Good evening, everyone, and good morning for those who are based in the U.S. Thank you for your participation to the webcast. I am Olivier Rigaudy, Deputy CEO and CFO of Teleperformance, and we are here together tonight to comment on the group results at the end of June 2021, that just released. You may have received the press release at the closing of the stock market. As usual, the presentation will be followed by a Q&A session. The replay of the webcast will be available online on the corporate website after the meeting. I won't read the usual regulatory disclaimer about contents for our looking statement. You can find them in the press release and at the beginning of the H1 slideshow.
I know that the period is busy and that many companies publish their half-year results on the same day, but I believe that we stand out because we have broken a new record of growth and profitability in this first half. Let's go to the slide. I will pass on the group overview, but you go directly to the key fact on the key figure related to the first half, but I just wanted to show you how wide we are, and I believe you know that. Let's go to the first half highlight. We're happy today to announce that we posted another growth record in 2021 in H1. Our organic growth was 36.8%. That means that we have even a better Q2 than Q1 that we did in the first half, because it was 35.7%.
Our current EBITDA increased to a level of 14%, which is above pre-COVID level, of course, above last year, but also above pre-COVID last year, achieving 14% figure. The net profit group shared quadruple to EUR 255 million, and the net free cash flow is up by more than 70% to EUR 333 million. This excellent first-half performance confirms a very positive trend in place since the second half of 2020 and far exceeds any simple return to pre-pandemic growth. There are three main drivers supporting the H1 strong performance, and which will explain the next 6 months-12 months growth outlook. We continue to benefit from the accelerating market digitalization, which is a solid positive macro trend supporting our long-time top-line growth. This is today illustrated by sustained growth pace of business development for the group, notably in Continental Europe and in the Americas region.
We have seen a large number of contracts with leading players in the digital and tech environment that we call e-tech clients now, and they represent 36% of our revenue. We have been actively involved since H2 2020 in support for service government for vaccination campaign, mainly in the Netherlands and in the United Kingdom. Excluding this temporary support activity that might be temporary, presenting an impact of around EUR 400 million or H1 organic growth, and despite this continuing negative effect on the visa management business and the hospitality and tourism sector, the group like- for-like growth remain at exceptional level surpassing 20%. This is absolutely important to notice. Lastly, of course, we benefited in the first half from favorable prior year comparison, which impacted the global health crisis that began in March last year.
I would like also to analyze the capacity of the group to accelerate and to adapt to this model. We are now in what I call an hybrid business model. A TP Cloud Campus is our system of managing people remotely, is now in place in 52 countries instead of 32 countries by the end of 2020. This is something that is going to last. We do believe that in the future, this is going to be a part of the hybrid model. Roughly 35% of our clients have agreed to work remotely, and this is something that is going to continue. More than 240,000 people, employees, are still working from home, and this is going to continue at least for a certain period of time.
What we say, what are the key, development is clearly the fact that we continue to support the government. I mentioned that we support mainly Europe, meaning Netherlands, France, Germany, and the U.K. in vaccination campaign, and we continue to do that. We have a strong commitment to our employees. As I mentioned earlier, we are certified best employer in 60 countries as we speak, more than 90% of the group workforce. We start to vaccinate our people across the country where we are authorized to do so. We have more than 15,000 people that we vaccinated in India, 1,000 in Dominican Republic, Philippines, and Colombia. This is exactly what we aim to do. Of course, I'm sure you remember, we have completed the acquisition of Health Advocate last June 22nd, finally we get the authorization to do that.
That is the first half highlight. Growth, good margin, better cash, continuing development on work at home, and strong commitment to employee. Support, of course, of the vaccination for some government in continental Europe and in U.K. Let's go to the figure precisely now. I think that beyond this commercial performance, which is shown here, which is a 36% like-for-like growth on which I will come back. We have been able this year, this quarter, this half-year, sorry, to deliver also a very good operational performance because we achieved this 14% like-for-like rate in margin, which never achieved at H1 level. This is something that we have been able to do so for different reason. I'll come back in a minute to that. We never achieve such a level of margin, and I do believe this is going to be unacknowledged by the market.
Let's move to the understanding of the sales figure. We increase our sales by EUR 924 million in like for like. This is absolutely outstanding. Of course, a part of it is coming from the vaccination, support vac service for government. I mentioned around 20% of the growth. 16% of the growth, sorry, 20% is the other part. Of course, we had a favorable basis of comparison in H1, but we took advantage of the development of the digital economy, this famous support line, and the adjust for that, the like-for-like growth remained exceptional above 20%. We have been hit by the currency effect, mainly for the US dollar, but also from some Latin American currencies that have slipped versus the euro and also the Indian rupee this year. This is what we have done.
