SOURCE: TELEPERFORMANCE

March 11, 2008 14:11 ET

TELEPERFORMANCE : 2007 WAS A RECORD YEAR FOR TELEPERFORMANCE

Achievements Exceeded Objectives

PARIS--(Marketwire - March 11, 2008) -


Announced in November 2007*

Strong Growth Rate and Improved Profitability Ratios

REVENUES: EUR 1,593.8 million +15%

NET OPERATING PROFIT: EUR 159.3 million +21%

NET PROFIT, GROUP SHARE: EUR 98.3 million +39%

* See Exhibit 1: Table describing the evolution of objectives and achievements in 2007

The consolidated accounts for the year 2007 submitted to the

Supervisory Board on March 11, 2008, highlighted the following results:

-- Based on published data, the Group's revenues amounted to EUR 1,593.8 million versus EUR 1,385.2 million at December 31, 2006, increasing by 15%. On a comparable basis (excluding foreign exchange and scope of consolidation effects), the revenues increased by 9%.

-- The Group's Net Operating Profit amounted to EUR 159.3 million, versus EUR 131.3 million at December 31, 2006, an increase of nearly 21%. The Operating Margin Rate represented 10% of the Group's revenues, versus 9.5% at December 31, 2006.

-- Net Profit, Group Share, amounted to EUR 98.3 million, versus EUR 70.9 million at December 31, 2006, representing an increase of 39%, exceeding the EUR 95 million objective announced last November.

-- Net cash flow amounted to EUR 132.4 million at December 31, 2007, versus EUR 128 million at December 31, 2006.

-- A dividend of EUR 0.44 per share, a 19% increase compared to last year, will be subject to the approval of the Shareholders' General Meeting on June 3, 2008.

+-------------------------+-----------+-----------+
|Condensed Consolidated   |31/12/2007 |31/12/2006 |
|Data                     |           |           |
+-------------------------+-----------+-----------+
|(in millions of euros)   |           |           |
+-------------------------+-----------+-----------+
|Revenues                 |   1,593.8 |   1,385.2 |
+-------------------------+-----------+-----------+
|Net Operating Profit     |     159.3 |     131.3 |
+-------------------------+-----------+-----------+
|Operating Margin Rate    |       10% |      9.5% |
+-------------------------+-----------+-----------+
|Net Financial Result     |      -0.4 |     -15.3 |
+-------------------------+-----------+-----------+
|Income Tax               |     -57.5 |     -41.9 |
+-------------------------+-----------+-----------+
|Net Profit               |     101.4 |      74.1 |
+-------------------------+-----------+-----------+
|Including Group Share    |      98.3 |      70.9 |
+-------------------------+-----------+-----------+

The Teleperformance Group's financial structure was modified as follows:

+-------------------------+-----------+-----------+
|Consolidated Financial   |31/12/2007 |31/12/2006 |
|Structure                |           |           |
+-------------------------+-----------+-----------+
|(in millions of euros)   |           |           |
+-------------------------+-----------+-----------+
|Cash Flow                |     180.8 |     141.7 |
+-------------------------+-----------+-----------+
|Change in Working Capital|      -3.8 |      +0.5 |
|Requirements             |           |           |
+-------------------------+-----------+-----------+
|Net Cash Flow from       |     177.0 |     142.2 |
|Operating Activities     |           |           |
+-------------------------+-----------+-----------+
|Net tangible and         |     -63.6 |     -59.5 |
|intangible investments   |           |           |
|(capex)                  |           |           |
+-------------------------+-----------+-----------+
|Free Cash Flow           |     113.4 |      82.7 |
+-------------------------+-----------+-----------+
|Net Financial Investments|    -222.9 |     -22.9 |
|(investments in          |           |           |
|subsidiaries and         |           |           |
|affiliates)              |           |           |
+-------------------------+-----------+-----------+
|Total Equity             |     965.6 |     739.4 |
+-------------------------+-----------+-----------+
|Equity, Group Share      |     952.8 |     726.4 |
+-------------------------+-----------+-----------+
|Financial liabilities*   |    -236.9 |    -306.2 |
+-------------------------+-----------+-----------+
|Including current        |    -101.0 |    -245.5 |
|financial liabilities    |           |           |
+-------------------------+-----------+-----------+
|Cash Assets & Cash       |    +369.3 |    +434.2 |
|Equivalents (excluding   |           |           |
|bank overdrafts and      |           |           |
+-------------------------+-----------+-----------+
|advances)                |           |           |
+-------------------------+-----------+-----------+
|Net Cash Assets / Net    |    +132.4 |    +128.0 |
|Financial Indebtedness*  |           |           |
+-------------------------+-----------+-----------+
|* including financial    |      56.4 |      48.6 |
|expenses related to      |           |           |
|minority interest        |           |           |
|purchase commitments:    |           |           |
+-------------------------+-----------+-----------+

