Transcom Holding AB (publ): Second quarter report 2023

Second quarter 2023 highlights

• Revenue increased to 174.8M€ (172.7)
• EBITDA excluding non-recurring items increased to 20.0M€ (19.4)
• EBITDA margin excluding non-recurring items increased to 11.4% (11.2%)
• Operating cash flow increased to 5.8M€ (0.1)
• Net debt/EBITDA decreased to 3.5 (3.9)

January – June 2023

• Revenue increased to 367.6M€ (348.3)
• EBITDA excluding non-recurring items increased to 45.5M€ (39.9)
• EBITDA margin excluding non-recurring items increased to 12.4% (11.4%)
• Operating cash flow increased to 23.7M€ (15.4)
• Net debt/EBITDA decreased to 3.5 (3.9)

Comments by the CEO: Increased demand for near & offshore delivery enhanced by AI & digital solutions

Revenue for the second quarter increased to 174.8M€, representing 5.9% organic growth excluding the exit of a low margin contract in Spain during the beginning of the quarter. EBITDA increased to 20.0M€ (19.4) and the EBITDA margin, excluding non-recurring items, increased to 11.4% (11.2%). 

During the quarter, we won several contracts from new and existing clients, continuing the positive mix shift towards AI & digitally enabled, near/offshore delivery. We implemented about a dozen AI solutions, mainly for clients within logistics, travel, fintech and retail.

We were again recognized as a Technology and Service Excellence Leader by analyst group Quadrant Knowledge Solutions, highlighting our attractive AI offering, driving customer experience and productivity for our clients, and supporting clients’ transformations.

While we are continuing to win new business, volumes in existing contracts are negatively impacted by the current macroeconomic environment, in particular due to weakness in discretionary consumer categories in eCom & Tech. As clients are seeking solutions to reduce cost, we are offering an industry leading portfolio of AI & digital solutions and a global footprint with cost effective near/offshore delivery.

After the end of the reporting period, Transcom announced the acquisition of timeframe AG, with about 20M€ revenue and upper “teens” EBITDA margin. Timeframe strengthens Transcom’s offering for the German market, including adding Greece as an attractive nearshore delivery location. 

During 2023, we have scored new records on client satisfaction and employee engagement, providing a solid platform in the current market environment. We remain committed to our strategy of client focus and operational excellence, through strong culture and leadership. We continue to shift our portfolio towards fast growing segments, AI & digital services, delivered from near/offshore locations.

We expect revenue growth and profitability improvements to remain uncertain during the next few quarters, given the current macro environment. We are planning actions to further reduce cost and improve our competitiveness. Longer term, we stand committed to our targets of double-digit organic growth and 16% EBITDA margin.

Jonas Dahlberg, President & CEO

Q2 2023 Financial Update Webcast

Transcom will host a live webcast on Thursday, August 24 at 9:00 CET. The presentation is available on https://www.transcom.com/global/about-us/investor-relations.

Presentation details

Date/Time: Thursday, August 24, at 9:00 am CET

Online Registration link: https://app.livestorm.co/transcom-holding/transcom-holding-ab-q2-2023-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 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.