If we enter in detail in the presentation, and by sector, I just wanted to highlight two or three things. First of all, in Q2, everything is growing. Everything is growing at different pace. We are going to come back to that. Every region, every sector is growing. When it comes to core service, the strong performances, of course, is in EMEA and Ibero-LATAM. This is absolutely amazing. We are at exceptional level in EMEA, but also in LATAM. We have the positive contribution from COVID-19 support in EMEA and EWAP, because U.K. is a country in the EWAP region. On top of that, we have a back to growth in India significantly as planned. We have a significant growth in specialized service, mainly driven by LLS, while TLScontact is starting at the very end of the half year, to start to grow again.
This is very limited. Globally, on the first half year, TLScontact is down versus last year, not only in sales but also in margin. If we move to margin, you will see that everything is growing too. Of course, the recurring margin rose to 14%, coming from 9.5% last year. What are the reason of this growth? You have the operating leverage, that for sure. You have the non-recurring health crisis management outlay. Of course, we are no more spending a lot of money to put people to work at home, marginally, but we're not on top of that. We had a disciplined cost management all along this first half.
This is something that we are very strict on, not only on CapEx, which you will see that in a minute, but also on the management cost, just to make sure that we will be able to deliver good margin. Of course, we have the favorable basis of comparison. Where are the highest performance? They are in EMEA, in India. Of course, I mentioned that we are back to higher than pre-crisis level in H1. Let's move on region by region. First of all, EWAP, English world and Asia Pacific. We have a satisfactory like-for-like growth in H1 in this market, with faster gain in Q2. Clearly, we have the support of the government that we need in U.K. that helps also in the growth, even if the growth in Q2 was less important than in Q1.
In Asia, the business enjoy another period of fast growth. On comparative, we are less favorable in Q2 because the crisis was much more in Q1 in China last year. Profitability improvement in Philippines, notably in offshore, in U.K. and in Asia Pacific. It could have been better if we would have been in a position to hire much more people in US domestic. As you know, the market has been, I would say, temporary, I would say, hit by the consequence of the crisis. Let's move to Ibero-LATAM. I would say few to say. Everything is green there. Strong like-for-like growth. New contracts with e-tech and quick and effective deployment on TP Cloud Campus, which was not so easy to make.
The best top-line performer are Colombia, Nearshore operation Mexico, Dominican Republic, El Salvador, and also Portugal and Spain that have been very active this first half. The margin gain are everywhere and supported by the growth in the business, notably in Spain, Mexico, Portugal and El Salvador and everywhere, I would say. I would say this zone is either running, I know it's Olympic Games, is running the marathon and the sprint in the meantime. Let's move to Continental Europe. Here, the growth is absolutely amazing because we are at more than 70% like-for-like, and in Q2, 68%. Of course, two-third of this H1 growth is coming from the fast ramp-up of the service that we support for the government vaccination campaign, notably in Netherlands. There is still one-third, which is significant, which is coming from other fast-expanding segments, including the e-tailing and online entertainment.
As a consequence, there is a robust improvement in margin, notably in the Netherlands, Greece, and Italian market. I just wanted to stay a minute there because for those who know the group for some years, very few would have bet on such a level of margin on H1 and even for the full year for CEMEA, that was a difficult zone some years ago. Moving to India. India, we had accelerated growth in Q2. Of course, we had a very favorable comparison and vis-a-vis lockdown. This year, we have been able to develop largely our work-at-home solution. Frankly, we have not been hit last April by the overcome of the pandemic resurgence. We have been able to swallow it and to support it.
Margin improvement, as mentioned, of course, the margin is significantly better because, as you might remember, we have stopped low-margin contracts starting Q4 last year, and now we are seeing the impact. This is absolutely amazing. This is a high level in terms of rate of result of the group. I do believe that the growth will be less vigorous in second half because of the basis of comparison. Let's move to specialized service. Acceleration of the growth here, too. 36% in Q2 versus 10.1% in Q1. This is due, of course, to LLS that continues to deliver a fantastic growth, but also for the fact that TLS is back positive in Q2, even if it's still low. This still helps to grow. Finally, the margins are increasing, also. We are very optimistic.
