Teleperformance SE

PAR:TEP

Earnings Call Transcript 2022-Q2

[Olivier Rigaudy, Deputy CEO & Group CFO]

Good evening, all of you. So I'm going to start. I believe that I'm online, but I'm not too sure. So I'm happy to be with you tonight to comment on the 2022 first half results. And this is going to be the agenda for today. So can we move to the next slide, please?

So it's a classical disclaimer. As you know, I'm not going to read it. You know it very well. So I'm going to cover 2 things, first, just to give you some first half highlights before we enter in detail in the first half result and joining and as a finishing with the outlook. So what is -- next slide, please.

So who we are, not surprisingly. You know Teleperformance for a while now. We are still 420,000 people, mostly working at home. As you can see, still 70% of people are still working at home from 88 countries, serving more than 1,000 clients in 170 markets with 265 language. So Teleperformance has not changed, and we continue to be there.

Next slide. What are for me -- next slide, please. Yes. What are for me the most important stuff to keep in mind for the first half? We have been able to deliver a sustained business and earning growth in first half of 2022. I'm sure that all of you have noticed that we had some -- a global environment which was not simple, but we have been able to deliver sales that are growing by 15% on a reported basis, which made of a -- and like-for-like growth of 5.5% despite high prior comps, notably on COVID line. I will be back on that, meaning a 12.9% growth excluding nonrecurring item, meaning excluding the non-COVID -- the COVID line that we sold last year.

More importantly, not only we grew on [indiscernible] from a non-COVID between the increase of growth in second quarter versus the first quarter, which was already delivering a good figure. So this is interesting because the exit rate is good, and it shows that the growth is not absolutely stopping at Teleperformance, far from that. And on top of that, not only grew, but we have been able to deliver an improved margin by 30 basis points to 14.3% versus the 14% figure that we have. So that are the main stuffs that you have to keep in mind.

What are for me is the 4 key drivers that you keep -- you have to keep -- to get in mind? First of all, it's, of course, market structural digitalization. This is not new. This is continuing, and this is going to continue for the charter, whatever the recession, whatever the growth would be, whether the market will be moved on [indiscernible], we do believe, and we are seeing that on a regular basis that the market is going more digital and is really helping us.

Secondly, and that's probably something that people forget, but you have to keep in mind that the portfolio of Teleperformance is very diversified and very robust. We are not selling one market, only unicorns or only retail or only stuff like that. We are covering all the spectrum of the economy. And of course, we are taking advantage of this global diversified portfolio.

Third point, which is important to notice also, is the fact that TLS has been able to come back to a certain level of growth, and we are seeing -- we are going to see that in a minute, but this is also helping the group largely to swallow all the difficulties that was ahead of us, notably the economic [indiscernible].

And last but not least, we have been able to successfully integrate the 2 recent acquisitions that we have done last year, Health Advocate and then at the end of last year, too, for Senture.

Next slide, please. Two things that I just wanted to mention also, we have been able to extend capacity with some new -- some 20 new sites in H1: 2 in Europe, 2 in Africa, 2 in U.S., 2 in Peru and India, meaning that on top of the people that are working at home, we have been able to add 7,000 works -- totally new workstation it helps to drive that growth. And we have drive the growth in the future part of -- second part of the year.

As I told you, 70% of the group are still -- of the group employees are still working at home, and I don't see why it could change. Maybe I don't know, but I mean I would not surprise that in the -- at least for fall, maybe for winter that the COVID will come back and will force to stay people working at home.

And last but not least, we continue to support our employees because we do believe that we cannot -- we lose out against our employee, and we push for them or help them. And we have been able to be certified in 64 countries today, 4 more in the last year, representing more than 90% of the group workforce.

So that's the first half. Let's move now to next slide and the figure. Next slide, please. So as I told you, like -- growth of 15% to close to €4 billion. We're far from -- not far from €4 billion in the first half, meaning a reported growth of 15% growth made of 5.5% like-for-like revenue growth despite the loss of COVID line. I will come back in a minute to that and a 12.9% like-for-like gain, excluding the impact from COVID support contracts.

As you can see either on the EBITDA level -- on EBITDA level, we have been able to improve our margin by 30 basis points, which is really appreciable, and to drive profit up to a net profit of €274 million at the end of this first half.

