TELEPERFORMANCE_Registration_document_2017

RISKS AND CONTROL

2.1 Risk factors

2.1 Risk factors

2.1.1 Operating risks

2.1.1.1 Business-related risks

■ a unique integrated network combining domestic, nearshore and offshore solutions; ■ constant innovation strategy aimed at increasing the value- added of the Group’s services; ■ worldwide presence to support the Group’s global clients; ■ secure processes in line with contractual provisions with clients (seeb2.1.1.6 Security and data protection risk ).

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Risk identification Teleperformance’s level of business is contractually related to that of its clients. A decline in a client’s business, whether or not arising from a general economic downturn, can affect the Group’s business. A client may also request that certain contractual conditions be amended. The price, which is a determining factor for certain business sectors (particularly in the telecommunications sector), or allocation of entrusted volumes are other aspects that can impact the Group’s business. Risk management Contractual clauses enable guarantees to be obtained in relation to certain criteria, such as volume, end-user satisfaction, as well as service quality, IT infrastructure, security systems and feedback provided by employees. The duration of contracts in the inbound calls business, which accounts for most of the Group’s revenue, varies between two and five years. Risk identification The outsourced customer experience management market is fragmented and competitive. However, the number of competitors operating worldwide is still limited (seeb1.2.3.1.2 Group Group’s competitive environment and position ). In each of the countries where it operates, the Group is faced with fierce competition comprising international and national businesses. These are generally companies specializing in contact center management, or companies offering outsourced general services and developing niche activities incorporated in a package offer. This environment may lead to certain constraints on prices, whether in connection with the award of a new contract or with the renewal of a contract with an existing client. The rise in such constraints in all of the Group’s markets could affect its business and profitability. Risk management In order to manage any risk of price constraints while catering for its clients’ needs, the Group has developed several strengths to set itself apart from its competitors: 2.1.1.2 Competition risks

2.1.1.3 Risks associated with regulatory and legislative changes

Risk identification In each country where the Group operates, its business may be subject to specific statutes and regulations in the fields of labor law, competition, consumer protection, data privacy and company law. The enactment of any regulation having a restrictive effect on the Group’s activity could impact growth. Governments and regulatory authorities may adopt regulations aimed at restricting outsourcing or improving consumer protections. For instance, numerous countries have adopted regulations giving individuals the option not to receive telemarketing calls. The risk of these regulations having a negative impact on the Group’s growth, which used to be considered material, is now much lower given the nature of the Group’s current activities. Risk management For several years now the Group has significantly increased its inbound call business and reduced the proportion of its outbound call business to individuals. The contribution of the inbound calls business to Group revenues is presented in sectionb1.2.2 Characteristics by activity . Risk identification Although Teleperformance’s business depends on its ability to renew its contracts and to sign new ones on profitable terms, no Group client represents more than 8% of revenue. Risk management With more than 850bclients, excluding LanguageLine Solutions, Teleperformance has the most diversified client base in the industry. Client concentration has tended to decrease over the last two years (seeb1.2.2 Characteristics by activity ). 2.1.1.4 Risks relating to potential client dependency

■ time-tested management and unrivaled credibility;

■ human capital development strategy that guarantees quality and reliability of service;

■ a highly client-oriented culture;

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Teleperformance bb - bb Registration documentbb 2017