Teleperformance SE
PAR:TEP
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
American Express Co
NYSE:AXP
|
Financial Services
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Target Corp
NYSE:TGT
|
Retail
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
84.04
153.2
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Estee Lauder Companies Inc
NYSE:EL
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Church & Dwight Co Inc
NYSE:CHD
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
American Express Co
NYSE:AXP
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Target Corp
NYSE:TGT
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
Mueller Industries Inc
NYSE:MLI
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
Teleperformance SE
You don't have any saved screeners yet
Ladies and gentlemen, welcome to Teleperformance's First Quarter 2020 Revenue Conference Call. I now hand over to Mr. Olivier Rigaudy, Deputy CEO and Group CFO. Sir, please go ahead.
Thank you. Good evening, everyone, and thank you for all your presence tonight. I hope you are in a good shape. I'm hosting this call from France with Investor Relations team connected from home, too. Quy, as you know very well, and Julia is also with us. I'm going to present you some -- present, sorry, the group revenue as of March, end of March 2020, and what we have done to cover this crisis and the outlook for where -- what we believe we can be, we can say today. I'll leave, first of all, to Quy -- hand the floor to give some precise stuff in advance of my comments. Quy, go ahead.
Thank you, Olivier, and good evening all. We're praying also that all the participants to the conference call are safe and healthy in these extraordinary times. So welcome to the event today for the first time from home. Financial press release related to the first quarter of 2020 revenue and we updated the communique on COVID-19 for our business has been released review today after the closing of the market.As usual, Olivier's presentation will be followed by a Q&A session. Slides are available on Teleperformance's website, the Investor Relations Press Release and Documentation section. And a replay of the conference call will be available later today on the group website in the same section.Today's call contains forward-looking statements that address our expected future performance and that, by their nature, address matters that are uncertain. These expectations of projected factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a detailed -- the detailed description of risk factors and uncertainties, please refer to the recent control section in our universal Registration Document 2019 available on Teleperformance website.Now I'll turn the call over to Olivier.
Thank you, Quy. Before we go in-depth in Q1 [ revenue, ] I would like to share with you some facts and figures reflecting the achievements made during this period in these extraordinary times that we are living today.So if you move to the Slide 3. What we have done over these last weeks, we have tried to prepare successfully Teleperformance to weather the storm and to manage the after-crisis period, the future in certain environments. And we are driven to -- with these three key priorities to fight against the virus. First of all, protecting employees. We have put in place a work system to agents in each program and hygiene standards in the group, 80 countries around the world. We have put 155,000 employees working from home, which is roughly 2/3 of our operation workforce, and we are only 5,000 people working at home at the end of '19, but even end of February -- January, sorry. In 6 weeks, we have been able to move to 5,000 to 150,000 people working at home. I just wanted to stay a minute there just for you to have an idea of what does it mean and what is represented in terms of work, of the dedication of the different teams, that we are very, very proud to have done that.In doing so, what we have done, we have not only protect employees, which was our first priority, but we have also been able to protect jobs by supporting brand and government in ensuring business continuity. I can't believe that roughly close to 90% of our people -- of our clients are served by home-working employees. It has not been so easy to make it happen. Of course, you need to have agreement with the client to be sure on the security part. But we have been able to get the agreement of the client, and most of them are very happy to have that because the continuity of the business is done. People are continuing to be served. And in some case, and I'll come back to that later on, you have a sharp increase of some client activity, while we have also the decrease, but see a sharp increase which is linked to the situation. So protecting employees, protecting jobs, but also protecting the company. So we have launched a reduction in the cost program on SG&A, mainly increasing salary, freezing increase, freezing a lot of product projects, cost-cutting costs, mainly on the SG&A to make sure that we are going to get out of this period safely. While in the meantime, with all the team of the finance team and support by our banker, we have been able to secure an additional credit line of EUR 655 million, adding to those we have already had -- or those we had plus treasury. So today, we are