Transcom Mid Quarter and CSR Update

March 5, 2013

Outstanding

Customer

Experience

TranscomMid-quarter and CSR update

Johan Eriksson, President & CEO

Stefan Pettersson, Head of Group Communications

Malin Lindfors Speace (Ethos International)

Agenda

2

1. Mid-quarter update2. Transcom Cares – background

and focus areas

3. Stakeholder dialogue –

presentation of results

(Ethos International)

6. Q & A

4. CSR objectives going forward

5. Supply Chain Management

(Ethos International)

Outstanding

Customer

Experience

Mid-quarter update

1

4

• A global customer

experience specialist...

• ...providing outsourced

customer care, sales,

technical support, and

credit management...

• ...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?

5

Transcom in numbers

• 29,000 people…

• …representing more than 100 nationalities

• 62 contact centers, onshore, off-shore and

near shore…

• …in 26 countries

• Delivering services in 33 languages...

• ...to over 400 clients in various industry verticals

• €653.2 million revenue in 2013

• Market cap: SEK 1,525.8 million as at December 30, 2013. Listed on NASDAQ OMX

Stockholm (TWW SDB B and TWW SDB A)

29000100622633400

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

Estonia

Latvia

Czech Republic

Hungary

Lithuania

Serbia

7

• Continuous focus

on underperforming

areas

• Growth in selected

areas and efficiency

improvements

• Broadening client

base

Positive progress on turnaround

During 2013, we continued to focus hard on enhancing Transcom’s performance

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*

* Underlying performance, excluding restructuring and other non-

recurring costs* Excluding non-recurring items.

8

65.071.0

75.980.7

86.391.1

94.6 94.4

11.917.2

32.138.1

59.3 56.7

49.7

36.2

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

Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413

Gross debt (€ m) Net debt (€ m) Net debt/EBITDA

• Gross debt stable compared to the Q313 level

• Net Debt decreased by €13.5m compared to the Q313 level

• Net Debt/EBITDA ratio: 1.40 (1.93 in Q313)

• Financial cost €1.3m (€2.0m in Q313)

Debt & leveraging

We have improved against the most important operational KPIs

9

Key performance

driver

Trend vs. 2012 2013 vs. 2012

Average Seat

Utilization ratio

(87% vs. 85%)

Share of revenue

generated offshore

(22% vs. 20%)

Average Efficiency

ratio (billable over

worked hours)

n/a (positive development)

Monthly staff

attrition

n/a (stable)

Improvements on four KPIs vs. previous year

Continue improving key performance indicators

• Seat utilization

• Efficiency

• Offshore/onshore split

• Attrition

In addition, we resolved a number of short-term challenges in 2013, which had weighed on our results

10

Stop the losses in France (€1m/month in 2012).

Successfully resolve tax claims

Lower corporate costs

Key priorities in 2014

11

• 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

• Higher costs due to ramp-down in Chile while simultaneously ramping up in Colombia

• Presence in Colombia will support strategy to expand in fast-growing Latin American markets

Transcom’s long-term strategic priorities are informed by these important trends

What we are seeing… Transcom is responding by…

More channels and increasing complexity• Rising interaction volumes with an

increasingly sophisticated customer base

• Social networks are emerging as important

customer channels

• Increasing product complexity

• Developing integrated channel

competencies

• Providing more insight due to increasing

customer demands

• Developing analytic platforms and KPIs

specific to customer service via non-voice

channels

Business Focus• While price is still an issue, more and more,

the focus is on generating revenue – up-

sell/cross-sell and customer retention – and

customer loyalty

• Sourcing, training and retaining the best

agents to deliver higher levels of customer

service

Market• Stagnant growth in mature, Western

outsourcing markets

• Significantly higher growth in emerging

markets, particularly APAC and Latin

America

• Seeking to capitalize on domestic

opportunities in developing markets to drive

growth and diversify revenue

• Developing traditional offshore locations as

delivery centers

• Increasing focus on community engagement

Outstanding

Customer

Experience

Transcom Cares – background and focus areas

2

Starting in November 2013, Transcom Cares is a global program

15

http://blog.transcom.com/tag/transcom-cares/




Transcom Cares focus areas

16

Starting in November 2013, Transcom Cares is our global CSR

governance program. We have three prioritized focus areas:

People developmentTo be recognized as a responsible employer, attracting people and

strengthening our brand in all our local markets.

Equality and diversityWe strive for gender equality on all levels, and are dedicated to show that equal

opportunity employment is part of our DNA.

Community engagementMany of our community engagement activities depend on our employees’

passion to contribute their time and energy, making us all proud to work at

Transcom.

