transcom's investor roadshow, london, march 2014
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20 March 2014
TranscomLondon Roadshow Presentation
Johan Eriksson, President & CEO
Pär Christiansen, CFO
Outstanding
Customer
Experience
Transcom at a glance
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 agentsTranscom’s business is to
help make sure that our
clients’ customers form
positive perceptions of their
interactions with them.
”
What is Transcom?
Transcom’s service portfolio enables the creation of outstanding customer experiences, while reducing cost and helping to drive growth
Customer service
• Quality, accuracy, speed,
efficiency and sales targets
• Competitive differentiation
• Reinforce buying decisions
and brand relationships
Technical support
• Tiered support models
• Extensive product training
• Resolve customer issues at
first contact
Customer retention
• Prevent defection and
maximize customer lifetime
• Protect your revenue
streams and turn potential
defectors into fans
4
Customer acquisition
• Acquire new customers
cost-efficiently
• Uncover customer needs,
identify the right offerings,
secure customer orders
Cross-selling & upselling
• Generate new sales directly
from existing customer base
• Support complex products
in day-to-day service
interactions
• Adept at building
relationships
Collections
• Recover debt and
rehabilitate customers
• Case management approach
• In-house teams for legal
processes
5
Transcom in numbers
• 29,000 people…
• …representing more than 100 nationalities
• 62 contact centers, onshore, off-shore and
near shore…
• …in 26 countries
• Delivering services in 33 languages...
• ...to over 400 clients in various industry verticals
• €653.2 million revenue in 2013
• Market cap: SEK 1,525.8 million as at December 30, 2013. Listed on NASDAQ OMX
Stockholm (TWW SDB B and TWW SDB A)
A global player serving clients in many industries
6
North Europe
Iberia &
Latam
North
America &
Asia
Pacific
Central & South
Europe
CMS
30%
22%20%
19%
9%
Communi-
cations
Financial
Services
Retail
Public Sector
Services
61%14%
6%
4%
7%
4%
Healthcare
3%
Other
Business mix
By region By industry
We have an extensive global footprint
Domestic markets
Austria
Netherlands
Slovakia
UK
Germany
Norway
Spain
Australia
Near Shore Locations Offshore Locations
Chile*
Peru*
Colombia*
Philippines*
Tunisia
7
Czech Republic
USA
Canada
Italy
Poland
Sweden
Denmark
Portugal
Switzerland
Croatia
* Developing into domestic/near shore
markets
Canada
Croatia
Estonia
Latvia
Czech Republic
Hungary
Lithuania
What is customer experience and how does Transcom add value?
2
What is customer experience?
• There is a multitude of “touch points” where
a customer can interact with an
organization, e.g. when evaluating,
purchasing, using, or getting support for a
product
• Customer Experience = The sum total of
a customer’s experience with a product, a
service, or a brand
9
“Customer experience is how your customers
perceive their interactions with your company.”
What is Transcom’s role?
10
Transcom’s principal role is to positively impact customer loyalty and, thus, revenue
through making service and support interactions as effortless and enjoyable as possible
How Transcom delivers Customer Experience
11
Multiple ToolsInconsistent Information
High Handle Time Low Productivity
• At the start of this project, we did not have a dynamic and well-designed knowledge
base system that could aid our agents in supporting and resolving our client’s
customers’ issues
• The reference information that our agents had to use was spread out across many
different documents, affecting their productivity negatively:
Client case example – innovative knowledge base for a world-leading consumer electronics company
Process Maps and Decision Trees
Frequently Asked Questions
Simulators Product How To’s
F e a t u r e s B e n e f i t s G a i n s
Transcom developed a robust and dynamic knowledge base system
O n e S t o p O n e S o u r c e
“One-Stop-Shop” repository of support tools and materials
R e p o r t s A n a l y t i c s
Most Viewed Content RatingAgent
FeedbackSite Utilisation Keywords
Powerful analytical capabilities
89.00%
97.00%
80.00%
82.00%
84.00%
86.00%
88.00%
90.00%
92.00%
94.00%
96.00%
98.00%
100.00%
May June July August September
First Call Resolution
First Call Resolution Linear (First Call Resolution)
Our first call resolution is significantly better since the implementation of the system
69%
85%
50.00%
55.00%
60.00%
65.00%
70.00%
75.00%
80.00%
85.00%
90.00%
95.00%
100.00%
Q1 Q2 Q3 Q4
Customer Satisfaction Rating
Customer Satisfaction Rating Linear (Customer Satisfaction Rating)
And we have seen a significant increase in customer satisfaction
Our performance in 2013
3
Key events in 2013
• Settlement agreement signed concerning former French subsidiary
• Settlement agreement resolving tax dispute in Italy
• Divestment of German Credit Management Services (CMS) operations
• Establishment of operations in Colombia
• Organizational changes in the North America & Asia Pacific region
• Transcom Cares launched as overarching Corporate Social
Responsibility (CSR) governance program
19
20
• Efficiency improvements and
continuous focus on
underperforming areas
• Targeted sales efforts
- Growth with existing clients
in new geographies
- Broadening client base
Positive progress on turnaround
During 2013, we continued to focus hard on enhancing Transcom’s performance
599.2
631.8
560.2
589.1
554.1
605.6
653.2
2007 2008 2009 2010 2011 2012 2013
6.0%
4.4%
2.2%
0.7%
1.5%
2.7%
4.3%
Revenue (€m)
Operating margin*
* Underlying performance, excluding restructuring and other non-
recurring costs* Excluding non-recurring items.