roughly in the range of EUR 1.5 billion available credit money to support the [ promise. ] And on top of that, during this period, we have been able to confirm our rate -- rating with Standard & Poor's that is confirmed at BBB- with stable outlook. So then now that's why we know of 3 issues: protecting people, protecting job, protecting the group. And clearly, this WAHA, what we call WAHA, work at home (sic) [ work-at-home-agent ] deployment has been one of the main response to address this priority. Of course, we have [ strict hygiene ] system implemented on site. But also, we have, I would say, about 7 million masks that have been delivered as we speak in the different countries in different centers. So that was our key facts and figure. And I can tell you, this is -- it has been a huge work on these last 6 to 7 weeks. If we come back now to the figures that you see that the growth in 2020 for the Q1 was 6.2% like-for-like despite the effect of the COVID-19 on operation. And clearly, here, you have 2 period: Of course, we have a fantastic growth in January and notably in February. That has been partially offset by flat performance in March due to the first COVID-19 impact. In March impact, you have 2 fortnight, if I may say. The first fortnight has been used. The second one has been impacted by the COVID-19. If we change now to the following slide, Slide 4, you have the detail of the figure and what I've just mentioned about the like-for-like, which is 6.2% like-for-like in the recorded quarter, while reported would be 6.4%. And it's just what I just mentioned. If we move now on Page 5, you have the decline this year. I would say [indiscernible], so very few currency effects, which is, in fact, an improvement of the dollar, which has been offset by the decrease of mainly the Colombian pesos and the Argentine pesos, but also the Brazilian real. And here, you have the like-for-like growth, which is roughly EUR 80 million in this quarter. Let's move now to precisely to the different, I would say, part of the company. You will find on Page 6, the detail by region and by our core service and specialized service. What is interesting is to see that the core service in this hasn't been able to deliver growth of 6.5 -- 6.8%, while the specialized service only 2.2%. But this 2.2% is, of course, a mix of very, very good performance of LanguageLine Solutions on which I'll come back in a minute. And an impact, a significant impact on TLS, where the travel ban and the difficulty to move, the fact that nobody is moving anywhere, has reduced dramatically the activity in this part of the world, in this part of our activity.Let's move to the English world. So the English world is 4.8% like-for-like. I'm on Page 7. Again, satisfactory growth in the first 2 months of the year. Of course, very slight growth in March despite the first impact of the COVID-19 in North America. Everything has been impacted, except for health care, Internet service and automotive industry. As of today, in the U.S., 90% of the employees are working at home. We had a significant growth in APAC, very strong growth in Malaysia along Q1. And what is very promising is a return to solid revenue growth in March in China. The revenue are still down in U.K. despite the fact that we have been able to deliver growth in March linked to the implementation of our hotline service for the government on the pandemic. But as a whole, that is the rough figure. If we now move to Ibero-LATAM, I would say, not a surprise, double-digit growth in March despite the slowdown compared in March, with the first 2 months. I would say, very few things to say but everything went well in Colombia, Brazil and nearshore business. And even in Mexico, that we are able to deliver growth. Financial service, e-tailing and internet service industry has expanded at a good pace. And what is absolutely amazing in this region, we have been able to very quick implement the work-at-home solution. And as of today, it's 80% of the people in this region are working at home, and which is a little -- significantly higher than the whole region. And we are close, giving an example, 100% in Portugal. That is absolutely amazing. As far as Europe is concerned, you have a growth which is lower, which is more mixed, which is either by region and by business. The business is contracting sharply in March, especially in CEMEA and Italy, where the lockdown, the strictest lockdown, can be seen. And you have an increase, which is -- you really can see though even smaller in Greece. Of course, in the multilingual hub, that is 100% also working at home, Scandinavia, Turkey, Egypt and Russia, where we have opened last year a new site. So another month, which is a little more mixed than in [ developed ] countries is still good. If we move now to India and Middle East, where this sharply decreased in March due to the drastic lockdown in India. A lot of sites had been closed there during the month. We have been able to expand work-at-home solution to minimize this impact. Roughly 60% there in India are working at home. 58% to be precise. We have prioritized international offshore contract, and we took the advantage of that to increase the termination of the less profitable domestic contract. We know that we had an offer issue because we are not able to [ sell ] all our