Hello, and welcome to the Teleperformance information update meeting call. My name is Sharon, and I will be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on a listen-only mode. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero and you will be connected to an operator. I will now hand you over to your host, Mr. Daniel Julien, CEO and Founder, to begin today's conference. Thank you. Thank you very much. Good morning, everybody, and thank you for being here. I'm here to announce a decision that has been very difficult to take. As one of our client just stated, we got so many commendation from the FBI because we were helping to catch criminal when monitoring some highly egregious content, and TP has been a truly protector in this space. You can imagine our decisions are difficult. Having said that, I also want to state that we vigorously support trust and safety as an essential service for the community. What has also become clear through our own personal due diligence is that the employee that do this job are deeply committed and want to continue to do it. However, we have made this decision as a result of listening carefully to the concern of our shareholders. We have discussed these decisions to remove ourself from the highly egregious content with our key trust and safety clients. While disappointed, they understand what we are doing and why, and right now we are working with them to continue to develop our partnership in the future. This is my introduction and now we are ready to answer your questions. Thank you very much. Thank you, Mr. Julien. Ladies and gentlemen, if you would like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will now take our first question from Anvesh Agrawal from Morgan Stanley. Your line is open. Please go ahead. Hi, thanks for the call. I got few, and if I can ask them one by one that would be easier. The first one is, just to be absolutely clear, are you exiting the entire trust and safety business or only a part of it? If it's part of it, how much sort of revenue you are exiting and what are the margins from that? That's the first one, please. Okay. First, we are absolutely not exiting the whole trust and safety business. There are so many things to protect, the integrity in the business, the anti-scam, so many things. What we are exiting are the queues with highly egregious content. Highly egregious content means flagrant, heinous, and odious content. Thank you. Can you? For the rest of the answer, I'm going to let Bhupender Singh to answer. You're on mute. In terms of the quantum of business, it's not a straightforward answer because the work in some clients is segregated, which means the highly egregious work is segregated. It goes to more dedicated teams. In some cases, it is not segregated. It goes to a wider queue. That needs to be worked out. Second, even where it is in segregated queues, dedicated queues, the client has to think about their own vendor and bundling strategy. Having said that, based the initial discussions, the portion of business that we will be giving up does not look substantial. In terms of exact quantum, we will take some time working with our clients, what that mean, and we are targeting before the year end to come to you with an estimate. If I may add, our clients deeply appreciate Teleperformance and want to find ways to continue to work with us as much it will be convenient for them. That's clear. The second question is, the clients with whom you are sort of exiting the business, do you also have them as your clients in other areas of the business? Any sort of ripple effect from this action of yours? We do not anticipate any ripple effect. Okay. Finally, slightly unrelated question to today's call, but can you shed some light on the discussions you had with the Colombian government yesterday? Does that play any part in your decision today? I don't think that it plays any part in our decision. These are two separate topic, but Agustin Grisanti, Chief Operating Officer, is going to give you the update. Yes. The Minister had asked us to reschedule the meeting due to some conflicts in his agenda. Today, with just half an hour ago, we got a confirmation that the new date for the meeting is going to be the 29th of November. Also taking advantage of the question, I tell you that, as we speak, a senior team of Teleperformance is meeting with the union representatives today. The senior team. That's clear. Excuse me. The senior team of Teleperformance Colombia. Yeah. Thanks. Yeah. Thanks. I'll go back in queue. Thank you. Next up we have Antonin Baudry from HSBC. Your line is open. Please go ahead. Yes. Thank you very much for this call. I do not understand exactly the answer about the proportion of this business in your content moderation business, because you told us during last week that highly egregious content representing less than one interaction per 1 million. Indeed it's very small. Do we have more details just to evaluate what it represents? I have a second question after that. Thank you. Yeah. As we were speaking about a specific client, we confirm this number. The second point, highly egregious content moderation represent effectively an extremely small part of the business. Sometimes queues of five people, 10 people, 15 people out of thousands when it's segregated. Still, from our client point of view, they may tend to prefer to work with a partner who is going to accept to deal with this part of business, rather than a partner who says, "I just take the easy, non-challenging part and make your own of this difficult part." This is what we are going now managing. Okay. Can you speak specifically about TikTok? Clearly, the answer that we gave you last week or beginning of this week, I don't remember, about TikTok, was accurate. There is an extraordinarily rare occurrence of highly egregious content. Okay. So- Okay. TikTok is even not necessarily in the picture. Okay. My second question is not on this particular subject, but on ESG in general. It becomes very important, the ESG rating in asset allocation. I just want to know if you discuss with