Q4 2012 financial highlights
- Net revenue €162.9 million, a 14.1% increase compared to Q411 (€142.8 million)
- Gross margin 18.2%, a 0.5 percentage point decrease compared to Q411 (18.7%)
- Underlying gross margin 18.5%, a 0.2 percentage point decrease compared to Q411 (18.7%)
- EBITA €0.2 million compared to €2.2 million in Q411**
- Underlying EBITA €2.9* million compared to €2.2 million in Q411**
- EPS -2.0*** Euro cents compared to -1.3 Euro cents in Q411**
- The exchange rate impact on revenue was +€3.6 million, and the impact on EBIT was +€0.2 million
Full year financial highlights
- Net revenue €605.6 million, a 9.3% increase compared to 2011 (€554.1 million)
- Gross margin 18.5%, a 1.2 percentage point increase compared to 2011 (17.3%)
- Underlying gross margin 18.6%, a 0.8 percentage point increase compared to 2011 (17.8%)
- EBITA €6.9 million compared to €-26.2 million in 2011**
- Underlying EBITA €12.8 million compared to €6.8 million in 2011**
- EPS -2.4*** Euro cents compared to -63.1 Euro cents in 2011**
- The exchange rate impact on revenue was €15.2 million and the impact on EBIT was €0.4 million
* Excluding €1.9m in restructuring and other non-recurring costs related to a restructuring of the Company’s corporate and regional organizations, and €0.8m in non-recurring costs related to specific activities in France, mainly legal and professional fees
** Historical data reflects a reclassification of €0.3 million in costs from depreciation to amortization, and the correction of a prior year misstatement of Italian pension liabilities as described in note 2.3
*** Impacted by a €20.6 million write-down of goodwill and other intangible assets
Comments from the President and CEO
Revenue growth trend continued in Q412
The growth trend continued in the fourth quarter with revenue increasing by 14.1% compared to the same period last year. Most of the increase was organic, whereas foreign exchange effects added 2.5 percentage points to overall growth. Increasing volumes with our installed client base was the most significant growth driver. Revenue generated by new clients also contributed meaningfully to our top-line growth. This is a direct resut of our successful client development efforts during the year, not least in new geographical regions. We have signed agreements with several new clients in the Asia-Pacific region, not only in the Philippines but also in Australasia. We will continue to execute on our strategy to evolve some of our offshore locations into home markets in 2013. This will allow us to grow in new attractive markets, diversify our client base, and increase our seat capacity utilization as we increasingly serve clients across many time zones.
From a full-year perspective, revenue increased by 9.3% to €605.6 million. Again, most of this revenue growth was generated organically, while currency effects contributed 2.7 percentage points.
Underlying profitability improved despite significant expansion investments
Underlying EBITA, excluding restructuring and other non-recurring costs, was €2.9 million in Q412 (€2.2 million in Q411). Of the €2.7 million in restructuring and non-recurring costs in the quarter, €1.9 million is attributable to the previously announced restructuring of our corporate and regional organizations, and €0.8 million is related to specific activities in France.
The rapid growth in the North and North America & Asia Pacific region has created some operational challenges related to the start-up of new service agreements, and has also necessitated extra investments in order to ensure high-quality service delivery to our clients. Performance in the North region was impacted by ramp-up costs for a new client, and by expansion investments in Sweden, Latvia and Estonia. In the North America & Asia Pacific region, we have not yet reached optimal utilization of the investment in additional capacity put in place in Q312. Revenue associated with this investment has gradually been ramped up during the fourth quarter, and we expect the seat capacity utilization in the Philippines to stabilize at an adequate level by the end of the first quarter of 2013. In the credit management services (CMS) business, lower volumes negatively impacted results. Also, a reassessment of accrued revenue in CMS negatively impacted the Q412 EBITA by €0.4 million.
Transcom’s underlying EBITA in FY 2012 was €12.8 million (€6.8 million in FY 2011). In addition to previously announced restructuring and non-recurring costs, the underlying EBITA in FY 2012 also excludes €1.7 million in non-recurring costs related to Transcom’s French operations, mainly legal and professional fees (€0.8m in Q412, €0.6m in Q312 and €0.3m in Q212).
Johan Eriksson, President and CEO of Transcom
The report is also available for download on www.transcom.com.
Results Conference Call and Webcast
Transcom will host a conference call at 10.30 am CET (09:30 am UK time) on Thursday, February 14, 2013. The conference call will be held in English and will also be available as webcast on Transcom’s website, www.transcom.com.
To ensure that you are connected to the conference call, please dial in a few minutes before the start in order to register your attendance.
Sweden: 08-503 364 34
UK: +44 (0) 1452 555 566
US: +1 631 510 7498
For a replay of the results conference call, please visit www.transcom.com to view the webcast of the event.
For further information please contact:
Johan Eriksson, President and CEO +46 70 776 80 22
Stefan Pettersson, Head of Group Communications +46 70 776 80 88