I.- THE GROUP'S BUSINESS IN 2007

The Teleperformance Group's consolidated revenues amounted to EUR 1,593.8 million, an increase of +15% based on published data.

If not considering the foreign exchange effect, the Group's consolidated revenues increased by 18.8%.

The negative impact related to the foreign exchange effects mainly resulted from the rise of the Euro against the US Dollar. This impact amounted to EUR 51.5 million for the whole financial year.

On a comparable basis, the Group's revenues increased by 9%. Such increase was generated throughout the network as follows:

-NAFTA region: +12.0%

-Europe: +8.1%

-ROW: +2.8%

Changes in the scope of consolidation in 2007 resulted from the following transactions:

- Transactions completed in 2006

In Europe:

- Acquisition of the SCMG group in Switzerland, which was consolidated as of December 1, 2006, enabling us to strengthen our position in this region of Europe;

- Sale of market research operations in France, Italy and Germany in the 2nd semester 2006;

- Transactions completed in 2007

In Europe:

- Acquisition of a 100% interest in the German group Twenty4help Knowledge Service AG, which was consolidated as of April 1, 2007.

- Acquisition of a 62% interest in the French company The Phone House Services Telecom, which was consolidated as of May 1, 2007.

In the NAFTA region:

- Sale of the US company Noble Systems Corp., which was deconsolidated as of January 1, 2007.

- Acquisition of the US company Alliance One, which was consolidated as of August 1, 2007.

- Acquisition of the Mexican company Hispanic Teleservices, which was consolidated as of December 1, 2007.

In 2007, the scope of consolidation effect represented a net positive impact of EUR 124.4 million, which may be split as follows:

+111.0 million in Europe and

+13.4 million in the NAFTA region.

The Group's revenues are now distributed per region as follows:

+-----------------+-----------+-----------+-----------+
|     (in %)      |31/12/2007 |31/12/2006 |Variations |
+-----------------+-----------+-----------+-----------+
|Europe           |      52.0 |      48.6 |      +3.4 |
+-----------------+-----------+-----------+-----------+
|Including France |      21.4 |      23.4 |        -2 |
+-----------------+-----------+-----------+-----------+
|NAFTA(*)         |      37.6 |      40.0 |      -2.4 |
+-----------------+-----------+-----------+-----------+
|Other            |      10.4 |      11.4 |      -1.0 |
+-----------------+-----------+-----------+-----------+
|Total            |       100 |       100 |           |
+-----------------+-----------+-----------+-----------+
+-----------------+-----------+-----------+-----------+

(*) North America Free Trade Agreement

II.- PROFITABILITY

The Group's Net Operating Profit amounted to EUR 159.3 million, versus EUR 131.3 million in 2006, an increase of nearly 21% exceeding the growth rate in revenues.

The Operating Margin Rate represented 10% of the Group's revenues, versus 9.5% in 2006.

The Group's Net Operating Profit was impacted by the following elements:

-An expense of EUR 12.1 million equal to the value of benefits acquired by employees under share award plans in 2006 and 2007;

-The Brazilian operations' goodwill was tested for impairment and partially depreciated (up to EUR 2.2 million);

-A net income of EUR 13.4 million gained from the sale of investments in subsidiaries and affiliates, and the sale of investment property in 2007.