MSCI specifically on their controversy rating, on how do you assess the risk of a potential downgrade of this controversy rating on Teleperformance. Thank you. Olivier Rigaudy is going to answer your question. We had interaction with MSCI recently. On 25th of October, we have been rerated AA. In that sector, they gave us not a good note on the controversy. This is not going to change our rating. We are going to engage with them in the next days. We will see what will be the outcome. Yeah, today, it's not going to change. Okay. Thank you. Next up we have Ben Wild from Deutsche Bank. Your line is open. Please go ahead. Hi. Yes, a few questions from me as well, and I'll take them one by one also. Just firstly, from what I can tell, content moderation provided about quarter of your ex-Majorel like-for-like growth last year. What share of your growth is coming from content moderation as a whole this year? I know it's early stages, but how does this decision affect your growth pipeline going forward? Thank you. Maybe, who wants to answer, Bhupender or Olivier? Bhupender. Yeah. Firstly, I think you also touched upon it, Ben. This year, we have been able to absorb a substantial decline of the COVID line of business in our numbers and still being able to demonstrate growth. That's something that I just want to highlight. Yes, a lot of that growth did come from content moderation, but there is a substantial growth that came from a lot of other lines of business. I think from that perspective. We'll give you the exact numbers later on, but we expect our growth trajectory to continue despite the decision that we've announced today. If I may be specific, we had two super performing sector, traditional business sector in 2022 that are BFSI and travel and transportation. Understood. My second question is just around the timeline for this decision. How quickly will you exit this work? Can you clarify that the third-party audit that is taking place in the coming months will continue to examine your highly egregious content moderation operations? Clearly. Answer number one, all the audit that we have announced are clearly maintained and already engaged. I am going to let Olivier Rigaudy to give you more details on that. Yes, we have already agreed with a global standard on compliance audit firm to start an audit for compliance to labor law, notably in Colombia. This audit will go as planned, exactly on time. I can tell you that the finding will be made public as soon as we'll be able to publish them. Now, for your question on how fast we are exiting, we are not going to exit like robbers. Clearly, in the first stage, we are honoring the contract that are related to this content, except if the client accept to release us from the contract. We clearly stated that we will not renew it. Second, we have totally stopped to sell, to offer this service to the market. Very, very soon that you've had with your clients. Yes. Can you outline in more detail, perhaps conceptually, how you can continue to provide social media players with content moderation services without doing the highly egregious content moderation? That was my final question. Thank you. I understand very well, and it's an excellent question because it's a delicate and subtle one. I'm going to let Miranda Collard, who is our Global Chief Client Officer, to give you some color. Maybe Eric Dupuy can give you some color. Finally, Bhupender Singh is going to make a global synthesis on your question because it's a very important one. Yeah. Thank you, Daniel. I think the overarching themes right now for us is, like our employees, our clients would really like to continue with this work, but they are completely understanding about the issue this has created overall for Teleperformance. They trust us. They trust Teleperformance to be very professional during this time and really work through and navigate the issues and how we can partner to evaluate the business on how we move forward to segregate it out. Thank you. Eric, do you have something to add? Not much to add. It is true that our client trust us, and we have already engaged discussion with them on how we're gonna continue to support this business and exiting smoothly from highly egregious content. Thank you. Bhupender, do you want to wrap up? I will. Let's understand, and we made this point before also, the buyers of these services, the clients that we have actually are large, sophisticated organizations, and they don't take the vendor selection decision that easily. It's a fairly extensive process, and Teleperformance has gone through that process. A number of clients benchmarks, Teleperformance has been rated either the benchmark or very close to the benchmark. Just because of what has happened over the past one week, the clients also don't want to give up on all the investments that the two parties have done in essentially evolving and building this line of business, because this is an evolving field. It's something that did not exist. There are a lot of things that everyone is learning. We are contributing to the line of service development and maturity, and they want to leverage on that knowledge of TP, especially real experience of TP at doing things, doing interactions, doing processes at very large scale. That's why they want to continue with the partnership. Ultimately, what it means in terms of exact quantum of business, that needs to work out, but that's one of the primary drivers why clients want to continue to engage with TP on this topic. Thank you. Another question? Next up, we have Oscar Val Mas from JP Morgan. Your line is open. Please go ahead. Yes, good morning, Daniel and team. I have a couple questions. I'll take them one by one. The first one is going back to the magnitude of the potential impact. Could you give us a sense of how much or how many employees you have in the segregated part of content moderation dealing with egregious? At the worst case, of the 7% of the group that is content moderation, how much could be at risk and how much is unrelated, like advertising or labeling? Okay. It's again, extraordinarily