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Transcom Q2 results presentation

Q2 and half-year results presentation.

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Transcom Q2 results presentation

  1. 1. 17 July 2014 Transcom Second quarter 2014 results presentation Johan Eriksson, President & CEO Pär Christiansen, CFO Outstanding Customer Experience
  2. 2. Transcom at a glance 1
  3. 3. 3 • A global customer experience specialist... • ...providing outsourced customer care, sales, technical support, and collections services... • ...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?
  4. 4. 4 Transcom in numbers • 29,000 people… • …representing more than 100 nationalities • 57 contact centers, onshore, off-shore and near shore… • …in 24 countries • Delivering services in 33 languages... • ...to over 400 clients in various industry verticals • €653.2 million revenue in 2013 • Market cap: SEK 1,650.3 million as at June 30, 2014. Listed on NASDAQ OMX Stockholm (TWW SDB B and TWW SDB A)
  5. 5. A global player serving clients in many industries 5 North Europe Iberia & Latam North America & Asia Pacific Central & South Europe CMS 32% 25% 20% 19% 4% Communi- cations Financial Services Retail Public Sector Services 61% 14% 6% 4% 7% 4% Healthcare 3% Other Business mix By region By industry
  6. 6. We have an extensive global footprint Domestic markets  Austria  Netherlands  Slovakia  UK  Germany  Norway  Spain  Australia Near Shore Locations Offshore Locations  Chile*  Peru*  Colombia*  Philippines*  Tunisia 6  Czech Republic  USA  Canada  Italy  Poland  Sweden  Denmark  Portugal  Switzerland  Croatia * Developing into domestic/near shore markets  Canada  Croatia  Serbia  Estonia  Latvia  Czech Republic  Hungary  Lithuania
  7. 7. Our performance in Q2 2014 2
  8. 8. 8 • Efficiency improvements and continuous focus on underperforming areas • Targeted sales efforts - Growth with existing clients in new geographies - Broadening client base Positive progress on turnaround We are focusing on enhancing Transcom’s performance * Excluding non-recurring items. 599.2 631.8 560.2 589.1 554.1 605.6 653.2 2007 2008 2009 2010 2011 2012 2013 6.0% 4.4% 2.2% 0.7% 1.5% 2.7% 4.3% Revenue (€m) Operating margin* 3.1% 1H 2014
  9. 9. Two thirds of the 8.7% revenue decrease in Q2 2014 is due to divestments and closures and to currency impact 51.0 48.7 38.6 37.3 34.6 29.9 31.7 29.2 10.7 6.8 Q2 2013 Q2 2014 9 Central & South Europe Iberia & Latam North America & Asia Pacific North Europe Change -4.5% CMS Net revenue, Q2 2014 vs. Q2 2013 €m -3.4% -13.6% -7.9% -36.4% 152.0 166.5 • Revenue impacted by divestments and closures in order to focus on the core CRM business in prioritized geographies (€-5.6m) • Negative currency impact: €-4.0m
  10. 10. Q2 2013 Q2 2014 Excluding divested or closed operations and currency effects, revenue decreased by 2.9% on a like-for-like basis 10 152.0156.9* * Like-for-like revenue in Q2 2013 adjusted for currency effects (€-4.0m) and a number of divestments and closures (€-5.6m) Closures and divestments: - Sale of a number of CMS units - Sale of Belgian operation - Closure of Valdivia site in Chile - Closure of Danish CRM operation €4.9m like-for-like revenue decrease mainly due to lower volumes in Iberia & Latam (Chile), North Europe and North America & Asia Pacific Net revenue, Q2 2014 vs. Q2 2013 on a like-for-like basis €m -2.9%
  11. 11. EBIT Q2 2013 One-off items 2013 One-off items 2014 Cost savings programs Volume & efficiency Expansion costs Other EBIT Q2 2014 Improved profitability in core CRM operations (€1.1 million cost due to re-domiciliation project impacted on the result this quarter) 11 2.6 -0.2 -1.1 -1.0 -1.2 +2.2 EBIT, core CRM business Q2 2013 vs. Q2 2014 +1.2 2.5 • €1.2m EBIT improvement excluding one-off items in Q2 2013 and Q2 2014, mainly driven by the North America & Asia Pacific and North Europe regions • Temporary drop in performance in Iberia & Latam: decreasing seat utilization and unsatisfactory efficiency in Chile
