Transcom Holding AB (publ): Fourth quarter report 2024

Q4 2024 highlights

• Revenue increased to €193.0M (€189.7)
• EBITDA excluding non-recurring items increased to €29.2M (€25.0)
• EBITDA margin excluding non-recurring items increased to 15.1% (13.2%)
• Operating cash flow decreased to €15.4M (€29.4)
• Net debt/EBITDA increased to 4.1 (3.7)

January-December 2024

• Revenue increased to €744.6M (€737.9)
• EBITDA excluding non-recurring items decreased to €91.8M (€95.7)
• EBITDA margin excluding non-recurring items decreased to 12.3% (13.0%)
• Operating cash flow decreased to €62.2M (€62.5)
• Net debt/EBITDA increased to 4.1 (3.7)

Comments by the CEO:

Transcom delivers strong Q4 2024 results

Q4 2024 marked a period of continued progress for Transcom, demonstrating a 1.8% revenue growth compared to the same period last year, reaching €193.0 million. This growth was fueled by a 10% increase in the eCommerce & Tech sector and a 9.8% growth in the English-speaking segment. The EBITDA margin, excluding non-recurring items, reached 15.1%, primarily due to the strong performance of the eCommerce & Tech sector in the English-speaking segment.

We have made significant strides in our strategic priorities. Our focus on digital enablement is evident in the 43% penetration of advanced digital and AI solutions within our existing client base. Cost reduction initiatives, including restructuring and downsizing of underutilized capacity in Europe, have contributed to margin improvement. Our sizeable sales investments in 2024 have resulted in a strong pipeline of new opportunities, particularly in the US market, positioning us for continued growth, but have temporarily affected negatively our profitability in the year.

The current macro-economic environment presents both challenges and opportunities. Notably, client organizations are grappling with margin pressure coupled with highly aspirational expectations on technology impact. While this poses challenges, it also creates opportunities for us to help our clients to meet their objectives with a balance of labor arbitrage and technology that offers a demonstrable ROI.

The improved EBITDA margin excl. non-recurring items in Q4, reaching 15.1%, reflects our focus on operational efficiency and cost control. Operating cash flow for Q4 was €14.0 million, and while lower than last year due to timing effects on Net working capital, the full year operating cash flow remains healthy. We maintain a solid financial position with unused credit facilities totaling €65.8 million as of December 31, 2024.

The results in Q4 show improvement as compared to last year. The market remains challenging, however with our competitive offering in India, Egypt, Tunis, Colombia, the Philippines and nearshore Europe we remain committed to deliver the best value to our clients. We also continue to make significant leaps in deploying AI-solutions – the latest news related to significant enhancement to our India-based operations where Sanas accent translation technology is now available to all clients operating within Transcom’s India, ensuring unmatched communication clarity.

We are confident that these efforts will drive sustainable growth and enhance profitability, positioning Transcom for continued success in the dynamic CX landscape.

Brian Johnson, President & CEO

Q4 2024 financial update webcast

Transcom will host a live webcast on Thursday, February 13, 2025 at 16:00 CET. The presentation is available on https://transcom.com/about-us/investor-relations.

Presentation details

Date/Time: Thursday, February 13, 16:00 CET
Online Registration link: https://app.livestorm.co/transcom-holding/transcom-holding-ab-q4-2024-results-presentation

For further information, please contact

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

Helene Ruda, Head of Sustainability and Corporate 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 85 contact centers and work-at-home networks across 29 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.