difficult to give an answer at this specific moment on the second part of your question. The initial interaction that we had with our clients via Miranda's team and Eric's team make us pretty confident. The first part of your question, the number of employees who could have been in or who are in this segregated, highly egregious file is in the magnitude of. Here we have to check exactly how we define and country per country and process by process, but is in the magnitude of maybe the couple of percent or in any case not above 5% of our total content moderation workforce. Now, yes, the impact can be larger than that. For me, personally, I do not expect this impact, even in my worst perception, to represent more, I mean, even in the case of snowball, more than maybe 20%-25% of our total business in content moderation. This is subjective, this is a perception, and this is because I want to give you an answer from deep of my heart and my understanding. That's incredibly useful. Thank you very much. The second question is actually related to the call you hosted two nights ago. Just to clarify, when Teleperformance talk about attrition, the kind of 80%-90% a year, does that include if an employee moves from one workstream and customer to another or not? Yes. So it's... Okay. So, but, so the attrition at a group level should be less than that in terms of employees that leave Teleperformance- Yes, yes. -altogether. Yeah, yes. Somehow the attrition is less, but let's be clear, there is a reality of the customer experience frontline business, which is it's not a job that people do for a long time. Depending on the community economic condition where the people are, this job can be more or less attractive. There are a lot of differences in the attrition. I would say the attrition standards are the attrition of the industry. There is no way to transform it with a magic stick. Somehow it has always been the case, maybe it has been exaggerated over 2021, 2022 due to the work movement in some countries, it's part of the equation of this industry. It's an entry job. Employees learn a lot. They are very happy to progress within the company or to have an experience to find another job somewhere else and an experience at Teleperformance as an outstanding value. It's also a very demanding job, and I speak about normal content, normal customer experience and not content moderation. By the way, content moderation, as we told you, experience a ratio of attrition that are less than half of the normal ratio of attrition. I can tell you, I was myself, two days ago, making a one-to-one fireside chat and questions with content moderator employees. These people are proud of what they do, and they like their job. Just to be clear, the attrition that Teleperformance sees not on a contract level, but on a group, could be less than 80% or 90%? Yeah. Yeah. Okay. Yes. Yeah, yeah. Yeah, that's clear. Thank you. By the way, excuse me. Yeah. By the way, when we speak about attrition, we also penalize ourselves somehow, because, I mean, eight out of 10 and the two other employees that are not front line do absolutely not have this level of attrition. I would say it's almost the opposite. The seniority of the middle management and the top management at Teleperformance is such that it is very often perceived as a competitive advantage by the market and by our clients. By the way, you have a testimony of that with the team that is speaking to you today, because their combined seniority is way above we are. How many are we? Three, six, seven is way above 150 years. Yes. That's very clear. Thanks, Daniel. Next up, we have Simon Lechipre from Stifel. Your line is open. Please go ahead. Yes. Good evening. A few questions, please. First of all, as a follow-up to some previous question, is there any risks that this decision impact your ability to win future business development opportunities against some peers operating the full content moderation business and so being more likely to win contracts? There are always a possibility, but the point is, if Teleperformance, who is a kind of reference and benchmark in this market, come to such kind of decision, and if a new negative story come in the press without clearly understanding the essential role of content moderation, there is also a possibility that a significant numbers of our competitors are going to make the same choice. It's not a certitude, but we could infer that this might start a change in the content moderation management strategy of our largest client. Our largest client keeping inside the highly segregated file and outsourcing the non highly egregious file. Am I clear. Yes, very clear. Okay. Secondly, looking at the other segments of the content moderation business, specifically, what are the market dynamics and the level of growth and what is the competitive landscape? Is it, let's say, more tougher compared to this highly egregious part? No, it's the same. You know, content moderation has a lot to do with process, scalability, structure, audits and somehow, you know, trust and safety against scam, fake news, intellectual property. I'm going to take you another element that is not generally classified in trust and safety, but that is trust and safety. In the banking business, anti-money laundering, fraud risk prevention. Everybody has to understand that we are entering into a world that is more and more digital, in which the risk are increasing, and not only from data security breach, but from bad actors impersonating legitimate actors. Okay. We can understand that the other segments of the content moderation businesses are also growing at that kind of 20% also? Yeah. Okay. Just lastly, to come back on the third-party audit that you did in the U.S., do you think you will be able to share more details and notably the name of the audit team or it will never happen? You know, when you have a legal contract, and specifically in the U.S., you better clearly respect it. If our Chief Legal Officer is on the floor, I know she could not be here by video, but if she is, I would like her to give her point of