Revenue in 2013 increased by 7.9% compared to 2012.
180.4 197.0
138.3145.8
119.4130.9
112.1122.7
55.3
56.8
2012 201321
Central &
South Europe
Iberia & Latam
North America
& Asia Pacific
North Europe
Growth
9.2%
CMS
Net revenue, 2013 vs. 2012
€m
5.5%
9.6%
9.4%
2.7%
653.2
605.6• All regions contributed to overall
growth
• Net of currency effects, growth was 8.8% (9.3% in core CRM operations)
• Main driver is increasing volumes with our installed client base
We have improved against the most important operational KPIs
22
Key performance
driver
Trend vs. 2012 2013 vs. 2012
Average Seat
Utilization ratio
(87% vs. 85%)
Share of revenue
generated offshore
(22% vs. 20%)
Average Efficiency
ratio (billable over
worked hours)
n/a (positive development)
Monthly staff
attrition
n/a (stable)
Improvements on four KPIs vs. previous year
Continue improving key performance indicators
• Seat utilization
• Efficiency
• Offshore/onshore split
• Attrition
EBIT 2012 Cost savings programs
Volume & efficiency Expansion costs Other EBIT 2013
EBIT, excluding non-recurring items, increased by €8.7m in 2013 compared to 2012
23
8.9
+8.9
+8.1
-2.9
17.6
-5.4
EBIT margin* increase in FY 2013 driven by improvements in Central & South Europe and CMS
24
FY 2013 FY 2012
EBIT margin*
North Europe
Central & South Europe
Iberia & Latam
North America & AP
CRM
CMS
Total
2.5%
2.9%
2.8%
-1.2%
1.9%
10.9%
2.7%
3.7%
-3.8%
4.6%
0.2%
1.3%
3.5%
1.5%
* Excluding non-recurring items
• North Europe: Costs for closing the Norrköping
site and the CRM operations in Denmark.
Temporarily higher costs due to volume ramp-up
in Norway and Sweden. New sites in Oslo,
Norway and Umeå, Sweden increased costs.
• Central & South Europe: Higher volumes,
increased offshore delivery, and deconsolidation
of former French subsidiary.
• Iberia & Latam: Costs due to expansion in Spain
and Latam, and closure of site in Valdivia, Chile.
Lower volumes and efficiency in Chile.
• North America & Asia Pacific: Lower volumes
delivered onshore in North America, price
decrease on one account.
