Earnings Call: H2 2020

Feb 25, 2021

Hello, and welcome to the 2020 Annual Results Presentation. My name is Monique, 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 on listen only. However, You will have the opportunity to ask questions at the end of the call. I will now turn it over to your host, Daniel Julien, to begin today's conference. Thank you. Thank you very much, Monique. Good morning, good afternoon, depending what place you are in the world. It's a pleasure today For the management team of Teleperformance to present you the annual result of 2020 That was a very, very difficult year for the world, for the economies and for the people. Fortunately, we have been lucky enough to continue To build a strong company as you are going to see now. Next please. Okay. Here we are. No, please Come back, please, here. Here we are. At December 30 1, 2020, the headcount of the group was 380,000 employees, which means that during 2020, we created net 50,000 jobs all around the world. That's something that I'm very happy with. Usual information, we speak almost all the dialects you can imagine. We are in 83 countries with 170 markets. And more importantly, At the end of 2020, we had 250,000 employees Working from home, 2 third of the group. So next please. So The highlights, very simple. Record growth, almost plus 12% like for like, A sharp acceleration in the like for like growth in the last quarter of the year, Plus 23%, something we have not seen for many, many years. A very resilient profitability despite the disruption of the COVID as We show an EBITA margin of 12.8% And an actual amount of €735,000,000 despite the near shutdown of our Visa Business and despite the additional costs created by the move from brick and mortar to Work from home. And finally, at the end of 2020, We deliver a net free cash flow of almost €500,000,000 which is Very significantly superior to last year. So we are going to Proposed to the general assembly of the shareholders to maintain the €2.40 dividend per share, Unchanged from 2019, and specifically, we are able to do that because we are extremely confident in 2021. Next, please. This is what is extraordinarily important to understand when you consider the year 2020. You see that January, February, we had a growth that was in the plus 8%, more or less in our guidance. Then, 15th March, the world stops. And The second half of March is dramatic, and we end March with 0 growth. April, we had April with minus 3%. But during the 6 weeks, We mobilize the group like a D Day operation. And during the 6 weeks, We pass all over the world from less than 10,000 people working from home to 200,000 people at beginning of May. And this It was an incredible logistic, mobilization engagement of all the teams of teleperformance all over the world. And our ability, our agility and ability to continue to Ensure the service to our clients help us to grow. And you see that starting June And since June, every single month has been above double digit growth to finish By the quarter, you see. Next, please. In fact, I think that next, please. Thank you. I think that we have been able to do that because From the day 1, we are very clear on our priorities. We said we have 3 priorities: And obviously, the logic was to pass, To work at home. And this work at home As we managed like a, I would say, Navy Seal operation, the executive management of the group Meeting, virtual meetings several times a week. The Board of the group was meeting every 2 weeks. And we used to measure the progress every single day. Seeing the crisis of the COVID crisis being here For a long time and definitely not over beginning of last summer, Our R and D teams decided to build an integrated digital platform To manage our employees from remote, this platform is called Teleperformance Cloud Campus, And we hire the employees digitally. We train them digitally. We monitor and we manage them digitally, and we give them the second light, the virtual light, the campus light At the same time, as the situation of the group was Very solid. We decided in June because we are very confident that the worst was behind us To maintain our dividend to the shareholders in June, and we continued our acquisition Acquiring a high level kind of digital and human concierge business for the healthcare in the USA This acquisition has been signed in 2020, but will be closed only when we will get all All the authorization of the U. S. Authorities, we got the federal authorization, But now we still have to get the authorization of California because we are operating also a little bit in California. It takes Few more weeks at what we were expecting, but we should be able to start to consolidate as advocate Next, please. Okay. I'm going to be fast. These are and you will be able to read that. These are the thank you note that we received from some of our clients all over the world. I have to tell you that we received also thank you note from some prime ministers For our support to the COVID line, specifically in the European region. Next, please. Okay. Sys is the Everest Group peak metrics and where you see clearly steady performance In the right hand corner with a star, leader and star performer Above all the competition and at least it's the market perception that comes here To confirm the numbers that we were showing you. Next, please. We are extraordinarily focused And delivering an environment and social good governance. This is in our values And in our philosophy of diversity and equity, we signed the UN Global Compact 9 years ago, in 2020, We got certified Great Place to Work. I remind you that Great Place to Work It's an independent third party organization that makes a deep Survey to our employee base country per country and that the status of Great Place to Work is definitely Given by teleperformance employees, we were able to pass from 70% of