clients. So we decided to put all our strength and all our effort on the international parts to maximize not the sales but the results. If we move now to Specialized Services. It's -- they're nice, if I may say. LanguageLine Solutions has been able to deliver a double-digit growth in Q1. In fact, for LanguageLine Solutions, this company is already leading with working-at-home. It is a business model, so it's not a big change. There was an impact in March, mainly for the people that were working in health care and decided to postpone their non-COVID-19 operations. So it really is [ little ] business. But as a rule, the business is [ aware of it .] Of course, there is a sharp decline in revenue in TLS, notably in March, but also it started already in January. In February, with China, where our operations were significantly reduced, and that is linked, of course, to the general situation. So that's where we are at the end of Q1. If I move now to Page 12, just to give you ideas. What we know, we know that the margin will be negatively impacted in H1, mainly due to Q2. We know that it really is probably the worst months. May and June should start to recover progressively. This is not [ driven ] but clearly, April, difficult, and we hope that May, with all the policy that has been announced across Europe, but not only across Europe, also elsewhere is starting again, and we hope that we will be able to cover it, especially in the countries that we are locked down. And we hope that it will help us. Second thing, which is interesting to notice, is an ongoing positive commercial momentum. Surprisingly, our business development team are very, very active, even if they cannot meet the people, but doing that remotely with virtual [ release ], with virtual staff has enabled a fantastic possibility of developing new business and new clients. And we think it's good for the future. We are not able to deliver a new guidance at this stage. We need to have a clearer view of this second quarter to be much more precise in our figures. But if we believe that like you that the things are going to improve gradually in Q2, especially in May and June and also starting July and after, we are reasonably confident that we could take advantage, at least in H2, with all the measures that we have taken to take advantage of that in terms of commercial, as I have mentioned earlier, but also in finance. And we think that we are going to continue to deliver our client needs across the world and to show that Teleperformance is probably one of the most resilient companies of this world, of the BPO world. That's what I wanted to let you know. I'm still, of course, open. I'm open for questions that you might have. And I'm ready to take these questions. Thank you.
[Operator Instructions] And we have our first question from Edward Stanley from Morgan Stanley.
I've got three, please. If you say April is the -- probably the worst month or you hope that it improves after that, can you give us an idea of either the last couple of weeks of March, which started to get very bad or what you're seeing in April, particularly in India? I guess, if we're trying to model that, then I'll ask that.
[ If we continue that -- ] I'm not going to answer in detail of 6 months. But especially March, it's complex, because March depends a lot of when countries have decided to lockdown to -- so it's difficult to read. What is clear is that probably April, we are going to be down double digit, while we believe that in May, we should be better to be probably better than that, we can see better than that. To what extent, I have no idea precisely. It's difficult to tell.
So that double digit was April rather than Q2 as a whole?
No, April, I'm just speaking of April. I'm not speaking of Q2.
Okay. Okay. I was interested to see the EUR 250 million cost savings strategy, which seems pretty large. I didn't realize that there were that many levers to pull. So can you tell us what specifically has amounted...
It's only in G&A -- it's only G&A by nature. It's on annual basis. So you won't have that in a full year basis because it -- the time it worked. So what has been done is, of course, no more travel, which is a significant impact in Teleperformance because people are traveling and traveling a lot. No more projects, no more [indiscernible], no more hire, no more [indiscernible]. I'm not speaking of agents, but no more -- I'm speaking of the management. No more hire. We freezed increase. No more travel; travel ban. We have a lot of projects that has been freezed or significantly reduced. So of course, there will be some other costs that will happen in the meantime. In front of that, we have also looked into the development of the work at home. So I don't know what will be the final figure at the end of the year for 2020 because you won't have the impact of the full EUR 250 million in the full year, but we are doing that, yes. It's a mix of a lot of things. G&A, G&A, G&A...
Okay. And on the second half of the year, the outlook sounds relatively positive, and it sounds like it's around -- well, comparatively, obviously, it sounds like this is around mainly new clients that you've acquired. Can you give us a feel for in which verticals you're acquiring clients? Why you're acquiring clients? Are your competitors going first? Are they outsourcing to...