It's probably too early to tell, but we hope that the second part of the year will be significantly better for TLScontact because we are going to go through a base of comparison that will be favorable for tourism and this industry. Let's move now to the other part of the P&L. Very few things to tell. You probably remember that we had the non-recurring item last year that was mainly non-cash linked to, of course, the performance share plan and the impairment of goodwill of [audio distortion] French business, notably in offshore. This year, we don't have that except that the performance share plan is increasing, even the value of the stock, but this is still non-cash and has no big impact on the cash flow. I'll come back later on that. Coming to the other parts, the net financial result is better.
This is linked to a better result on FX on the whole hedge that has been positive versus last year. The cost of the debt is roughly the same. The effective tax rate is now 28%. I remember you, it was last year very high because you had this impact of the impairment of goodwill. Without that, we were roughly in the same range of 29.5% versus this year 28.1%. Lastly, we are able to deliver net profit of EUR 255 million, which is four times than last year and close to double versus two years ago. More interestingly, for me, is the cash flow. Here, we have been able to deliver a very good performance. Of course, you have the cash flow that is after lease payment, interest paid and tax that is growing following the figures that I just showed.
On top of that, we have been able to monitor properly our working capital needs. It's only EUR 38 million increase versus, I remember you, EUR 924 million increase in sales over the half year. Last year, we had the positive effects that is, of course, no more existing today. This is something positive. On top of that, we have been able to monitor properly our net capital expenditure that is below last year in absolute term, and of course, in relative term, because we have deployed most of our people working at home, and we have limited CapEx in new facility. We have opened only three new facilities in this first half in 2021. Very good performance in cash flow, and this is good for the future. I'm not going to comment on the balance sheet except if there are question later on on that.
What I just wanted to show is what's happening to the debt. The debt is increasing, of course, because we had to pay for Health Advocate, sorry, at the end of the month. The growth is limited. The increase of the debt is limited, given the fact that we had the good figures in the first half. Of course, this shows that the debt will come down in the second half because we won't have a dividend anymore in the second half of the year and no acquisitions so far that are prepared. That is the result of the first half. What happened? Here you have the capital allocation. As you can see, net CapEx is there over the years to sustain the like-for-like growth. Clearly this year, the model has changed given the work-at-home approach, and this is going to help us.
I estimated that the CapEx will be roughly in the range of 3% of the revenue, maybe a little more, 3.2%, 3.3%. It's difficult to tell today, but clearly, it will be significantly less than last year. M&A, of course, you know that we are targeting high-value, mid-size business, looking for expertise and assets, and positive track record over the last year help us to make an accretive acquisition. We are looking to different file, and I'm sure you are going to ask the question, but so far, nothing has been announced. In terms of dividend payout, we are going to stay with the market standard. We increased last year, given the impact on the net results of the pandemic, but we will go back to the payouts, which is classical, around 33% over the year. What are our guidance for the full year?
Of course, given this figure, we are going to increase. We increase our guidance of like for like of around +18% versus a target of at least 12%. We increase our EBITDA margin target of more than 14.4% versus 14% before. Some of you will say this is probably conservative. Maybe. Probably, yes. Probably, this is much more the style of the company to be conservative than to be too much optimistic. Frankly, what we see is that we continue to have a dynamic business development and sustained acceleration of this digital transformation that is going to accelerate. I'm convinced of that. Of course, statically, we are going to have lower revenue contribution in the second part of the year versus last year of the government support service. We had a comparison that is difficult to beat in Q4. This is technical.
Of course, we will have Health Advocate consolidated for the full second part of the year. As a whole, we are reasonably optimistic for 2021 on the trend for the future. For 2022, it's probably, of course, too early to announce anything in term of guidance. What is clear is that there will be some impact of the basis of comparison, specifically of the H1 that could have an impact on the global figure. Fundamentally, we are positive, and we are clearly, I would say, reasonably optimistic or at least confident about the next months to come. That's what I can tell you, and I'm ready to answer the question you will probably raise. Thank you.
If you would like to ask a question on the phone line, please press star one on your telephone keypad. Please ensure that your line is unmuted locally. You'll then be advised when to go ahead with your question. That's star one. Please stand by whilst we prepare the first question. The first question comes from the line of Antonin Baudry calling from HSBC. Please go ahead.
Yes, Olivier. Thank you very much. Good evening. I have three questions. My first question is that it would be to know in the current growth, would it be possible to know what is related to existing clients, the growth of existing clients and the new clients? If I calculate correctly, your full-year guidance of top-line growth implies a flat revenue growth in H2. Beyond the decrease of the COVID-19 contracts, is there any headwinds that we have to keep in mind in H2? My second question is about employees. Will it be possible to have your view on employees' attrition, your capacity to hire enough to fuel the demand and potential wage inflation? Will it be possible to see a pressure on your margins related to that? One last question is about your M&A strategy.
