Presentation from Transcom's Mid Quarter and CSR Update held in Stockholm March 6, 2014.

1. March 5, 2013
Transcom
Mid-quarter and CSR update
Johan Eriksson, President & CEO
Stefan Pettersson, Head of Group Communications
Malin Lindfors Speace (Ethos International)
Outstanding
Customer
Experience

2. Agenda
1. Mid-quarter update
2. Transcom Cares – background
and focus areas
3. Stakeholder dialogue –
presentation of results
(Ethos International)
4. CSR objectives going forward
5. Supply Chain Management
(Ethos International)
2
6. Q & A

3. Mid-quarter update
1
Outstanding
Customer
Experience

4. What is Transcom?
• A global customer
experience specialist...
• ...providing outsourced
customer care, sales,
technical support, and
credit management...
• ...through an extensive
network of contact centers
and work-at-home agents
4
”
Transcom’s business is to
help make sure that our
clients’ customers form
positive perceptions of their
interactions with them.

5. Transcom in numbers
• 29,000 people…
• …representing more than 100 nationalities
• 62 contact centers, onshore, off-shore and
near shore…
•
•
•
•
•
…in 26 countries
Delivering services in 33 languages...
...to over 400 clients in various industry verticals
€653.2 million revenue in 2013
Market cap: SEK 1,525.8 million as at December 30, 2013. Listed on NASDAQ OMX
Stockholm (TWW SDB B and TWW SDB A)
29000100622633400
5

6. We have an extensive global footprint
Domestic markets
Near Shore Locations
Offshore Locations
 Austria
 Netherlands
 Slovakia
 UK
 Germany
 Norway
 Spain
 Australia
 Canada
 Croatia
 Estonia
 Latvia
 Czech Republic
 Hungary
 Lithuania
 Serbia
 Chile*
 Peru*
 Colombia*
 Philippines*
 Tunisia
6
 Czech Republic
 USA
 Canada
 Italy
 Poland
 Sweden
 Denmark
 Portugal
 Switzerland
 Croatia
* Developing into domestic/near
shore markets

7. During 2013, we continued to focus hard on
enhancing Transcom’s performance
Positive progress on turnaround
Revenue (€m)
Operating margin*
653.2
631.8
• Growth in selected
areas and efficiency
improvements
605.6
599.2
589.1
6.0%
560.2
4.4%
554.1
4.3%
2.7%
2.2%
1.5%
0.7%
2007
2008
2009
2010
2011
* Underlying performance, excluding restructuring and other non* Excluding non-recurring items.
recurring costs
7
• Continuous focus
on underperforming
areas
2012
2013
• Broadening client
base

8. Debt & leveraging
Gross debt (€ m)
Net debt (€ m)
Net debt/EBITDA
100.0
86.3
90.0
80.0
71.0
70.0
75.9
91.1
94.6
94.4
80.7
2.50
65.0
59.3
60.0
2.00
56.7
49.7
1.50
50.0
38.1
40.0
36.2
32.1
1.00
30.0
20.0
11.9
3.00
17.2
0.50
10.0
0.00
0.0
Q112
Q212
Q312
Q412
Q113
Q213
Q313
Q413
• Gross debt stable compared to the Q313 level
• Net Debt decreased by €13.5m compared to the Q313 level
• Net Debt/EBITDA ratio: 1.40 (1.93 in Q313)
• Financial cost €1.3m (€2.0m in Q313)
8

9. We have improved against the most
important operational KPIs
Continue improving key performance indicators
• Seat utilization
• Efficiency
• Offshore/onshore split
• Attrition
Improvements on four KPIs vs. previous year
Key performance
driver
Trend vs. 2012
2013 vs. 2012
Average Seat
Utilization ratio
Share of revenue
generated offshore
(22% vs. 20%)
Average Efficiency
ratio (billable over
worked hours)
n/a (positive development)
Monthly staff
attrition
9
(87% vs. 85%)
n/a (stable)

10. In addition, we resolved a number of short-term
challenges in 2013, which had weighed on our
results
Stop the losses in France (€1m/month in 2012).
Successfully resolve tax claims
Lower corporate costs
10

11. Key priorities in 2014
• 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
• Higher costs due to ramp-down in Chile while simultaneously
ramping up in Colombia
• Presence in Colombia will support strategy to expand in fast-growing
Latin American markets
11