our employee base Working in great place to work to 87% at the end of the year. And we got the Usual certification, Verigo, VGO, MSCI, CEI, full C for good. We got certified by all the actors Thank you. Next please. And for the next, please, we are going to see the strategy. Next, So the vision is very simple. Teleperformance He is becoming a leading global group of digital integrated business services. In fact, using Hi Tech and Itouch Plus, knowledge services, we bring a unique selling proposition to our clients, which is That we are going to help them to develop simpler, faster, safer, better, more cost effective interaction With the customer or citizen. As I said, we are all about Diversity and we are all about fighting the global warming. And so We integrate in our management indicators and measures of indicators That could be considered as qualitative, but our gender diversity, our carbon footprint and so on. The world is challenged. The world is Challenged because there is a digital disruption plus the health disruption. And The economy is disrupted as well, because you have the digital disruptors and The traditional more the brick and mortar, more traditional disrupted companies. And everybody needs today an agile transformation But implemented with a lot of discipline to overcome The global health crisis and to continue to grow. And In 2020, we had an acceleration of the digital business. And that was super positive for teleperformance because it's something that we had anticipated way before. And so the growth, the strong dynamic of the e commerce, e service, e streaming, e Entertainment, e Learning, e Government has been more Than able to cover the weak or negative dynamic Of the activity sector that were very negatively impacted by The crisis, the S crisis, I mean, the transportation, airline, hotels And of course, the Visa business. We are building up Now we are with 100 of 1000 of knowledge service Engineers whether in technology, analytic and process, but we continue to build this knowledge service team At very high speed to reach the fastest possible by the end of 2021 or mid-twenty 22, The magic number of 2,000 knowledge service And finally, we extend our line of services, not being On Livoice, we do more and more, of course, digital channel, whether it's Chat management, email management or middle office and back office process. So we continue also to have very clear in our mind how Strategic acquisition process. As I told you, we acquired SK Advocate, Health Advocate, end of 2020. And we are going to continue to make Acquisitions either in 2021 or 2022. But as usual, we do not want to Acquire companies that are fragile. We only want We acquire company that have a profile similar or even stronger than teleperformance. We want them to do different things that what we do, either to serve different clients or to add expertise To the teleperformance range of services, but we are going To continue to make acquisition and obviously to serve first The big U. S. Market that is not just the U. S. Domestic market, but large global companies That are mostly based in Silicon Valley, but there are also large global companies that are based in China today. And we keep a strong focus on that. Next, please. I already presented the Health Advocate company, and it's Very specific company who helps the employees of our client To take better advantage of the health coverage in the maze of The U. S. Healthcare Market. This is a sophisticated company With proprietary ERP platform and that delivers excellent margin for the group. Next please. This is not going to be new for you. The iPEC, I mean, the robust infrastructure, The data security and The smart technology, digital, analytics, RPA and so on. And Teleperformance has more than 20 proprietary Solutions that improve the process of our clients. But generally, we are also an integrator Of the best of breed technologies that exist in the market. But you know what, The Mound, the world is hybrid. Today with the pandemic Today with the digital, we know that the amount of the world is hybrid. The work organization is now and is going to be now more and more partially brick and mortar, The economy is also hybrid. We have a digital economy, and we have Brick and Mortar Economy. And so, Somehow, during the time of pandemic, where there is a lot of anxiety and people are at home, They tend to have more interaction with the company they buy product or service from or with governments. And I can tell you something. In 2020, the star Was named empathy, human empathy. But to be able To deliver human empathy, you had to have a very strong technology. The star is the empathy. The art director, I would say, is the technology. And so The future of our world is an augmented level of service Service, I'm going to say Bionic service. Next please. Okay. Finally, Every large company find its Resilience in its purpose. And for us, our purpose is to be The force are good and to bring positive outcome For our different stakeholders, of course, for our shareholders, but first for our clients And even before our clients, first for the employees and the communities where we operate. And we decided to have now a Global Sustainable ESG Management model, and that's why for 2021, We are going to make sure that we have more than 90% of our employees working in a great place to work Teleperformance organization, we are going to decrease and not only in 1 year, but Several years, our carbon footprint and making sure we use more renewable energy. And we are very, very focused on gender balance. And I have to tell you that We were extraordinarily proud a few days ago to receive the accolade of the Indian Chamber of Industry and Commerce for our outstanding management of diversity in India. When you know what is the situation in India, you understand that we are a force of good