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Transcom Q4 2014 results presentation

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Transcom Q4 2014 results presentation

  1. 1. 5 February 2015 Transcom Fourth quarter 2014 results presentation Johan Eriksson, President & CEO Pär Christiansen, CFO Outstanding Customer Experience
  2. 2. At a glance 1
  3. 3. 3 • A global customer experience specialist… • …employing 29,000 people… • …representing more than 100 nationalities... • …operating 54 contact centers, onshore, off-shore and near shore… • …in 23 countries… • …delivering services in 33 languages... • ...to over 400 clients in various industry verticals… • …generating €616.8 million revenue in 2014… • …with a market cap of SEK 1,649.1 million as at December 30, 2014. Listed on Nasdaq Stockholm (Mid Cap segment) under ticker TWW. Transcom in numbers
  4. 4. 4 • Founded in Sweden in 1995 • European expansion; focus on organic growth • Presence in 15 European countries at the end of 2001 • Transcom WorldWide formed in 2000, headquartered in Luxembourg • Shares were listed in 2001 • Acquisition-led growth • Diversification into debt collection via acquisitions • Expansion of near-shore services • Establishment in Latin America, serving Spanish clients • Expansion into North America & Asia through acquisition of NuComm and Cloud10 • Restructuring program to strengthen competitiveness and improve profitability • Focus on growth in prioritized geographies; divestment of smaller country operations • Divestment of Credit Management Services (CMS) unit, to focus on core customer care business • Re-domiciliation to Sweden • Growth with clients while creating more balanced client portfolio • Continuously improve service offering, focusing on advanced, value- added services • Strengthen global footprint • Ensure competitive operational platform This year, Transcom celebrates 20 years in business
  5. 5. 5 599.2 631.8 560.2 589.1 554.1 605.6 653.2 616.8 2007 2008 2009 2010 2011 2012 2013 2014 6.0% 4.4% 2.2% 0.7% 1.5% 2.7% 4.3% Revenue (€m) Operating margin* * Underlying performance, excluding restructuring and other non-recurring costs 3.5% We are now leaving the turnaround phase that we initiated at the end of 2011 • Focus on core customer care business • Targeted sales efforts -Growth with existing clients in new geographies -Broadening client base • Efficiency improvements and continuous focus on underperforming areas
  6. 6. • Like-for-like revenue growth • Significant margin improvement • Re-domiciliation to Sweden completed in Q4 2014 • Leaving the turnaround phase that we initiated at the end of 2011 • Mid-term financial targets externally communicated 6 Key messages
  7. 7. Our performance in Q4 2014 and FY 2014 2
  8. 8. 8 Q4 2013 Q4 2014 Like-for-like revenue, Q4 2014 vs. Q4 2013 €m 158.7152.6 • Like-for-like revenue in Q4 2013 adjusted for currency effects (€+1.1m), CMS divestments and site closures (€- 8.7m) • All regions contributed to the €6.1m like-for-like revenue increase On a like-for-like basis, revenue in Q4 2014 increased by 3.8%
  9. 9. 9 EBIT Q4 2013 One-off items 2013 One-off items 2014 CMS divestment Cost savings programs Volume & efficiency Expansion costs Other EBIT Q4 2014 2.2* +1.0 +1.2 +2.5 +3.8 -0.2 EBIT (mEUR) Q4 2013 vs. Q4 2014 -0.4 9.2 • Strong margin progression in the North America & Asia Pacific and North Europe regions * Excluding €21.1m intangible asset impairment in Q4 2013 -0.9 EBIT margin in Q4 2014 improved to 5.8% (1.3% in Q4 2013*)
  10. 10. 10 • North Europe: Higher business volumes in the region, and higher efficiency in Sweden and Norway • Central & South Europe: Higher efficiency in Italy mitigated start-up costs for new sites in Hungary and Serbia • Iberia & Latam: Positive impact from reversal of personnel-related accrual • North America & Asia Pacific: Increased efficiency and cost reductions. Positive development in Asia continues. 2014 Oct-Dec 2013 Oct-Dec* EBIT margin North Europe Central & South Europe Iberia & Latam North America & AP CRM* CMS Total 7.3% 3.8% 5.0% 6.4% 5.8% n/a 5.8% 2.3% 4.7% 1.1% -4.6% 1.3% 2.9% 1.3%* * Excluding €21.1m intangible asset impairment in Q4 2013 Particularly strong development in North America & Asia Pacific and North Europe regions in Q4 2014
