Transcom Q113 results presentation
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Transcom Q113 results presentation Transcom Q113 results presentation Presentation Transcript

  • 18 April 2013 Transcom First 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 • 30,000 people • 70 contact centers, onshore, off-shore and near shore • 27 countries • Delivering services in 33 languages... • ...to over 400 clients in various industry verticals • €605.6 million revenue in 2012 • Market cap: SEK 1046.2 million as at March 28, 2013. Listed on NASDAQ OMX Stockholm (TWW SDB B and TWW SDB A) 4
  • We have an extensive global footprint Home markets  Austria  Netherlands  Slovakia  UK  Belgium  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 home/near shore markets  Canada  Croatia  Estonia  Latvia  Czech Republic  Hungary  Lithuania
  • Transcom’s organization 6 • Corporate management - CEO, CFO, CIO, Head of Operations, Head of Global Sales & Accounts • Regional management - North region (25% of revenue) - Iberia (19% of revenue) - North America & Asia Pacific (19% of revenue) - South (16% of revenue) - Central Europe (10% of revenue) - Credit Management Services (CMS) in eight European countries (10% of revenue)
  • Transcom’s service portfolio 7 • 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 8 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 Q1 2013 2
  • Revenue in Q1 2013 increased 15.9% compared to Q1 2012 38.1 43.2 25.4 31.6 30.6 33.2 24.6 28.014.0 16.7 14.4 17.8 Q1 2012 Q1 2013 10 Central Europe South Iberia North America & Asia Pacific North Growth +13.5% CMS Net revenue, Q113 vs. Q112 €m +24.5% +8.3% +13.9% +19.3% +23.3% 170.5 147.1 • All units contributed positively to the top-line growth • Main driver is increasing volumes with our installed base clients • Several new clients added during the year also contributed • Revenue benefited from €3.8m in compensation received for transferring the right to collect on a Swedish debt portfolio • France deconsolidated from March 1 (effect in Q113: -€0.9m)
  • EBIT increased by €5m in Q1 2013 compared to Q1 2012 11 Restructuring net effects Volume & efficiency- driven gains Expansion investments Other EBIT Q113 EBIT Q112 1.1 +2.3 +4.3 -1.7 +0.1 6.1 • €3.8 million positive impact in Q113 as a result of compensation that Transcom has received in exchange for transferring our right to collect on a Swedish debt portfolio • €6.0 million positive impact in Q113 due to a capital gain following the deconsolidation of our former French subsidiary, offset by €6.0 million in restructuring and other non-recurring costs • EBIT in Q112 included a non-recurring cost of €1.3 million related to site closures in North America
  • EBIT margin improvements in North America & APAC, Central Europe, South and CMS, counterbalanced by North and Iberia 12 2013 Jan-Mar 2012 Jan-Mar EBIT margin North Central Europe South Iberia North America & AP CMS TOTAL 0.2% 3.4% 4.7% 2.0% -2.0% 23.4% 3.6% 3.4% -1.9% -4.9% 5.5% -4.8% 6.0% 0.7% • Volume and efficiency-driven performance improvements in North America & Asia Pacific, Central Europe and South • Deconsolidation of France as well as higher volumes and efficiency in Italy benefited South • North: Volume fluctuations against forecast, leading to overstaffing, and salary increases • Iberia: Impact of early Easter • CMS: Compensation received for transferring our right to collect on Swedish debt portfolio
  • We need to successfully address a number of short- and medium-term operational and financial challenges 13 Stop the losses in France (€1m/month in 2012). Transcom plans to stop financing the French subsidiary’s loss-making operations beyond March 1, 2013. Increase onshore seat utilization in North America Successfully resolve tax claims Germany – renegotiate labor agreements Return UK CMS to profitability Successfully implement action plan to improve operational performance in the North region
  • What will it take for Transcom to return to historical margins? 14 Key performance driver Trend vs. Q1 2012 Q1 2013 vs. Q1 2012 Average Seat Utilization ratio (89% vs. 83%) Share of revenue generated offshore (21% vs. 16%) Average Efficiency ratio (billable over worked hours) n/a (positive development) Monthly attrition n/a (unchanged) Improvements on four KPIs vs. previous year Continue improving key performance indicators • Seat utilization • Efficiency • Offshore/onshore split • Attrition
  • 111.2 65.3 65.0 71.0 75.9 80.7 86.1 73.4 13.2 11.9 17.2 32.1 38.1 59.3 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 0.0 20.0 40.0 60.0 80.0 100.0 120.0 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Gross debt (€ m) Net debt (€ m) Net debt/EBITDA • Gross debt increased by €5.4m vs. Q412 • Net Debt increased by €21.2m compared to the Q412 level • Net Debt/EBITDA ratio: 2.51 (1.97 in Q412) • Interest charge €0.9m (€0.7m in Q412) Debt & leveraging
  • 3 Going forward – Transcom’s strategic direction
  • 17 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
  • 19 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
  • Thank you! Questions?