Let's move now to a more precise analysis of our revenue growth analysis in the following slide, please. Of course, when you look what happened in this first half, we have a currency effect that sort of surprise close to €160 million, which is mostly made by -- coming from the U.S. -- appreciation of the U.S. dollar, €110 million, and other currency. So if you take that, you have after a growth of 12 -- 4.5 -- or 4.5%, sorry, close to €200 million, made up a decrease of COVID line by €266 million, which is not a small amount; and an increase of like-for-like growth of €462 million, which is a 12.9% that I just mentioned a minute ago.

As of this -- on top of that, of course, there is a change in scope, half year for Senture and for Health Advocate, adding €160 million to the total of the group. So this is clearly the way we have been able. So positive impact from currency, positive impact from changes can and an organic growth that exceed largely as the increase of the COVID line that was weighted.

Let me go to the next slide, which is probably the most interesting for me to explain what happened. Here, of course, we are showing on the 2 years and half period. The like-for-like growth, including COVID line and the like-for-like growth excluding COVID line. Not a surprise, in 2022, there was a decrease in contribution of COVID line, as expected, probably much more in the second part of the -- in the second quarter than the first one, but clearly a decrease that was weighted.

But beyond that, and if you exclude this part, you see that over the period, the non-COVID growth is steady above 10% post [indiscernible] prices and accelerating even in Q2 versus Q1. So this is exactly what we were waiting for. We are able to continue to grow. And this slide is showing not only the size of the growth of Teleperformance but also the quality of the growth. Teleperformance is able to take advantage of the conjectural growth when there is a COVID line that is -- that has to be set up, but also to take advantage of the structural growth that is coming from the degradation of the market and from the client.

Of course, we do believe that in the second part of the year, our COVID line should also decline. But to be honest, I'm not too sure what will be the landscape. We might think that COVID line may start again partially at least in Q3 and Q4 if COVID is starting to develop again, notably in Europe.

Next slide, please. This is exactly what I explained to just -- before just to show how the group is diversified as a well-diversified client portfolio. We are not betting on 1 single or 2 single, I would say, sector. We are everywhere in this business, across different business across the world. So we are able to capture any ways that can happen. Let's say, in gaming, I'm not speaking of gambling, of course, but gaming online, but also government, financial service, health care. Telco, that is probably going to come back. While, of course, the unicorns are going to be less growing in the future.

But even that, social media will continue to grow. And we are here to capture this growth, whether it's digital transformation, new economy or traditional one that has to react to this global environment. So Teleperformance can enjoy a large diversified client portfolio that enable us to achieve and to grab the growth where it lies.

Next slide, please. So it's just -- here to give you much more detail about what happened over the Q2 and the H1 for like-for-like growth per region and also on reported. I'm going to stay on like-for-like, even if I would be happy to pointed out the growth of H1 in Specialized Services reported, which is more than 50%. Of course, it's coming from as the dollar, but not only.

If you look much more to the Q2 like-for-like growth, you will discover that, of course, not a surprise Ibero-LATAM is still growing at 17%; India, close to 19%. And on top of that, Specialized Services grew -- has grown by 23% -- close to 23%, specifically due to the growth of -- recovery of TLScontact. When it comes to EWAP and CEMEA, of course, these 2 regions are growing at high level that have been suffering from the COVID line, where they lost a significant part of the business, showing negative figure for the quarter for CEMEA, which is not a surprise, but positive figure -- largely positive figure, if you exclude COVID line.

Let's move now to the EBITA by activity. Next slide, please. And as you can see, we have gained 30 basis points in this first half because roughly margins have been maintained in core service roughly, even if it's a little decline. But globally, it's due to the fact that COVID line have decreased, while Specialized Services has increased dramatically over the period. So we are able to deliver 30 basis points in H1, which is exactly what we promised to the market for the full year, knowing that the first half is not all -- other ways are more easy to deliver. And of course, we have some help by the dollar -- from the increase of the dollar but not dramatically.

Let's move now on the following slide on the recent analysis region by region. If we come to the English market, we see that as expected, we have a relevant momentum in the North American market, whether it's domestic and offshore. Of course, it has been driven by social media, online entertainment, travel, financial service that grew very fast. In the meantime, there was -- as expected, there was a contribution of support contract in the U.K. that has been -- that have been reduced linked to the COVID support, and this is not a surprise. That's the reason why the growth seems to be limited. But if you take that out, the growth is significant, double digits, and the EBITDA has significantly grown over the period.