I don't know, I'm not sure. So first of all, we do believe that we need to be close for a client. And we have engaged a large, large connection to be close from the client. To tell you what will be the volume, exactly the volume, that is going to be delivered in each [indiscernible] one that knows that, please give me the figure because I don't know. But what we've seen is a business development, important decision development. And we see that as very, very effective. I don't know if we gain market share or if it's much more trend that has already launched, I would say, the coming months that is happening today. But what has been decided very, very early in this crisis is to be very close from the client. And not only by mail, by phone, by social media to be -- to help the people to understand what they have to do, how to move on and working at their home just to be close on the client because -- and we have a lot of testimony from clients that people are [indiscernible] of course, are happy of that. Of course, I'm not mentioning that, but there are people that are [indiscernible] just trying to balance this stuff: hotels, transportation, all these people are -- this is difficult for them, of course, and we have less volume. But as a whole, if things are -- and I don't know, frankly, and the ones that know, please tell me. I don't know how it's going on in [ June ] but we are prepared to take -- to move on if the things aren't doing well in the industry. That's the way I can tell it if you want to know.
Okay. Okay. I just have one quick follow-up on something you said earlier. The -- you said working from home will incur costs. Can you give us a feel for how much cost per agent are they capitalized?
No, it's difficult to tell you. What I can tell you is that when you move so quickly, you have, of course, a time where the productivity is not perfect. The first 2 weeks are not the best. But at least, we have overcome the situation. We have some investment to do. We believe that there will be some CapEx needed to that. But in the meantime, as we are reducing your CapEx in development, we believe this is going to be wash up more than positive. More interestingly than what's happened in 2020, what is sure tomorrow that the level of working at home will not come back to 5,000 people in our group. And I'm convinced that I don't know where we are going to stand, but we should stand probably at higher level than what we are today, 20%, 25% of our workforce. I don't know why. I'm not able to tell that tomorrow -- to do it today. If clients that were reluctant to move to working at home are discovering that this is working. Not for all, but it is working, and that might help for the future and especially for the expansion of the group to [indiscernible].
So we have another question from Bilal Aziz from UBS.
Olivier, I know you've broken down the market figures in Specialized Services, but perhaps talk about the fourth quarter figures for TLS and LLS and for the first quarter. And second question, was TLS still profitable in the first quarter? And in a scenario of sustained travel restrictions or a slower return, do your cost savings cover any close of application centers within that business? And very finally, does the EUR 250 million cost-saving program include the investments in Project Eagle, which I assume have been postponed? Or is it all incremental to that as well?
It has been -- there is a bit of reduce on the Project Eagle. So there are some things that has been postponed or reduced, but there is a part of it that is done, of course. About TLS, clearly TLS is the most difficult part of the group today. It is a very, very tough time because finally, nobody is traveling anymore. So you have no more sales in TLS. So the impact on the prices in TLS is huge. It's huge because even if the people have been able to cut costs dramatically, and I can tell you that the company is doing very well in doing so, but you have no more -- you have no more sales at least for the -- or no more sales for the Q2. I'm not sure it's going to start again very quickly in Q3. So we have some centers that are closed, of course, as we speak. It's probably where -- but it's small center, it's not big center. But clearly, the major impact in terms of profits in TLS don't [ dream. ] So -- but we are here to serve our clients. We try to adjust as much as we can. But clearly, TLS is going to be even [indiscernible] starting Q2, yes. That's true.
So we have another question from Suhasini Varanasi from Goldman Sachs.
I had one on the employee costs. Given the kind of the clients we're seeing in some of your end markets like the travel sector, are you considering any employee furlough schemes? And is that cost benefit included in the EUR 250 million?
I'm not sure. No, no. Employee cost, it's direct cost. Most of it is direct cost, which is a margin. Of course, there are some employee reduction in G&A. But the big impact is much more in the margin. Of course, there are some [indiscernible] costs. There are some -- and you have country where you had severe lockdown. So it has an impact on the margin. But the employee cost is -- the impact is much more in the margin. I'm not so sure to have understood your question because you are far away. I don't know where you are locked down, but have hard time to understand your question. But clearly, clearly...
I was just trying to understand if you've taken -- and the governments across Europe have launched employee furlough schemes, so...
