Transcom Q1 2015 presentation
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This document provides an overview of Transcom's first quarter 2015 results presentation. Some key points: - Transcom is a global customer experience specialist with over 30,000 employees in 23 countries serving over 400 clients. - In Q1 2015, revenue increased 2.4% on a like-for-like basis compared to Q1 2014. EBIT margin improved to 3.7% from 3.4% driven by higher profitability in certain regions. - Key performance indicators such as seat utilization and efficiency ratios improved compared to the previous year, and staff attrition decreased. - Transcom's strategic priorities going forward include delivering outstanding customer experiences to drive revenue and loyalty, capital
Transcom Q1 2015 presentation
- 1. 21 April 2015 Outstanding Customer Experience Transcom First quarter 2015 results presentation Johan Eriksson, President & CEO Pär Christiansen, CFO
- 3. 3 • A global customer experience specialist… • …employing 30,000 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 2.1 billion as at March 31, 2015. Listed on Nasdaq Stockholm (Mid Cap segment) under ticker TWW. Transcom in numbers
- 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. Steady improvement towards our mid-term EBIT margin target of at least 5 percent 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% Q1 2013 Q1 2014 Q1 2015 5 12-month rolling EBIT* margin development * Excluding non-recurring items Mid-term target • Targeted sales efforts -Growth with existing clients in new geographies -Broadening client base • Efficiency improvements and continuous focus on underperforming areas
- 6. 6 Q1 2014 Q1 2015 Net income, Q1 2015 vs. Q1 2014 €m 5.3 1.6 Net income improved significantly in the quarter • €2.5m improvement in net financial items • Income tax decreased by €0.7m (current tax in Q1 2015: 25%)
- 7. Our performance in Q1 2015 2
- 8. 8 Q1 2014 Q1 2015 Like-for-like revenue, Q1 2015 vs. Q1 2014 €m 160.9157.1 • Like-for-like revenue in Q1 2014 adjusted for currency effects (€+4.6m) and CMS divestments (€-6.7m), and one-off effect in Q1 2014 (€-0.9m due to sale of right to collect on portfolio) • The €3.8m like-for-like revenue increase was mainly driven by higher business volumes in North Europe and Iberia & Latam • We are refocusing our efforts on revenue growth, targeting at least 5% On a like-for-like basis, revenue in Q1 2015 increased by 2.4%
- 9. 9 EBIT Q1 2014 One-off items Q1 2014 Cost savings programs Volume & efficiency Expansion costs Other EBIT Q1 2015 5.4 -2.1 +1.7 -0.2 +0.6 +0.4 EBIT (mEUR) Q1 2014 vs. Q1 2015 5.9 EBIT margin in Q1 2015 improved to 3.7% from 3.4% (1.6% in Q1 2014 excluding CMS and one-off effect) • EBIT in Q1 2014 includes €1.0m from since-divested CMS units and a positive €0.9m one-off effect • Excluding the effects mentioned above, the EBIT margin improved by 2.1 percentage points • Higher profitability in the North America & Asia Pacific and Iberia & Latam regions
- 10. 10 • North Europe: EBIT strengthened due to higher volumes and improved efficiency in the Netherlands. EBIT in Q1 2014 was positively impacted by a €0.9m one-off item. • Central & South Europe: Lower volumes in Italy and start-up of new projects. • Iberia & Latam: Improved profitability in Chile and Portugal. Continued focus on improving efficiency in Latin America. • North America & Asia Pacific: Increased efficiency and cost reductions. Positive development in Asia continues. EBIT margin improvement driven by higher profitability in North America & Asia Pacific and Iberia & Latam 2015 Jan-Mar 2014 Jan-Mar EBIT margin North Europe Central & South Europe Iberia & Latam North America & AP CRM CMS* Total 4.8% 4.2% 1.3% 3.5% 3.7% n/a* 3.7% 4.8% 5.3% -1.1% 0.3% 2.3% 18.1% 3.4%** * Divested since Q1 2014 ** 1.6% excluding CMS and €0.9m one-off effect in Q1 2014
- 11. Trend vs. Q1 2014 Q1 2015 vs. Q1 2014 Average seat utilization ratio Average Efficiency ratio (billable over worked hours Monthly staff attrition 89% vs 88% n/a – slight positive development Decrease – positive development 11 Improvements on KPIs vs. previous year Key drivers to reach mid-term profitability targets
- 12. 12 80.7 86.3 91.1 94.6 94.4 90.1 85.7 67.0 62.8 56.7 38.1 59.3 56.7 49.7 36.2 55.3 54.3 38.4 24.6 27.1 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 Q115 Gross debt (€ m) Net debt (€ m) Net debt/EBITDA • Gross debt decreased by €6.1m compared to the Q414 level • Net Debt increased by €2.5m compared to the Q414 level • Net Debt/EBITDA ratio: 0.9 (0.9 in Q414) Debt & leveraging
- 13. 3 Going forward – Transcom’s strategic direction
- 14. 14 Transcom’s brand promise Outstanding Customer Experience, driving revenue and brand loyalty ”
- 15. Attractive market growth 15 • 5-6% annual growth in customer management BPO in the next five years • Fastest growth in emerging APAC and Latam… • …but the bulk of the industry increase will be generated in mature markets, in particular the United States
- 16. An industry in change 16 PRIMARY CHANNELS USED: •Telephone, including voice and interactive voice response (IVR) self-service •Email response management •Web chat •Social media monitoring and response •Knowledge management for Web-based self-service
- 17. Frost & Sullivan recognizes Transcom’s growth and innovation in multiple customer care outsourcing markets 17 • 2015 European Frost & Sullivan Award for Visionary Innovation Leadership • 2014 Peru Frost & Sullivan Award for Growth Excellence Leadership • 2014 Philippines Contact Center Outsourcing Growth Excellence Leadership Award
- 19. 19 www.transcom.com blog.transcom.com LinkedIn Stay up-to-date on Transcom