Let's move to Ibero-LATAM. Next slide, please. So very few things to say that -- except that we are growing very fast in all the countries of the region. Even if the Spain and Portugal region was not so easy to beat. And of course, also you find there the most genomic sector, social media, online entertainment, health care, financial service and always travel that is back on track. So the growth is roughly the same, whether it's Q1 and Q2, around 17%. And the margin is a little down. It's mostly because we are ramping up a new -- never sites and new contract to support the growth. And I do believe that we are going to see better margin in the second part of the year. So a very good figure from Ibero-LATAM.

Let's move to CEMEA. Next slide, please. Yes, we have, of course, a big impact of the decrease of the COVID line, not only in Q2, which was more important in Q2 than in Q1. But if you strip that out, the growth is significant, high single digits. And good results with a multinational client, the travel again, automotive, financial service and online Internet sector. The margin is a bit down, of course, in terms of breaking even of the operational impacts of the reduction of the COVID line but still delivering good margin at global level.

Let's move to the next slide, India, where I would say there's little to say. Growth is consistent over the quarter from Q1 to Q2, close to 19% on both side and revenue -- and margin significantly increasing to 17.5%. Here, we are investing, I would say, the mission of the group, to concentrate on the international business and to make all the work that we did on the local domestic contract and on the other 2. So good margin and again good growth.

Finally, Specialized Service. Next slide, please. Of course, big growth linked to TLS, but also LanguageLine Solutions continued to deliver good figures, whether it's margin or growth. And we had to add also Health Advocate since July, so it's coming on the consolidation for the first time. So growing fast, good margin, above 30% again. And we see that continuing over the next months.

So if we move to the next slide, I will give you much more detail on the other part of the first half results. We have the amortization of intangible request -- sorry, access that are growing mainly under the U.S. dollar appreciation. So no big impact. And you have two issue of increase also performance share plans into the new share plans that we are issuing and some other that are limited to some specific operation by Nordics. The operating profit is growing by 10% at a high level.

Next slide, please. If we move back to the following steps, so you have the decrease of the results -- financial result, which is due to 2 things. Of course, the noncash impact of the operations that we did last June in financial -- in issuing a new bond. So we'll the last to amortize previous non -- bonds that we have not amortized over the period, plus the impact of the inflation in Turkey and in Argentina. But as a whole, the financial charge is roughly flat. Income tax has no major change. So we -- we finally, we have been able to deliver a net profit of €274 million, growing at 7.5% this first half.

Next slide, which is interesting, please, in the cash flow. I think that's something which is very interesting to understand, that the net free cash flow seems to be roughly equal to last year. But in the meantime, we have been able to significantly increase our net capital expenditure by €50 million, notably on new side, as mentioned, but also in IT -- in our IT system to be much more under control and the monitoring on the cloud service that is -- that has an impact on our CapEx. And we have been able also to generate €40 million from the working cap, which is interesting. So at the end of the day, we are able not only to restart on investment that was very low last year to a certain level, control our working capital and being able to deliver a very good cash flow for paying dividend and paying the debt. So very good performance in cash flow.

I'm not going to comment on the next slide, but let's go to the following one, which is more interesting, which is what happened on the debt. The debt is flat. But in the meantime, we have been able to repay -- to pay the dividend, to buy back some shares and to be impacted by the FX. We increased the lease liability, and we have some loans that are going to be repaid in the second part of the year. So I do expect that in the second part of the year, we'll be able to significantly reduce the debt, and you will see that in the second part of the year.

So as far as finance is concerned, we still have our BBB level of Standard & Poor's. We have duration of our debt and we have a level of debt that help us to be in a position to seize any acquisition provided that are coming on stream.

So as a whole, if I come to the next slide, very good growth, very good margin and very good cash flow. So we are happy with this first half. Let's have a look to what will be the second part of the year on the next slide, please. We confirm totally our full year targets with the recurring like-for-like growth excluding COVID, above 10%; like-for-like growth including COVID line, above 5%; 30 basis points increase in EBITDA margin; and targeting selective acquisition, creating value for the group. That are our targets for the full year.

