29 August 2013

TranscomSwedbank Mid-Quarter Update Seminar

Johan Eriksson, President & CEO

Outstanding

Customer

Experience

Transcom at a glance

1

Transcom in numbers

3

• 29,000 people

• 62 contact centers, onshore, off-shore and near shore

• 26 countries

• Delivering services in 33 languages...

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

• €605.6 million revenue in 2012

• Market cap: SEK 921.7 million as at August 26, 2013. Listed on NASDAQ OMX Stockholm

(TWW SDB B and TWW SDB A)

4

Situation today and short-term focus

• Transcom’s profitability has decreased in

recent years, but is now improving

• We see positive effects as a result of

restructuring actions

• Continuous focus on underperforming areas

• Growth in selected areas and efficiency

improvements

• Broadening client base

Market trends

• Growth driven by domestic Asia Pacific and

Latin America markets

• Diversification (geography and

business models)

Going forward - Strategic direction

• Creation of outstanding customer

experiences, while helping clients to reduce

cost and drive growth

• Flexibility is critical

EBIT margin has declined since 2007, but the negative

trend reversed in 2012

Recap of Transcom’s situation and focus areas

Our performance in Q2 2013

2

Revenue in Q2 2013 increased 13.0% compared to Q2 2012

38.0 43.9

27.031.6

28.9

34.6

25.7

27.514.0

15.813.8

13.1

Q2 2012 Q2 20136

Central Europe

South

Iberia

North America

& Asia Pacific

North

Growth

+15.5%

CMS

Net revenue, Q213 vs. Q212

€m

+17.0%

+19.7%

+7.0%

+12.9%

-5.1%

166.5

147.4

• Stable growth in our CRM operations

• Main driver is increasing volumes with our installed client base

• Several new clients added during the year also contributed significantly

Transcom’s win rate* increased by 22 percent in H1 2013 compared to H1 2012

7

• Qualification process strengthened

• Leverage existing client relationships to grow with them in new

geographies

• Targeted sales efforts

- Focus on business proposition

- Optimize seat capacity utilization in all locations

- Grow with domestic clients in selected geographies,

especially Latin America (focus in 2014) and Asia Pacific

(business started for several new local clients in 2013)

* % win of qualified opportunities

We successfully doubled our capacity in the Philippines in one year

8

2011 2012

4000

8000+

Number of agents in the

Philippines

2012 vs. 2011

• Leverage relationships with existing clients, as well

as winning new clients

• Strengthened the Transcom brand to facilitate

revenue growth and recruitment

• Recruiting processes key to success

The value we deliver to our clients is also recognized by industry observers

9

• Transcom was presented with the 2013 Frost & Sullivan Philippines Contact Center

Outsourcing Customer Value Enhancement Award

“Increasingly, Transcom is seen by its clients as a reliable partner whom they

can rely on to drive sales and growth. The company’s organic revenue growth is

testimony enough of its client engagement and value it delivers for them.”

Krishna Baidya, Research Manager for ICT, Frost & Sullivan Asia Pacific

EBIT Q212 Cost savings programs

Volume & efficiency Expansion investments

Corporate costs EBIT Q213

1.4

+2.5+1.0 -1.0

-1.02.9

EBIT Q212 Cost savings programs

Volume & efficiency Expansion investments

Corporate costs EBIT Q213

0.5

+2.5

+1.8 -1.0-0.9

2.9

EBIT increased by €2.4m in our core CRM business in Q2 2013 compared to Q2 2012

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Transcom Group

Core CRM business*

* Excludes Credit Management Services (CMS), which will be demerged from Transcom

Short-term focus areas to improve profitability

3

We need to successfully address a number of short-and medium-term operational and financial challenges

12

Stop the losses in France (€1m/month in 2012).

Increase onshore seat utilization in North America

Successfully resolve tax claims

Lower corporate costs

Improve operational performance in Latin America

Successfully implement action plan to improve operational performance in the North region

Key business/pricing models used by Transcom

13

Business/pricing

model

Key characteristics

Price per

transaction (e.g.

call or data entry)

• Transcom gets paid for each transaction, e.g. each call

taken

• Time spent per transaction is capped critical to

balance quality and time spent on each transaction

• Accuracy of volume forecast is key to planning and

profitability

Price per minute • Transcom gets paid based on the time the agent

spends with each customer (usually no cap)

• Accuracy of volume forecast is key to planning and

profitability, but less risk than in price per call models

Price per activity • Typically used for back-office tasks/processes

• Time spent per activity is capped important to

balance quality and time spent on each task

• Transcom uses client systems and pre-defined

processes

• Back-office tasks usually take longer to complete than

the typical call

Price per hour • Provides a greater degree of financial predictability

and stability

Currently the most

commonly used

model in the North

region

Alternative models

used by Transcom

Our target is to improve the balance of pricing models used in all regions…

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Pricing model North

region

Average for other

regions

(benchmark)

Price per transaction (e.g. call)

Price per minute

Price per activity

Price per hour

1-25%

26-50%

51-80%

0%

• Business model mix currently used in the North

region is more exposed to accuracy of volume

forecasts, compared to other regions

Key business models used by Transcom, by region

...in order to avoid excessive risk due to poor forecast accuracy

15

Scheduled staffing level based on forecast

Staffing need based on actual volume

Invoice sent out

two days later

than forecast

Delayed

campaign

Time

Example

Going forward– Transcom’s strategic direction

4

17

Transcom’s brand promise

Outstanding Customer

Experience, driving

revenue and brand

loyalty

”

Industry growth in the coming years will primarily be driven by domestic expansion in Asia Pacific and Latin America

478.5683.8

420.6

481.3330.8

466.3234.5

264.8

60.5

96.5

59

85.9

2011 2016

18

Central & East Europe

Western Europe

Latin America

North America

Asia Pacific

1584

2079 2011-16 CAGR

7.8%9.8%

7.1%

2.7%

7.4%

* Agent positions in principal markets (reflecting approximately 75-80 percent of total global capacity)

Source: Ovum, Transcom analysis

Middle East & Africa

2.5%

83% of expected growth in Latin

America is domestic, i.e. non-offshore

64% of expected growth in Asia

Pacific is domestic, i.e. non-offshore

Outsourced agent positions* by region, 2011 and 2016e

Thousands

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Short-term focus

• Executing turnaround in underperforming areas

• Revenue expansion and efficiency improvements

• Quality and service delivery

Medium-to long-term priorities

• Grow revenue at least in line with overall market growth in the markets where we choose to compete

• Improve profitability and decrease earnings volatility

- Continuously strengthen operational

efficiency

- Optimizing our geographic delivery mix

- Focus on broadening our client base

Growth opportunities and key priorities going forward

North America and Asia Pacific

• Continue expanding in local markets in Asia Pacific

Latin America

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

• Enter new countries to improve competitiveness

North Europe

• Leverage strong position in home market

Central Europe

• Primarily near shore opportunities

• Strong capability in expanding Eastern European markets

Growth opportunities Key priorities

Thank you!

Questions?