Can you explain again your M&A strategy in terms of geographies, business targeting, price paid, and your capacity to self-finance acquisitions? Of course, I see that you could be interested by a big asset in India. Will it be possible for you to finance that internally? Thank you, Olivier.
Existing client or new client, I have no major change versus what we have lived in the past. You have to put out, of course, the COVID line for the support of the government, which are new clients. In some way, it's difficult to make the analysis with this new client, because this is new client. And probably this will be longer-term client for the future. I'm quite convinced of that. There is no change, we are roughly at the same level that we were before. Headwinds in H2? No. We have no headwinds in H2. First of all, we have no idea what's going on with these government clients. We have no idea, we are very careful on that. Of course, you remember that we had a Q4 that was very high last year.
I'm reasonably confident that we are going to deliver a good second half, this is too early to give much more detail on that. We will probably have a better view by September. Frankly, there is no headwind ahead of us. About the employee attrition, the story is much more linked to U.S., but also in some countries in Europe. In US domestic , you have a situation where people have been They get some helicopter money, and they wanted to stay home, and some people have changed their way of living, and people are starting to come back to work. This is going to last until probably mid-September.
At that time, most of the federal, I would say, program will ended, and we will come back to a situation that is more classical, and at a time where there are some pickup into Q4, as you know, notably in US domestic. Frankly, about potential pressure on margin, we have no issue there. Either we go offshore, and I'm sure you have seen that we have been able to improve and to increase our Filipino business, and as I told you, through the margin, or either we are able to convince our domestic client to continue to sustain the growth and to pay the people. We will be close to $15 an hour, close to everywhere, to 80%, 85% by September, October in U.S.
Of course, this is something that is happening, there are some difficulty in some place, and we are not the only one to do that. That's the reason why you need to deliver a good promise to your people. Frankly, this is not so easy. It's not specific to Teleperformance. It's for the full competition and for other sector in retail, in hotel, in tourism, in everywhere. This is part of the job now, and we are able to manage it. Sometimes it's difficult as we do believe that in Q4, starting Q3 and Q4, the system will be over in U.S. M&A strategy, no change. As usual, we are looking for not buying more of the same.
We have no interest to buy the things that we know how to do. There is no reason to put debt and goodwill on our balance sheet on something that we can do organically. We are looking for something that are add-on, companies that are well-managed, with a good management, profitable, and that you can enlarge their distribution of product or services across our network. There are different possibilities. Of course, we have understood that the world is more and more digital. That helps for us. It's important for us to be part of this story. We are looking to that. Whether it will happen or not, this is frankly something that is difficult to tell. I'm not sure. About financing, of course, we prefer to use debt. Given the price of the debt today, we are going to use debt.
If there is a fantastic opportunity that we cannot miss, we might ask shareholder to join us, provided, and I can promise on that, provided there will be no dilution for them.
Thank you very much.
The next question comes from the line of Nicolas Tabor calling from Stifel. Please go ahead.
Good evening. Thank you very much for taking my question. The first question would be if you could give us the July exit rate at the end of Q2. The second question would be on the government's COVID support contract. It seems they were stable in Q2 versus Q1, and I was trying to understand why maybe the acceleration of the COVID vaccination did not trigger any changes or increase in revenue, and what are you expecting for Q3 in terms of revenue for that part of the business? On the rebound of the specialized services margin, can you give us an idea of how much is driven by LLS? Is it only LLS, or are there some loss mitigation at TLScontact ahead of the rebound of the activity, and what's the moving parts there? Thank you very much.
By the last one, all the rebound in the margin coming from LLS, and then to a lower extent from our small business of receivable stuff, Alliance One. This is not coming from TLScontact, which is still doing losses in first half, of course, and has not improved versus last year. We hope that it will happen in second part of the year, but depends a lot of the travel. What we see is a small pickup on the visa demand in June and July, but it's too early. Government line, it's made of different things. That's just for you to understand, there are, of course, first line was information line, after it was a trace and track line, after it has been vaccine line. There are different stuff that happen in different region. That could last.
Frankly, this is difficult to predict what is going to be the story. What we see is two things, is first, we have shown to all these governments that we are serious and able to, I would say, to cope with the difficulty to answer so many issues so quickly, and that is probably something which is very important for us to have shown to a big continental government. Of course, we were already working with the Government of Her Majesty for years. In continental Europe, in Netherlands, Germany, France, we have shown to this government that they can rely on us on a big stage, on a big step. I do believe this could continue for other stuff, but this is difficult to tell.