As you have understood, the world has changed. Globally, this is more complex to manage, but the group is very -- it's confident in the future to be able to continue to grow to deliver good margin and cash flow in this global environment that is, I would say, uncertain.

I'm, of course, ready to take any questions that might occur from you right now.

[Operator]

[Operator Instructions]. Our first question comes from the line of Simon LeChipre from Stifel.

[Olivier Rigaudy, Deputy CEO & Group CFO]

Is there a question?

[Operator]

My apologies, speakers, Simon has disconnected. We will now proceed to the next question, coming from the line of Oscar Val from JPMorgan.

[Oscar Val Mas, JPMorgan Chase & Co.]

I have three questions. The first one is, could you give some more color on why you've seen like-for-like accelerate ex COVID in Q2 from Q1? Was it easier to hire people? Have you seen some more outsourcing from your customers? That's the first question.

The second question is on CapEx. So CapEx was higher than last year. In the past, you've talked about CapEx stepping down post COVID because you have work from home. Can you talk about the full year guidance for CapEx? And then the final question is just on FX. You've talked about FX, both translational but also transactional, being a benefit in H1. Could you quantify that benefit or just give some color on FX?

[Olivier Rigaudy, Deputy CEO & Group CFO]

Okay. Thank you for your question. Whether Q2 is higher than Q1, I'm not sure it's because we have been able to be -- to hire better, to -- it's always the same story when you have volumes that are coming, when you are getting client, it takes time. It's not happening from day 1. So I'm not sure you have a specific, I would say, reason of Q1 -- of Q2 being above Q1 except that, as I told you, we have been able to track the right clients. We have been able to develop a commercial force on time. And of course, there are -- we took advantage of some -- probably there is some effect that it's coming from travel that helps.

But not only, we have been able to get new clients, too. So the structural digitalization of this world, this new client, the ability to open the spectrum largely at the growth, that is the reason. And what is interesting is that business is there despite this global environment that is gloomy. And if you read the paper, you can jump out the window, but we are there to be able to grab the market.

About CapEx, I believe we are going to land something around 3.5% of the sales, maybe 3.6%. It's difficult to tell. In CapEx, you have 2 stuff. One is IT, and you have to put much more money on IT to secure everything and to develop our cloud company solution across the world. And the other is just to open new site in some specific region. I mentioned Peru. I mentioned also India, where we are putting much more volume where there are still people wanting -- working on brick-and-mortar. So that's the reason.

I think it -- there are two ways of thinking -- speaking of CapEx. One is, of course, is less cash flow at the time you invest. The other one is, of course, positive because it's creating much more value for the future. And I do believe this is the second part of this appreciation that has to be retained. We are able to generate further sale not only for 2022 but also for 2023. So that's where I believe we are going to land, something between 3.6%, 3.7%, maybe difficult to tell roughly, but roughly in this area.

As far as FX is concerned, you have 2 issues. One is, of course, the translation of the high-margin business, mostly LanguageLine Solutions, Health Advocate, from dollar to euro. So given the higher margin, this helps a little the translation stuff. But that's not the most important one. The most important one, which is difficult also to assess, is to prepare 2023 because having a dollar equal to euro, as you can imagine, all this currency in Mexico -- less in Mexico, but in, say, India, in Colombia, in Philippines, that are decreasing versus dollar helps to increase our margin. While in the meantime, you have, of course, increase in wages.

So what I'm just telling is that it helps to develop the business. To quantify it precisely, I would have a hard time to do it because most of the time, it's most -- it's a balance between the increase in the sales and in the revenue while you have some inflation costs that are coming on top of that on wages. But at least it help us to continue to have, I would say, solutions that are profitable for people that want to outsource. Let's put it this way.

[Oscar Val Mas, JPMorgan Chase & Co.]

Okay. That was very clear. Maybe just a quick technical follow-up to check on the last point. Do you hedge or what percentage do you hedge of your dollar revenue that has cost bases in emerging markets, for example?

[Olivier Rigaudy, Deputy CEO & Group CFO]

We have -- as you can imagine, we have already started 2023 hedges. We are above 50%, of course, as we speak.

[Operator]

Our next question comes from the line of Anvesh Agrawal from Morgan Stanley.

