Transcom Holding AB (publ): First quarter report 2023

First quarter 2023 highlights

• Revenue increased to 192.8M€ (175.6)
• EBITDA excluding non-recurring items increased to 25.5M€ (20.5)
• EBITDA margin excluding non-recurring items amounted to 13.2% (11.7%)
• Operating cash flow amounted to 17.9M€ (15.2)
• Net debt/EBITDA amounted to 3.4 (4.1)

Comments by the CEO: Strong start of the year

Transcom starts the year on a high note. Revenue for the first quarter increased to 192.8M€ representing 9.8% growth. The organic growth was 8.1% and primarily driven by the Service & Utilities sector in Europe.

Adjusted EBITDA excluding non-recurring items increased to €25.5 million (20.5) and the adjusted EBITDA margin increased to 13.2% (11.7%). The profitability improvements are driven by increased operational efficiency and continued mix-shift and is particularly strong in the Global English segment.

During the quarter, we won several important contracts, continuing our mix-shift towards profitable near/offshore locations and fast-growing client segments. Examples include a major offshore Trust & Safety program for a social media company and a major offshore customer service program for a fintech company.

Demand for near/offshore delivery and digital solutions is increasing. During the quarter, we launched T:Translate, our automated translation solution for voice and text-based channels, enabling our agents to serve customers in any language from low-cost locations.

In general, we experience a strong interest in our AI solutions such as chat-bots and agent assist solutions. As an industry leader in Digital Customer Experience and with a global delivery footprint, Transcom is well positioned to benefit from these market trends.

In line with our strategy to focus on fast growing clients in near/offshore locations, we exited a low margin contract in Spain in the beginning of Q2. This contract represents 25M€ annual revenue and essentially all staff and liabilities are subrogated to new operators, meaning that only limited restructuring costs will be recorded in the second quarter.

In the beginning of 2023 we scored new records on client satisfaction (NPS 74) and employee engagement (eNPS 43), boding for continued growth and increased profitability. We remain committed to our strategy of client focus and operational excellence, through strong culture and leadership. And we continue to shift our portfolio towards digital solutions, profitable near/offshore locations and fast growing client segments.

We are entering the second quarter with positive momentum, although growth is expected to slow down in the medium term. We are committed to double digit organic growth and to achieve 16% EBITDA margin by 2025.

Jonas Dahlberg, President & CEO

Q1 2023 Financial Update Webcast

Transcom will host a live webcast on Thursday, May 11 at 9:00 CET. The presentation is available on https://www.transcom.com/global/about-us/investor-relations.

Presentation details

Date/Time: Thursday, May 11, at 9:00 am CET
Online Registration link: https://app.livestorm.co/transcom-holding/transcom-holding-ab-q1-2023-results-presentation

Important note: Please register via the link above at least 5-10 minutes prior the webcast in order to obtain the webcast link.

For further information, please contact

Jonas Dahlberg, President & CEO Transcom
Phone: +46 (0)70 347 23 83, email: Jonas.dahlberg@transcom.com

Snejana Koleva, Chief Financial Officer
Phone: + 46 (0)70 508 3830, email: snejana.koleva@transcom.com

Helene Ruda, Head of Group communications
Phone: +46 (0)70 311 7560, email: helene.ruda@transcom.com

About Transcom

Transcom provides digitally enhanced customer experience (CX) services to some of the world's most ambitious brands. More than 300 clients globally, including disruptive e-commerce players, category redefining fintechs, and technology legends rely on us for on-, off-, and nearshoring services. Transcom’s over 30,000 employees work in over 85 contact centers and work-at-home networks across 27 countries, creating brilliant experiences in customer care, sales, content moderation and backoffice services. We help our clients drive their brands forward, customer satisfaction up and operating costs down. For more information, visit www.transcom.com.