Transcom reports financial results for the first quarter ended 31 March 2013

Q1 2013 financial highlights

  · Net revenue €170.5 million, a 15.9% increase compared to Q112 (€147.1
million)
  · Gross margin 20.9%, a 3.1 percentage point increase compared to Q112 (17.8%)
  · EBIT €6.1 million compared to €1.1 million in Q112
  · EPS 0.0 Euro cents compared to -0.1 Euro cents in Q112
  · The exchange rate impact on revenue was +€1.4 million, and the impact on
EBIT was +€0.2 million

Comments from the President and CEO

Strong revenue growth

Revenue in the quarter increased by 15.9% compared to the same period last year,
with all of our units contributing positively to the top-line. Foreign exchange
effects added 1.4% to overall growth. While the growth is mainly the result of
expansion with existing clients, we have added several new clients in various
industry sectors during the past twelve months, bringing the total number of
Transcom clients to over 400 globally. Our reported revenue in the quarter also
benefited from compensation received for transferring the right to collect on a
Swedish debt portfolio (see below).

EBIT increase in the quarter mainly driven by CMS

We reported EBIT of €6.1 million, compared to €1.1 million in Q112. EBIT was
positively impacted by €3.8 million as a result of compensation that Transcom
has received in exchange for transferring our right to collect on a Swedish debt
portfolio to another party.

EBIT in Q113 was positively impacted by €6.0 million due to a non-cash capital
gain following the deconsolidation of our former French subsidiary. This was
offset by €6.0 million in restructuring and other non-recurring costs in the
quarter, as outlined below:

  · The estimated cost for a settlement agreement related to the closure of
Transcom’s former subsidiary in France, accounting for the larger part of the
€6.0 million in non-recurring costs booked in the quarter. Transcom is currently
in the process of negotiating the terms and conditions upon which Transcom will
be released from any further liabilities with respect to the liquidation of our
former French subsidiary. We expect to be able to announce the final outcome of
the negotiations during the second quarter of 2013.
  · Costs related to the previously announced move of the Finance organization
from Luxembourg. The Group Finance organization is in the process of being moved
to our Management office in Stockholm, while the regional accounting and finance
responsibilities currently performed by our staff in Luxembourg are being
transferred to each respective region in order to integrate more closely with
regional management teams. This transition will be a gradual one, with the
objective of completing the move during the second half of 2013. As a result of
consolidating resources, we expect a reduction in run-rate costs for the Finance
function.
  · The closure of Transcom’s CRM business in Denmark. The CRM operations in
Denmark have been loss-making for an extended period of time. The overall market
situation in the country is challenging and we do not expect conditions to
improve sufficiently in order to reach profitability within a reasonable time.
Danish CRM operations account for just over one percent of revenue in the North
region, but recorded a €0.7 million loss in 2012.
  · In addition to the items above, we have decided to take additional steps in
order to improve our capacity utilization in North America, which is still below
target. The actions taken in 2012 and Q1 2013 will allow us to realize continued
margin improvements throughout 2013.

In total, the positive impact on our quarterly EBIT run rate of the actions
described above – once completed – amounts to €2.3 million, with a positive
quarterly cash-flow effect of €3.9 million.

From an operational perspective, we saw improvements in our South and Central
regions, while EBIT decreased in the North, Iberia and North America & Asia
Pacific regions. Higher efficiency in Germany and higher volumes overall
contributed to the performance improvement in the Central region. In South,
higher offshore volumes and lower costs related to our former French subsidiary
had a positive effect on margins. In the North America & Asia Pacific region, we
expect to realize further margin improvements both offshore and onshore in the
coming months as a result of increased capacity utilization. In Iberia, EBIT
suffered from the fact that we had three working days less than in the same
quarter last year. In addition, we invested to raise capacity at our Peru site.
In North, lower volumes than anticipated during parts of the quarter impacted
negatively on efficiency. Volumes in the telecom sector in the North region fell
significantly short of forecasts, leading to a situation of overstaffing. We
were able to gradually adjust staffing throughout the quarter.

As previously announced, Transcom’s Board of Directors is currently evaluating a
number of strategic alternatives for our Credit Management Services (CMS)
business unit. This process is progressing, and we will communicate further
details as soon as a decision has been reached.

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 10.30 am CET (09:30 am UK time) on
Thursday, April 18, 2013. 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.

Sweden: 08-503 364 34

UK: +44 (0) 1452 555 566

US: +1 631 510 7498

Passcode: 19640088

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

For further information please contact:

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

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 credit management services through our extensive
network of contact centers and work-at-home agents. We are 30,000 customer
experience specialists at 70 contact centers across 27 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 OMX Stockholm Exchange under the symbols TWW SDB A and TWW SDB B.