on a formula including these dividends. In that case, the amount paid to minority shareholders is recognized as goodwill adjustment.

The impact of the implementation of these standards may be summarized as follows:

+-------------------------+---------------+--------------------+
|                         |  Balance Sheet|                    |
+-------------------------+---------------+--------------------+
|In Millions of Euros     |       Goodwill|Shareholders’ Equity|
|                         |               |                    |
+-------------------------+---------------+--------------------+
|Amount at January 1st,   |          +34.7|                -3.3|
|2005                     |               |                    |
+-------------------------+---------------+--------------------+
|Conversion difference    |           +6.8|                -0.7|
+-------------------------+---------------+--------------------+
|Increase in debts        |           +5.8|                -3.4|
+-------------------------+---------------+--------------------+
|Financing expense        |               |                    |
+-------------------------+---------------+--------------------+
|Part related to purchase |               |                    |
|commitments              |               |                    |
+-------------------------+---------------+--------------------+
|Amount at December 31st, |          +47.3|                -7.4|
|2005                     |               |                    |
+-------------------------+---------------+--------------------+

+-------------------------+-----------------+--------------------+
|                         |                 |        Result      |
+-------------------------+-----------------+--------------------+
|In Millions of Euros     |  Financial Debts|  Financing Expenses|
|                         |                 |                    |
+-------------------------+-----------------+--------------------+
|Amount at January 1st,   |            +38.0|                    |
|2005                     |                 |                    |
+-------------------------+-----------------+--------------------+
|Conversion difference    |             +7.5|                    |
+-------------------------+-----------------+--------------------+
|Increase in debts        |             +9.2|                    |
+-------------------------+-----------------+--------------------+
|Financing expense        |             +1.7|                -1.7|
+-------------------------+-----------------+--------------------+
|Part related to purchase |                 |                    |
|commitments              |                 |                    |
+-------------------------+-----------------+--------------------+
|Amount at December 31st, |            +56.4|                -1.7|
|2005                     |                 |                    |
+-------------------------+-----------------+--------------------+

+-------------------------+--------------------+
|                         |                    |
+-------------------------+--------------------+
|In Millions of Euros     |Net Income, Group   |
|                         |Share               |
+-------------------------+--------------------+
|Amount at January 1st,   |                    |
|2005                     |                    |
+-------------------------+--------------------+
|Conversion difference    |                    |
+-------------------------+--------------------+
|Increase in debts        |                    |
+-------------------------+--------------------+
|Financing expense        |                -1.7|
+-------------------------+--------------------+
|Part related to purchase |                +4.8|
|commitments              |                    |
+-------------------------+--------------------+
|Amount at December 31st, |                +3.1|
|2005                     |                    |
+-------------------------+--------------------+
About the SR.Teleperformance Group:

SR.Teleperformance (Euronext: FR 0000051807), the world's #2 provider of outsourced CRM and contact center services, operates under various brands, such as Teleperformance for customer acquisition, customer service and customer growth programs, as well as TechCity Solutions and Cash Performance respectively specializing in technical support and debt collection. In 2005, the SR.Teleperformance Group achieved EUR 1,195.8 million revenues (US$ 1,485 million - exchange rate: EUR 1 < > = US$1.24).

The Group operates over 45,600 computerized workstations, with more than 58,000 employees (Full-Time Equivalents) across 266 contact centers (including 102 contact centers directly managed in clients' premises) in 39 countries, and conducts programs in more than 51 different languages on behalf of a diversified client base of major international companies.

For more information, please visit: www.srteleperformance.com

SR.Teleperformance Contacts: (info@srteleperformance.com)

Michel PESCHARD, Corporate Secretary, Member of the Board

+33-1.55.76.40.80

Nadine DAVESNE, Press Relations

+33-1.46.67.63.44

+33-6.07.15.05.43

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