12. Transcom’s long-term strategic priorities are informed
by these important trends
What we are seeing…
More channels and increasing complexity
•
•
•
Rising interaction volumes with an
increasingly sophisticated customer base
Social networks are emerging as important
customer channels
Increasing product complexity
Business Focus
•
While price is still an issue, more and more,
the focus is on generating revenue – upsell/cross-sell and customer retention – and
customer loyalty
Market
•
•
Stagnant growth in mature, Western
outsourcing markets
Significantly higher growth in emerging
markets, particularly APAC and Latin
America
Transcom is responding by…
•
•
•
Developing integrated channel
competencies
Providing more insight due to increasing
customer demands
Developing analytic platforms and KPIs
specific to customer service via non-voice
channels
•
Sourcing, training and retaining the best
agents to deliver higher levels of customer
service
•
Seeking to capitalize on domestic
opportunities in developing markets to drive
growth and diversify revenue
Developing traditional offshore locations as
delivery centers
Increasing focus on community engagement
•
•

13. Transcom Cares – background and
focus areas
2
Outstanding
Customer
Experience

14. 14

15. Starting in November 2013, Transcom Cares is
a global program
15

16. Transcom Cares focus areas
Starting in November 2013, Transcom Cares is our global CSR
governance program. We have three prioritized focus areas:
People development
To be recognized as a responsible employer, attracting people and
strengthening our brand in all our local markets.
Equality and diversity
We strive for gender equality on all levels, and are dedicated to show that equal
opportunity employment is part of our DNA.
Community engagement
Many of our community engagement activities depend on our employees’
passion to contribute their time and energy, making us all proud to work at
Transcom.
16

17. 3. Stakeholder dialogue –
presentation of results
Ethos International
3
Outstanding
Customer
Experience

18. Materiality process
•
Materiality analysis is used to prioritise focus areas
•
Based on significant economic, environmental and social impacts; and
•
Influence on assessments and decisions of stakeholders
The process
Strategic
Ranking of
aspects
Aspects
Materiality
Operational
Aspects in
Supply Chain
Materiality
Targets
E.g. No human
right incident
in acquired
business
Actions
Follow-up
E.g. Human
Rights Due
Diligence
according
to Ruggie’s
principles
KPIs based on
ranking of
aspects
For each aspect there are KPIs to use for follow-up on progress and to report on
www.ethosinternational.se
Communication
Sustainability
report
GRI
COP

19. Materiality result
Economic
A. Be transparent with financial reporting
High
B.
emerging markets
F
D. Source from local suppliers
A
E.
M
I
N
Ensure high degree of customer satisfaction
G. Have a great customer experience brand
L
J
Ensure a sustainable supply chain
F.
O
External
Work proactively with anticorruption
C. Conduct sustainability risk assessments on
Social and Environmental
B
H. Strengthen our commitment to community
G
engagement
E
K
C
I.
Uphold freedom of association and right to
collective bargaining for employees
J.
H
practices
D
P
Have fair and transparent recruitment
K.
Recruit from the local communities
L.
Be an equal opportunity employer
M. Provide continuous training for employees
N. Focus on health and safety management for
employees
Low
O. Focus on fair working conditions for
employees
Low
Internal
G
www.ethosinternational.se
F
Internal rating in progress results not available yet
High
P.
Reduce our CO2 emissions

20. Most important aspects in each stakeholder group
•
Clients
www.ethosinternational.se
Provide continuous training for employees
•
Be transparent with financial reporting
•
Have fair and transparent recruitment practices
Provide continuous training for employees
•
Focus on fair working conditions for employees
•
Ensure high degree of customer satisfaction
Focus on health and safety management for employees
•
Be transparent with financial reporting
•
Focus on fair working conditions for employees
•
Be an equal opportunity employer
Focus on fair working conditions for employees
•
Uphold freedom of association and right to collective bargaining
•
Ensure high degree of customer satisfaction
•
ESG analysts
Work proactively with anticorruption
•
Equity
analysts
•
•
Investors
Be transparent with financial reporting
•
Owners
•
•
Employees
Be an equal opportunity employer
Have fair and transparent recruitment practices
•
Be an equal opportunity employer
•
Focus on fair working conditions for employees

