Q1 2020Presentation

May 7, 2020

Today’s presenter

Jonas DahlbergPresident & Chief Executive OfficerTranscom since June 2019

Previous roles:• CFO, Transcom Holding AB (2019-2020)• CFO, Sweco Group (2012 – 2019)• President, Sweco Russia (2008 – 2012)• Associate Principal, McKinsey (1998 – 2008)

2

Agenda

• Q1 highlights• Company and strategy• Financial performance• Summary

Q1 highlights

• Solid demand proving resilience of business model –Stable or increasing volumes with existing clients

• Strong inflow of new contracts – Contract value Q1>FY19, YTD 2xFY19

• WAH mobilization to safeguard production – 50% of workforce WAH end Q1, 60% currently

• COVID-19 subduing financials short term – Capacity limitations and increased operational cost amid lockdowns

• Transcom standing strong in the pandemic – Additional 30 MEUR funding secured

4

Company and strategy

Utilities BFSI Gov &Health-

care

Media Travel

What we do: outsourced customer relationship management

We are a global customer care provider offering future proof customer facing

concepts delivered by our global team of local specialists…

…supporting our clients’ digital agenda by combining our core services with

leading digital capabilities and tools…

…delivering services in 33 languages to international brands in various

industries

Core services

Conversational commerce

Digital channels

Robotic Process

Automation

Interaction Analytics

Chatbots

Gamification

Call Chat Email

26,000customer experience specialists

serving customers via

Services & utilities

Commerce & Logistics

Auto-motive

Logistics Retail/ e-commerce

IT/Tech White-goods

Telco & Cable

Social media MessagingTelco Cable

6

Solid foundation as basis for profitable growth

1. Building the foundation

2. Profitable growth

• Reduction of 30 MEUR OH and support cost

• Attractive segments and delivery locations

• Developing strong digital offering

• Client focus

• Operational Excellence

• Culture & Leadership

Double digit margin and solid organic growth

From 5 to 9% EBITDA 2015-2019

7

Next phase is about profitable growth – Achieving double digit margins and solid organic growth

8

Client focus Operational excellence Culture and leadership• Leadership for people performance

• Clear, decentralized accountability and lean OH

• Culture of client and customer centricity

• Operational performance management

• Best practices for productivity, recruiting, retention and workplace presence

• Client-by-client improvement approach

• Strengthen market presence in North America

• Accelerate sales in Europe

• Develop and protect existing clients

Transcom is highly competitive in the “new normal”

9

• Continued social distancing drives consumers from physical channels to distance channels

• Clients looking for improved efficiency and improved customer experience

• Increased demand of resilient business continuity options in case of coronavirus resurgence

The new normal

Strong references in ecom, fin-tech and digitally enabled businesses

Strong portfolio of digital services and CX services

Leading WAH service and globally diversified site operations

Transcom’s position

Amid COVID-19 our business model is more relevant than ever

10

As consumers are socially distanced from physical retail…

Call Chat Email

Social media Messaging

… Transcom is available to service consumers

26,000customer experience specialists

serving customers via

Transcom is growing in attractive customer segments

11 Note: On July 27, 2018, the group acquired Awesome OS which has been consolidated from this date. 2019 includes Latin America until Feb 2019 (0.9M Sales and -0.1M EBITA). Adj. EBITDA% per industry includes allocation of unallocated/group-wide expenses.

Developments during the quarter

6.3%

6.5%

14.3%

EBITDA Q1 2020 LTM

Revenue by industry segment, MEUR

130 155 160

206208 198

208 179 176Telco & Cable

2018 2019 Q1 2020LTM

Service & Utilities

Commerce & Logistics

544 541 534

• Q1 organic growth 5% adjusted for the loss of INPS contract in December

• COVID-19 impact on revenue 2.8 MEUR due to capacity limitations

• Solid growth in the most profitable segments

Strong development in sales of new contracts

12

13

18

26

FY 19 Q1 20 YTD Apr 20

New logos:• US grocery delivery• US fintech• Nordic grocery• Global fintech• Global FMCG • Global ecom• German fintech• Nordic FMCG• European FMCG

In year revenue of new contracts, MEUR

Expansions:• Nordic bank• European ecom• Global fintech• German media • Spanish bank• Spanish bank