  12. 12. EBIT Q2 2013 One-off items 2013 One-off items 2014 Cost savings programs Volume & efficiency Expansion costs Other EBIT Q2 2014 EBIT comparison including CMS is negatively impacted by €1.3m due to sale of CMS units, in addition to the €1.1 cost for re-domiciliation 12 2.9 -0.3 -2.4 -1.3 -1.2 +2.2 EBIT, Transcom Group Q2 2013 vs. Q2 2014 • €1.2m EBIT improvement excluding one-off items in Q2 2013 and Q2 2014, mainly driven by the North America & Asia Pacific and North Europe regions +1.4 1.4
  13. 13. Excluding the €1.1m one-off cost due to the re-domiciliation, EBIT margin in the core CRM business improved from 1.6% to 2.5% 13 • North Europe: Improved performance in the Netherlands and divestment of loss- making Danish CRM unit • Central & South Europe: Profitable growth in Italy and Germany • Iberia & Latam: Lower volumes and efficiency in Chile and Portugal, ramp-up of volumes at new site in Colombia • North America & Asia Pacific: Increased efficiency and cost reductions • CMS: EBIT impacted by €1.3 million cost as a result of the divestments of a number of CMS units 2014 Apr-Jun 2013 Apr-Jun EBIT margin* North Europe Central & South Europe Iberia & Latam North America & AP CRM* CMS Total 3.8% 1.8% -1.4% 1.5% 1.6% -16.3% 0.9% 1.2% 2.0% 3.5% -0.1% 1.6% 3.0% 1.7% * Includes €1.1m cost for redomiciliation in Q2 2014
  14. 14. Key priorities in 2014 14 • Increase onshore seat utilization in North America • Increase focus and accountability • Focus on creating opportunities for profitable growth, also expanding onshore footprint • Improve operational performance in the North Europe region • We have ended a number of unprofitable client contracts • Greater financial predictability through the implementation of a new agreement with one of our largest clients • Improve operational performance in Latin America • Address decreasing seat utilization and unsatisfactory efficiency levels in Chile • Presence in Colombia will support strategy to expand in fast-growing Latin American markets
  15. 15. What will it take for Transcom to return to historical margins? 15 Key performance driver Trend vs. Q2 2013 Q2 2014 vs. Q2 2013 Average Seat Utilization ratio 87% vs. 88% Share of revenue generated offshore 22% vs. 19% Average Efficiency ratio (billable over worked hours) n/a - flat Monthly staff attrition n/a – positive development (decrease in staff attrition) Improvements on four KPIs vs. previous year Continue improving key performance indicators • Seat utilization • Efficiency • Offshore/onshore split • Attrition
  16. 16. 16 71.0 75.9 80.7 86.3 91.1 94.6 94.4 90.1 85.7 17.2 32.1 38.1 59.3 56.7 49.7 36.2 55.3 54.3 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 Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Gross debt (€ m) Net debt (€ m) Net debt/EBITDA • Gross debt decreased by €4.4 million compared to the Q114 level • Net Debt decreased by €1.0m compared to the Q114 level • Net Debt/EBITDA ratio: 2.30 (2.40 in Q114) • Financial cost €0.6m (€1.3m in Q114) Debt & leveraging
  17. 17. 3 Going forward – Transcom’s strategic direction
  18. 18. 18 Transcom’s brand promise Outstanding Customer Experience, driving revenue and brand loyalty ”
  19. 19. 19 Growth opportunities North America and Asia Pacific • Continue expanding in local markets in Asia Pacific • Expand onshore volumes in North America Latin America • Serving domestic markets and the US, in addition to Spanish clients North Europe • Leverage strong position in home market Central Europe • Primarily near shore opportunities • Strong capability in expanding Eastern European markets
  20. 20. Stay up-to-date on Transcom 20 www.transcom.com blog.transcom.com LinkedIn
  21. 21. Thank you! Questions?

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