Transcom Q213 results presentation

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Information about Transcom Q213 results presentation

Published on August 29, 2013

Author: TranscomGroup

Source: slideshare.net

18 July 2013 Transcom Second Quarter 2013 Results Presentation Johan Eriksson, President & CEO Outstanding Customer Experience

Transcom at a glance 1

3 • A global customer experience specialist... • ...providing outsourced customer care, sales, technical support, and credit management... • ...through an extensive network of contact centers and work-at-home agents Transcom’s business is to help make sure that our clients’ customers form positive perceptions of their interactions with them. ” What is Transcom?

Transcom in numbers • 29,000 people • 62 contact centers, onshore, off-shore and near shore • 26 countries • Delivering services in 33 languages... • ...to over 400 clients in various industry verticals • €605.6 million revenue in 2012 • Market cap: SEK 865.6 million as at June 28, 2013. Listed on NASDAQ OMX Stockholm (TWW SDB B and TWW SDB A) 4

We have an extensive global footprint Domestic markets  Austria  Netherlands  Slovakia  UK  Germany  Norway  Spain  Australia Near Shore Locations Offshore Locations  Chile*  Peru*  Philippines*  Tunisia 5  Czech Republic  USA  Canada  Italy  Poland  Sweden  Denmark  Portugal  Switzerland  Croatia * Developing into domestic/near shore markets  Canada  Croatia  Estonia  Latvia  Czech Republic  Hungary  Lithuania

Transcom’s service portfolio 6 • Customer service Customer experience specialists trained to support best-in-class product, service and brand experiences for our clients’ customers • Technical support Tiered support models, from the simplest questions to more complex support scenarios • Customer retention Preventing defection and maximizing the lifetime of a customer • Customer acquisition Acquiring new customers cost-efficiently, and building strong customer relationships as a basis for future interactions • Cross- and upselling Building relationships and identifying customer needs during any type of interaction, and taking appropriate action to satisfy the customer’s need • Credit management services (CMS) Early collections, Contingent collections and Legal collections

Recap of our situation and focus areas 7 Situation today and short-term focus • Transcom’s profitability has decreased in recent years, but is now improving • We see positive effects as a result of restructuring actions • Continuous focus on underperforming areas • Growth in selected areas and efficiency improvements • Broadening client base Market trends • Growth driven by domestic Asia Pacific and Latin America markets • Diversification (geography and business models) Going forward - Strategic direction • Creation of outstanding customer experiences, while helping clients to reduce cost and drive growth • Flexibility is critical

Our performance in Q2 2013 2

Revenue in Q2 2013 increased 13.0% compared to Q2 2012 38.0 43.9 27.0 31.6 28.9 34.6 25.7 27.514.0 15.8 13.8 13.1 Q2 2012 Q2 2013 9 Central Europe South Iberia North America & Asia Pacific North Growth +15.5% CMS Net revenue, Q213 vs. Q212 €m +17.0% +19.7% +7.0% +12.9% -5.1% 166.5 147.4 • Stable growth in our CRM operations • Main driver is increasing volumes with our installed client base • Several new clients added during the year also contributed significantly

EBIT Q212 Cost savings programs Volume & efficiency Expansion investments Corporate costs EBIT Q213 EBIT increased by €1.5m in Q2 2013 compared to Q2 2012 10 1.4 +2.5 +1.0 -1.0 -1.0 2.9

EBIT margin improvement driven by Central Europe and South 11 Including corporate cost allocations* 2013 Apr-Jun 2012 Apr-Jun EBIT margin North Central South Iberia North America & AP CRM CMS TOTAL 1.0% 1.9% 3.6% 3.2% 0.0% 1.9% 0.0% 1.7% 1.3% -10.0% -3.1% 4.8% 3.0% 0.4% 6.5% 0.9% • North: Shortfall compared to projected call volumes impacted profitability. New pricing model to be implemented gradually from Q413. • Central: Higher volumes and performance improvements in Germany and the Netherlands. • South: Deconsolidation of France as well as higher volumes and efficiency in Italy. • Iberia: Lower volumes in Chile with associated dismissal costs. • North America & Asia Pacific: Low capacity utilization onshore in North America offset profitable growth in Asia. • CMS: Impact of sale in Q113 of right to collect on a debt portfolio. Evaluation of strategic alternatives for CMS progressing; further details to be communicated when decision is made. Excluding corporate cost allocations* 2013 Apr-Jun 2012 Apr-Jun EBIT margin North Central South Iberia North America & AP CRM CMS TOTAL 4.8% 5.7% 7.3% 6.9% 3.5% 5.5% 3.8% 5.4% 4.7% -7.1% 0.4% 8.3% 6.3% 3.7% 10.1% 4.3% * Corporate costs increased from €5m in Q212 to €6m in Q213. This increase is of a temporary nature, and we expect corporate costs to begin decreasing in Q413.

We need to successfully address a number of short- and medium-term operational and financial challenges 12 Stop the losses in France (€1m/month in 2012). Increase onshore seat utilization in North America Successfully resolve tax claims Lower corporate costs Improve operational performance in Latin America Successfully implement action plan to improve operational performance in the North region

What will it take for Transcom to return to historical margins? 13 Key performance driver Trend vs. Q2 2012 Q2 2013 vs. Q2 2012 Average Seat Utilization ratio (88% vs. 85%) Share of revenue generated offshore (19% vs. 16%) Average Efficiency ratio (billable over worked hours) n/a (positive development) Monthly attrition n/a (slight increase) Improvements on four KPIs vs. previous year Continue improving key performance indicators • Seat utilization • Efficiency • Offshore/onshore split • Attrition

14 65.3 65.0 71.0 75.9 80.7 86.3 91.1 13.2 11.9 17.2 32.1 38.1 59.3 56.7 0.00 0.50 1.00 1.50 2.00 2.50 3.00 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 Q411 Q112 Q212 Q312 Q412 Q113 Q213 Gross debt (€ m) Net debt (€ m) Net debt/EBITDA • Gross debt increased by €4.9m vs. Q113 • Net Debt decreased by €2.6m compared to the Q113 level, despite €5.3m transfer in relation to former French subsidiary • Net Debt/EBITDA ratio: 2.38 (2.51 in Q113) • Financial cost €1.1m (€0.9m in Q113) Debt & leveraging

3 Going forward – Transcom’s strategic direction

16 Transcom’s brand promise Outstanding Customer Experience, driving revenue and brand loyalty ”

North America and Asia Pacific • Continue expanding in local markets in Asia Pacific Latin America • Serving domestic markets and the US, in addition to Spanish clients North Europe Central Europe • Near shore Short- and medium-term growth opportunities

18 Short-term focus • Continuous focus on executing turnaround in underperforming areas • Continued focus on revenue expansion and efficiency improvements • Increased focus on quality and service delivery to support significant ramp-up of new volumes Medium-to long-term priorities • Grow revenue in line with overall market growth in the markets where we choose to compete • Improve profitability and decrease earnings volatility - Continuously strengthen operational efficiency - Optimizing our geographic delivery mix - Focus on broadening our client base Summary: key priorities going forward

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