there, Like in many other places, like in most of other places or maybe all other places. Next please. Stacy is the management of the group. Of course, in a group of 380,000 people, you can imagine there are several other people that are very important. And by the way, I systematically have a CEO webcast with the top 20,000 managers of the group. Then you have a line of 2,000 directors. Then you have a group, the global management group, We've made of a little bit more than 30 people. And then you have the Executive Committee, where you find Bhupender Singh, who used to be the CEO of Intellinet that we acquired 2 years ago. And Bhupender is The Global Chief of Transformation is in charge of knowledge services, R and D, Marketing, Lean 6 Sigma Discipline, IT and Data Security. Then, and he's an Indian citizen. Then you have Eric Dupuy, French citizen living in the U. S. Who is the Global Chief of Business Development, Miranda Conard, who is with the group for Maybe 20 years, even if CA is a young lady, as you can see, and who is a Global Chief Client Officer of the group, She is U. S. Citizen. Agustin Grisanti, who is the Global Chief Operating Officer of the group And he is a citizen from Argentina in Spain. Scott Claring, the President of our specialized service line, Language Line Solutions, the beautiful company, TNS contact usually beautiful company and that will come back to be a beautiful company when travel is going to resume, Probably more in 2022 than 2021. The recovery management And hence, advocate as soon as we can consolidate Olivier Rigaudy, who is Deputy Chief Executive Officer and The Global CFO of the group, French, Scott is U. S. Citizen and Lee Ryan, who is our Chief Legal Officer and who is a So as you can see, an executive committee made of U. S. Citizen, French, Indian and LatAm leaders, Diverse, like our Board that is extraordinarily diverse. Next please. So 2021, And we are end of February, so we I can say that we have a Reasonable good level of visibility, that's not 2021, excuse me, this is 2022, this is we maintain the drive that we gave few years ago, Saying that we would make €7,000,000,000 in revenue by 2022 And we will have an EBITDA margin in 2022 of 14.5%. And you are going to see a little bit later that 2021 from 2020 to 2021 2020 to 2021 is way in the middle. Next please. That's it for me. And now I'm going To give the floor to Olivier Rigaudi, Deputy CEO and Chief Financial Officer of the Group. Good evening. Good morning for those who are in U. S. Or good afternoon. Thank you to be there. I'm going to present you quickly The 2020 annual results and we are going to start of course by the P and L summary. I'm sure you see the figure. I just wanted to highlight 2 things, which seems to me important to notice. First of all, as you can see, The like for like growth in 2020 is above the 2019 growth that was already achieved last year. So we are at 11.6% versus 10.6% in 2019 showing this fantastic growth. Secondly, we delivered An EBITDA figure of €735,000,000 which is only less €30,000,000 less than last year with a rate of 12.8%, which is a decrease in absolute term of less than 4%. This is something I just wanted to mention. And of course, We are significantly above our guidance that we gave last July. Next Slide please. Yes. On this slide, I just wanted to classically explain you what is the currency effect that we suffered this year. It was negative, mainly due to the Latin American currency, the Indian rupee and to a less extent in the 2nd part of the year, The U. S. Dollar. I just wanted to highlight also that the like for like growth correspond to close to €600,000,000 That has been delivered again this year knowing that to make it simple, we lost more than €100,000,000 from TLS. So this growth of €600,000,000 has been done with a negative figure coming from TLS, around €100,000,000 a little more than €100,000,000 And that's something that I just wanted to point out. If we move to the next slide, again, this has been presented by Daniel a minute ago. I just wanted to stay a minute to show that we have been able to deliver good growth in January, February. Of course, March to end of May, we had some sites such shutdown, travel bans, and everything was totally disrupted. And the upturn in growth appeared starting in June. And as you can see, there was an acceleration in Q3, as you remember, And we absolutely explode in Q4. Just to give you the figure, in Q1, we were at plus 6.2, including the last 15 days of March, they were negative. In Q2, a +3.8. In Q3, we went to 12.3 percent and in Q4, as you know, 23.3 percent. That's just to give you It's a pattern of the year and this is, of course, promising for the beginning of 2021. If we move now to the next slide, This is a classical slide that you know, but I just wanted to stop on it just to show how this group has changed over this year. Of course, the global accounts are now representing 50% of the group revenue, meaning that the global accounts are accounts in which we are serving for At least 2 countries, maybe significantly more for other. And what we call the e client are now more than 25% of our revenue with the top 1st 250 clients. It shows how much the group has changed over the year. Of course, 90% of these clients were served From Home Solutions at the height of the crisis. And when you look what happened, of course, from pay TV and telco But also when you look at health care, the financial service, public sector, As media and entertainment are growing so fast, it show how much in match with what has been told to you about the And different new clients that we were able to serve all along this year. Next slide please. I just wanted to stay a minute on this slide just to show what happened from H1 to H2. Of course, you'll find on the slide on the linked part of the slide, the full year figure, You'll find the 