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Author: Dominique Raviart
SR Teleperformance, the France-headquartered call-centre specialist, has announced a 2006 revenue target of €1.35-1.4bn (up from €1.196bn in 2005) and an operating margin target of 9.5% (up from 8.9% in 2005). It is also rumoured that the group will simplify its name to "Teleperformance".
Teleperformance is predicting 15% growth for 2006, of which 10% will be organic. However, Q1 activity was strong with 17.1% organic growth (and 30.1% in total). Europe was particularly buoyant, with organic growth reaching 21.5% to revenues of €156m. North America was also strong, with 10.2% organic growth. Meanwhile, Teleperformance continues to refocus its business on inbound calls (which now account for 66% of all revenues) and away from outbound calls, a move it initiated a couple of years ago, when the US passed legislation less favourable to cold calling.
The company is expanding out its worldwide presence: it is creating a subsidiary in Japan, and aims for an initial headcount of 150. This follows the launch of a subsidiary in Chile early this year. Teleperformance is also beefing up its offshore presence in Mexico (to service the US market) and will be launching operations in China in H2 of this year.
Considering the early Q1 numbers and the level of internal activity in Q1, we believe that Teleperformance will be able to reach and improve on its new growth targets. However, we are even more impressed by its operating margin guidance - 9.5% is not bad for a business often looked down on by IT outsourcers and BPOers, and described as low margin and "not sticky enough". Does this French player's performance reflect the overall performance of the market? Definitely not. However, the call-centre services industry is proving again its dynamism, despite its bad reputation.
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