EBITDA (Earnings Before Interest, Taxes and Depreciation and Amortization) amounted to EUR 223.1 million, or 14% of revenues.

The Financial Result shows a net expense of EUR 0.4 million in 2007 versus a net expense of EUR 15.4 million in 2006.

Such improvement mainly resulted from:

- The conversion of the OCEANE bonds in February 2007, which represented an approximate expense of EUR 6 million in 2006, including EUR 0.8 million related to the implementation of the IAS 32/39;

- The EUR 8.5 million proceeds generated through financial investments in 2007 based on the funds raised and not invested yet in the context of the cash increase in capital completed at the end of 2006.

Income tax amounted to EUR 57.5 million, versus EUR 41.9 million in 2006, that is to say a tax rate of 36.2% versus 36.1% at December 31, 2006.

To be noted that no profit on sale of discontinued operations was recognized in 2007 and 2006.

As a consequence, the Group' Net Profit amounted to EUR 101.4 million, versus EUR 74.1 million in 2006.

Net Profit, Group Share, amounted to EUR 98.3 million versus EUR 70.9 million in 2006, increasing by almost 39%.

III.- FINANCIAL STRUCTURE

At December 31, 2007, the Teleperformance Group benefited from a positive net cash flow of EUR 132.4 million, versus EUR 128 million in 2006.

Financial liabilities amounted to EUR 236.9 million, including EUR 56.4 million financial expenses related to minority interest purchase commitments in subsidiaries.

The Group's total equity represented EUR 965.6 million at December 31, 2007, including EUR 952.8 million as Group Share, versus EUR 726.4 million in 2006.

The major changes impacting the Group's financial structure resulted from the capital increase carried out by Teleperformance for a total amount of EUR 164.6 million, including EUR 156 million from the OCEANE bonds that were converted at the beginning of 2007 following the implementation of the early redemption clause set out in the Information Note. And the remaining EUR 8.6 million were generated through the two stock option plans granted in 2001 which could be exercised in June 2007.

Internally generated funds from operations amounted to EUR 180.8 million in 2007, versus EUR 141.7 million in 2006, increasing by more than 27%.

In 2007, changes in working capital requirements went up by EUR 3.8 million. Excluding buy-out operations, the EUR 30.8 million increase in working capital requirements was offset to the extent of EUR 27 million by a decrease in working capital requirements driven by buy-out operations.

As a consequence, the Group's net cash flow generated by operating activities amounted to EUR 177 million, versus EUR 142.2 million in 2006.

As for tangible and intangible investments, excluding finance leases, in 2007 they represented a net amount of EUR 63.3 million, versus EUR 59.5 million in 2006.

This figure includes the income gained from the sale of investment property, i.e., EUR 6.2 million.

Free Cash Flow ended up at EUR 113.4 million, versus EUR 82.7 million at December 31, 2006, representing a 37% increase.

Over the same period, Net Cash Outflow amounting to EUR 222.9 million was related to external growth operations mainly completed in Europe (Technical Assistance) and in the NAFTA region (Debt Collection in the United States and acquisition of H-Tel in Mexico).

The sale of investments in subsidiaries and in affiliates generated a net cash flow of EUR 11 million, mainly with the sale of the US company Noble Systems Corp.

Cash flows related to financing activities were translated into a net cash outflow of EUR 3.5 million, including:

- EUR 21.1 million for the payment of dividends,

+ EUR 9.2 million for a cash increase in capital

+EUR 8.4 million for the net increase in financial liabilities.

Finally, after considering all these transactions, the Group's Change in cash and cash equivalents, excluding foreign exchange and scope of consolidation effects, generated in 2007 declined by EUR 111.7 million.