764, 735, this year, which is a decline of 100 basis points. But if you look in detail, all of it is coming from the first half, because the first half, you saw that we moved from 12.8 to 9.5%, sorry, while we were able to deliver the same level of profitability in margin, in percentage In H2, this is absolutely noticeable. Knowing that, in the meantime, and I'm coming on the right side of the slide, that We have been able to do that while we have spent EUR 45,000,000 To protect employee and deploy Huawei during the full crisis. It was roughly split H1, H2 the same way. But we experienced €45,000,000 of cost to cover to deploy the work at home across the world in this group for the full year. There are some positive stuff that's happening for Our rent reduction and various government support measures, but they are still very minimal, while we have been also able to I'll continue to follow our receivable and the write down on receivable are only €4,000,000 So what is the most Important things to notice there is not only we have been able to deliver a good figure for the full year, but We have been able to deliver very good figure for the 2nd part of the year, while being obliged to cover some costs for the Work at Home deployment, plus And I'll come back later on that, plus the fact that TLS was totally down all along the year. If we move now to the 2nd to the following slide, it gives you the figure by quarter And by region versus last year and also for the full year. What is the most interesting things to be told there is that In this quarter, everything go green. The core service grew by 26% and the specialized service, which was largely affected Last quarter by TLS start to come back to a positive figure with LLS. I'll come back in a minute to Of course, you have noticed that CMEA is delivering a fantastic figure. I'll come back later on that. But what is interesting too is to see that India and Middle East came back on green and Iberolitam is continuing to deliver a good growth as it did all along the year. And EUAP also delivered a good growth even if we knew that some people were moving their business from Philippines to Colombia and had an impact And finally, on specialized service, TLS is still down between 70% 80% each year, but LLS has been able to swallow that and to deliver a fantastic growth as you can imagine. Coming to the next slide, just to give you the margin by region and for the H2 That shows that everything went well. The core service moved from 13.3 to 14.3 In terms of margin rate, which was absolutely massive and it came, of course, from it came, of course, from Iberolitam from CMEA that grew dramatically in term of not only in term of volume, but also in term of percentage And on the fact that India and Middle East, given the decision we took, came back to a very, very high level Profit delivering close to 21% margin in H2 2020. The specialized service is, of course, down given We experienced it with TLS. The impact of the shutdown of TLS in margin is close to €80,000,000 this year, Just to give you an idea. And finally, the group was able to deliver on H2 the same figures If we move much more in detail in each zone, in Ewap, We knew that we are back on track on the growth in Q4 with a 15% close to 16% growth 6% like for like growth for the full year and an EBITDA that is still affected by the impact of Philippine, by the Very tight restriction of movement of Philippines, but back on track in UK, in China, in Malaysia and is promising for the future. If we move now to the next slide, Ibero LatAm, I would say little to say, they continue to experience a growth that is Between 25% 27%, even in Q4, this is absolutely amazing, while the EBITDA is also while the EBITDA, sorry, is also increasing in H2 versus last year. Everything is okay. Most of the people have moved from a to a work at home model as mentioned earlier on and to serve numerous new We see clients, notably in FinTech. And the main drivers are, of course, Colombia that start to be a big operation Mexico, Portugal and Spain. And you see that there is a sharp increase in recurring EBITDA in H2 from the prior year period. If we move now to Europe, Europe is there, sorry. So you have a 50% increase Like for like growth in Q4, meaning that we are going to deliver a 23% like for like growth for the full year. And the margin consequently grew dramatically in 20 in second half from 10.4% to 13.4 percent 13.3%, reaching close to €100,000,000 Where does it come from? It's come from new Contracts signed before the crisis and brisk sale operation deployment of COVID to support service government notably in Netherlands, but So in France, in Germany and in other country, and we saw that the improvement of the profitability in H2. If we move now to India and Middle East, as I told you back on growth in Q4 after A difficult period in the first half, which was, I would say, managed because we decided to reduce Domestic operation that was not sufficiently profitable and we had of course a lot of disruptions linked to the COVID. So we are back on track in Q4 and we see that the margin in H2 are significantly improving even the decisions that we took all along the year. Finally, specialized service. Of course, there is an impact of TLS. As I told you, you have a decrease on a full year basis, Which is beyond which is less, sorry, important than the decrease of the sales of TLS. But we are back on growth in Q4. While the recurring EBITDA is, of course, a little down versus last year. If we move now to the other part of the results, 2 things to tell. There is nothing new in front of what you saw. You have the performance share plan and the other which are mainly non recurring non cash item. Of course, the reformation plan is purely accounting and the others are mainly the write down of the goodwill of the mainly Linked to the French speaking