Yes, yes, yes. Of course.
So have you taken advantage of any of this scheme...
Yes, yes, yes. In Italy, in Spain, in France, in Germany, but the big impact of the big countries are not these impacts. It is important, but of course, the bit impact of the -- and clearly, we took advantage of that, yes.
Is it possible to give us an idea of what percentage of the employee costs are...
I'm not able to answer you. I'm not able to answer you today, especially because [ roles ] have changed all over the months. And I think it would be clear in a moment from now, but today, I'm not able to give you precisely. It is difficult to follow. One of the difficulty is the fact that this crisis is evolving everyday. So everything is changing everyday, and it's difficult to precisely have all the impact. So I cannot answer you this. I cannot give you this answer today.
No problem. And then a question on working capital, please. Are you facing any difficulties collecting your receivables especially from your hard-hit sectors?
Yes. That's a good question. We have some demand. Some people wanted to lengthen their delay payment but not so much so far. We have not seen major impact. We are, of course, looking to that very precisely. This is going probably to happen much more now. So we are very precise on that. But so far, we have not seen major impact. But of course, we are following that very, very precisely, especially when the -- if the crisis continues in [ times ] because it's where lies the difficulty.
And last one, please. You mentioned that April was down the double digits. Is it 10% to 20%, over 20%? I mean if [indiscernible] April. You said April, in the month of April, I think, you said revenues was down double-digits. Please correct me if I've got it wrong.
No, I said 20%. No, no. Clearly, no, 20%.
We have another question from Laurent Gelebart from Exane.
Olivier, two questions. The first one regarding cost cutting. Which part is cyclical and will come back next year? Which part is structural, i.e., sustainable, lower SG&A level of costs? The second question regards productivity. If people work at home, normally, they are not traveling any longer. So they may work longer period of time in a day. So they may be more productive. So this is going to help you going forward or not?
You're right, you're right. You're right, at the time you put in place the working at home -- the work at home, you have inefficiencies and I'm telling you the truth. So when you move 150,000 people in 6 weeks from the centers to home, I can tell you it's not done, let's put it this way, easily. So there. Now it starts to be a little more -- it's more, I would say, manageable. But the start has been tough, of course, and the productivity in this time, we are not everywhere. But of course, you change all the [indiscernible] and you change the everything. So this has an impact, of course, on the margin. But this is now over, and this is partial -- could continue, but this is, of course, something new. About the structural part, of course -- I don't know. Of course, most of the steps are [ out of control ], but you discover that finally, you are able to manage this company without traveling, which is -- so whether it's structural or [indiscernible] difficult. I do believe that we may need a certain point of time to continue to travel. And frankly, to stop traveling as we do since now -- as we have done since 7 weeks or 8 weeks even more, because we start to stop travel mid-February. Last probably was 20th of February. So it has a -- it's controlled. But this is -- I'm not sure you cannot -- I don't believe that we can reduce it to 0? I don't believe that. But clearly, it's a big impact. I know people are traveling across the world everywhere [indiscernible] company. And when you stop that on nothing, it does have an impact, a significant impact.
Okay. And I have a last question regarding the way your contract has been set up. So normally, you get, let's say, basic plus bonus depending on some KPIs you are able to fulfill. I guess that quality KPI this time is a bit difficult to fulfill so...
At the beginning, it was difficult. But we launched -- when we get the agreement of the client, there was a discussion about to freeze bonus and merits. Of course both sides, and of course, to be very, very close to the client to understand what was going on [ local ] and, to your question, to react. But all the legal team spent their time last week to freeze -- to review all these statement of work and MSA, to freeze that because the clients were absolutely likely to continue their service. And of course, we understand that CPI could be chaotic at least at the beginning, and we agreed to freeze that, yes.
Okay. So you don't expect plus or minus on that versus the prior situation?
No, no, no.
Okay. And then assuming that the lockdown are no longer in place, everybody come back to work, but still we have the economic crisis. So how do you believe the volumes on verticals will react all your customers? You believe it's back to normal or some...
