14 May 2013

Transcom Johan Eriksson, President & CEO

Outstanding

Customer

Experience

Transcom at a glance, current situation and focus areas

1

3

• 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 Transcom’s business is to

help make sure that our

clients’ customers form

positive perceptions of their

interactions with them.

”

What is Transcom?

Transcom in numbers

• 30,000 people

• 70 contact centers, onshore, off-shore and near shore

• 27 countries

• Delivering services in 33 languages...

• ...to over 400 clients in various industry verticals

• €605.6 million revenue in 2012

• Market cap: SEK 1046.2 million as at March 28, 2013. Listed on NASDAQ OMX Stockholm

(TWW SDB B and TWW SDB A)

4

We have an extensive global footprint

Home markets

Austria

Netherlands

Slovakia

UK

Belgium

Germany

Norway

Spain

Australia

Near Shore Locations Offshore Locations

Chile*

Peru*

Philippines*

Tunisia

5

Czech Republic

USA

Canada

Italy

Poland

Sweden

Denmark

Portugal

Switzerland

Croatia

* Developing into home/near shore

markets

Canada

Croatia

Estonia

Latvia

Czech Republic

Hungary

Lithuania

Transcom’s organization

6

• Corporate management

- CEO, CFO, CIO, Head of Operations, Head of Global

Sales & Accounts

• Regional management

- North region (25% of revenue)

- Iberia (19% of revenue)

- North America & Asia Pacific (19% of revenue)

- South (16% of revenue)

- Central Europe (10% of revenue)

- Credit Management Services (CMS) in eight European

countries (10% of revenue)

Transcom’s service portfolio

7

• Customer service

Customer experience specialists trained to support best-in-class product, service and brand experiences for our clients’ customers

• Technical support

Tiered support models, from the simplest questions to more complex support scenarios

• Customer retention

Preventing defection and maximizing the lifetime of a customer

• Customer acquisition

Acquiring new customers cost-efficiently, and building strong customer relationships as a basis for future interactions

• Cross- and upselling

Building relationships and identifying customer needs during any type of interaction, and taking appropriate action to satisfy the customer’s need

• Credit management services (CMS)

Early collections, Contingent collections and Legal collections

Recap of our situation and focus areas

8

Situation today and short-term focus

• Transcom’s profitability has decreased

in recent years, but is now improving

• We see positive effects as a result of

restructuring actions

• Continuous focus on underperforming

areas

• Growth in selected areas and efficiency

improvements

• Broadening client base

Market trends

• Growth driven by domestic Asia Pacific

and Latin America markets

• Diversification (geography and

business models)

Going forward - Strategic direction

• Creation of outstanding customer

experiences, while helping clients to

reduce cost and drive growth

• Flexibility is critical

Market trends – Understanding our business

2

Communications & Media and Financial Services account for almost two-thirds of global industry capacity

10

Communications & Media 39%

26%

Financial Services

Retail & Wholesale 8%

Manufacturing 4%

Energy & Utilities 4%

4%

4% Other

Government & Education Healthcare

3% 3%

Travel & Hospitality

Professional services

2% 1%

Professional services

Distribution of outsourced agent positions* by industry vertical, 2011

100% = 1.58 million

* Agent positions in principal markets (reflecting approximately 75-80 percent of total global capacity)

Source: Ovum

Increasing demands for quality: an opportunity for Transcom

11

Historically

Our task: Respond to voice calls

from customers as efficiently as

possible, at the lowest possible cost

Today

Our task has expanded:

Deliver excellent customer experience

New channels and technology platforms

Offer more knowledge due to diversity of

products and greater customer

demands

Generating a much higher degree of

revenue and brand loyalty to clients

Feed back customer intelligence to

clients

-

Market trend: Increased diversification in terms of market presence

• Stagnant growth in mature, Western outsourcing

markets

• Significantly higher levels of growth in selected

developing markets, and rising interaction volumes with

an increasingly sophisticated customer base

• Outsourcers will seek to capitalize on

domestic opportunities in developing markets,

to drive growth and diversify revenue

• Traditional offshore locations also developing

into domestic delivery centers

Expansion in new markets

Industry growth in the coming years will primarily be driven by domestic expansion in Asia Pacific and Latin America

