March 2020 Investor Presentation
Agenda 1 Transcom at a glance 2 2 Business update and strategic priorities 8 3 Key credit highlights 15 4 Key financials 26 5 Supporting materials 33 1 Confidential
Transcom at a glance 1 2 Confidential
Transcom – a Nordic contact center champion with a global footprint Full service offering in 33 languages through 51 sites in 20 countries Transcom in numbers International footprint and offering Transcom is active in 20 countries , with 51 sites serving clients in 33 languages Privately-owned since Operating 1.5m+ 51 2017 Europe North America 40 sites across 1,000+ work-at-home 16 countries by Altor, a leading Nordic agents 33 languages private equity firm customer interactions on contact centers worldwide: a daily basis on-shore, near-shore and €543m off-shore, in addition to work-at-home agents 2019A sales 27,000 Philippines 11 sites delivering off-shore 200+ services to English - 33 speaking regions languages clients served globally across a employees in 20 countries spoken diverse range of industries Global presence : Albania, Canada, Croatia, Estonia, Germany, Hungary, Italy, Latvia, Lithuania, Netherlands, Norway, Philippines, Poland, Portugal, Serbia, Spain, Sweden, Tunisia, United Kingdom, US Sales overview (2019A) 1) Key financials (€ m) By geography/language By industry 579 Telco & cable Commerce & 544 543 logistics Global English 29% 33% 34% 9,2% 7,2% 6,3% 66% Europe 50 36 39 38% Services & 2017A 2018A 2019A utilities Sales Adj. EBITDA Adj. EBITDA margin % Note: 1) Breakdown excluding non-material unreconciled sales. 3 Confidential
A leading provider of outsourced customer relationship management solutions… Future-proof multi-channel delivery on a global scale …supporting clients’ digital agenda by …delivering services in 33 languages to Transcom is a global customer care provider offering future-proof customer- combining core services with leading digital international brands in various industries capabilities and tools… facing concepts delivered by a global team of local specialists… Services & utilities 27,000 Conversational customer experience commerce specialists Utilities BFSI Gov & Media Travel Health- care serving customers via... Digital Gamification channels Commerce & logistics Core services Auto- Logistics Retail/ IT/Tech White Robotic Chatbots process motive e-commerce goods Call Chat E-mail automation Telco & cable Interaction analytics Messaging Social media Telco Cable 4 Confidential
…with a highly competitive digital offering… At the forefront of developing high-value digital solutions Customer experience (CX) Digital interactions Digital process automation Gamification management ▪ ▪ ▪ ▪ Global business intelligence : Digital channels Chatbots : AI serving as customer Gamification: application of game- data-driven analysis and reporting service representative to both agent design elements in a non-game - Messaging (conversational and end-consumer. Often context. Game types cover the full commerce) embedded in chat or messaging agent life-cycle needs: ▪ Interaction analytics : insights from - Webchat channel - Leadership in-depth analysis of - communications between end- Social media - Employability customer and Transcom’s clients ▪ Robotic process automation : - Rating-apps automation of repetitive manual - Operational back-office process - Self-service ▪ CX advisory services : advisory on - Commercial designing, implementing and ▪ managing best-in-class customer Robotics desktop automation : experience solutions real-time automation of front-end tasks on the screen of the agent Strong focus on increasing digital customer penetration Digital solutions implemented for 45% of top 20 clients ▪ Launch of T:Labs – Transcom’s hub for rapid digital innovation and experimentation with our clients ▪ Best cloud implementation Best use of customer insights, finalist Innovation & CX Awards ▪ 5 Confidential
…serving an established portfolio of satisfied blue -chip clients Quality offering well- entrenched in clients’ operations Services & utilities Commerce & logistics Telco & cable Transcom agents providing high-quality service Integrated into the clients’ systems Technically trained Updated and prepared Up-sell, cross-sell and retention Trained agents able to answer “entry - Agents are incentivised by KPIs set by level” queries, with a pass -through Agents are aware of changes to clients’ Agents can access clients’ systems clients and can offer pre-agreed deals system in place – i.e. transferring product offering and are prepared to and provide live information about should a client call to terminate a customers to senior Transcom agents handle potential complaints deliveries and other requests contract (where necessary) 6 Confidential
Transcom is riding the key trends that will shape the industry going forward Digitalisation, shift in service mix, market consolidation and increased outsourcing to drive market development Key industry trends Technological capabilities ▪ New technologies , such as AI and analytics, will have a significant long-term impact and shape the future of the CRM/BPO industry Robotic Cognitive / New technologies Analytics artificial ▪ process However, the market will continue to be dominated by human interactions in the automation intelligence and ongoing foreseeable future digitalisation ▪ New technologies will automate some interactions but mainly augment agent capabilities High Maturity Low ▪ Focus is moving from voice to text-based channels Value per contract ▪ The service mix changes towards value-added care, sales, and outbound provide significant upside Service mix change Value-added sales ▪ towards higher- New high-margin care models (in- and out-bound) are emerging and many companies value interactions are shifting volume to pro-active outbound care and sales Current contracted value Service expansion ▪ Companies follow different archetypes in their customer experience models Outsourced contract volume Selected consolidators ▪ Market is consolidating through mega-deals and smaller roll-ups ▪ Vendors pursue consolidation path acquiring other global and local players to strengthen Market delivery footprint and industry exposure consolidation ▪ Financial investors continue to remain interested in the segment (e.g. GBL’s acquisition of Webhelp) Additional volume from ▪ Additional volume from increasing outsourcing drives ~25% of the annual market outsourcing drives growth Increasing ~25% ▪ The need to access capabilities remains a fundamental growth driver, especially given outsourcing share the increased digital interaction complexity ▪ Continued push for lower cost and improved customer experience of annual market growth Source: Third party provider. 7 Confidential
Business update and strategic priorities 2 8 Confidential
A solid foundation as a basis for profitable growth Profitable growth 2 Building the foundation 1 ▪ Client focus ▪ Operational excellence ▪ Reduction of € 30m OH and support cost ▪ Culture & leadership ▪ Attractive segments and delivery locations ▪ Developing strong digital offering From 5 to 9% EBITDA margin Double-digit margin and (2015-2019) solid organic growth 9 Confidential
Growth in attractive segments Portfolio shift away from telco & cable towards growth sectors and high-margin business Sales by industry 1) Comments (€ m) ▪ Commerce & logistics - Fast-growing vertical EBITA margin 579 - Increasing share of sales driven by e-commerce 2019A 2) and acquisition of Awesome 544 543 Commerce & 17% logistics ▪ Service & utilities - Stable outlook 24% 10.7% 29% - Fintech and insurance amongst attractive segments for expansion - Selective M&A supporting journey, incl. TMS 37% Services & - Impacted by divestiture of legal services utilities operations in Spain in June 2019 38% 38% ▪ Telco & cable 6.4% - Increasing profitability on the back of operational improvements and exits from unprofitable contracts - Not actively seeking new logos Telco & 46% cable 38% 33% 5.1% 2017A 2018A 2019A Note: 1) Breakdown excluding non-material unreconciled sales. 2) Estimates. 10 Confidential
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