January 2020 Investor Presentation Confidential
Today’s presenters Jonas Dahlberg Lars Fromm Mattias Holmström Chief Executive Officer Head of Financing, Altor Director, Altor Transcom since June 2019 Altor since March 2018 Altor since August 2011 Board Member of Transcom since April 2017 Previous roles: Previous roles: Previous roles: CFO, Transcom (2019) Head, Loan Capital Markets SWE, Danske Bank (2015-2018) Senior Consultant, Booz & Company (2010-2011) CFO, Sweco Group (2012-2019) Director, Large Cap Leveraged Finance, Nordea (2011-2015) Investment Analyst, Altor (2009-2010) President, Sweco Russia (2008-2012) Manager, Acquisition Finance, SEB (2003-2011) Client Relations, Chinsay AB (2007-2009) Associate Principal, McKinsey (1998-2008) Associate, Corporate Finance, Enskilda Sec. (1998-2003) 2 Confidential
Agenda • Executive summary • Company overview • Industry trends • Financial development • Summary Appendix 3 Confidential
Executive summary Confidential
Transcom at a glance • Transcom provides world-class customer services to leading consumer brands in Europe and North America • Since Altor’s buy -out in 2017, Transcom is on a transformation journey aiming at double-digit margins and profitable growth • Strategy includes the improvement of operational efficiency, growth in attractive segments, further development of the delivery model, expansion of the digital offering, and is supported by M&A • Developments during 2018-2019 show improvements on essentially all key financials: EBITDA, margin, E/O items, cash flow and leverage • Transcom is now ready for the next phase of the journey – profitable growth through organic and acquired expansion in attractive segments 5 Confidential
Strategic priorities and development At de-listing Q3 2019 LTM Target Deliver cost-out program (run-rate) - EUR 27m EUR 33m 8.8% Continued margin expansion 5.3% (adj. EBITDA margin) Diversify industry vertical exposure Other Telco & cable (% sales) Near-shore Off-shore Transcom site footprint On-shore TMS Durrës Xzakt Awesome OS ASA M&A connected! (1) (Client growth, (SME, 2017) (eCom, 2018) (Media, 2019) 2018) (Utilities, 2019) 6 (1) TMS connected! was acquired outside the bond group, intended to be incorporated at a later stage. Confidential
Company overview Confidential
Transcom in numbers 27,000 40 11 EUR 543m 2017 Q3 2019 LTM privately owned sales sites in the sites in people, 50 sites, 20 countries since 2017 Philippines Europe Majority owner: Altor serving English speaking markets 33 200+ 1,000+ Non-IG 1.5m+ rating customer languages spoken international distributed workforce in interactions Rating from North America (US & clients Moody’s and S&P on a daily basis Canada) (B3 and B-) Global presence : Albania, Canada, Croatia, Estonia, Germany, Hungary, Italy, Latvia, Lithuania, Netherlands, Norway, Philippines, Poland, Portugal, Serbia, Spain, Sweden, Tunisia, United Kingdom, US 8 Confidential
A leading provider of outsourced customer relationship management solutions… We are a global customer care …supporting our clients’ digital …delivering services in 33 languages provider offering future proof agenda by combining our core to international brands in various customer facing concepts delivered services with leading digital industries by our global team of local capabilities and tools… Services & utilities specialists… 27,000 Conversational commerce Utilities BFSI Gov & Media Travel customer experience specialists Health- care serving customers via Digital Gamification Commerce & logistics channels Core services Auto- Logistics Retail/ IT/Tech White Robotic Call Chat E-mail motive e-commerce goods Chatbots Process Automation Telco & cable Interaction Analytics Telco Cable Social media Messaging 9 Confidential
…for global English and European markets through international delivery… Europe Global English • Delivery across • US • UK Markets Europe • 33 languages • Philippines • On-shore in 9 • Off-shore from the countries Philippines Delivery model • Near- /off-shore 8 • Work-at-home in countries the US Share of total 36% Europe revenue Global English 64% as of Q3 LTM 2019 Site locations Serviced geographies 10 Confidential
…serving an extensive portfolio of satisfied clients, with long - standing relations… Selected clients by vertical (1) Cumulative share of revenue by client Services & utilities Commerce & logistics Revenue % 200+ clients 100% 75% 50% 25% IPSY 0% 0 10 20 30 40 50 60 +200 NPS Note: As of Q3 2019 45 (2) • No single client >10% of revenue • Top 10 clients <55% of revenue • Top 10 client relations 13-year long on average Telco & cable 11 (1) As of H1 2019. (2) Net Promoter Score calculated in line with the industry practice, NPS of 26 in H2 2018. Confidential
…with a highly competitive digital offering… 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 embedded context. Game types cover the full • Interaction analytics : insights commerce) in chat or messaging channel agent life-cycle needs: from in-depth analysis of - Webchat • Robotic process automation: communications between end- - Leadership - Social media customer and Transcom’s clients automation of repetitive manual - Employability back-office process • - Rating-apps CX advisory services: advisory on • - Operational Robotics desktop automation: designing, implementing and - Self-service management of the best-in-class real time automation of front-end - Commercial customer experience solutions tasks on the screen of the agent • 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 • Innovation & CX Awards Best cloud implementation Best use of customer insights, finalist 12 Confidential
…and growth supported through acquisitions in attractive segments and geographies M&A transactions since take-private in 2017 June 2017 July 2018 August 2018 March 2019 April 2019 Transcom Holding AB Transcom Holding AB Transcom Holding AB TopCo AB Transcom Rostock acquires ASA acquires Xzakt acquires Awesome OS acquires a site in Durrës acquires TMS connected! (1) Informationsdienste GmbH Kundralatiom AB to expand footprint on the to further strengthen its to strengthen digital capabilities to strengthen European near- to create a center of excellence German market and strengthen position in the Nordics within and position in the e-commerce shore and multilingual services for utilities and strengthen capabilities in the media the SME market industry with +500 employees exposure to German market industry • Going forward, Transcom is looking for “polished pearls”, i.e. companies with double -digit profitability, attractive growth potential and complementary assets • ASA Informationsdienste was Transcom’s first carve -out deal, transaction type growing in importance for the future 13 (1) Acquired outside the bond group, intended to be incorporated at a later stage. Confidential
Industry trends Confidential
Mature industry expanding on the back of fast-growing segments CRM BPO revenue expected growth by vertical (1) , CAGR 17-20,% Global BPO CRM market ~10.0% Market size USD bn ~5% ~5.0% ~4.5% ~4.0% ~4.0% 3.7% 83 ~3.0% ~2.5% European ~4% 79 ~1.5% average 75 72 68 66 Retail incl. High Industrial Financial Utilities Public Telco & Other e-commerce tech & Auto services sector & Media Healthcare Global contact center outsourcing spend, 2018 LatAm 12% APAC 15% 45% North America 29% 2015 2016 2017 2018 2019E 2020E EMEA 15 Source: Citi, McKinsey, Everest Group. (1) Reported numbers are for Europe only. However similar trends are reported for the US market (Everest Group, 2019). Confidential
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