Serving Western Europe and Global English markets through diversified delivery

13

Europe Global English

Markets• Delivery across

Europe• 33 languages

• US• UK• Philippines

Delivery model• On-shore in 8

countries• Near- /off-shore

from 9 countries

• Off-shore from the Philippines

• Work-at-home in the US and Canada

Share of total revenueQ1 2020 LTM

65%35% Europe

Global English

Site locations Serviced geographies

Unprecedented WAH mobilization supported by strong purpose

14

Workforce, Percent Transcom’s missions in COVID-19

• Keep our people safe and avoid further virus transmission in society

• Continue to service people and keep society up and running

WAH enabled: number of HC that there is a WAH solution in place for, if forced to move them home "tomorrow“As of May 6, 62% and 66% of the direct workforce is working at home and enabled to work at home respectively.

10%

56%

6%

50%

Mar 23Mar 16 Mar 31

WAH-enabledWAH

60% of staff working from home…

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… also making our sites safer

Key recent appointments

16

Brent J. WelchMember of the Board

• Mgmt consultant, Uinta Consulting (‘17-present)

• COO, Teleperformance (‘12-’17)

Aaron FavaraSVP, Global Accounts & Virtual Work

• Managing Partner, Concept Quarry (’15-’19)

• VP, Arise Virtual Solutions (’10-’15)

Don BerrymanEVP – CCO– North America

• Global EVP – CCO, Sitel (’13-’19)• President – Americas, Sitel (‘11-

’13)

Snejana KolevaCFO

• Finance Director, Rock Tools Division, Sandvik (‘17-’20)

• Senior positions, Sandvik (’13-’17)

Financial performance

Q1 results subdued by the COVID-19 pandemic

• Q1 EBITDA ex EO– 10.1 MEUR, -1.9 MEUR– 7.9%, -0.9pp– Corona impact -1.7 MEUR

• Significantly lower EO items: Q4 -1.6 MEUR (-4.0)

• Net debt/EBITDA 4.2x (Dec 2019: 4.2x) 1)

• Additional 30 MEUR funding secured in the quarter

18 1) Net debt / EBITDA 2020 calculated in line with the definition of Leverage Ratio in the terms and conditions of the outstanding senior secured notes based on an EBITDA of EUR 46.9m (not including non-recurring items in excess of 15% of EBITDA) and Net Interest Bearing Debt of EUR 198.6m (excluding Subordinated Loans and pension liabilities)

Quarter effected by COVID-19, however solid EBITDA considering last year includes divested and exited business

19 1) 2016 figures represents consolidated TWW accounts, 2017-2018 is consolidated at Issuer level, and adjusted for the acquisitions of TWW and Xzakt group. On July 27, 2018, the group acquired Awesome OS which has been consolidated from this date. 2019 and onwards are fully including recording of IFRS 16 Leases, no retroactive calculation done for comparison periods.

2) M&A amortization not included in D&A.

586 584544 541 534

31 38 39 49 47

5,3%6,5%

7,2%

9,0% 8,8%

2016A 2017A 2018A 2019A 2020LTM

EURm

Sales Adj. EBITDA excl IFRS 16Adj. EBITDA excl IFRS 16 %

(11.4%)

Sales and EBITDA development 1) Summary of historical P&L 1)