view. Our Chief Legal Officer is a more than 40 years senior U.S. lawyer. Lee, are you around? No, it doesn't seem that Lee is around. Clearly, we will do our best, and we are doing our best to try to get at minimum an edited version or whatever, but a contract is a contract. We are not known to breach contracts. Next up we have Simona Sarli. Excuse me. I say that because there might be a mismatch in understanding between the French or the European Community and the U.S. community. U.S. is the rule of law and the strict rule of law, and a contract is a sacred document. Next up, we have Simona Sarli from Bank of America. Your line is open. Please go ahead. Yes. Thank you very much for taking my question. The first one, please, and I will take it again, one by one. It's a question for Bhupender and some of the initial remarks where he mentioned that some of the egregious content is part of segregated queues. How much is roughly instead dealt more generally by a broader group of content moderators? Therefore, operationally, how easy it is to terminate that part of the business? Thanks. Yeah. Simona, in terms of the quantum of business that is not segregated, it's in a similar order as the remaining, which is segregated. You can just kind of double that. That's the same order because for some clients it's segregated, for some clients it is not segregated. In some places it is segregated, in some places it's not segregated, but I think we can just double that number. How difficult or easy it is, it's not that straightforward because the routing is done by the AI engine. In some cases it can be done, in some cases it cannot be done. As we move forward, as AI becomes more intelligent, the routing will become more intelligent, so it'll be easier to segregate as we go ahead. Today, it may be somewhat more difficult. Okay. Thank you. A second question. Is highly egregious content higher margin than other lines in trust and safety, like, for example, the anti-scam? Answer is no. Yeah. The answer is no. Probably that was a mistake of the market because, in my own perception, it should be higher priced, allowing for higher selection, higher pay, higher protection, higher everything. This is not the market condition today. By the way, I would say the same thing. The people who are in the SWAT team in the police should be way better compensated than the people who are not in the SWAT team. I am not sure that the difference is sufficient, but that's another topic. Thank you. Lastly, even if, obviously, as you mentioned, it's a very small percentage of your total number of content moderators, so you were talking about less than 5%, what will happen to these people that have been working on segregated egregious content? Will they be reallocated to other business lines? Normally, yes. You know what? The beauty of Teleperformance is that we are a growing company, and typically we add between 20,000-30,000 net jobs in a year. These very good people, and we appreciate them, we respect them. I am sure that they are going to be sad that we take that decision, but we are not going to put them in trouble. That's a promise. It's in our best interests. The 5% we are speaking of is for the content moderation, it's not for the sales group. Yeah. Next up we have David Cerdan from Kepler. Your line is open. Please go ahead. Good evening. I have a couple of questions. The first one is just on the wording. In the press release you mentioned you stop the highly egregious content moderation activity. Does it include only the egregious content moderation? Because in some previous calls you have separated highly egregious from egregious. Just to be clear on this point. My second question is regarding your discussion with shareholders. How many shareholders have you discussed with on this point? What was the results of the discussion? I think that you had also some investors favorable to continue with the business. Can you explain this? Yeah, yeah. You know, when you take decisions, you always balance the plus and the minus, and you try to make the decision that is the most appropriate for your own business. Teleperformance has been taken into a kind of polemic over the last week. A trust crisis that according to me was totally fabricated. It was important to give a strong signal, even if individually we can question this decision. As the Global Executive Committee of Teleperformance, each of us unanimously support this decision. That's point number one. The point number two, the difference between egregious and highly egregious comes from our proximity to the field. Agustin Grisanti in Colombia, Bhupender and I in the U.S. interacting and clearly touching, seeing, listening. It's clear that depending on the cultural environment in which you are, egregious has very different perception. I'm going to give you an example. In the U.S., if you see in a post the word S with suspensive points, it's okay. If you say the word like we say it more or less 10 times a day in France in our casual discussions, it's egregious. You understand that it's the same for pictures. If you are in Europe, and if you see a picture of somehow a lady without a lot of clothes, it's not highly egregious. In some other country, it is. In the U.S., if you see two men kissing because it's the rule of the LGBTQ that is totally accepted by the community, it's not egregious. If you are in Egypt where it's illegal, it's egregious. There is localization, and definitely there are level into the egregious. That's why we took highly egregious. Highly egregious is, and I sent you back to the definition, flagrant, heinous, and odious content. The example is obviously the child sexual abuse. There are other kind of example, and we are going to work with our employees, with academics, with our clients to try to define a standard. We would love, by the way, if the governments of the world would define a standard. As the society evolve much faster than the lawmaker, we are going to try to define what is the appropriate standard. Just to be clear on the content moderation processes, 97% of the content is controlled by the artificial intelligence and the rest i s controlled by humans? How do you separate egregious from normal content? Is it the machine that do the job, or is there another process? It's the machine that does the job. Let's be clear. In the case of some clients that I'm not going to mention, but that have been evoked multiple times, it's an internal team at the client company. We'll take our last question from Nicole Manion from UBS. Your line is open. Please go ahead. Thank you for taking my questions. I have a couple or three actually. Firstly, the work that you said that you've been signing in the last week, can you confirm that that isn't content moderation of the highly egregious kind, or is that still to be determined? 