478,5 683,8

420,6

481,3 330,8

466,3 234,5

264,8

60,5

96,5

59

85,9

2011 2016

13

Central & East Europe

Western Europe

Latin America

North America

Asia Pacific

1584

2079 2011-16 CAGR

7.8% 9.8%

7.1%

2.7%

7.4%

* Agent positions in principal markets (reflecting approximately 75-80 percent of total global capacity)

Source: Ovum, Transcom analysis

Middle East & Africa

2.5%

83% of expected growth in Latin

America is domestic, i.e. non-offshore

64% of expected growth in Asia

Pacific is domestic, i.e. non-offshore

Outsourced agent positions* by region, 2011 and 2016e

Thousands

Market trend: Diversification in service channels changes business models

• Social networks are emerging as important customer

service channels

o Although still small in relation to voice, email and chat

• A growing number of people are more comfortable with non-

voice channels, and expect interaction on their terms...

• …As a result, companies are getting serious about social

media in customer service and marketing

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• Outsourcers need to further develop analytics platforms

and KPIs specific to customer service via social media

• Agents are not only customer service representatives;

they become PR agents and brand ambassadors.

Implications for training and recruiting

• Channel integration will become more important

Increasingly sophisticated non-voice offerings

Growth will be driven by opportunities beyond the traditional voice business

15

25.0 21,4

5,5 17,5

2011 2016e

30.5

38.9

Multichannel, automated

and analytics services

Traditional voice business

Customer management BPO market,

2011 and 2016e

USD billion

Source: Gartner (October 2012)

• The market today comprises mainly

voice-based services…

• … but the situation is expected to

change dramatically in the next few

years with the emergence of

multichannel, automated and analytics

services

The number of work-at-home agents is expected to grow significantly faster than contact center-based agents

0

20000

40000

60000

80000

100000

120000

140000

2011 2012 2013 2014 2015

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2011–15 CAGR = 18%

Global outsourced home-based agent growth*,

2011–2015*

* Total agents working exclusively from home for 20 or more hours per week

Source: Ovum

• Higher quality of customer

service

• Lower overall cost

• Scheduling flexibility

• Empowers employees

• Resilience in face of external

disruption

• Lower absenteeism and better

staff retention

• Ability to recruit high-quality

employees

Key drivers

3

Our performance in Q1 2013

Revenue in Q1 2013 increased 15.9% compared to Q1 2012

38,1 43,2

25,4 31,6

30,6

33.2

24,6

28.0 14.0

16.7 14,4

17,8

Q1 2012 Q1 201318

Central Europe

South

Iberia

North America

& Asia Pacific

North

Growth

+13.5%

CMS

Net revenue, Q113 vs. Q112

€m

+24.5%

+8.3%

+13.9%

+19.3%

+23.3%

170.5

147.1

• All units contributed positively to the top-line growth

• Main driver is increasing volumes with our installed base clients

• Several new clients added during the year also contributed

• Revenue benefited from €3.8m in compensation received for transferring the right to collect on a Swedish debt portfolio

• France deconsolidated from March 1 (effect in Q113: -€0.9m)

EBIT increased by €5m in Q1 2013 compared to Q1 2012

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Restructuring

net effects

Volume &

efficiency-

driven

gains

Expansion

investments

Other

EBIT

Q113

EBIT

Q112

1.1

+2.3

+4.3 -1.7

+0.1 6.1

• €3.8 million positive impact in Q113 as a result of compensation that Transcom has

received in exchange for transferring our right to collect on a Swedish debt portfolio

• €6.0 million positive impact in Q113 due to a capital gain following the

deconsolidation of our former French subsidiary, offset by €6.0 million in

restructuring and other non-recurring costs

• EBIT in Q112 included a non-recurring cost of €1.3 million related to site closures in

North America

EBIT margin improvements in North America & APAC, Central Europe, South and CMS, counterbalanced by North and Iberia

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2013

Jan-Mar

2012

Jan-Mar

EBIT margin

North

Central Europe

South

Iberia

North America & AP

CMS

TOTAL

0.2%

3.4%

4.7%

2.0%

-2.0%

23.4%

3.6%

3.4%

-1.9%

-4.9%

5.5%

-4.8%

6.0%

0.7%

• Volume and efficiency-driven performance improvements

in North America & Asia Pacific, Central Europe and

South

• Deconsolidation of France as well as higher volumes and

efficiency in Italy benefited South

• North: Volume fluctuations against forecast, leading to

overstaffing, and salary increases

• Iberia: Impact of early Easter

• CMS: Compensation received for transferring our right to

collect on Swedish debt portfolio

4

Short-term focus areas to improve profitability

What will it take for Transcom to return to historical margins?