Teleperformance's Net Cash surplus developed as follows:

+-------------------------+-------+
|(in millions of euros)   |Amount |
+-------------------------+-------+
|at January 1, 2007       |+128.0 |
+-------------------------+-------+
|Free Cash Flow           |+113.4 |
+-------------------------+-------+
|Net impact of changes in |-222.9 |
|the scope of             |       |
|consolidation            |       |
+-------------------------+-------+
|Dividends paid           | -21.1 |
+-------------------------+-------+
|Increase in share capital|  +9.2 |
+-------------------------+-------+
|Impact of the conversion |+152.7 |
|of OCEANE bonds          |       |
+-------------------------+-------+
|Finance leases           | -14.1 |
+-------------------------+-------+
|Minority interest        | -10.7 |
|purchase commitments     |       |
+-------------------------+-------+
|Translation differences  |  -1.0 |
+-------------------------+-------+
|Other                    |  -1.1 |
+-------------------------+-------+
|at December 31, 2007     |+132.4 |
+-------------------------+-------+

IV.- DIVIDENDS 2007 < > = EUR 0.44 per share

During the Shareholders' General Meeting which will be held on June 3, 2008, the Board of Directors will suggest to set the dividend amount to EUR 0.44 per share, a 19% increase.

V.- OUTLOOK

Business activity has been sustained throughout the network since the beginning of the year.

Based on such level of activity, the growth and profitability objectives that were announced during the last financial meeting in November 2007 are confirmed.

According the Group's achievements in the first quarter 2008 and market trends, growth objectives will be fine-tuned in our next financial meeting which will be held on May 21, 2008.

VI.- Teleperformance - The World's Leading Provider of Outsourced Contact Center Services (source: Datamonitor)

See Exhibit 2

VII.- The North American Frost & Sullivan award for Industry Innovation & Advancement is presented to Teleperformance in recognition of its IT security best practices.

See Exhibit 3

VIII.- SHARE BUY-BACK PROGRAM

During the Supervisory Board meeting held on March 11, 2008, it was decided that Teleperformance would launch the share buy-back program in order to cancel repurchased shares pursuant to the tenth resolution adopted by the Combined Ordinary and Extraordinary General Meeting on June 1, 2007.

IX- A STRENGTHENED MANAGEMENT TEAM

In order to further strengthen the Group's management team, it was decided to appoint:

- Mrs Martine Dassault as Vice-Chairwoman of the Supervisory Board,

- Mr. Michel Peschard as Finance Managing Director, Member of the Board of Directors

As a consequence, the Group's management is now structured as follows:

Board of Directors:

-Jacques Berrebi: Chairman, Member of the Board of Directors

-Michel Peschard: Finance Managing Director, Member of the Board of Directors

-Olivier Douce: Member of the Board of Directors

Supervisory Board:

-Daniel Julien: Chairman of the Supervisory Board

-Martine Dassault: Vice-Chairwoman of the Supervisory Board

-Philippe Dominati: Deputy Vice-Chairman of the Supervisory Board

-Philippe Ginestié: Member of the Supervisory Board

-Alain Laguillaumie: Member of the Supervisory Board

-Daniel Bergstein: Member of the Supervisory Board (independent member)

-Bernard Canetti: Member of the Supervisory Board (independent member)

-Eric Delorme: Member of the Supervisory Board (independent member)

-Philippe Santini: Member of the Supervisory Board (independent member)

About Teleperformance:

Teleperformance (NYSE Euronext: FR 0000051807), the world's leading 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 Technical Help and Cash Performance respectively specializing in technical support and debt collection. In 2007, the Teleperformance Group achieved EUR 1.593 billion revenues (US$2.182 billion - exchange rate at December 31, 2007: EUR 1 < > = US$1.37). Last November, the Teleperformance management team announced 2008 revenue objectives at around EUR 1.755 billion, increasing by +10% compared to 2007 (US$2.580 billion at: EUR 1 < > = US$1.47).

The Group operates about 75,000 computerized workstations, with more than 83,000 employees (Full-Time Equivalents) across 281 contact centers in 45 countries and conducts programs in more than 66 different languages and dialects on behalf of major international companies operating in various industries.

