23 October 2014

Transcom Third quarter 2014 results presentation

Johan Eriksson, President & CEO

Pär Christiansen, CFO

Outstanding

Customer

Experience

Transcom at a glance

1

3

• A global customer experience

specialist...

• ...providing outsourced

customer care, sales,

technical support, and

collections services...

• ...through an extensive

network of contact centers

and work-at-home agents Transcom’s business is to

help make sure that our

clients’ customers form

positive perceptions of their

interactions with them.

”

What is Transcom?

4

Transcom in numbers

• 29,000 people…

• …representing more than 100 nationalities

• 54 contact centers, onshore, off-shore and near shore…

• …in 23 countries

• Delivering services in 33 languages...

• ...to over 400 clients in various industry verticals

• €653.2 million revenue in 2013

• Market cap: SEK 1,338.9 million as at September 30, 2014. Listed on Nasdaq Stockholm (TWW SDB B and TWW SDB A)

A global player serving clients in many industries

5

North Europe

Iberia &

Latam

North

America

& Asia

Pacific

Central & South

Europe

CMS

33%

24%

21%

21%

1%

Communi-

cations

Financial

Services

Retail

Public Sector

Services

61% 14%

6%

4%

7%

4%

Healthcare

3%

Other

Business mix

By region By industry

We have an extensive global footprint

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Country Domestic

Near shore Offshore

Sweden ✓ ✓

Norway ✓

Denmark ✓

Netherlands ✓

Estonia ✓ ✓

Lithuania ✓ ✓

Latvia ✓ ✓

Germany ✓

United Kingdom ✓

Italy ✓

Hungary ✓ ✓

Poland ✓ ✓

Croatia ✓ ✓

Serbia ✓

Tunisia ✓

Spain ✓

Portugal ✓

Chile ✓

Peru ✓ ✓

Colombia ✓

USA ✓

Canada ✓ ✓

Philippines ✓ ✓

• Domestic markets –

service delivery from the

customer’s country

• Near shore – service

delivery to countries in the

vicinity

• Offshore – service delivery

to countries far away

Update on important activities

• Divestment of credit management services business complete – focus on core customer care

business

• Expansion in Eastern Europe for domestic business (new sites in Szeged and Belgrade)

• Establishment of Gdansk as a multilingual site

• Entry into Colombia

• Several new client acquisitions with global potential

• Focus on expanding onshore volumes in the United States

• Launch of a research and innovation program with the objective of developing:

- New technological solutions and tools

- New operating models and processes

• Launch of “Transcom Cares” as the company’s overarching Corporate Social Responsibility

(CSR) governance program

• Re-domiciliation to Sweden from Luxembourg

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Our performance in Q3 2014

2

9

• Efficiency

improvements and

continuous focus on

underperforming areas

• Targeted sales efforts

- Growth with existing

clients in new

geographies

- Broadening client base

Positive progress on turnaround

We are focusing on enhancing Transcom’s performance

* Excluding non-recurring items.

599.2

631.8

560.2

589.1

554.1

605.6

653.2

2007 2008 2009 2010 2011 2012 2013

6.0%

4.4%

2.2%

0.7%

1.5%

2.7%4.3%

Revenue (€m)

Operating margin*

3.1%

1H 2014First Sept

2014

YTD

3.3%

Four-fifths of the revenue decrease in Q3 2014 is explained

by divestments and currency impact

52.3 48.2

34.7 35.1

31.4 30.4

29.4 31.0

8.2 1.4

Q3 2013 Q3 2014 10

Central &

South Europe

Iberia & Latam

North America

& Asia Pacific

North Europe

Change

-7.8%

CMS

Net revenue, Q3 2014 vs. Q3 2013

€m

+1.2%

-3.2%

+5.4%

-82.9%

146.0 156.0

• Revenue impacted by

CMS divestments

completed in order to

focus on the core CRM

business in prioritized

geographies (€-6.8m)

• Negative currency

impact: €-1.1m

Q3 2013 Q3 2014

Excluding divested operations and currency effects, revenue

decreased by 1.4% on a like-for-like basis

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146.0 148.1*

Net revenue, Q3 2014 vs. Q3 2013

on a like-for-like basis

€m -1.4%

* Like-for-like revenue in

Q3 2013 adjusted for

currency effects (€-1.1m)

and a number of CMS

divestments (€-6.8m)