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Key performance

driver

Trend vs. Q1 2012 Q1 2013 vs. Q1 2012

Average Seat

Utilization ratio

(89% vs. 83%)

Share of revenue

generated offshore

(21% vs. 16%)

Average Efficiency

ratio (billable over

worked hours)

n/a (positive development)

Monthly attrition n/a (unchanged)

Improvements on four KPIs vs. previous year

Continue improving key performance indicators

• Seat utilization

• Efficiency

• Offshore/onshore split

• Attrition

We need to successfully address a number of short- and medium-term operational and financial challenges

23

Stop the losses in France (€1m/month in 2012). Transcom plans to stop financing

the French subsidiary’s loss-making operations beyond March 1, 2013.

Increase onshore seat utilization in North America

Successfully resolve tax claims

Germany – renegotiate labor agreements

Return UK CMS to profitability

Successfully implement action plan to improve operational performance in the North region

Revenue in the North region is typically driven by the time that our agents spend in contact with our clients’ customers

• In the North region, Transcom typically commits to delivering against agreed service

levels for volumes in the range of 80-120 percent of the forecast (non-compliance being

subject to penalties)

• Volumes in Q1 2013 in the North region fell significantly short of forecast call volumes,

leading to a situation of overstaffing

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Volume forecast

Guaranteed volume

(~80-90% of forecast)

“Extraordinary

circumstances”

(~>120% of forecast)

Actual call volume

Illustrative

Accuracy of volume forecast is key to planning and profitability

25

Scheduled staffing level based on forecast

Staffing need based on actual volume

Invoice sent out

two days later

than forecast

Delayed

campaign

Time

Example

Key business/pricing models used by Transcom

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Business/pricing

model

Key characteristics

Price per

transaction (e.g.

call or data entry)

• Transcom gets paid for each transaction, e.g. each call

taken

• Time spent per transaction is capped critical to

balance quality and time spent on each transaction

• Accuracy of volume forecast is key to planning and

profitability

Price per minute • Transcom gets paid based on the time the agent

spends with each customer (usually no cap)

• Accuracy of volume forecast is key to planning and

profitability, but less risk than in price per call models

Price per activity • Typically used for back-office tasks/processes

• Time spent per activity is capped important to

balance quality and time spent on each task

• Transcom uses client systems and pre-defined

processes

• Back-office tasks usually take longer to complete than

the typical call

Price per hour • Provides a greater degree of financial predictability

and stability

Currently the most

commonly used

model in the North

region

Alternative models

used by Transcom

Key business models used by Transcom, by region

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Pricing model North

region

Average for other

regions

Price per transaction (e.g. call)

Price per minute

Price per activity

Price per hour

1-25%

26-50%

51-80%

0%

• Business model mix currently used in the North

region is more exposed to accuracy of volume

forecasts, compared to other regions

• We are currently working to improve the balance

of pricing models used in all regions

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Going forward – Transcom’s strategic direction

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Transcom’s brand promise

Outstanding Customer

Experience, driving

revenue and brand

loyalty

”

North America and Asia Pacific • Continue expanding in local markets in Asia Pacific

Latin America • Serving domestic markets and the US,

in addition to Spanish clients

North Europe

Central Europe • Near shore

Short- and medium-term growth opportunities

31

Short-term focus

• Continuous focus on executing turnaround in underperforming areas

• Continued focus on revenue expansion and efficiency improvements

• Increased focus on quality and service delivery to support significant ramp-up of new volumes

Medium-to long-term priorities

• Grow revenue in line with overall market growth in the markets where we choose to compete

• Improve profitability and decrease earnings volatility

- Continuously strengthen operational efficiency

- Optimizing our geographic delivery mix

- Focus on broadening our client base

Summary: key priorities going forward

Thank you! Questions?