market that was done already in H1. Next slide, please. Two words about what's happening below the operating profit. Below the operating profit, you have the financial results That seems to be stable. And in fact, you have a decrease of final charges by €10,000,000 which is mainly due to the fact that We have been able to manage properly the financial charges. Of course, we have less gain Foreign exchange gains that we had last year that explains the stability of this figure. More surprisingly maybe for you is income tax. Two things to be told there. There is a mix effect, which is linked to the fact that we experienced good results in country in which we have Higher tax rate more than last year, meaning that Colombia and Greece were doing well, while Philippines and Tunisia were less good than the previous year. While in the meantime, you have the effective tax rate, which is impacted by the impairment charge on goodwill. Without that, we are much more between 28% 29%. Finally, the net profit is at 3.24 And we decided to propose to maintain the dividend at the same level. Just a word that I'm going to tell you about the cash flow, which is something on which we can be proud. As you might remember, last year It was not fantastic in terms of working cap in cash flow and its impact on cash flow. We decided to change to put a much more Focus on that this year. So not only we have been able to reduce the CapEx to 4.4% of revenue, Of which a significant part is coming from the switch from brick and mortar to work at home. But also we have been able to, I would say to pay specific attention to our receivable despite the growth what we experienced We experienced it, sorry, and we have been able to release a lot of cash from our receivables that were trapped last year. And we are able to deliver this year a cash flow that is close to €400,000,000 to €500,000,000 If we move to the Next slide and the next slide, sorry, because what is interesting is that in this year, We have been able to repay debt by closely to close to €400,000,000 Of course, it's before the El Sadler Kit acquisition that is going to happen next Thank you. We'll continue to invest and that's something that is interesting that the group is now at a good level of debt. If you take the pure debt, Financial debt versus EBITDA, we are below 2%. And our credit rating has been confirmed last year My standards and pull, firstly in April, but also after in November when we announced the acquisition of Health Advocate. So that's where we are today. Final word on the debt. The cost of the debt is 1.4% versus 1.7% last year And it's going probably not probably, certainly going to continue to decrease in 2021. The average maturity of the debt is 4.2 years. We are using different source. We are well protected against potential increase in rate. And as you may know and you may remember, we have issued a bond last November to cover the Acquisition of Health Advocate that is in our pocket, if I may say, and we are ready to finance this acquisition. Lastly, dividend. Dividend maintained in the absolute term as proposed by Daniel a minute ago by the Board. Of course, it's an increase in payout ratio because the net result has declined, but it is mostly due to the non cash charges that we are that we experienced last year. If we move now to the outlook, as mentioned by Daniel a minute ago, so we are Announcing to the market that our like for like growth will be at least 9% in 2021, probably much It's more important in the first half than in second half. We will deliver at least an EBITDA margin of 14%, and we hope To integrate Telsey Botte during Q2 2021. That's what I wanted to let you know about the figure. And I'm now, like probably Daniel, open for questions that you may have or you might have. Thank Our first question comes from the line of Edward Stanley from Morgan Stanley. Edward, go ahead with your question. Thank you. Evening, both, and congratulations. It's quite a performance. I've got three questions, if I could. Firstly, what does your margin and growth guidance assume for the TLS recovery? Or are you not really assuming anything for TLS recovery in that 9 Percent like for like and 14% margin. The second question, I've already had a few questions from investors about how much Your revenue in 2020 was linked to COVID contracts that may drop away in 2021 and what the duration of those COVID contracts are. And the third question, it looks like 20% or so of your CapEx came from ramping up work from home. That I presume that €49,000,000 of cost to get work from home agents set up won't Recur in 2021, so I'm just keen to know what your what you think your steady state CapEx to sales is for the business and if you'd have more thoughts on how many I'm going to answer to the first two and Olivier is going to answer to The CapEx. First, regarding TLS 21, we are not expecting a great recovery of TLS In 2021, we think that the business travel and the travel in a general way It's going to really pick up again around 2022. What we have in 2021 It's a conservative approach on TLS, on which We know we are going to significantly less money than last year because we have Stream the SG and A, but just in a way to keep The tool solid to operate and restart because it's not going to last forever. I always say TLS is a super horse. It's not because it's sick for 2 weeks That we are not going to help the horse to recover. This is what we are doing. We do not put any strong positive Expectation in revenue or results in 2021. 