[Anvesh Agrawal, Morgan Stanley]

Just got two questions. First, I mean, given the strong Q1 and a strong Q2 really, so ahead of the expectation, what's sort of holding you back from updating the guidance? Is it the usual prudence? Or you are sort of aware of the macro uncertainty and you're seeing something that's sort of not driving the upgrade?

And then second is just clearly to unpick on the margins point, really. I mean the dips margin declined 50 basis point. Our understanding was COVID is not particularly very high-margin business than the core? So I was just trying to understand why the margins have declined. And do you see this dynamic playing out in the second half again as the COVID continues to stop online?

[Olivier Rigaudy, Deputy CEO & Group CFO]

Two things, guidance -- I don't know if you know us very well, but we are careful guys. We are not there to announce figure and not to deliver them. So we'll see what we will do later on. But so far, we are staying on what we said to the market, and there is no reason to change.

Of course, the global environment is complex. As I told you, we have significant visibility. Of course, we don't know what will be -- as always, we don't know what will be the volume in the last quarter, depending on our clients. But we are reasonably confident that we are going to deliver a good year. So that's what I can tell you.

But the matter of COVID, 2 things. First of all, you have to understand the margin -- the COVID margin globally versus U.K. and versus Europe. And as a whole, they are also different globally. They are not silicon from around the core service. What has an impact, and I mentioned it all on, is the size of the business, the operational gearing.

If you look at we have lost roughly €300 million coming from this business. Of course, it has an impact on the SG&A. Of course, we gain all our stuff, but that's the reason. What will be the second part of the year? Difficult to tell. Of course, there are still €300 million to swallow in the second part of the year, roughly.

I'm not too sure we are not going to be able to deliver some COVID business in the second part of the year, but that's too early to tell. So it might help a little on the margin. But as you have seen, we have been able to deliver good margin in the U.S., with a good margin in India and of course, Specialized Service. And of course, we are growing very fast in LATAM. And this is -- when you wrap up so many clients, so many sites, it does an impact on your margin. That's what I can tell you.

[Anvesh Agrawal, Morgan Stanley]

Maybe just to sort of or just be the follow up. So is it fair to assume that if you exclude the impact from the unwind of the COVID-related revenue and the impact on the margins, your margin in dips would be sort of higher year-on-year as well?

[Olivier Rigaudy, Deputy CEO & Group CFO]

Yes. No, margin will be up if you -- of course, you have understood that the impact of the TLS recovery is significant. But we are growing everywhere. A little -- of course, I would prefer to make this distinction at the end of the year because the first half is always difficult to judge because you have classically ramping up that is starting in Q1 and Q2. And you take advantage of the growth in the Q3 and Q4. But -- so as a whole, there is no decrease of the margin by far in core service as well.

[Operator]

Our next question comes from the line of Antonin Baudry from HSBC.

[Antonin Baudry, HSBC]

This is Antonin from HSBC. Would it possible to have more details on what you are preparing if we have a downturn in 1 or 2 quarters or even a recession? Let's say, we speak more and more about recession in 2023. Did you prepare something in terms of contract, in terms of effort, in terms of existing clients versus new clients, how to chase new clients? What do you do at your level in the book?

[Olivier Rigaudy, Deputy CEO & Group CFO]

No. First of all, as you know us, we are also very, very careful in cost. But there is no doubt on that, and it's not changing. But in the meantime, we have to -- we have the right people and the right team to size -- to seize the advantage of new -- of growing business. As always, you have to select your clients clearly. Even in recession, there are people that are going to be -- wanted to outsource. Some of them wanted to offshore. Some of them will ask for more sales.

So I'm not sure recession is going -- I'm quite sure that the recession, to a certain extent, create business because people have to react. So all the jobs just to be prepared, that collection is going to increase. So there are stuff that are going to increase. And even in this turbulent time, Teleperformance can grab business.

So I know I cannot give you figures and I cannot give you precise name. But what I can tell you, we are prepared to -- we have tightened the belt significantly early on in the group, but also to be able to seize any opportunity that might come linked to this global environment, to the gloomy environment, that is happening, that is promised by the market, by the paper, by the analysts and by everybody.

[Antonin Baudry, HSBC]

Perhaps a quick follow-up. Is it possible to have the split of your growth between new clients and on the existing clients, please?