I don't know when it's going to be back to normal. Today, difficult to tell, but the main impact of the group was much more on [ loss share ] impact. Ability to sustain, of course, demand impact. But the offer, the fact that absentees were significant people because were afraid, we can understand that. It was a [ right ] lockdown because there was a lot of difficulty to come to work because the transportation wasn't possible or things like that. So the main impact for us this first half so far was mainly our offer. The demand stuff, the demand part, of course, is existing, as mentioned, in transportation. And we have significant decrease in transportation business, in hotel business and all that, of course. But the main impact for me is -- and if the lockdown is gone or reduced, it will significantly help, I believe.
So we have another question from Nicolas Tabor from MainFirst.
The first question would be on the productivity. Do you have any numbers on the number of calls processed like margin that you can share with us?
No, the point is not doing that. The point is there is a productivity. The main impact, as I mentioned, I tried to explain, in some case, yes, sites were totally closed, so you have to move this [ priority ] site to a work at home. So certainly, things are [ disappearing, ] depending where. It's not -- and this is the main impact. That was the main impact. Productivity, of course, is the fact that suddenly you have to stop. There are some countries where the government decided to stop totally. After they came back, after they come back partially because they need us to make it work in some countries and people, because we are supporting COVID-19 or client, most of the time, so the productivity impact is the fact that in some cases, you had a lockdown, you had a total lockdown, especially in India. But not only in India, but mainly in India. It was a total lockdown. So we had to move quickly now -- a little more than or close to 60% are working at home, which is not happening today, as you can imagine.
And this deployment of the working at home, so how do you manage that? Because I guess people don't use laptops in the working station usually. So do you -- do they mix...
Usually, the mix of workflow is what we call BYOD, bring your own device, and take them -- try to take some computer from the center to home and to buy some computer because everybody is speaking [indiscernible] Sorry, nobody is speaking of the computer wars because we have to buy also computers. So we bought some of them. So it's a mix of all the institution. And of course, it depends a lot of the country. The story was this one, yes.
And when you said 66% or the 150,000 employees working at home, so that's 235,000 employees, which are operational, as you mentioned.
Yes, yes.
And so what about the remaining 100,000 employees? Because last year, you had 290,000 full-time equivalents and only 10,000...
[indiscernible] in the management, the TAs, the supervisors that can work also at home. But -- and we tried to put maximum people in production, but there are still -- there are people that are locked down. They cannot work. That is an issue. And there are people that working at home. And there are still people in centers, but not so much, but there are still people in center, where you have the social distancing [ issued in full. ] What is important, what is a key issue for us is the people that are locked down that you cannot even -- so I hope it's going to be reduced in May and in June because people have to rework because...
Okay. Great. And regarding the CapEx, you don't have any rough guidance of where will you target...
We have the -- on CapEx, it's always the same story. It's like a train: you want to stop it, it takes time. So -- because we were running on a guidance of 7% like-for-like growth, so you might imagine that we had some projects. So these projects have -- some of them have been launched. So you're obliged to finish and some of them have been stopped. So I believe the reduction of CapEx will start to be seen in mid-May, in early May, and to be much more visible in the second part of the year because -- and today, I cannot give you a precise figure because in the meantime we, I mentioned earlier, we put much more money on the working at home. So we have budget but this is going to be significantly reduced versus a budget. But the budget was [indiscernible] versus last year, so we are growing. So it's too early to give you precise figure.
So we have another question from Lucas Ferhani from Deutsche Bank.
I'll just have one left. Just on the headwinds in terms of the revenue line. What's the part that's really led by demand coming down from your clients and the part that's led from your not being able to have the employees and having 100% service level? Because it seems from what you said that actually demand is not moving much and all of the kind of headwinds to revenues is from, obviously, they're not being able to have all of your employees work in the productivity. Is that fair to say?
I would say, in the first months, March, April and probably May, the main story is [ offer. ] I don't know if 80-20, but maybe 75-25, except TLS. Except TLS where it's probably the opposite because TLS you have no more -- you have less demand and you have no more demand, which is exactly the opposite of the other story. But as a whole, I think that today, the main story and has been the main story has been the demand -- has been the [ offer, ] the ability to sell.
