Transcom WorldWide S.A. Our people make the difference Investor Presentation Q1 2006 1
Company Overview Transcom is Europe s largest CRM operator by geographic footprint Fast growing Customer Relationship Management (CRM) company 49 service centres * delivering services to 28 countries Over 11,700 employees speaking 33 languages in over 9,800 workstations Q1 2006 revenues up 29% to 137.2m ( 106.7m) Q1 2006 net income up 33% to 7.6m ( 5.7m) * Includes 3 managed sites 2
Company Overview History and Development Founded in 1995, spun off from Kinnevik on 6 September 2001 and listed on Stockholmsbörsen Unique pan-european footprint developed in close association withtele2, Europe s largest alternative telecommunications company 1999 2000 2001 2002 2003 2004 2005 People 2,099 3,748 5,500 7,700 8,500 9,900 11,700 Centres 12 18 26 30 37 41 49 Revenue ( m) 108 161 215 229 286 369 445 Countries 8 11 15 17 19 23 28 3
Company Overview Services Offered Inbound Communication Telephone, E-mail, Internet & Fax and IVR Telemarketing and Outbound Lead generation, sales conversion, market analysis, customer loyalty and win back programmes CRM Consultancy Services Advise and improve CRM operations, tailored solutions available Contract Automation Sophisticated application of IVR systems Administrative Tasks Back office support, distributing information, processing correspondence, database registration and contact processing Web Servicing Improving customer interaction with client websites Credit Management Services Collections, sales ledger management, front office, reminder services, debt surveillance & debt purchase in Business to Business and Business to Consumer Legal Services Certified lawyers provide expertise in wide range of services including: bond issues, power of attorney and requests for information regarding laws, contract creation and consultancy 4
Company Overview Services to 28 countries with 11,700 employees speaking 33 languages across 49 sites Austria -Vienna Belgium -Liege Chile - Lota * Croatia -Vukovar Czech Republic -Prague Denmark - Albertslund, Vordingborg Estonia - Tallinn England - St. Albans Finland - Turku France - Paris, Raon, Tulle, Roanne Germany - Rostock, Halle, Dusseldorf, Tönivorst Hungary -Budapest Italy - Milan, L Aquila, Lecce, Bari Latvia -Riga Lithuania - Vilnius Luxembourg -Howald The Netherlands - Eindhoven, Groningen Norway - Halden, Fredrikstad, Oslo Poland -Olsztyn Portugal - Famalicao Romania -Bucharest * Serbia -Belgrade * Spain - Leon, Madrid (2), Barcelona (2), Seville Sweden - Karlskoga, Borås, Strömsnäsbruk, Kungsör, Norrköping, Stockholm Switzerland - Zurich Tunisia - Tunis Call centre locations * = Managed sites 5
Company Overview Key Clients Include 6
Market Overview Relative CRM Market Development in Europe High High Tier 2 Hungary Eastern & Southern Europe are the fastest-growing CRM markets Market growth, 2003 2008 Average Tier 3 Poland Czech Republic Turkey Russia South Africa Greece Portugal Spain Austria Israel Germany Italy Switzerland France Belgium Denmark Norway Finland Netherlands Ireland Sweden UK (Size of circle indicates number of Agent Positions) Source: Datamonitor 2004 Low Low Average market maturity Tier 1 High 7
Market Overview CRM Agent positions by Vertical Segments Financial services Outsourcing Manufacturing Communications Retail Travel and tourism Public sector Utilities Technology Forecast to grow at CAGR of 11.3% in 2003-2008 Outsourcing is one of the fastest growing vertical markets across EMEA Distribution and wholesale Entertainment, media and leisure Healthcare Other 2008 2003 Source: Datamonitor 2004 0 50 100 150 200 250 300 350 400 Agent positions (000s) 8
Market Overview Relative Development of Outsourced CRM Vendors Few No. of companies Many - Highly fragmented market - Top 10 European firms account for < 25% of the market * * for the 7 major European countries, UK, Ireland, Italy, France, Germany, Spain and the Netherlands Size of outsourcer, within Europe Small national Large national Large international Specialization Product coverage Total solution 9 Source: Datamonitor,
Strategy Transcom s focus is to become the largest and most profitable Outsourced Services Organisation in all its operating countries 10
Strategy Transcom s Key Objectives Focus on increasing Collections and other high margin businesses Continue to deliver strong revenue growth Expand in fast growing new markets Increase revenue share outside Tele2 Further develop near / offshore services 11
Execution Transcom s Unique Selling Points Ability to offer unrivalled pan-european service Established in lower cost 2 nd tier city locations delivering Lower fixed operating costs Multi-million Euro Government investment Higher quality of workforce Lower staff turnover Better efficiencies 12