€2.1m like-for-like

revenue decrease mainly

due to lower volumes in

Iberia & Latam and North

Europe

EBIT Q3 2013 One-off items 2013

One-off items 2014

Cost savings programs

Volume & efficiency

Expansion costs

Other EBIT Q3 2014

EBIT margin in core CRM business improved to 3.5%

(2.6% in Q3 2013)

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3.9 0.0 0.0

-1.3

-0.6

+3.5

EBIT, core CRM business

Q3 2013 vs. Q3 2014

-0.4 5.1

• Improvement mainly driven by the North America & Asia Pacific and North Europe

regions

EBIT Q3 2013 One-off items 2013

CMS divestment

Cost savings programs

Volume & efficiency

Expansion costs

Other EBIT Q3 2014

EBIT margin including CMS improved to 3.6%

(2.9% in Q3 2013)

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4.6 0.0

-1.3

-0.6

+3.5

EBIT, Transcom Group

Q3 2013 vs. Q3 2014

• Improvement mainly driven by the North America & Asia Pacific and North Europe

regions

-0.4 5.3

-0.5

EBIT margin increase mainly driven by improvements in the

North Europe and North America & Asia Pacific regions

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• North Europe: Improved performance in

Sweden, Norway and the Netherlands, as

well as divestment of loss-making Danish

CRM unit

• Central & South Europe: Increased

profitability in Germany and Poland.

Investments in new sites in Hungary and

Serbia had a counterbalancing effect.

• Iberia & Latam: Lower volumes and

efficiency in Chile, and lower volumes in

Spain

• North America & Asia Pacific: Increased

efficiency and cost reductions. North

American operations now profitable.

• CMS: Strategic review completed. All

units sold or integrated with core CRM

business.

2014

Jul-Sep

2013

Jul-Sep

EBIT margin

North Europe

Central & South Europe

Iberia & Latam

North America & AP

CRM*

CMS

Total

5.0%

2.3%

0.9%

5.2%

3.5%

13.0%

3.6%

3.2%

2.1%

2.7%

2.1%

2.6%

8.2%

2.9%

Key priorities in 2014

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Increase onshore seat utilization in North America

• Increase focus and accountability

• Focus on creating opportunities for profitable growth, also expanding

onshore footprint

Improve operational performance in the North Europe region

• We have ended a number of unprofitable client contracts

• Greater financial predictability through the implementation of a new

agreement with one of our largest clients

Improve operational performance in Latin America

• Address decreasing seat utilization and unsatisfactory efficiency levels in

Chile

• Presence in Colombia will support strategy to expand in fast-growing Latin

American markets

What will it take for Transcom to return to historical margins?

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Key performance driver Trend vs. Q3

2013

Q3 2014 vs. Q3 2013

Average Seat Utilization

ratio

88% vs. 86%

Share of revenue generated

offshore

22.5% vs. 19%

Average Efficiency ratio

(billable over worked hours)

n/a – positive development

Monthly staff attrition n/a – flat

Improvements on four KPIs vs. previous year

Continue improving key performance indicators

• Seat utilization

• Efficiency

• Offshore/onshore split

• Attrition

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75.9 80.7

86.3 91.1

94.6 94.4 90.1

85.7

67.0

32.1 38.1

59.3 56.7

49.7

36.2

55.3 54.3

38.4

0.00

0.50

1.00

1.50

2.00

2.50

3.00

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314

Gross debt (€ m) Net debt (€ m) Net debt/EBITDA

• Gross debt decreased by €18.7 million compared to the Q214 level

• Net Debt decreased by €15.9m compared to the Q214 level

• Net Debt/EBITDA ratio: 1.70 (2.30 in Q214)

• Financial cost €0.4m (€0.6m in Q214)

Debt & leveraging

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Going forward – Transcom’s strategic direction

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Transcom’s brand promise

Outstanding Customer

Experience, driving

revenue and brand

loyalty

”

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North America and Asia Pacific

• Continue expanding in local markets in Asia Pacific

• Expand onshore volumes in North America

Latin America

• Serving domestic markets and the US, in addition to Spanish clients

North Europe

• Leverage strong position in home market

Central Europe

• Primarily near shore opportunities

• Strong capability in expanding Eastern European markets

Growth opportunities

Stay up-to-date on Transcom

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Thank you! Questions?