'Cause you said you'd had some wins in last week. Maybe I'll ask that one first. Who said that? I'll answer that. The wins that I referred to were not in the highly egregious content space. Okay. Thanks. Just wanted to ask that you've obviously spent a lot of time over the last week or so presenting more insights into content moderation and including, again, the highly egregious part, seemingly with a view to sort of doing a bit more education around it. Is there something in particular or not? Absolutely not. Absolutely not. Our decisions is a result of a maturation process, integrating all the different component and making a trade-off that we expect to be positive for the group. Yeah, makes sense. Finally, just wanted to ask on sort of the cost side, as you work with your clients to sort of figure out what is highly egregious and what isn't, do you expect any higher costs in the business that remains, given that sounds like a sort of, you know, a greater effort to run the contracts? Secondly and relatedly, could there be any costs associated with contract exits, restructuring, that kind of thing that we should be aware of? Thanks. I don't think so because our intention is to work hand in hand with our client and not to approach this decision on a conflictual mode. Does on the long term the content moderation management generate more additional costs? If we think, if we prove that it must, it will be what it is. There is a market. There are best practice on the market. There is a cost to best practices and clients will choose what they want. There are no further question at this time. I would like to turn the conference back to Mr. Julien for any additional or closing remarks. This is very nice from you. You know what? I'm going to surprise everybody. I don't want to make any closing remark, but I would like the member of the Executive Committee, each of them to give the closing remark in one sentence. You are going to have a better flavor of what we think. Please, we are going to start by our Global Chief Client Officer, Miranda Collard, U.S. citizen. Thank you, Daniel. My closing comment would be, I feel very confident that we will be the professional partner that we've always been as Teleperformance. That we'll weather through this with our clients and continue to build and be exactly who we're expected to become in the future. Thank you for your time. Thank you. I suggest that the second one being Agustin Grisanti, who is Argentinian citizen, but presently in Colombia. Okay. My closing remark is that we are equally convinced about the importance of the content moderation and the role that it plays. That we are going to be close to our clients and we will get the best for our shareholders in the medium and long term. I'm going to ask Eric Dupuy, French citizen living in the USA. Okay. Chief Business Development Officer. As I don't want to repeat what Miranda says about the trust we have with our client, I just want to share some numbers. The traditional CS business in which we play for the last 45 years is 8x-9x bigger than the trust and safety business. I'm not even mentioning here that a lot of it is still captive. Even if we will reduce our sales investment against egregious content. Daniel. We cannot hear you, Eric. We cannot hear you. I'm going to pass in the interest of time. I'm going to pass to Bhupender Singh, Indian citizen living in London and currently present in New York City. Thank you, Daniel. I'll just reiterate a few points. One, we fundamentally believe trust and safety is an essential first responder service that is needed for the society. Number two, for this essential service, TP is possibly one of the very few global companies that can do it at scale professionally. Number three, our people who do this activity are proud of it and would like to continue doing it. Number four, our clients also, which are global majors, actually like TP and would have liked to find ways to continue doing this work. Having said all that, having listened to feedback from many of you over the past one week, we decided we would not be intellectually arrogant, because ultimately we work for all you guys. As a commercial establishment, we do need to deliver shareholder returns, and we've decided this tough decision. Thank you, Bhupinder. Our distinguished Chief what? Chief Financial Officer and Delegate CEO, Mr. Olivier Rigaudy, French citizen living in Paris, a rarity in Teleperformance. Yeah. Thank you, Daniel. I don't want to be long, and I'm not going to add many more stuff on what has been said by either Agustin or Bhupender or Miranda and Eric. What is clear is that this decision has been made just to make sure that the financial committees with whom we had a very good relationship over the last year will trust again us, and I believe that this is going to happen tomorrow. Just wanted to say again that it won't hurt dramatically the P&L on the prospect on the future of Teleperformance. I'm quite convinced this is going to be easily swallowed, as mentioned earlier on, like the COVID crisis. Finally, I'm going to finish this presentation by an Aesop sentence, which is, "Better to yield when it's folly to resist than to resist stubbornly and be destroyed." Thank you very much. Thank you. That concludes today's conference. Thank you, everyone, for your participation. You may now disconnect.