The visibility on this contract is very low, 15 days, 20 days maximum, because people are reacting, of course, to the situation of the pandemic. By nature, there are ups and downs, peaks and valley, if you see what I mean. It's not only vaccination, but of course, vaccination is not over by far, and not over in other countries on which we are looking for. There is a sanitary pass. There are other stuff that could happen. The exit rate of July, I don't have it so far. What I can tell you it's reasonably good so far.
Great. Thank you very much.
The next question comes from the line of Anvesh Agrawal, calling from Morgan Stanley. Please go ahead.
Hi. Just to clarify on this COVID benefit, I think in the Q1 you said that the ex-COVID benefit of business is +26% organic, and in the first half it's close to 20%, so that implies there is some slowdown in the core business between Q1 and Q2. Is that the right way to interpret, or there is some sort of one-offs in there which we are missing? Then just if you can, it's obviously out in the press, the potential bid for Hexaware. If you can make any preliminary comment around what would be your interest in looking into that company and how it fits within Tele's business, that would be great.
You won't be surprised, on Hexaware, I'm not going to make any comment on that. I have no comment to do. Q1 and Q2, you have to keep in mind on the COVID line impact, you have to keep in mind that the impact of the COVID line are higher. You have to take also the reference base. We are not going down in core business between Q1 and Q2, the size of the COVID business in Q2 versus the reference is higher than it was in Q1, because in Q1 in 2020, we had some business that was still working well. It's part of the story. This is a main story it's exactly what happened in this part.
Okay. Fair enough. Thank you.
Before we move to the next question, please be reminded, if you would like to ask a question, please press star one on your telephone keypads. The next question comes from the line of Laurent Gélébart, calling from Exane. Please go ahead.
Good evening, Olivier. Just one question on my side regarding your full-year EBITDA margin expectation, that you are seeing at 14.5%. It is fairly cautious regarding what you expect on H2, and normally H2 is a higher margin than H1 by far, and on top you get the contribution of Health Advocate, which is accretive to the group, and you get probably a restart of TLScontact. Can you elaborate a bit on your expectation for the full-year EBITDA margin, please?
Of course, the 14.5% looks conservative, but today we are not ready to be much more precise on that because it's if I may say, for the group, because we have not been at this level forever. Clearly, you're right, Health Advocate will have an impact. It's not a big one, but it's an impact. Of course, we hope that TLScontact will be back on track. On top of that, you have the Q4 impact of the COVID line of last year, especially in CEMEA. There will be a reference that would be difficult. Clearly, you start to know us. We are conservative because, I don't know you say that in English, but in French I will say [Non-English content].
Okay. I have follow-up question. If you had to strip out the contribution of COVID-19 related contracts in CEMEA in top line, what would have been the EBITDA margin of the division?
In such computation, I might make it next year. When I will have the full picture. Clearly, the contribution of the COVID line is not very different from the other activities in term of margin itself. There are different model between different countries that could be different. Finally, this is of course positive, and I do believe that. The main question will be for 2022, whether we will be able with what we have, we will regain in case this line disappeared, which is something that is still questionable. I don't know whether this pandemic will be over in 2022. If this line disappear, what we are going to have in front of that, I'm thinking of TLScontact, I'm thinking of everything. In term of sales, it could be probably favorable, but in term of margin, I don't see that favorably.
Let's put it this way.
Okay. I have a last question, Olivier. How do you explain the difference of margins of EWAP, for instance, with the other businesses? Do you see a normative level a lot higher than what we are seeing today in H1, for instance?
They could be better, but by far, we agree on that. You have two things. You have a part of the business, especially in the first half, that has moved from the EWAP zone, notably Philippines to Latin America, notably Colombia. That didn't help. That was very true in the first quarter, less true in Q2, but this is going to adjust. You have also, a model which is a little different on COVID line in U.K. versus Europe, that is not exactly at the same level. You have this domestic business that has been impaired or when the growth has been reduced in US domestic. All of that has an impact. I strongly believe we should come back to a normal normative level during starting in H2 and probably in 2022. We are addressing this point very precisely, very firmly.
Thank you, Olivier.
We have no further questions coming through on the phone line, so I'd like to hand the floor back over to your host for any closing remarks. Thank you.
Thank you to all. You have understood that we have done an outstanding first half. We are, as I told you, reasonably optimistic for 2021. We are engaged in a big change of digitalization, acceleration of digitalization, sorry. I'm really confident that the group will be able to catch it. Thank you to all, and let's speak later individually to some of you. Thank you. Bye-bye.