21. 21
Truly a people’s
business
Outstanding
Customer
Experience

22. Transcom is an important employer for young people
We employ ~20,000 people
every year, a majority of
whom are young people
At Transcom, they gain
excellent skills in
communication and sales
22
For many young people,
Transcom is their first job
It is our duty as an employer
to empower and coach our
people

23. >85% of Transcom’s managers are recruited
internally
Country Manager
Contact Center Manager
Business Manager
Team Leader
Agent
23
Support functions:
–IT
–Quality
–Operations
–HR
–Finance

24. Many of our senior leaders started out as
agents or in junior support roles
Juan Brun, Spain
First job at Transcom?
Started as team leader in
July 2002
Current position?
Operations Director for
Iberia & Latam Region
(2010)
What do you like the most
about a career at Transcom?
”To be able to work with
committed and talented
people as our people makes
the difference in our
business, they are the
engine of the company”
Øistein Lund, Norway
First job at Transcom?
Started as agent in 1997
Current position?
Contact Center Manager
Norway (2006)
What do you like the most
about a career at Transcom?
”The possibility to
continuously take on new
challenges as the career
path is evolving. For me it
has been a great experience
to be part of the Transcom
Norway journey from the
beginning in 1997.
Dyne del Rosario-Tubbs,
Philippines
First job at Transcom?
Started as Quality
Assurance Specialist in
April 2006
Current position?
Senior Client Operations
Manager (2013)
What do you like the most
about a career at Transcom?
”I was given the opportunity
to test the waters in different
departments enabling me to
find out where I would like
to build a career. Transcom
has always been good at
looking after me and
addressing my concerns.”

25. CSR objectives going forward
4
Outstanding
Customer
Experience

26. 26
What we have done
People Development
Equality and Diversity
Community Engagement
• >85% of managers
recruited internally – a true
career for young people
• Employment of disabled
people, for example in the
Netherlands, Germany,
Spain, and Chile
• On-site child care centers,
pharmacies, and
employee microloans are
some activities supporting
our employees in the
Philippines
• Learn as we go – role
models and mentors
support our young leaders
on their road to success
• Caring managers – 90% of
employees feel they get
support from their
manager
• Extensive training
programs and talent
management programs in
place or to be launched
• Women make up 61% of
our workforce, but 39% of
managerial employees –
we need to empower and
facilitate a more equal
distribution
• Diversity of cultures and
languages is key to our
service delivery, e.g. in
our multilingual centers
• Supporting the local
communities in the cities
or countries we are
operating in – via charity
organizations or direct
involvement
• Activities to aid poor
people in Latin American
countries and Asia

27. 27
Our objectives going forward
People Development
Equality and Diversity
• Launch of a global Talent
Management program in
April 2014
• Gender distribution manager ratio reflecting
our gender distribution for
the total workforce
• Global management
training program for
managers at all levels
• Attrition ratio in line with
market levels
• Diversity – more proactive
management and followup
Community Engagement
• Transcom Cares program
launched globally in 2013
• Activities will continue to
be initiated and driven by
employees, supported by
Transcom

28. Transcom is a signatory of UN Global Compact
Transcom fully supports the ten principles of the UN Global Compact with
respect to human rights, labor rights, environmental care and anticorruption work.
These principles are an integral part of our corporate strategy, business
culture and day-to-day operations.
Policies and Codes of Conduct
Code of
Business
Conduct
• Ethical practices adopted
across our company and the
standards to which our
people are expected to
aspire.
• Action plan: All employees
are obliged to sign the Code
of Conduct and we also
conduct traning sessions
every year.
28
Supplier Code
of Business
Conduct
• Standards to which our
suppliers and partners are
expected to adhere.
• Action plan: Supplier selfassessments and evaluation
conducted by Ethos during
Q1 2014.
Environmental
Policy
• Our commitment to a
responsible approach to
reducing the environmental
impact of our business and to
encourage our people to
adopt environmentally friendly working practices.
• Action plan: Review of
travel policies.

29. 5. Supply Chain Management –
Ethos International
5
Outstanding
Customer
Experience

30. Transcom supply chain management process
www.ethosinternational.se

31. Q&A
6
Outstanding
Customer
Experience

32. Stay up-to-date on Transcom Cares activities
www.transcom.com
LinkedIn
32
blog.transcom.com