Transcom Holding AB (publ): Fourth quarter report 2022

Fourth quarter 2022 highlights

• Revenue increased to 191.4M€ (175.3)
• EBITDA excluding non-recurring items increased to 30.4M€ (26.2)
• EBITDA margin excluding non-recurring items increased to 15.9% (14.9%)
• Operating cash flow increased to 24.8M€ (4.3)
• Net debt/EBITDA decreased to 3.5 (4.1)

January-December 2022

• Revenue increased to 717.3M€ (623.1)
• EBITDA excluding non-recurring items increased to 93.3M€ (74.8)
• EBITDA margin excluding non-recurring items increased to 13.0% (12.0%)
• Operating cash flow increased to 52.4M€ (22.0)

Comments by the CEO

Continuing on the positive trajectory - Concluding the best year so far

Transcom continues on the positive trajectory and concludes 2022 with the highest revenue and profitability to date. Revenue for the year amounted to 717.3 MEUR (+15.1%) and the EBITDA margin amounted to 13.0% (+1.0pp).

The fourth quarter marked a continuation of the positive trend. Revenue increased to 191.4 MEUR, growing 9.2%, of which 7.2pp organic. The organic growth was primarily driven by ramp-up of new contracts in the eCommerce & Tech and the Service & Utilities sector within the European segment.

EBITDA increased to 30.4 MEUR (26.2), and the EBITDA margin increased to 15.9% (14.9%). The profitability improvements are primarily attributable to the eCommerce & Tech sector within the European segment.

We continue to execute the cost reduction program launched in the second quarter, aiming to adjust our delivery to an increased share of permanent Work-at-Home and to further increase our internal efficiency. The program is on track to deliver annualized savings of 10 MEUR by January 1, 2023, compared to the run rate cost base of the first quarter 2022.

Demand for near/offshore and digital solutions are increasing, as clients are looking for ways to mitigate labour shortage and wage inflation in Europe and North America. To meet this demand, we opened additional capacity in Cairo (Egypt), Tetovo (Northern Macedonia) and Porto (Portugal) during the fourth quarter.

In December we announced the acquisition of Forcontact, a customer experience specialist focused on luxury and fashion eCommerce clients, predominantly serving the Italian market from nearshore locations.

We remain committed to our strategy of client focus and operational excellence, through strong culture and leadership. We continue to shift our portfolio towards eCommerce & Tech, near/offshore delivery, and digital solutions.

Although growth is slowing down in the short-term, amid muted consumer spending, we are entering the first quarter with positive momentum. We stand committed to our long-term targets of double-digit organic growth and 16% EBITDA margin.

Jonas Dahlberg, President & CEO

Q4 2022 Financial Update Webcast

Transcom will host a live webcast on Thursday, February 23 at 9:00 CET. The presentation is available on https://www.transcom.com/global/about-us/investor-relations, direct link here.

Presentation details

Date/Time: Thursday, February 23, at 9:00 am CET

Online Registration link: https://app.livestorm.co/transcom-holding/transcom-holding-ab-q4-2022-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.