Transcom Holding AB (publ): Fourth quarter report 2023

Q4 2023 highlights

• Revenue decreased to 189.7M€ (191.4)
• EBITDA excluding non-recurring items decreased to 25.0M€ (30.4)
• EBITDA margin excluding non-recurring items decreased to 13.2% (15.9%)
• Operating cash flow increased to 29.4M€ (24.8)
• Net debt/EBITDA increased to 3.7 (3.5)

January – December 2023

• Revenue increased to 737.9M€ (525.9)
• EBITDA excluding non-recurring items increased to 95.7M€ (93.3)
• EBITDA margin excluding non-recurring items amounted to 13.0% (13.0%)
• Operating cash flow increased to 62.5M€ (52.4)

Comments by the CEO:

Concluding the best year so far

Revenue for the fourth quarter amounted to 189.7M€ (191.4) and EBITDA was 25.0M€ (30.4). The decrease is primarily driven by the weak demand in discretionary consumer categories and a weak retail season. We continue to win new contracts both from new and existing clients but experience lower volumes from existing contracts.

Despite the weakness in Q4, Transcom concludes the best year so far, with revenue of 737.9M€ (717.3) and EBITDA of 95.7M€ (93.3). We are on a trajectory of profitable growth and since 2019, we have increased revenue with 36% and adjusted EBITDA with 96%.

Clients are looking for cost efficient solutions to address their demand challenges and we respond by accelerated our transformation in line with our strategy, further shifting our delivery towards AI & near & offshore delivery.

In February, Transcom signed the agreement to acquire VCosmos in India, with about 700 employees. India offers an unbeatable combination of competitive cost level and scalable talent pool. VCosmos has one of the most experienced customer service teams in the Indian market. The acquisition of VCosmos is perfectly in line with our strategy to strengthen our AI and near/offshore delivery.

Shortly after the year-end, Transcom successfully raised 65M€ in a private placement of senior secured notes, with the same terms as existing notes. The additional financing is intended for further acquisitions to accelerate our strategy.

Due to the weak consumer sentiment, we expect revenue and EBITDA to be subdued during the next couple of quarters. We are taking actions to further reduce cost and improve our competitiveness. We stand committed to our three-year plan of double-digit organic growth and 16% EBITDA margin.

Finally, I have had five fantastic years at Transcom. We’ve increased revenue and profitability, elevated employee and client satisfaction and significantly shifted the portfolio towards digital, near/offshore delivery and fast-growing clients in eCom & Tech. Transcom is now on a very solid footing and we’re entering a new phase of development of the company. At this point, I’ve concluded it is the right time for the company and me to hand over the baton to a new CEO. I’m incredibly proud of all colleagues and what we have achieved together with our clients. I’m convinced that the company will also continue to develop strongly in the future.

Jonas Dahlberg, President & CEO

Q4 2023 Financial Update Webcast

Transcom will host a live webcast on Thursday, February 22 at 9:00 CET. The presentation is available on https://www.transcom.com/global/about-us/investor-relations.

Presentation details

Date/Time: Thursday, February 22, at 9:00 am CET

Online Registration link: https://app.livestorm.co/transcom-holding/transcom-holding-ab-q4-2023-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. If you register in advance, you will be sent an email reminder an hour prior to the webcast.

For further information, please contact

Jonas Dahlberg, President & CEO
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 AI and 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 90 contact centers and work-at-home networks across 28 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.