For more information, visit: www.teleperformance.com

Exhibit 1

EVOLUTION OF OBJECTIVES AND ACHIEVEMENTS IN 2007

+------------------------+-----------+-----------+-------------+
| in millions of euros   |Objectives |   2007    |Achievements |
+------------------------+-----------+-----------+-------------+
|                        | Financial | Financial |        2007 |
+------------------------+-----------+-----------+-------------+
|                        |   Meeting |   Meeting |             |
+------------------------+-----------+-----------+-------------+
|                        | Nov. 2006 | Nov. 2007 |             |
+------------------------+-----------+-----------+-------------+
|EUR /$ exchange rate       |EUR 1 = $1.25 |EUR 1 = $1.37 |  EUR 1 = $1.37
|
+------------------------+-----------+-----------+-------------+
|Revenues                |      1,49 |      1,57 |       1,593 |
+------------------------+-----------+-----------+-------------+
|                        |    + 7.5% |    +13.4% |        +15% |
+------------------------+-----------+-----------+-------------+
|Net Operating Profit    |   145/150 |       156 |       159.3 |
+------------------------+-----------+-----------+-------------+
|                        |     + 12% |     + 19% |        +21% |
+------------------------+-----------+-----------+-------------+
|Net Profit, Group Share |     84/88 |        95 |        98.3 |
+------------------------+-----------+-----------+-------------+
|                        |     + 21% |     + 34% |        +39% |
+------------------------+-----------+-----------+-------------+
+------------------------+-----------+-----------+-------------+

Exhibit 2

2008 CONTACT CENTER OUTSOURCER RANKINGS

NOTE: Two other leading providers were disqualified from the study due to lack of client feedback

TELEPERFORMANCE - OVERALL #1 RANKING OF ALL STUDIED PROVIDERS

"FROM THE PERSPECTIVE of market impact, Teleperformance was not only the vendor with the largest base of revenues and APs, but it also had the most diversified base of business from a regional standpoint. End user sentiment was also very solid for Teleperformance, in that users of outsourcing services consistently rated it in excess of the average in all categories, with particularly solid scores on service quality and client engagement."

(see graphic in attachment)

"Teleperformance is also well placed to provide multishore solutions to vendors, with an ever-growing number of facilities in new delivery locations. Further, it has also made significant investments in order to develop self service options for clients looking at automated or blended solutions.

TELEPERFORMANCE RECOMMENDATION:

SHORTLIST

Datamonitor believes that Teleperformance should be on this year's Decision matrix shortlist. Not only has it proven capable of delivering service to clients in an extremely diverse collection of locations ranging from a large number of sites in multiple languages , it has also been willing to pioneer entry to new geographic delivery markets. In addition, Teleperformance is likely to appeal to those US firms interested in pursuing the burgeoning American Hispanic market, especially with the recent acquisition of Hispanic Teleservices (HTC). This firm is one of the logical choices for firms seeking either local/regional contact center solutions, or for those that require multicountry/global support across a variety of functions."

Exhibit 3

2008 SECURITY PRACTICES INDUSTRY LEADER

"Teleperformance is the first company in its industry to be recognized as the clear leader in security practices.

They appear to be far ahead of the competition."

- Michael DeSalles, Strategic Analyst

Frost & Sullivan

"The 2008 North American Frost & Sullivan award for Industry Innovation & Advancement in Contact Center Outsourcing is presented to Teleperformance in recognition of its solid security foundation (network, applications and desktop) and industry-leading security organization. This includes Payment Card industry (PCI) compliance other important supplementary certifications, and the use of security Best Practices as part of an ongoing commitment to excellence in serving clients in this vital area."

Source: Frost & Sullivan, February, 2008

This information is provided by HUGIN

Contact Information

  • Teleperformance Contacts:
    (Email Contact)

    Michel PESCHARD
    Finance Managing Director, Board Member
    +33-1.55.76.40.80

    Nadine DAVESNE
    Press Relations +33-1.46.67.63.44
    +33-6.07.15.05.43