Okay. And just on the contract, again, it was mentioned previously but just -- is there a thought that based solidly on what's the service level, how many calls, how many agents you have working? Or is this just the base plus something based on KPIs and mostly quality? Is there anything that can be [indiscernible] on?
There are plenty of agreements so I'm not aware of all of them. But largely, the idea is to serve. It's much more of the volume. So KPIS, of course, you cannot be paid for if you can't deliver that service. But it's mainly the ability to sell, the volumes of calls, [indiscernible] because [indiscernible] it could be also voice, non-voice interaction and BPO stuff that are continuing to be -- to develop, especially in e-commerce and banking and all that.
Okay. And the last one on LLS. So I think you mentioned that there were also some headwinds there because the traditional kind of activity in health care is affected by the virus. Is there any potential benefits from the increased activity in health care because of the virus [indiscernible] [ probably make it work? ]
I'm not sure if you use the word benefit of the virus, but let's put it this way: What we saw on LLS, we saw probably a reduced growth versus the level of growth that we had and we experienced in the first 2 months of the year. But frankly, I'm not really worried about LLS. LLS is going to deliver very good growth again this year. Probably less than what we expected at the beginning of the year but very good growth. Of course, there are some things that have been postponed, and of course it has an impact especially in March and probably in April. I don't see what is going on in May and June. It's difficult to predict. But at least in May, maybe in June, I believe, this [indiscernible] [ has been postponing the restart. ] So I'm not so concerned by LLS. LLS is different. This company knows to work at home. Serving that for years now. So now we are able to deliver. So frankly, it's probably the -- it's the less worrying part of the group, the less difficult part of the group, because I wouldn't say it's a business as a whole, but close to. Of course, it's not the business as a whole. People are making -- getting cough, not taking care. But they are much more in a position to -- much more traditional position in this part of the -- as a group. I don't know if there are other questions.
Yes, we have another question from Christophe Chaput from ODDO.
Yes. Just two questions for me. The first one is a clarification on organic for the Q2 because you said basically that [ APL ] is down double digits. May is better.
Should be.
So should we understand...
Q2 will be down. To what level, I don't know, but will be down.
Does it mean that it could be only, let's say, single digit decrease?
In second -- in Q2?
In May? Yes. Because April is double digits. May is, let's say, high single-digit, and June, let's say, even single digits, mid to high, let's say. The Q2, my point is to say that Q2 is not necessarily decreasing by double digits.
No, no, no. I'm not saying that. I'd even say that Q2 is going...
No, no, no. It's just a clarification. I mean it's the way you say it, that's all. It means that the Q2 will not necessarily drop by more than 10%. That's correct.
But again, keep in mind that probably the way it's going to be done is, of course, TLS will be significantly down in Q2.
Yes. So the mix effect will pull them out, the margin downward, for sure.
Probably, probably.
And so if you look, let's say, at the full year, obviously, it will -- it is massively difficult to forecast, I mean. But under what level of organic, the margin is going to decline? Which means that if you put a 0% organic for the full year or 2%, are you able to have a flat margin which means that below 0% organic, you are in a...
I don't know, I don't know. But it seems to be difficult that we have new impact on the margin for the full year, if you have an impact, a significant impact in Q2, especially with TLS. To what extent, I don't know. But this is difficult to tell, frankly.
Okay. And the last one is about China. You say that you recover in a certain extent. Do you recover the pace of normative growth that you experienced during the last quarter over there?
Yes, yes, yes. And then a little more. China was supposed to grow dramatically in 2020. So I [indiscernible] the beginning of the year, and we are back close to our plan. Of course, we have not been able to swallow what has been lost, but at least we are back on track.
And is it a kind of specific area, if I may? Which means that if you look at Ibero-LATAM or English part of the world, so imagine that Q2, let's say, with a sharp decrease. Do you expect this kind of area to recover, let's say, more or less fully in Q3 or Q4, let's say?
What do you mean by recover? We are going to swallow all the loss that we have -- I don't believe that we are going to swallow the loss that we are doing as the reduction of the business that we are going to suffer in Q2. Hope to be clearly...