[Olivier Rigaudy, Deputy CEO & Group CFO]

I must say, I don't have the figure right now. I should have prepared that. But frankly, from what I know, we are still very, very new client oriented, more than 70%, close to 80%. We are able -- new client or new LOEs, that's what this is in line of business, but we are able to get new clients. But as always, the growth of sharing much more -- is much more happening in the second part of the year than in the first part. So we see that also at the end of the year, but we have been able to grab new clients clearly.

[Operator]

Our next question comes from the line of Patrick Jousseaume from Societe Generale.

[Patrick Jousseaume, Societe Generale]

Can you hear me, Olivier?

[Olivier Rigaudy, Deputy CEO & Group CFO]

Very well.

[Patrick Jousseaume, Societe Generale]

Okay. Perfect. My question is about the bottom of the P&L with amortization of intangible defense plan, also the tax rate. Could you guide us on that? You see that the market was expecting net profit to be a bit higher than it was in H1, and I guess that might have come from this item. So could you be a bit more precise on what we should model over the full year for these rates, please?

[Olivier Rigaudy, Deputy CEO & Group CFO]

It should be roughly double of what it is in terms of -- so I'll give you the precise figure, but something like that is going to be double next year. What is difficult to predict is the impact of the dollar on the amortization. So we have €70 million in the first half. It should be in the range of €140 million, €150 million for the year. It's my guess today. Of course, it might change with the dollar. And for the plan, it's going to be double what it is, close to double what -- that's also a figure for the first half.

[Patrick Jousseaume, Societe Generale]

And tax rate should be up also 100 basis points as it has been on first half?

[Olivier Rigaudy, Deputy CEO & Group CFO]

I don't know. Difficult to tell, but it's going to be between 28% and 29%. Let's take 28.5%. It's difficult to -- let's keep this global figure stable for the full year, yes. We promise that we are not losing money. So we are doing that. We are being taxed.

[Operator]

Our next question comes from the line of Simon LeChipre from Stifel.

[Olivier Rigaudy, Deputy CEO & Group CFO]

So you are back.

[Simon LeChipre, Stifel, Nicolaus & Company]

Yes. Can you hear me now?

[Olivier Rigaudy, Deputy CEO & Group CFO]

Yes.

[Simon LeChipre, Stifel, Nicolaus & Company]

Okay. So this is Simon from Stifel. Two questions, please. First of all, as a follow-up on the macro environment, when you discuss with your clients across the different end markets, do you see kind of cautiousness or, let's say, any change in BAV or to the macro uncertainties? And secondly, on inflation, could you give us an update on how you have been managing inflation so far? And perhaps if you could give us an update on the pricing effect in your top line in H1? And how does it compare with the average labor cost inflation you are experiencing?

[Olivier Rigaudy, Deputy CEO & Group CFO]

Complex questions. Thank you to have raised this point because it's, of course, made of plenty of stuff. So as far as client are concerned, there are people that are probably much more, I would say, wiser than others. No surprise, you can read the Wall Street Journal or whatever. But as a whole, we have not seen any collapse, let's put it this way. There could have been softness in some client, but some [indiscernible] other and new clients come that is significantly higher than expected.

The pipeline seems to be more than correct. So we are not really afraid. Of course, there are ups and down. We are used to live with that. So -- but there is no general decrease. It might happen tomorrow. But today, we are not seeing that by far.

Secondly, on the inflation. So what we have done is that we start to follow that very precisely to moderate to follow all the contract where we have increased price, which was essentially linked to increase in salary. To a certain extent, if I'm not a certain instance, we are happy to increase salaries. There is no need -- no problem with that. No -- but the client cannot say, "I'm increasing my salary in my own organization and deny to increase the price where we are increasing our salary in outsource organization."

So we are following that. We are tracking that by contract. We have, I would say, master plans that help us to follow precisely country by country, region by region where we are in term of increase of price. And we follow the margin like maniacs. And I can tell you that, of course, it depends a lot from country to other, and you have more inflation in some country, less than others. And on top of that, you have currencies that are slipping more than others. So it's difficult to tell you what is exactly -- whether to conduct an analysis between price, volume and FX.

What I can tell you, because we are following that on a volume basis, because we are following the paid production RO, we are exactly on line between price and volume. So we have no discrepancy between volume and price. So we are following that precisely just to keep our margin safe.

