Transcom Holding AB (publ): Third quarter report 2021

Third quarter 2021 highlights

• Revenue increased to 153.5 M€ (140.4)
• EBITDA excluding non-recurring items* amounted to 17.5M€ (18.5)
• EBITDA margin excluding non-recurring items amounted to 11.4% (13.2%)
• Operating cash flow amounted to -1.5M€ (20.9)
• Net debt/EBITDA amounted to 4.1 (3.4)

January-September 2021

• Revenue increased to 447.8M€ (400.4)
• EBITDA excluding non-recurring items* increased to 48.7M€ (47.1)
• EBITDA margin excluding non-recurring items amounted to 10.9% (11.8%)
• Operating cash flow amounted to 17.7€ (41.8)
• Net debt/EBITDA amounted to 4.1 (3.4)

Comments by the CEO:

Continued solid growth and new contract wins

Transcom delivered 9% revenue growth in the quarter, of which 6%p organic. The organic growth is primarily driven by continued positive development in the eCommerce & Tech sector while the acquisition of City Connect and consolidation of TMS constitute the acquired growth.

EBITDA improved by 0.2 MEUR when adjusting for Covid mitigation cost of 1.2 MEUR (1.0 MEUR taken as NRI Q3 2020). Growth in eCommerce & Tech and improvement of operational performance contributed positively to EBITDA, while weak demand in Spain impacted profitability negatively. Transcom has performed a restructuring of the Spanish business involving 300 employees, at a cost of 6 MEUR recorded as NRI.

ECommerce & Tech is the main growth and profit engine for Transcom. During the third quarter, the sector grew 33% and amounted to 45% of total revenue. During the last 12 months, the eCommerce & Tech sector delivered EBITDA of 47.8 MEUR at 18.2% margin.

Our sales momentum continues to be strong. Annual revenue of new contracts closed in the third quarter amounted to €22 million. During the year, Transcom has secured new business with annual revenue of 168 MEUR. These contract wins provide a solid foundation for continued organic growth into 2022.

Transcom continues to receive recognition for our strong digital offering. In October, IDC named Transcom a "major player" in digital customer care. This adds to similar praise from analyst firms such as Everest Group, ISG and HFS.

We expect a good ending of the year, supported by recent contract wins and operational improvements. Our strategy is focused on client service and operational excellence, through strong culture and leadership. Moreover, we are continuing our shift towards digital services, eCommerce & Tech and increased near/offshore delivery. We stand committed to our long term targets of double digit organic growth and 16% EBITDA margin.

Jonas Dahlberg, President & CEO

Q3 2021 Financial Update Webcast
Transcom will host a live webcast on Wednesday, November 17, 2021 at 9:00 CET. The presentation is available on https://www.transcom.com/en/investor-relations, direct link here.

Presentation details
Date/Time: Wednesday, November 17, 2021 at 9:00 CET
Online Registration link: https://app.livestorm.co/transcom-holding/transcom-holding-ab-q3-2021-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 is a global customer experience specialist, providing customer care, sales, technical support and credit management services through our extensive network of contact centers and work-at-home agents. We are more than 28,000 customer experience specialists operating in more than 60 contact centers across 25 countries, delivering services in 33 languages to international brands in various industry verticals.