[indiscernible] obviously. But the full year guidance was an organic of 7%. Are you able -- not really for the Q3, let's say, but for the Q4, to post a 7% organic? Let's say...
Why loss? We're not -- frankly we are making prediction today. Frankly, as I told you at the very beginning, we are not able to deliver again today. There are so many -- there is a guidance in sales and a guidance in margin. This is difficult, really difficult today to -- we need much more stability to see that. We hope we will be able to do that after the Q2. But frankly, today, I don't want to mislead the market that things are going well or things are going badly. But what I can tell you is that, we had a good first quarter. The second quarter will be probably difficult. We will have a hit on sales, [indiscernible] probably hit also on margin that is going to be affected by the mix from TLS notably, but also by the lockdown. What will be Q3 and Q4? I must confess that I don't know. We have some forecast, but I don't know. What I'm sure is 2 things: First, the group is solid and have liquidity to delivery and is well managed. And secondly, I do believe that on a commercial part, on the business development activity side, the group is very active. Those are the 2 things on which I'm sure today. I'm sorry that has to remain not precise but there is [ a reason for us also. ]
Moreover, I can fully understand for sure, Olivier. The last one for me is what -- could you help us to understand the cost, the extra cost of work-at-home into the OpEx? Because it seems to say that the operational profit margin in H1 will be much more affected by TLS.
Also by the lockdown, by the lockdown. The country on a lockdown.
Because the lockdown is a lack of sales, if I may.
Yes, the platform margin.
For sure, for sure. And on top of that, you could -- or we could add some extra costs related to work-at-home.
I don't know if it's [ our force ] or level of productivity. So it's difficult to make a distinction between the fact that you've changed totally your operational forces and what is actually additional cost. I know what the additional cost in terms of CapEx or laptop which is not dramatic. So it is not huge. But the fact that it is not working from day 1 perfectly, that's [indiscernible] to assets today.I don't know if there are other questions, but I'm ready to take one or two last questions before I move on.
Okay. So we have another question from Lucas Ferhani from Deutsche Bank.
Just a quick follow-up. Obviously, there's some pressure from government on companies who are using the various measures to furlough people. You said you're using it in various European countries. Are you worried there might be pressure on the dividend from that side?
So far, the French government says that dividend might be provisioned if you decided to use to -- not to pay social charges or not -- or use a grant loan that has been guaranteed by the government, which is not our case. We didn't choose that, and we are not going to use that, especially in France. So the furloughs, it's an issue only for France. I'll just remind you that we have 2,800 people in France versus 333,000 across the world. So the question is on this one. So the Board will make a decision on time on this issue. And I will be -- we will know that on time. But decision has been to postpone the General Assembly to end of June to leave sufficient time to make an appropriate decision by the Board that will be done probably in the 3 weeks to come. The last question, I'll take it. If not...
No, we have no more questions, sir. We have no more questions.
Thank you to all. I hope you have understand we are living in a complex world especially. I believe you, too. So what we tried to explain is where we are, to be clear. I just wanted to conclude in telling two things: So we have made a fantastic work to move to this working-at-home situation. There are still uncertainties. There are still impacts that are not totally, I would say, completely understood. But what we do believe that this company is solid, not only financially but is going to be resilient and take advantage of the situation when the situation will be [indiscernible] behind [indiscernible] than today. Thank you to all. Keep safe, and we'll be in touch in the...
Coming year.
Coming days and weeks. Quy, you want to add something?
Yes. If I may, leave with information regarding the financial communication agenda, the next event. As mentioned by Olivier, our next investor meeting and financial communication event is, as we announced in 24th of March, the Shareholders' General Meeting has been postponed to 26th of June. [indiscernible] April 16. And regarding next communication of financials for Teleperformance, H1 results will be done on 29th of July with a webcast on that day. Of course, Teleperformance will continue to participate in the coming months to numerous now digital conferences organized by webcast, and in parallel, feel free to reach out directly for interest in digital meetings with us or follow-up questions, and we'll be happy to address the quickest. Thank you all, and I'll speak to you on the next. Bye.
Thank you. Bye-bye.
Ladies and gentlemen, this concludes the conference call. Thank you all for your participation. You may now disconnect.