2nd, COVID. In 2020, somehow, We have a pretty balanced impact of the positive coming from the COVID Services, UK and Europe mostly, with The negative that we got from TLS, The travel industry and the hotel business. Now In 2021, our COVID service Continue to exist and will continue probably during the whole first half To round down probably during the second half. But at the end of the day, It should not create any specific disturbance in teleperformance trends Because in fact, it's an effect of balance. When we are going to have less COVID Super, we are going to see the hotel business and the airline business picking up again. If you hear me, I'm going to answer on the CapEx. Of course, you're right. We are not going to have the same level of CapEx On switching the workstation from brick and mortar to home, But there are still CapEx that will be paid for security for some and for some growth. On top of that, You have to remember that we are going to spend some CapEx for the GSS business That has been awarded to TLS, and that could explain part of the growth. But as a whole, you are right. It's probably the level of CapEx in 2021 will be in percentage lower than it was in 2020. We are going to open less new station and that brick and mortar station and that could have an impact, yes. For the one who don't know, what is the GSS business? Just excuse me. It's the significant contra For Visa Service that we cosigned for the U. S. Government On which we have CapEx ahead of results. We are going to have probably significant CapEx In 2021, when we are going to have the activity much more in 2022, 3, 4, 5, 6 and so on. Okay. Can I just can I follow-up very quickly? It looks like in your press release that you're adding in Some workstations into existing sites. And I just wonder, obviously, that is you forecasting that you will bring some of your staff Back to the office, I think in the past, you've said you aim to keep maybe 40% or 50% of staff working at home. Is there an updated number for that proportion of staff Do you expect to work from home long term? Honestly, today, it's still a kind of Moving situation, we already set up The profile of the operation with some of our clients, not all, we are targeting to have More or less post COVID, 50% brick and mortar and 50% work from remote. But it can be forty-sixty or sixty-forty. We have to be humble At this level today because the behavior of the people and the decision criteria Can vary significantly, and it depends also of the individuals We're at the helm of some of the companies. All right, we have another question. Our next question comes from the line of Sylvia Barca from JPMorgan. Sylvia, go ahead with your question. Thank you. I was just wondering, out of the 50% growth In CEMEA in Q4, could you just call on roughly how much of that was contracts kind of ramping up And how much was the incremental COVID work? First question. And secondly, on the COVID related costs, We are basically the same in H1 and H2. So just wondering, I guess, something related to move to working from home. So We'll request in the second half, and will all these costs going to fall away into 2021? And then finally, just coming back to TRS. So did you move about €30,000,000 in 2020, if my math is right? And Do you now expect basically breakeven in 2021? Is that how we should understand your comments? Thank you. I was not able to hear very well. So Olivier, I'm going to let you answer. Thank you. No, no, me too. I want to give you for the growth that we had in CMEA, a part of the growth is coming, of course, from Contracts that have been ramped up before notably in Greece, notably on the multilingual hub and there are some COVID line too. So it's a mix of those. Daniel mentioned that the COVID line was roughly the COVID government was roughly equal to what we lost. It's true. On the full year, it might be a little different from quarter to another, of course, but that's part of the reason, but that will continue Later on. Not sure to have And the point Olivier is, to be fair, Is that, yes, the COVID business magnifies the result Of Europe, when the problems in The hotel and aviation deserve The business in EUAP. I'm not sure to have understood your second question, sorry. Can you repeat it? And maybe to be a little far from your microphone, please. I'm sorry? The second question is on the COVID costs. I'm really sorry, but I have a hard time to understand what you said. It's the communication is really, really, really bad. Maybe I would suggest you to send us your question by e mail. I'm trying to answer Quickly after, but I have had time to understand your second question and the third one linked to TLS, which is which I believe was linked to TLS, I'm not sure to have understood the fundamental questions that you raised. Can we move to another question, please? Yes. Our next question comes from the line of David Ryu from Bank of America. David, go ahead with your question. Good evening, gentlemen. Just two questions from my side. Firstly, on new contracts. There was Some very strong progress made in closing new contracts in 2Q and 3Q of 2020. I was hoping you could talk a bit about contract wins in the Q4, if any, and also how you see the pipeline on potential new contract closes going into the Q1. And then my second point is just on digital revenues Or the sort of former Dibs business on Telenet. Can you perhaps talk about How much that is now contributing to overall revenue? Just to be clear, that is different from the sort of e retail The percentage of 26 that you presented. Just those two questions, please. Okay. First, The pipeline the whole business development activity in 2020 has been very strong. And at the end of 2019 also, that's the reason why, because between the time we signed the contract and the time we stopped To really be at significant level, you typically have 6 to 9 months. So it's not what you see in 2020 is not just The result of what has been signed in 2020, it's partially for what has been signed in the first 3 months of the year, but afterwards, it tends to manifest itself the year after. The pipeline in 2021 is very strong. We do not have 1 ounce of anxiety on our pipeline. Now regarding