Post on 22-Jun-2015
description
23 October 2014
Transcom Third quarter 2014 results presentation
Johan Eriksson, President & CEO
Pär Christiansen, CFO
Outstanding
Customer
Experience
Transcom at a glance
1
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
Transcom in numbers
• 29,000 people…
• …representing more than 100 nationalities
• 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
• €653.2 million revenue in 2013
• Market cap: SEK 1,338.9 million as at September 30, 2014. Listed on Nasdaq Stockholm (TWW SDB B and TWW SDB A)
A global player serving clients in many industries
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North Europe
Iberia &
Latam
North
America
& Asia
Pacific
Central & South
Europe
CMS
33%
24%
21%
21%
1%
Communi-
cations
Financial
Services
Retail
Public Sector
Services
61% 14%
6%
4%
7%
4%
Healthcare
3%
Other
Business mix
By region By industry
We have an extensive global footprint
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Country Domestic
Near shore Offshore
Sweden ✓ ✓
Norway ✓
Denmark ✓
Netherlands ✓
Estonia ✓ ✓
Lithuania ✓ ✓
Latvia ✓ ✓
Germany ✓
United Kingdom ✓
Italy ✓
Hungary ✓ ✓
Poland ✓ ✓
Croatia ✓ ✓
Serbia ✓
Tunisia ✓
Spain ✓
Portugal ✓
Chile ✓
Peru ✓ ✓
Colombia ✓
USA ✓
Canada ✓ ✓
Philippines ✓ ✓
• Domestic markets –
service delivery from the
customer’s country
• Near shore – service
delivery to countries in the
vicinity
• Offshore – service delivery
to countries far away
Update on important activities
• Divestment of credit management services business complete – focus on core customer care
business
• Expansion in Eastern Europe for domestic business (new sites in Szeged and Belgrade)
• Establishment of Gdansk as a multilingual site
• Entry into Colombia
• Several new client acquisitions with global potential
• Focus on expanding onshore volumes in the United States
• Launch of a research and innovation program with the objective of developing:
- New technological solutions and tools
- New operating models and processes
• Launch of “Transcom Cares” as the company’s overarching Corporate Social Responsibility
(CSR) governance program
• Re-domiciliation to Sweden from Luxembourg
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Our performance in Q3 2014
2
9
• 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 2014First Sept
2014
YTD
3.3%
Four-fifths of the revenue decrease in Q3 2014 is explained
by divestments and currency impact
52.3 48.2
34.7 35.1
31.4 30.4
29.4 31.0
8.2 1.4
Q3 2013 Q3 2014 10
Central &
South Europe
Iberia & Latam
North America
& Asia Pacific
North Europe
Change
-7.8%
CMS
Net revenue, Q3 2014 vs. Q3 2013
€m
+1.2%
-3.2%
+5.4%
-82.9%
146.0 156.0
• Revenue impacted by
CMS divestments
completed in order to
focus on the core CRM
business in prioritized
geographies (€-6.8m)
• Negative currency
impact: €-1.1m
Q3 2013 Q3 2014
Excluding divested operations and currency effects, revenue
decreased by 1.4% on a like-for-like basis
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146.0 148.1*
Net revenue, Q3 2014 vs. Q3 2013
on a like-for-like basis
€m -1.4%
* Like-for-like revenue in
Q3 2013 adjusted for
currency effects (€-1.1m)
and a number of CMS
divestments (€-6.8m)
€2.1m like-for-like
revenue decrease mainly
due to lower volumes in
Iberia & Latam and North
Europe
EBIT Q3 2013 One-off items 2013
One-off items 2014
Cost savings programs
Volume & efficiency
Expansion costs
Other EBIT Q3 2014
EBIT margin in core CRM business improved to 3.5%
(2.6% in Q3 2013)
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3.9 0.0 0.0
-1.3
-0.6
+3.5
EBIT, core CRM business
Q3 2013 vs. Q3 2014
-0.4 5.1
• Improvement mainly driven by the North America & Asia Pacific and North Europe
regions
EBIT Q3 2013 One-off items 2013
CMS divestment
Cost savings programs
Volume & efficiency
Expansion costs
Other EBIT Q3 2014
EBIT margin including CMS improved to 3.6%
(2.9% in Q3 2013)
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4.6 0.0
-1.3
-0.6
+3.5
EBIT, Transcom Group
Q3 2013 vs. Q3 2014
• Improvement mainly driven by the North America & Asia Pacific and North Europe
regions
-0.4 5.3
-0.5
EBIT margin increase mainly driven by improvements in the
North Europe and North America & Asia Pacific regions
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• North Europe: Improved performance in
Sweden, Norway and the Netherlands, as
well as divestment of loss-making Danish
CRM unit
• Central & South Europe: Increased
profitability in Germany and Poland.
Investments in new sites in Hungary and
Serbia had a counterbalancing effect.
• Iberia & Latam: Lower volumes and
efficiency in Chile, and lower volumes in
Spain
• North America & Asia Pacific: Increased
efficiency and cost reductions. North
American operations now profitable.
• CMS: Strategic review completed. All
units sold or integrated with core CRM
business.
2014
Jul-Sep
2013
Jul-Sep
EBIT margin
North Europe
Central & South Europe
Iberia & Latam
North America & AP
CRM*
CMS
Total
5.0%
2.3%
0.9%
5.2%
3.5%
13.0%
3.6%
3.2%
2.1%
2.7%
2.1%
2.6%
8.2%
2.9%
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
What will it take for Transcom to return to historical margins?
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Key performance driver Trend vs. Q3
2013
Q3 2014 vs. Q3 2013
Average Seat Utilization
ratio
88% vs. 86%
Share of revenue generated
offshore
22.5% vs. 19%
Average Efficiency ratio
(billable over worked hours)
n/a – positive development
Monthly staff attrition n/a – flat
Improvements on four KPIs vs. previous year
Continue improving key performance indicators
• Seat utilization
• Efficiency
• Offshore/onshore split
• Attrition
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75.9 80.7
86.3 91.1
94.6 94.4 90.1
85.7
67.0
32.1 38.1
59.3 56.7
49.7
36.2
55.3 54.3
38.4
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
Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314
Gross debt (€ m) Net debt (€ m) Net debt/EBITDA
• Gross debt decreased by €18.7 million compared to the Q214 level
• Net Debt decreased by €15.9m compared to the Q214 level
• Net Debt/EBITDA ratio: 1.70 (2.30 in Q214)
• Financial cost €0.4m (€0.6m in Q214)
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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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
Growth opportunities
Stay up-to-date on Transcom
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www.transcom.com blog.transcom.com
Thank you! Questions?