EURm 2016 2017 2018 2019 2020 LTM 2019 Q1 2020 Q1

Sales 586.1 584.0 543.6 541.5 534.1 135.1 127.7

Cost of sales -458.7 -456.3 -419.3 -399.3 -392.5 -100.5 -93.7

D&A2) -8.0 -8.2 -7.7 -10.9 -11.7 -2.1 -2.9

D&A leasing -0.4 -0.3 -0.1 -0.1

Gross profit 119.4 119.5 116.7 130.9 129.6 32.4 31.1

% margin 20.4% 20.5% 21.5% 24.2% 24.3% 24.0% 24.3%

SG&A -96.2 -89.5 -85.1 -79.3 -81.0 -18.7 -20.3

D&A leasing -12.5 -11.8 -3.9 -3.1

Adj. EBITA 1) 23.1 30.0 31.6 39.0 36.9 9.9 7.7

% margin 3.9% 5.1% 5.8% 7.2% 6.9% 7.3% 6.0%

Adj. EBITDA 1) 62.8 60.7 16.0 13.8

% margin 11.6% 11.4% 11.8% 10.8%

Adj. EBITDA excl. IFRS 16 31.2 38.2 39.4 48.8 46.9 11.9 10.1

% margin 5.3% 6.5% 7.2% 9.0% 8.8% 8.8% 7.9%

Q1 EBITDA impact due to COVID-19

20

EBITDA excl. COVID-

19 impact

10,1

Impact from lost revenue

due to absenteeism

and lockdowns

0,2

Mitigated costs

Logistics and lodging

of staff

EBITDA excl. NRI

0,6 0,1

Employeecost

0,1

IT and facilities

costs

EBITDA incl. COVID-

19 impact

11,81,9

9,3

Extra ordinary costs due to COVID-19

E/O items trending downwards

Non recurring items, EUR millionsLTMBy quarter

Q1 non recurring items totaled EUR -1.6 million

• Of which EUR -1.1 million operational, whereof EUR -0.8 million refers to COVID-19

• Of which EUR -0.5 million transactional

E/O continued to decline and totaled EUR 6.0 million for 2020 LTM

Note: FY 2017 is consolidated at Issuer level and full year adjusted for the acquisitions of TWW group and Xzakt group. 21

0

5

10

15

20

25

30

35

40

45

50

16.6

2.2

37.3

7.2

Q2 2017

7.0 6.0

Q1 2017

9.5

Q3 2017

20.0

3.5

Q4 2017

23.8

Q1 2018

34.5

20.6

Q4 2018

4.3

Q2 2018

34.4

Q3 2018

3.6 4.0

32.5

Q2 2019

Q1 2019

15.0

3.12.2

Q3 2019

0.8

11.5

0.5

8.4

Q4 2019

1.6

Q1 2020

6.0

Solid cash flow in the quarter

• Q1 operating cash flow amounted to EUR 7.3 million (13.1)

• Q1 working capital change amounted to EUR -4.0 million (3.4)

• Working capital swing of temporary nature

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EURm 2019Jan – Dec

2019 Q1

2020 Q1

Profit/loss before tax 2,143 -908 -923

Adjustments for non cash items 33,429 7,211 8,071

Net financial items 17,565 4,041 4,292

Income taxes paid -7,456 -663 -126

Changes in working capital 5,684 3,396 -3,997

Operating cash flow 51,366 13,077 7,318

Investments -16,522 -2,345 -3,144

Acquisitions/disposals of business, net of cash -1,101 -604 -

Other -560 -93 27

Cash flow from investing activities -18,183 -3,042 -3,117

Cash flow from financing activities -32,055 -2,240 -1,242

Cash flow for the period 1,127 7,796 2,959

Q1 working capital in line with normal variations

Note: 2016 figures represents consolidated TWW accounts, 2017-2018 figures are consolidated at Issuer level. Q2 2017 and onwards includes the acquisition of Xzakt group.Q3 2018 and onwards, includes the acquisition of Awesome group.

EUR millions

23

-120-100

-80-60-40-20

020406080

100120140160

6,5

8,5

3,5

0,0

3,0

0,5

7,57,0

1,5

5,0

1,0

8,0

5,5

2,0

6,0

2,5

4,04,54.3

6.1

Q3 2018

Q4 2018

Q2 2016

5.45.4

Q4 2017

Q1 2017

Q1 2019

Q2 2019

6.3

5.3

24

4.7

4.9

Q1 2016

3.0

Q3 2016

Q4 2016

4.0

Q2 2017

Q3 2017

Q1 2018

6.4 5.5

18

Q2 2018

5.3 5.5

30 31 31

3.9

26 27 31 2229 34 25 30

36

NWC %

Prepaid expenses and accrued income

Trade receivables

Trade payables

Other receivables - Current

Accrued expenses and prepaid income

Other liabilities - Current

6.1

33Q

3 2019

Q4 2019

5.6

30

Q1 2020

5.9

31

3.9

Summary

• Solid demand subdued due to capacity limitations and increased operational cost

• Transcom is more relevant than ever – Strong development of new sales

• We’re staying the course in the new normal – Client focus and operational excellence through great culture and leadership

Summary

Thank you.