Intelenet, what is important to understand In that the policy of the Indian government, the confinement policy of the Indian government It has been extraordinarily tough in March in April May. And we had a lot of our centers totally closed. And in India, like in the Philippines, it's a little bit More difficult to have the employee working from home. We have a very significant percentage working from But you do not have the same level of home equipment In broadband, for example, that we may need. Having said that, the India business Has been I would say has been very positively contributing To the group, first, because Beside the numbers, what we have acquired the day we acquired Intellinet Was a very advanced digital business And a very strong knowledge service activity. And it's not by chance that we decided to promote the CEO of Intelenet to become The Global President of Business Transformation. And I can tell you that what the group has got from India It is much more than the Indian results themselves and probably Part of the explanation of our great success in business development Comes from the sophistication and the character the hybrid character of the solution That we propose to the client. I got the question from Sylvia Baker by in Britain, so I can answer them. About the first one, which is there is a question related to the cost of COVID that are It's roughly the same way between H1 and H2 that surprised a little. This is not exactly comparable because in H1 you had some first cost linked to the panic for the first reaction plus the cost of the mask Because we bought €7,000,000 masks, I'm sure you remember, and we have all these costs incurred in the first half, While in the 2nd part of the year, there was much more the growth linked to the volume of the business that is that we have Experienced. One thing, these costs are not away. Some of them are continuing because as you understand, there are still people Less, but still people working in our site and we still continue to clean them on a regular basis, very regular basis. We check them, so there are some costs which are still there and will continue to be there until the pandemic is finished. So there will be again some costs in 2021 Linked to this pandemic. 2nd question is about the sorry. Excuse me. But also, We are strengthening and spending quite a lot of money in data security. We are opening 2 data security And 1 in Manila, 1 in Greece to have full endpoint control, 7 days a week, 24, 24. I mean, the strategy that we took in terms of data security and that is going on It is more or less equivalent to what you would expect from the data security team of a bank. Yes, sure. And second question is about the result of TLS. You were betting on a result of €45,000,000 on Pre COVID and meaning a loss of 30, 25 to 30, this is not totally stupid. And our expectation for 2021 is of course We hope that this company will be able to breakeven. Yes, At best. At best. All right. Our next question comes from the line of Suhasini Varnasi. Suhasini, go ahead with your question. Hi. Thanks for taking my question. 2 for me, please. If I think about the revenue guidance for 2021, at least 9% like for like growth. If you use the exit rate in Q4, which is over 20% for first half, You can easily get double digit growth if you want to put 0% growth for second half of the year. So can you maybe talk us through what you're Expecting in terms of second half expectations drag from any contracts or just tougher comps and why the growth should not be a little bit higher? And second one On the cash flows, you did see some benefit from postponement of Social Security payments. Can you quantify what that was, please? Yes. I'm going to answer first question, Olivier Seguin. But I love your question. I recognize The optimism and the positivism of the Indian culture. I'm from the whole world, and I know something is that the world is not just heaven. So when I'm at the beginning of the year, I know that there will be always something bad that I don't know that will happen and that I Better integrate, otherwise the market is going to kill us. So yes, there is a possibility To make more than 9% organically, but 9% organically is The highest beginning of the year guidance that we have ever given. So, Let us see what's going to be the first half, and then we are going to discuss again. Notably, the reference base for H2 this year is going to be higher. Last word on the cash flow. There Some costs that have been delayed, notably in U. K. And in U. S. Social charges, the total amount is in the range of €20,000,000 25,000,000 We hope to be able to swallow that in 2021 in term of cash flow. Thank you very much. Appreciate it. All right. Our next question comes from the line of Nicholas Taber from Stifel. Nicolas, go ahead with your question. Good evening. Can you hear me very well? Yes, yes. Great. Thank you very much for taking my question. The first one is on Tellus quickly. Can you give us An idea of what's the level of, let's say, revenue decline in Q4, so we understand If it's almost closed or if there's still some revenue stream there? And then can you update us on the end of the bidding Process for the DSS contract and what timing of revenue ramp up we could expect, If that's possible. And then on the coming back on the organic growth evolution into 2021, I mean, as you are increasing your exposure to the e economy, which seems to be growing very fast, Isn't there a likelihood that if this trend continues as your exposure to this fast growing market expands, then you Also have a normative acceleration of the organic growth. You used to always show us this 8% average organic growth graph In the past years, I remember. So is that something that should accelerate versus this historical normative? So, TLS was not closed and the team of TLS are doing A lot of work of