  11. 11. 11 2013 2014 Like-for-like revenue, 2014 vs. 2013 €m 616.8613.6 • Like-for-like revenue in 2013 adjusted for currency effects (€-7.9m) and a number of CMS divestments (€-31.7m) On a like-for-like basis, revenue in 2014 increased slightly, by 0.5%
  12. 12. EBIT 2013 One-off items 2013 One-off items 2014 Cost savings programs Volume & efficiency Expansion costs EBIT 2014 12 14.2* -2.9 +0.3 +1.8 -3.3 +11.4 EBIT, core CRM business (mEUR) 2013 vs. 2014 21.4 • Considerable improvement in the North America & Asia Pacific region • North Europe and Central & South Europe regions also developed strongly * Excluding €21.1m intangible asset impairment in Q4 2013 EBIT margin in the core CRM business improved to 3.5% in 2014 (2.3% in 2013*)
  13. 13. 13 * Excluding €21.1m intangible asset impairment in Q4 2013 • North Europe: Higher volumes in the region and improved performance in the Netherlands, as well as divestment of loss-making Danish CRM unit • Central & South Europe: Growth and Increased efficiency in Italy, Germany and Poland. • Iberia & Latam: Volume decreases, mainly in Chile, impacted negatively. • North America & Asia Pacific: Increased efficiency and cost reductions. New profitable business in Asia. • CMS: Strategic review completed. All units sold or integrated with core CRM business. 2014 2013* EBIT margin North Europe Central & South Europe Iberia & Latam North America & AP CRM* CMS Total 5.3% 3.3% 0.9% 3.5% 3.5% n/a 3.5% 3.8% 2.9% 2.3% -1.1% 2.3% 4.6% 2.4%* Margin increase in 2014 mainly driven by improvements in North America & Asia Pacific and North Europe
  14. 14. 14 Key performance driver Trend vs. Q4 2013 Q4 2014 vs. Q4 2013 Average Seat Utilization ratio 89% vs. 85% Share of revenue generated offshore 23% vs. 22% Average Efficiency ratio (billable over worked hours) n/a – slight negative development Monthly staff attrition Decrease – positive development Improvements on four KPIs vs. previous year Continue improving key performance indicators • Seat utilization • Efficiency • Offshore/onshore split • Attrition We are continuing to focus on our key performance indicators
  15. 15. 15 80.7 86.3 91.1 94.6 94.4 90.1 85.7 67.0 62.8 38.1 59.3 56.7 49.7 36.2 55.3 54.3 38.4 24.6 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 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Gross debt (€ m) Net debt (€ m) Net debt/EBITDA • Gross debt decreased by €4.2 m compared to the Q314 level • Net Debt decreased by €13.8m compared to the Q314 level • Net Debt/EBITDA ratio: 0.9 (1.70 in Q314) Debt & leveraging
  16. 16. 16 2014 key priorities Status Increase onshore seat utilization in North America • We returned our North American business to profitability in 2014 • Focus on further improving capacity utilization, and driving future growth Improve operational performance in the North Europe region • Major improvements compared to last year Improve operational performance in Latin America • We have won new business with domestic clients, but volumes are still too low • Strong focus on improving capacity utilization and efficiency We have made good progress our key priorities for 2014
  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. Transcom has adopted a set of mid-term financial targets 19 • Like-for-like revenue growth of at least 5 percent per year • EBIT margin of at least 5 percent • Net debt/EBITDA ratio of maximum 1.0 • Provided that the net debt/EBITDA target is met, Transcom would be in a financial position to start paying a dividend in 2016, i.e. for the 2015 financial year We have a solid foundation from which to take the next steps in our development, our mid-term targets are:
  20. 20. Transcom strategic priorities 20 Grow together with our clients, while creating a more balanced industry and client portfolio Continuously improve our service offering, focusing on advanced, value-added services Strengthen Transcom’s global footprint Competitive operational platform
  21. 21. Organizational changes to be implemented in 2015 in order to increase focus and accountability in important areas 21 CEO North Europe Central & South Europe Iberia & Latam North America Asia Pacific Operations Finance Commercial HR • Chief Operating Officer (COO) appointed • Chief Commercial Officer (CCO) and Group HR Director to be appointed
  22. 22. 22 www.transcom.com blog.transcom.com LinkedIn Stay up-to-date on Transcom
  23. 23. Thank you! Questions?

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