Transcom Q2 results presentation
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Transcript of Transcom Q2 results presentation
![Page 1: Transcom Q2 results presentation](https://reader031.fdocuments.ec/reader031/viewer/2022022412/58f347a91a28abe30e8b45d1/html5/thumbnails/1.jpg)
17 July 2014
TranscomSecond quarter 2014 results presentation
Johan Eriksson, President & CEO
Pär Christiansen, CFO
Outstanding
Customer
Experience
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Transcom at a glance
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• 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 agentsTranscom’s business is to
help make sure that our
clients’ customers form
positive perceptions of their
interactions with them.
”
What is Transcom?
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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)
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A global player serving clients in many industries
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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
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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
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Our performance in Q2 2014
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• 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
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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
34.629.9
31.729.2
10.7
6.8
Q2 2013 Q2 20149
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
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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%
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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
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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
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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%
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• 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
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Key priorities in 2014
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• 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
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What will it take for Transcom to return to historical margins?
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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
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71.075.9
80.786.3
91.194.6 94.4
90.185.7
17.2
32.138.1
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
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Going forward– Transcom’s strategic direction
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Transcom’s brand promise
Outstanding Customer
Experience, driving
revenue and brand
loyalty
”
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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
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Stay up-to-date on Transcom
20
www.transcom.com blog.transcom.com
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Thank you!
Questions?
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