Execution Transcom s Unique Selling Points Strategy of deploying consistent technology & organisational structure Highly flexible and dynamic culture capable of rapid growth & deployment Low cost cross border (offshore) service offerings Double digit revenue growth without capital expansion 13
Execution Transcom s Credit Management Services (Collections) April 2005 Acquisition of Creditexpress in the Czech Republic January 2006 Acquisition of Dr. Finsterer + Koenigs in Germany March 2006 Acquisition of Credit & Business Services (CBS) in the UK TWW estimates 50% profits will be derived from Collections services by Q4 2007 Actively pursuing partnerships with debt portfolio purchasers Strong synergies with existing CRM business Contact centre infrastructure and shared services Customer overlap / cross-sell opportunities Integrated product offerings 14
Execution The Offshore Opportunity Offshore opportunities = low cost cross-border services with skills / language synergy Key Offshore opportunities are Baltic States serving UK and Finland North Africa serving France, Spain and Italy Latin America serving Spain and Portugal Poland serving Germany France / Austria serving Switzerland Baltics is competitive with India and remains a priority for Transcom Baltic advantages over India are Accessible from UK within 2 hours Equivalent operating cost to India Excellent availability of highly educated English speaking workforce Political stability European empathy 15
Execution Operating Review Q1 2006 Highlights New CRM contracts in key vertical markets included: Open Bank (Online Banking, Spain) Alpha Card (Financial Services, Belgium) Expansion of services provided to Citibank into Hungary New debt collection contracts with: Leaseplan (Leasing) Euler Hermes (Financial Services) CDON (Media & Entertainment) Launch of new contact centre in Bari, southern Italy Expansion of existing operations in Tunis, Zurich and Vienna 16
Execution Financial Review First Quarter 2006 Highlights Net sales up 29% to 137.2 million ( 106.7 million) Profit before tax up 33% to 10.4 million ( 7.8 million) Net income up 33% to 7.6 million ( 5.7 million) Basic EPS up 25% to 0.10 ( 0.08) External sales up 41% to 36.6 million (26.7% of total sales) 17
Execution Financial Review Full Year 2005 Highlights Net sales up 20% to 444.8 million ( 369.7 million) Profit before tax up 36%* to 32.7 million ( 24.0 million*) Net income up 42%* to 24.5 million ( 17.3 million*) Basic EPS up 42%* to 0.34 ( 0.24*) 18
Execution Net Sales & Gross Profit Development EUROm 450 425 400 375 350 325 300 275 250 225 200 175 150 125 100 75 50 25 0 1998 1999 2000 2001 2002 2003 2004 2005 + 33% CAGR NET SALES + 20% YOY NET SALES IN 2005 Net Sales Gross Profit 19
Execution Gross Profit & Pre-tax Profit Development 100 90 80 + 72% YOY PRE-TAX PROFIT IN 2005 70 60 50 EUROm 40 30 20 10 Gross Profit Pre-tax Profit 0-10 1998 1999 2000 2001 2002 2003 2004 2005 20
Financials Consolidated Financial Summary ( million, except EPS) Q1 2006 Q1 2005 FY 2005 FY 2004 Net Sales 137.2 106.7 444.8 369.7 Gross Income 27.6 21.4 93.1 79.5 SG&A -17.2-13.5-60.0-55.0 Goodwill Amortisation 0.0 0.0 0.0-5.0 Operating Income 10.4 7.9 33.1 19.5 Pre-tax Profit 10.4 7.8 32.7 19.0 Net result after tax 7.6 5.7 24.5 12.3 Earnings per Share (EUR) 0.10 0.08 0.34 0.17 Total weighted average outstanding number of shares before dilution 72,603,759 72,023,681 72,227,673 71,819,861 21
Financials Consolidated Balance Sheet ( million) 31 Mar 06 31 Mar 05 Fixed assets Goodwill Other fixed assets 97.4 83.1 74.6 61.0 22.8 22.1 Current assets Short-term receivables Cash and bank Total assets Shareholders equity Minority interest in Equity Long-term liabilities Short-term liabilities Total liabilities 155.6 114.7 40.9 253.0 141.2 0.7 4.2 106.9 253.0 125.8 87.7 38.1 208.9 114.0 1.0 8.3 85.6 208.9 22
Financials Consolidated Cash Flow Statement ( million) 31 Mar 06 31 Mar 05 Opening liquid funds 51.4 37.7 Cash flow from Operations Capital expenditure Purchase of business Working capital movement Financing activities Net cash flow Closing liquid funds 10.3-2.3-13.9-0.8-3.8-10.5 40.9 8.3-3.0-0.0-0.9-4.0 0.4 38.1 23
Outlook Outlook and Focus for 2006 Further growth of non-tele2 business Margin development through higher value services Expansion of debt collection across enterprise Continued geographical expansion with low cost centres Potential further acquisitions (particularly in debt collection industry) from strong cash position Continued improvements in business efficiency 24
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