[Operator]

Our next question comes from the line of Karl Green from RBC.

[Karl Green, RBC Capital Markets]

I've just got three questions as well. Firstly, just in terms of your recommitment in the outlook to pursuing value-added M&A, just if you can make any comments about the shape of the M&A pipeline versus how it stood 6 months ago. The second question just goes back to the rapid improvements in TLScontact just in terms of what proportion of the Q2 organic growth uplift was represented by TLScontact. I'm assuming it's a very large proportion, but just some sort of color there would be helpful. And then the final question, just a technical one, just on the net finance charge. I think you mentioned that there was the refi cost of the June bond refinancing. Can you just indicate what that was in absolute terms, please?

[Olivier Rigaudy, Deputy CEO & Group CFO]

So the first question was on -- sorry?

[Karl Green, RBC Capital Markets]

M&A pipeline, sorry.

[Olivier Rigaudy, Deputy CEO & Group CFO]

M&A pipeline. So M&A pipeline, so there are some pipelines as always. I do believe that the global environment is going to change and probably to make the story different than it was over the last 18 months, where money was flooding up and people were ready to buy stuff at 20x EBITDA figure. So multiple. So that's clearly not our -- a cup of tea, let's put it this way. So it should help.

Of course, we are not going to -- there are, of course, financial criteria on the acquisition, whether in term of growth, in term of multiple, in term of duty or P&L. So that has not changed. And of course, the global environment should help to a certain extent. But we see what could happen. When you have quality assets, people are waiting for a good price. And this is something that is going to continue.

In term of strategic stuff because the main story is there: are we going to buy something that is going to be supporting? We are not going to buy the same stuff that we are doing. There is no interest to buy the same stuff that we are already having. Of course, adding new stuff whether it's by vertical, whether on specific markets, whether on specific geography, that could be interesting, could happen. It's less -- not so easy or specific verticals or specific product.

In term of Specialized Service, of course, we are looking to different stuff, whether it's niche, whether it's a large business. We probably will continue to focus on the U.S. and European market, just to be clear. And that is clearly for tomorrow. And there are some stuff in the pipeline. I cannot comment more. It's not because you have something in pipeline that you are doing the acquisition. I'm well paid to know that. But of course, we are looking to different opportunities. I cannot, of course, comment on that.

About TELUS, what I can tell about TELUS, TELUS, we have 2 legs. One is the Shinhan area, the other one being the U.K. contract. In fact, in the -- we are in the U.K. area, in the U.K. business, we are above what we were in 2019, surprising me. But people are traveling a lot, and we have been able to grab that as far as visa is concerned. And clearly, this is working well. And I do believe that this is going to continue at least until the end of the summer. We'll see what will be the story after, but this is something that is good.

On the Shinhan area, which was mainly France but not only Germany, there was also country. But the big part was France. Clearly, we are not at the level that we were before because of China. Chinese people are not traveling to Paris or to Europe, and this is not happening as we speak. But in the meantime, to a certain extent, TLS, I would say, between brake took advantage of this crisis to be much more fit. So people are much more organized. The company is much more digitalized and being able to grab much more business is in -- not to grab much more business but being much more profitable on the business that they [indiscernible]. That is the reason why.

And I do believe that to a certain extent, TLS is stronger than it was before the crisis. I hope the Chinese will come back. This is too early to tell, but that's something clear. On the financial side, you have 3 -- more than €3 million -- €4 million that are coming from the fact that when you issue a bond, you have a premium and you amortize the premium over the length of the bonds. And as we have payback silicon part of the bond that was maturing in '24 and '25, we have amortized quicker these charges that was supposed to be amortized over the length of the bond. That's it.

[Operator]

At this time, speakers, we don't have any questions in the queue. You may proceed.

[Olivier Rigaudy, Deputy CEO & Group CFO]

If there is no more question, I'm happy to wish you a very good evening. And for those who are taking holiday, which are probably numerous of you -- number of few next week. I wish you happy holiday, and we'll meet together at any time. Of course, the team is ready Quy, Juan and all the IR team is ready to answer all the question you might have, and I would be delighted to meet you in the road show that are going to come back at end of August or early September. Thank you so much for your time and for your interest in Teleperformance. Bye, bye.