Outstanding

Customer

Experience

3. Stakeholder dialogue –presentation of results

Ethos International

3

www.ethosinternational.se

Materiality process

• Materiality analysis is used to prioritise focus areas

• Based on significant economic, environmental and social impacts; and

• Influence on assessments and decisions of stakeholders

The process

AspectsRanking of

aspectsAspects in

Supply Chain

Materiality GRI COP

E.g. Human Rights Due Diligence according to Ruggie’sprinciples

Materiality

Strategic Operational Communication

E.g. No human right incidentin acquired business

Targets ActionsSustainability

reportFollow-up

KPIs based on ranking of aspects

For each aspect there are KPIs to use for follow-up on progress and to report on


Materiality result

Economic

A. Be transparent with financial reporting

B. Work proactively with anticorruption

C. Conduct sustainability risk assessments on

emerging markets

D. Source from local suppliers

E. Ensure a sustainable supply chain

F. Ensure high degree of customer satisfaction

G. Have a great customer experience brand

Social and Environmental

H. Strengthen our commitment to community

engagement

I. Uphold freedom of association and right to

collective bargaining for employees

J. Have fair and transparent recruitment

practices

K. Recruit from the local communities

L. Be an equal opportunity employer

M. Provide continuous training for employees

N. Focus on health and safety management for

employees

O. Focus on fair working conditions for

employees

P. Reduce our CO2 emissions

Internal

Exte

rnal

Low High

Low

Hig

h

P D

H

K

I

CE

JN

A

O

ML

B

G

F

G Internal rating in progress results not available yetF


Most important aspects in each stakeholder group

Owners

Investors

Equity

analysts

ESG analysts

• Provide continuous training for employees

• Be transparent with financial reporting

• Have fair and transparent recruitment practices


• Focus on fair working conditions for employees

• Be an equal opportunity employer


• Uphold freedom of association and right to collective bargaining

• Ensure high degree of customer satisfaction

Employees



• Work proactively with anticorruption

Clients

• Have fair and transparent recruitment practices



• Provide continuous training for employees


• Ensure high degree of customer satisfaction

• Focus on health and safety management for employees

Truly a people’s business

Outstanding

Customer

Experience21

22

Transcom is an important employer for young people

We employ ~20,000 people

every year, a majority of

whom are young people

It is our duty as an employer

to empower and coach our

people

At Transcom, they gain

excellent skills in

communication and sales

For many young people,

Transcom is their first job

>85% of Transcom’s managers are recruited internally

23

Agent

Team Leader

Business Manager

Contact Center Manager

Country Manager Support functions:

–IT

–Quality

–Operations

–HR

–Finance

Øistein Lund, Norway

First job at Transcom?

Started as agent in 1997

Current position?

Contact Center Manager

Norway (2006)

What do you like the most

about a career at Transcom?

”The possibility to

continuously take on new

challenges as the career

path is evolving. For me it

has been a great experience

to be part of the Transcom

Norway journey from the

beginning in 1997.

Dyne del Rosario-Tubbs,

Philippines


Started as Quality

Assurance Specialist in

April 2006

Current position?

Senior Client Operations

Manager (2013)



”I was given the opportunity

to test the waters in different

departments enabling me to

find out where I would like

to build a career. Transcom

has always been good at

looking after me and

addressing my concerns.”

Juan Brun, Spain


Started as team leader in

July 2002

Current position?

Operations Director for

Iberia & Latam Region

(2010)



”To be able to work with

committed and talented

people as our people makes

the difference in our

business, they are the

engine of the company”

Many of our senior leaders started out as agents or in junior support roles

Outstanding

Customer

Experience

CSR objectives going forward

4

26

What we have done

People Development

• >85% of managers

recruited internally – a true

career for young people

• Learn as we go – role

models and mentors

support our young leaders

on their road to success

• Caring managers – 90% of

employees feel they get

support from their

manager

• Extensive training

programs and talent

management programs in

place or to be launched

Equality and Diversity

• Employment of disabled

people, for example in the

Netherlands, Germany,

Spain, and Chile

• Women make up 61% of

our workforce, but 39% of

managerial employees –

we need to empower and

facilitate a more equal

distribution

• Diversity of cultures and

languages is key to our

service delivery, e.g. in

our multilingual centers

Community Engagement

• On-site child care centers,

pharmacies, and

employee microloans are

some activities supporting

our employees in the

Philippines

• Supporting the local

communities in the cities

or countries we are

operating in – via charity

organizations or direct

involvement

• Activities to aid poor

people in Latin American

countries and Asia

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Our objectives going forward

People Development

• Launch of a global Talent

Management program in

April 2014

• Global management

training program for

managers at all levels

• Attrition ratio in line with

market levels

Equality and Diversity

• Gender distribution -

manager ratio reflecting

our gender distribution for

the total workforce

• Diversity – more proactive

management and follow-

up

Community Engagement

• Transcom Cares program

launched globally in 2013

• Activities will continue to

be initiated and driven by

employees, supported by

Transcom

Transcom fully supports the ten principles of the UN Global Compact with

respect to human rights, labor rights, environmental care and anti-

corruption work.

These principles are an integral part of our corporate strategy, business

culture and day-to-day operations.

Policies and Codes of Conduct

Code of Business Conduct

• Ethical practices adopted across our company and the standards to which our people are expected to aspire.

• Action plan: All employees are obliged to sign the Code of Conduct and we also conduct traning sessions every year.

Supplier Code of Business

Conduct

• Standards to which our suppliers and partners are expected to adhere.

• Action plan: Supplier self-assessments and evaluation conducted by Ethos during Q1 2014.

Environmental Policy

• Our commitment to a responsible approach to reducing the environmental impact of our business and to encourage our people to adopt environmentally -friendly working practices.

• Action plan: Review of travel policies.

Transcom is a signatory of UN Global Compact

28

Outstanding

Customer

Experience

5. Supply Chain Management –Ethos International

5


Transcom supply chain management process

Outstanding

Customer

Experience

Q & A

6

Stay up-to-date on Transcom Cares activities

32

www.transcom.com blog.transcom.com

LinkedIn

http://www.transcom.com/

http://blog.transcom.com/

http://www.linkedin.com/company/transcom

http://www.linkedin.com/company/transcom

Transcom Mid Quarter and CSR Update

Investor Relations

Transcript of Transcom Mid Quarter and CSR Update