Financial results for the first quarter of 2002

FINANCIAL RESULTS FOR THE FIRST QUARTER OF 2002 Luxembourg, 25 April 2002 - Transcom WorldWide S.A. ('Transcom') (Stockholmsbörsen: TWWA, TWWB; Nasdaq: TRCMA, TRCMB) today announced its financial results for the three months ended 31 March 2002. HIGHLIGHTS · Net sales of ?58.1 million · Gross margin improves to 24% (20%) · EBITDA up 48% to ?6.7 million · Operating profit margin more than doubles to 6.2% with operating income up 112% to ?3.6 million · Geographical expansion increases number of employees to more than 6,300 and seats to 4,555 · ?17 million of new contracts secured since year end Consolidated income statement (? 2002 2001 2001 million) Q1 Q1 Full Year Net Sales 58.1 59.1 215.3 Earnings before depreciation and 6.7 4.5 14.6 amortization Operating income 3.6 1.7 2.3 Income after financial items & 3.5 1.5 1.4 before income tax and minority interest Net result 2.2 1.0 -0.8 Earnings per share (?) 0.03 0.01 -0.01 Basic number of shares outstanding 63,630,248 62,938,677 63,053,939 OPERATING REVIEW Transcom continued to show a strong development in operating profitability during the first quarter, delivering a 112% increase in operating income. Sales remained stable despite the weaker economic conditions in the first quarter of 2002, particularly in the telecommunications sector, compared to the same period last year. The capital investment in organically building out the network in 2001, by adding six new call centers, enabled Transcom to reduce the amount of 'overflow' business outsourced to 3rd party suppliers from 20% in the first quarter of 2001 to approximately 5% in 2002. This reduction, together with further improvements in efficiency levels due to strict cost control and above industry average utilisation rates, impacted positively on both the gross margin, which increased to 24% (20%), and the operating margin, which was up to 6.2% (2.9%). The Group provides a broad range of customer relationship management services, comprising inbound and outbound teleservices relating to customer service, technical support and telemarketing, as well as internet services and fulfillment tasks. Transcom has the widest geographical coverage of any call center organization in Europe. Net sales in the Nordic region increased by 9.7% year on year to ?26.6 million, while net sales on the continent amounted to ?31.5 million in the first quarter. Transcom continued its expansion in the first quarter and employed more than 6,300 people in 27 call centers in 16 countries by the end of the quarter. The Group entered the Lithuanian market for the first time with the acquisition of Neltelink in Vilnius, in April. Neltelink currently employs 100 people and has a strong client list of well-known brands. This expansion to cover all three Baltic States reflects the presence of Transcom's principal customer, Tele2 AB, in the region. The Group already has operations in Tallinn (Estonia) and Riga (Latvia) and is well positioned for further growth into Eastern Europe. The geographical expansion of Transcom's operations will continue and is particularly focused on the establishment of new operations in Western Europe. The forward order book remains strong and Transcom has already secured new contracts that will generate ?17 million of revenues in 2002, as well as an additional ?30 million of newly committed revenues for 2003. Following the reorganization and expansion of the sales forces in each of Transcom's three regions in 2001, as well as increased investments in marketing, the number of outstanding quotes to potential customers has doubled compared to the same period last year. Transcom derives a significant proportion of its income from its principal client, the rapidly expanding Tele2, the leading pan-European telecommunications service provider. This relationship continues to enable Transcom to organically develop the largest call center network in Europe. Transcom's sales not related to the Tele2 group amounted to ?8.1 million in the first quarter. The operating results for 2002 will continue to benefit from the additional capacity and increased efficiency levels arising from the opening of new call centers in Tulle (France), Halle (Germany), Vordingborg (Denmark), Borås (Sweden), Casablanca (Morocco) and Riga (Latvia) during 2001. FINANCIAL REVIEW Earnings before interest, taxes, depreciation and amortization increased by 48% to ?6.7 million (?4.5 million). Combined depreciation and amortization for the period increased to ?3.1 million (?2.8 million), reflecting the expansion in 2001. Operating profits for the first three months of 2002 consequently more than doubled to ?3.6 million (?1.7 million). Transcom's pre-tax profits were up 133% to ?3.5 million (?1.5 million), whilst profits after tax also more than doubled to ?2.2 million from ?1.0 million for the same period last year. Cash flow management continued to improve year on year with operating cash flow increasing to ?5.8 million (?1.7 million) for the first quarter due to the increase in profits, as well as improvements in working capital principally arising from the reduction in capital expenditure from ?3.4 million to ?1 million. As a result, Transcom had liquid funds of ?18.8 million (?8.0 million) at the end of the quarter, up from ?17.6 million at the year end. Long term debt of ?15.5 million remained at the same level as at 31 December 2001, comprising the drawn down element of the ?27.5 million convertible loan from Industriförvaltnings AB Kinnevik. The equity to assets ratio at the end of the quarter was 58% (60%). OTHER INFORMATION Transcom's financial results for the second quarter of 2002 will be announced on 6 August 2002. The shareholders' annual general meeting will be held on 28 May 2002 in Luxembourg. This interim report has not been subject to review by the Company`s auditors. The Board of Directors of Transcom WorldWide S.A.. Luxembourg, 25 April 2002. For further information please contact: Vigo Carlund, President and CEO +46 8 562 000 00 Matthew Hooper, Investor & Press enquiries +44 20 7321 5010 Transcom WorldWide is a rapidly expanding Customer Relationship Management (CRM) solution provider, with 27 call center operations employing more than 6,300 people in 16 countries - Luxembourg, Sweden, France, Denmark, Germany, Finland, Italy, Switzerland, Norway, the Netherlands, Spain, Austria, Morocco, Estonia, Latvia and Lithuania. The company provides CRM solutions for companies in a wide range of industry sectors, including telecommunications and e-commerce, travel & tourism, retail, financial services and utilities. Transcom offers clients a broad array of relationship management services, including inbound and outbound call handling, Interactive Voice Response, Internet Services, e-mail processing and fax broadcast. Client programs are tailor-made and range from single applications to complex programs, which are offered on a country-specific or international basis in up to 38 languages. Transcom WorldWide S.A.'A' and 'B' shares are listed on the NASDAQ National Market under the symbols TRCMA and TRCMB and on the Stockholmsbörsen O-List under the symbols TWWA and TWWB. ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/04/25/20020425BIT01020/wkr0001.pdf The full report