English

Transcom: Interim report 1 January – 30 June 2015

”Transcom’s revenue and margin increased in Q2. Looking at our rolling 12-month EBIT margin development, we are confirming the steady improvement towards our mid-term target of at least five percent.”

Johan Eriksson, President & CEO of Transcom

Key highlights Q2 2015

  • Revenue increased by 3.3%, like-for-like 2.6%, driven by higher volumes in the Central & South Europe and Iberia & Latam regions
  • EBIT margin improved from 0.9% to 3.0%. Excluding items affecting comparability in Q2 2014, the margin improvement was 0.5 percentage points
  • Profitability improvements in all regions
  • Significant decrease in net debt


Q2 2015 financial highlights

  • Net revenue €157.0 million, a 3.3% increase compared to Q2 2014 (€152.0 million). Adjusted for exchange rate impact as well as for divested operations, revenue increased by 2.6%
  • Gross margin 19.3%, flat compared to the same period 2014
  • EBIT €4.7 million compared to €1.4 million in Q2 2014
  • EPS 4.3 Euro cents compared to -4.8 Euro cents in Q2 2014


YTD 2015 financial highlights

  • Net revenue €317.9 million, a 1.9% increase compared to the same period 2014 (€312.1 million). Adjusted for exchange rate impact as well as for divested operations, revenue increased by 2.5%
  • Gross margin 19.5% compared to 20.0% in the same period 2014
  • EBIT €10.6 million compared to €6.8 million in the same period 2014
  • EPS 24.9 Euro cents compared to 1.4 Euro cents in the same period 2014


COMMENTS FROM THE PRESIDENT AND CEO

We are making good progress against all our financial targets. Both Transcom’s revenue and EBIT margin improved in the second quarter. Growth in the Central & South Europe and Iberia & Latam regions drove the revenue increase, while all regions contributed to improved profitability. Also, our balance sheet continues to strengthen.

3.3% REVENUE INCREASE

Revenue increased by €5.0 million (+3.3%) and on a like-for-like basis, adjusting for divestments and currency effects, revenue in Q2 2015 increased by €3.9 million (+2.6%). This was driven by growth with clients in the Central & South Europe and Iberia & Latam regions.

The reported €5.0 million revenue increase is comprised of:

  • €-4.3 million: divestment of CMS units that Transcom completed in 2014 in order to focus on the core customer care business
  • €+5.4 million: positive currency translation impact
  • €+3.9 million: growth in Central & South Europe and Iberia & Latam

We are focusing on organic revenue expansion, with a mid-term target of reaching at least five percent.

IMPROVED EBIT MARGIN AND A STRENGTHENING BALANCE SHEET

Transcom’s EBIT margin in Q2 2015, was 3.0%, compared to 2.5% excluding items affecting comparability in Q2 2014. Profitability improvements in all regions contributed to the increase.

If we consider Transcom’s EBIT margin development on a rolling 12-month basis, we can confirm a steady improvement towards our mid-term target of at least five percent. 12-month rolling EBIT in Q2 2015, excluding items affecting comparability, reached 3.8 percent.

We are also improving in relation to our third financial target, i.e. net debt/EBITDA. Our target is for this ratio to be 1.0 or lower. This quarter, net debt/EBITDA was 0.3, compared to 2.3 in Q2 2014.

Our objective going forward is to increase revenue organically, while continuing to improve our operational efficiency in order to strengthen margins further. One particular area of focus is Latin America, where we have faced a challenging situation during the past year. Performance is progressively improving on the back of growth with new domestic clients. Our operation in Chile returned to profitability in June, and we see a significant improvement in Peru.

MANAGEMENT CHANGES

On June 15, Pär Christiansen, Transcom’s previous CFO, started in his new role as Chief Operating Officer (COO), handing over his responsibilities as Chief Financial Officer (CFO) to Ulrik Englund. Philip Sköld, our new Chief Commercial Officer (CCO), will join Transcom on August 8.

Johan Eriksson, President and CEO of Transcom

The interim report is also available for download on www.transcom.com

Results Conference Call and Webcast

Transcom will host a conference call at 10:30am CET (09:30am UK time) on Thursday, July 16, 2015. The conference call will be held in English and will also be available as webcast on Transcom’s website, www.transcom.com.

Dial-in information

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. No pass code is required.

Sweden: +46 8 505 564 74

UK: +44 203 364 5374

US: +1 855 753 2230

For a replay of the results conference call, please visit www.transcom.com to view the recorded webcast of the event.

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Transcom WorldWide AB (publ) discloses the information provided herein pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication on July 16, 2015 at 08:00 AM CET.


For further information please contact:

Johan Eriksson, President and CEO                              +46 70 776 80 22

Ulrik Englund, CFO                                                         +46 70 286 85 92       

Stefan Pettersson, Head of Group Communications      +46 70 776 80 88