Transcom: Interim report 1 January – 30 June 2016


”Soft volumes continued to impact Transcom’s results this quarter. As stated
last quarter, implemented measures are expected to yield improvements in the
second half of the year.”

Johan Eriksson, President & CEO


Key highlights Q2 2016

  · Organic revenue decreased by 8.7%, out of which 3.6% is related to
Transcom’s previously disclosed decision not to renew an agreement with an
Italian public sector client.
  · EBIT margin decreased to 2.1%, mainly due to the volume decrease in the
English-speaking markets & APAC region. However, good progress was made during
the quarter in terms of increasing capacity utilization in the region,
supporting improvements for the second half of the year.
  · Cost reduction and operational efficiency programs progressing according to
plan.

Q2 2016 financial highlights

  · Net revenue €140.0 million, a 10.9% decrease compared to Q2 2015 (€157.0
million). Organic revenue decreased by 8.7%.
  · Gross margin 18.6% compared to 19.3% in the same period 2015.
  · EBIT in Q2 2016 was €3.0 million (€4.7 million).
  · EPS 3.9 Euro cents compared to 4.3 Euro cents in Q2 2015.

YTD 2016 financial highlights

  · Net revenue €287.2 million, a 9.7% decrease compared to the same period last
year.
  · (€317.9 million). Organic revenue decreased by 8.6%.
  · Gross margin excluding non-recurring items 18.6% compared to 19.5% in the
same period 2015.
  · EBIT was €6.8 million (€10.6 million).  EBIT excluding non-recurring items
was €6.3 million (€10.6 million).
  · EPS 7.9 Euro cents compared to 24.9 Euro cents in the same period 2015.
  · Net debt/EBITDA 0.6.

Comments from the President and CEO

As anticipated and disclosed in our Q1 2016 interim report, soft volumes
continued to impact Transcom’s results this quarter. Improved capacity
utilization, mainly in Asia, as well as efficiency improvements and cost savings
are expected to drive improvements in the second half of this year.

Organic revenue decreased by €13.3 million (-8.7%) compared to Q2 2015. In the
English-speaking markets & APAC region, lower volumes on some client accounts
impacted our revenue. In the North Europe region, call volumes with telecom
clients in Sweden and Norway were lower than last year. In addition to this, the
divestment of CMS Denmark during Q1 2016 had a €3.0 million negative impact on
revenue in the quarter. In the Continental Europe region, our previously
disclosed decision not to submit a tender for a new agreement with one of our
public sector clients in Italy had a €5.6 million (-3.6%) negative impact on the
revenue comparison vis-à-vis Q2 2015. In the region, we also saw lower business
volumes with some clients in Spain.

Mainly due to soft volumes, Transcom’s EBIT margin development on a rolling 12
-month basis deteriorated slightly this quarter. Improving our EBIT margin is
our most prioritized target at the moment. The realignment of our regional
management structure in the Continental Europe region is progressing according
to plan and is starting to yield improvements. The program is expected to yield
€2.9 million in annual cost savings, estimated to take full effect during Q4
2016. I expect further efficiency gains in addition to these direct cost savings
to be realized in the coming years. In addition to this, our Group-wide
operational excellence program is also moving ahead as planned, generating
improvements over the coming years, starting in the second half of 2016.  The
expected margin uplift will also be supported by the fact that several of the
growth opportunities that I highlighted in our Q1 2016 report, mainly in the
English-speaking markets & APAC region, are expected to materialize in the
second half of this year. We have already started to prepare for volume
increases on several client accounts.

As disclosed on July 14, we have signed a renewed agreement with Tele2, one of
Europe's leading telecom operators. Tele2 is Transcom’s largest client,
accounting for roughly 15 percent of revenue. Approximately 2,000 employees are
currently dedicated to the Tele2 account, providing multichannel customer
service and support to customers in Croatia, Estonia, Germany, Latvia,
Lithuania, the Netherlands and Sweden. In the last few years, we have
strengthened our partnership with Tele2, with a focus on consistent and
efficient delivery of world-class customer service. Together, we have managed to
exceed ambitious targets set for customer satisfaction. The new agreement
creates a stable platform from which to continue developing the award-winning
customer service.

As a result of the positive profitability trend over the last few years,
Transcom’s financial position is strong. This allowed Transcom to pay a dividend
for 2015, amounting to SEK 1.75 per share. At the end of Q2 2016, our net
debt/EBITDA ratio stood at 0.6, compared to 0.7 at the end of Q1 2016 (0.3 in Q2
2015).

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
Tuesday, July 19, 2016. The conference call will be held in English and will
also be available as webcast on Transcom’s website, www.transcom.com.

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.

--------------------

This information is information that Transcom WorldWide AB (publ) is obliged to
make public pursuant to the EU Market Abuse Regulation and the Securities
Markets Act. The information was submitted for publication, through the agency
of the contact persons set out below, at 08:00 CET on July 19, 2016.

For further information please contact:

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

Ulrik Englund, CFO                                                     +46 70
286 85 92

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

Transcom (http://www.transcom.com/) 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
30,000 customer experience specialists at 52 contact centers across 21
countries, delivering services in 33 languages to international brands in
various industry verticals. Transcom WorldWide AB’s share is listed on the
Nasdaq Stockholm Exchange under the ticker symbol TWW.

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