process optimization and R and D right now, But TLS is still losing money months per month. That's the point number 1. The point number 2, we already said it. We aim to have a balanced, I mean, to be at 0 in 2022, if we are more welcome, If we are a little bit less, it will not be a disaster. We know that we have a very solid business, clients who appreciate us and they Appreciate us even more today because they know that we remain open. We continue to deliver the service while losing A significant amount of money. And yes, there is the GSS Master contract that has been awarded to a pool of 2 companies of which We are one of them. We know the value of this contract. It's a Multiyear contract, and we do not expect to record any money, Any revenue on this contract before 2022? Now On the growth, should it be more than 9%, less than 9%? The fact that we are with the e commerce goes very well. Yes, for sure. As long as the e commerce company do not go bankrupt. Remember, if I remember well, there was a super e commerce company that had an incredible value. A few months ago, it was called WeWork and How It Has Finished. So frankly speaking, we are reasonable people, And we do not disappoint, and we achieve better than the average of the market. And more or less, we achieved the double than the average of the market. So we are not going to have a philosophical debate To know if it should be 9% or 10% or 11%, it doesn't make sense when you are in February. Thank you very much. All right. We have another question from the line of Daniel Hobden from Credit Suisse. Daniel, go ahead with your question. Good evening, guys. Just one left From me, please. It's around the growth, but not around the number. It's around where the growth is coming from. Are you seeing structural Full growth opportunities coming through from new clients looking to outsource or are you winning your work from your competitors? A little bit of all. We are Gaining share of wallet in many of our existing clients, We are winning new clients from some competitor, And we have also a kind of significant Rebadging dynamic, what we call rebadging dynamic is taking business that was in house And managing it, I really think that when you look at all the business analysts, They say that last year was either flat or Very little growth of the market. So obviously, we won market share. And Yes. We won new clients that were not usual outsourcers In the different regions, please help, but I'm unable here right now To quantify what is the percentage of each. When I say I'm unable, it's because I don't have the numbers just right in my mind. I think we have a last question. All right. Our final question comes from the line of Laurent Jean Labart from Exane. Laurent, go ahead with your question. Good morning, Daniel and good morning, Olivier. I have a couple of questions. So the first one is that you are mentioning that you want to expand your addressable market to cut more broadly in the BPM market. Who will let us know where exactly we want to develop? And do you need M and A to enter those new segments? That's the first question. The second question regards automation. So where do you start with the roadmap of automation for the company? Okay. So the addressable market, The reason why we have an acquisition policy is exactly the The reason why is USA, at the beginning of the 20th century, had a very open immigration policy And melting pot policy. When we acquire a business is we want to acquire a business that is A complementary expertise from what we have. So Yes. The extension of the addressable market come from the fact that we present more Sophisticated solutions to our clients, clearly, and that we are much more proactive In the partnership with our clients, but The shortcut and the speed, even if it has a cost, but It's more certainty comes also with the acquisition Like the one off Health Advocate, yes, we plan to continue to make acquisition In 2021 2022, first, to increase the percentage of the digital business within teleperformance And second, In the BPO environment, you have what we call the customer experience management, but you have also the middle office and the back office Support. And I think it's something where Teleperformance is legi team to progress. There is a business In which we had no significant presence, I would say, 2 years ago, where we have made Significant inroads, and I think we are going to continue to make significant inroads, which is the trust and safety Platform monitoring for the social media, for example. And in that case, it has been without acquisition, it's all homegrown. So the second question, the automation and the bots. We follow that In the monthly meeting of the management committee, we follow the growth region per region, is going fast. I mean, all of our regions today Chief Knowledge Services, Supermature. We are center of excellence, of course, in LATAM in India and in LATAM. But today, we have built a strong team in Europe. We have been a strong team and we continue to strengthen it in the U. S. We have a strong team in the Philippines. So I mean, again, our vision of the future of the society and of the future of teleperformance serving the society The world is going to bring augmented services to the individuals, And these augmented services are going to be Bionique. So a mix of digital and human touch, And Pati, emotional intelligence, we can call it different ways. Thank you. Thank you, Daniel. I think we are over now with the question. And except these are We are going to leave you and to leave you alone now. And hopefully, we if you want to be in contact with the team Tomorrow and the day after, we'll, of course, be available to answer all the questions you might have. All the documentation will be put on the site between tonight and Monday morning. Thank you. Thank you for joining today's call.