Transcom reports financial results for the third quarter and nine months ended 30 September 2014


Key highlights

  · EBIT margin in the core CRM business improved by 0.9 percentage points in Q3
2014, from 2.6% to 3.5%
  · Performance improvements in the North Europe, North America & Asia Pacific
and Central & South Europe regions
  · Performance in the Iberia & Latam region has improved compared to Q2 2014,
and is expected to continue improving in the next quarters
  · Divestment of CMS Austria completes the strategic review of Transcom’s CMS
business unit.

”I am pleased with the significant margin improvement in Q3. We are continuing
to execute on our key priorities, and remain focused on further enhancing our
profitability.”

Johan Eriksson, President & CEO


Q3 2014 financial highlights

  · Revenue €146.0 million (€156.0 million in Q3 2013). Adjusted for exchange
rate impact and divested operations, revenue fell by approximately 1.4%
  · Gross margin 20.8%, a 0.6 percentage point increase compared to Q3 2013
(20.2%)
  · EBIT €5.3 million (3.6%) compared to €4.6 million (2.9%) in Q3 2013
  · EPS 0.2 Euro cents compared to 0.1 Euro cents in Q3 2013.

January – September 2014 financial highlights

  · Revenue €458.1 million (€492.9 million). Adjusted for exchange rate impact
and divested and closed operations, revenue was essentially flat
  · Gross margin 20.3%, a 0.3 percentage point increase compared to the same
period 2013 (20.0%)
  · EBIT €12.1 million (2.6%) compared to €13.5 million (2.7%) in the same
period 2013
  · EPS 0.2 Euro cents compared to 0.3 Euro cents in the same period 2013.

Comments from the President and CEO

We saw a significant margin improvement in Q3, even as our Iberia & Latam region
faced a challenging quarter due to low efficiency in Chile. Performance in our
Chilean operation improved gradually during Q3 however, and I expect that the
unit will continue improving in the next quarters. The divestment of CMS Austria
during the quarter completes the strategic review of our Credit Management
Services business unit, and we are now focusing fully on further enhancing
profitability in our core customer care business.

Revenue decrease mainly due to divestments in the CMS business during the year

On a like-for-like basis, adjusting for divestments and currency effects,
revenue fell slightly by €2.1 million (1.4%) compared to Q3 2013. While business
volumes have fallen in the North Europe and Iberia & Latam regions compared to
last year, we expanded volumes with our clients in the North America & Asia
Pacific and the Central & South Europe regions.

The greater part (€6.8 million) of the remaining €7.9 million in reported
revenue decrease is attributable to the divestment of a number of Credit
Management Services (CMS) units during the year. Currency movements had a €1.1
million negative effect on revenue.

Continued profitability improvements in our core customer care business

Our strong focus on improving profitability is yielding results both in terms of
gross and operating margin. The EBIT margin in our core CRM business increased
by 0.9 percentage points, from 2.6% to 3.5%.

This increase in profitability is driven by performance improvements in our
North America & Asia Pacific and North Europe regions. I am happy to report that
our North American operation is now profitable, and that the positive
development in Asia Pacific continues. In our North Europe region, efficiency
has improved with a corresponding positive effect on margins. We also report a
slight positive margin development in our Central & South Europe region.

I am pleased that we saw good margin progression overall even though performance
in the Iberia & Latam region worsened compared to last year. The decrease in
this region is mainly due to the challenges faced by our Chilean operation in
terms of insufficient volumes and efficiency. Compared to Q2 2014, we see an
improvement in Chile, and we are continuing to focus on addressing the
situation. I expect a significant improvement in the next quarters.

Strategic review of CMS completed and re-domiciliation progressing according to
plan

During Q3, we finalized the divestment of CMS Austria. This completes the
strategic review of our Credit Management Services (CMS) operations. A number of
other CMS country units have been divested during the year, while parts of the
business have been integrated with our CRM operations. Starting in our Q4 2014
report, CMS will no longer be reported as a separate business unit.

On September 25, we announced that the Swedish Companies Registration Office has
granted Transcom permission to implement the merger plan which will execute the
re-domiciliation of the parent company of the Transcom Group from Luxembourg to
Sweden.  The process of preparing for the implementation of the re-domiciliation
and the merger is progressing according to plan. The final registration of the
merger is expected to occur on November 26, and we anticipate that November 28
will be the first day of trading in the ordinary shares of Transcom WorldWide AB
on Nasdaq Stockholm (under the ticker TWW). As previously announced, a 1:50
reverse split of the ordinary shares of Transcom WorldWide AB (publ) is intended
to be executed shortly after the implementation of the merger.

Johan Eriksson, President and CEO of Transcom


The interim report is also available for download on www.transcom.com

Results Conference Call and Webcast

Transcom will host a conference call at 10:30am CET (09:30am UK time) on
Thursday, October 23, 2014. The conference call will be held in English and will
also be available as a live webcast (http://www.media-server.com/m/p/k3xg2kzz).

Dial-in information

To ensure that you are connected to the conference call, please dial in a few
minutes before the start in order to register your attendance. No pass code is
required.

Sweden: +46 8 505 564 74

UK: +44 203 364 5374

US: +1 855 753 2230

For a replay of the results conference call, please visit www.transcom.com to
view the recorded webcast of the event.

For further information please contact:

Johan Eriksson, President and CEO                          +46 70 776 80 22

Pär Christiansen, CFO                                               +46 70 776
80 16

Stefan Pettersson, Head of Group Communications +46 70 776 80 88
About Transcom

Transcom is a global customer experience specialist, providing customer care,
sales, technical support and collections services through our extensive network
of contact centers and work-at-home agents. We are 29,000 customer experience
specialists at 54 contact centers across 23 countries, delivering services in 33
languages to over 400 international brands in various industry verticals.
Transcom WorldWide S.A. Class A and Class B shares are listed on the Nasdaq
Stockholm Exchange under the symbols TWW SDB A and TWW SDB B.

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