• CMS: Revenue increase and lowered production
and overhead costs
25
65.071.0
75.980.7
86.391.1
94.6 94.4
11.917.2
32.138.1
59.3 56.7
49.7
36.2
0.00
0.50
1.00
1.50
2.00
2.50
3.00
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Q112 Q212 Q312 Q412 Q113 Q213 Q313 Q413
Gross debt (€ m) Net debt (€ m) Net debt/EBITDA
• Gross debt stable compared to the Q313 level
• Net Debt decreased by €13.5m compared to the Q313 level
• Net Debt/EBITDA ratio: 1.40 (1.93 in Q313)
• Financial cost €1.3m (€2.0m in Q313)
Debt & leveraging
4
Going forward– Transcom’s strategic direction
Key priorities in 2014
27
• Increase onshore seat utilization in North America
• Increase focus and accountability
• Focus on creating opportunities for profitable growth, also expanding onshore footprint
• Improve operational performance in the North Europe region
• We have ended a number of unprofitable client contracts
• Greater financial predictability through the implementation of a new agreement with one of our largest clients
• Improve operational performance in Latin America
• Higher costs due to ramp-down in Chile while simultaneously ramping up in Colombia
• Presence in Colombia will support strategy to expand in fast-growing Latin American markets
28
Transcom’s brand promise
Outstanding Customer
Experience, driving
revenue and brand
loyalty
”
Transcom’s long-term strategic priorities are informed by these important trends
What we are seeing… Transcom is responding by…
More channels and increasing complexity• Rising interaction volumes with an increasingly
sophisticated customer base
• Social networks are emerging as important
customer channels
• Increasing product complexity
• Developing integrated channel competencies
• Providing more insight due to increasing
customer demands
• Developing analytic platforms and KPIs specific
to customer service via non-voice channels
Business Focus• While price is still an issue, more and more, the
focus is on generating revenue – up-sell/cross-
sell and customer retention – and customer
loyalty
• Sourcing, training and retaining the best agents
to deliver higher levels of customer service
Market• Stagnant growth in mature, Western
outsourcing markets
• Significantly higher growth in emerging markets,
particularly APAC and Latin America
• Seeking to capitalize on domestic opportunities
in developing markets to drive growth and
diversify revenue
• Developing traditional offshore locations as
delivery centers
• Increasing focus on community engagement
30
Growth opportunities
North America and Asia Pacific
• Continue expanding in local markets in Asia Pacific
• Expand onshore volumes in North America
Latin America
• Serving domestic markets and the US, in addition to Spanish clients
North Europe
• Leverage strong position in home market
Central Europe
• Primarily near shore opportunities
• Strong capability in expanding Eastern European markets
5
Transcom Cares– CSR focus areas and objectives
Transcom Cares was launched as our CSR governance program in November 2013
32
Starting in November 2013, Transcom Cares is our global CSR
governance program. We have three prioritized focus areas:
People developmentTo be recognized as a responsible employer, attracting people and
strengthening our brand in all our local markets.
Equality and diversityWe strive for gender equality on all levels, and are dedicated to show that equal
opportunity employment is part of our DNA.
Community engagementMany of our community engagement activities depend on our employees’
passion to contribute their time and energy, making us all proud to work at
Transcom.
33
What we have done
People Development
• >85% of managers
recruited internally – a true
career for young people
• Learn as we go – role
models and mentors
support our young leaders
on their road to success
• Caring managers – 90% of
employees feel they get
support from their
manager
• Extensive training
programs and talent
management programs in
place or to be launched
Equality and Diversity
• Employment of disabled
people, for example in the
Netherlands, Germany,
Spain, and Chile
• Women make up 61% of
our workforce, but 39% of
managerial employees –
we need to empower and
facilitate a more equal
distribution
• Diversity of cultures and
languages is key to our
service delivery, e.g. in
our multilingual centers
Community Engagement
• On-site child care centers,
pharmacies, and
employee microloans are
some activities supporting
our employees in the
Philippines
• Supporting the local
communities in the cities
or countries we are
operating in – via charity
organizations or direct
involvement
• Activities to aid poor
people in Latin American
countries and Asia
34
Our objectives going forward
People Development
• Launch of a global Talent
Management program in
April 2014
• Global management
training program for
managers at all levels
• Attrition ratio in line with
market levels
Equality and Diversity
• Gender distribution -
manager ratio reflecting
our gender distribution for
the total workforce
• Diversity – more proactive
management and follow-
up
Community Engagement
• Transcom Cares program
launched globally in 2013
• Activities will continue to
be initiated and driven by
employees, supported by
Transcom
Transcom fully supports the ten principles of the UN Global Compact with
respect to human rights, labor rights, environmental care and anti-
corruption work.
These principles are an integral part of our corporate strategy, business
culture and day-to-day operations.
Policies and Codes of Conduct
Code of Business Conduct
• Ethical practices adopted across our company and the standards to which our people are expected to aspire.
• Action plan: All employees are obliged to sign the Code of Conduct and we also conduct traning sessions every year.
Supplier Code of Business
Conduct
• Standards to which our suppliers and partners are expected to adhere.
• Action plan: Supplier self-assessments and evaluation conducted by Ethos during Q1 2014.
Environmental Policy
• Our commitment to a responsible approach to reducing the environmental impact of our business and to encourage our people to adopt environmentally -friendly working practices.
• Action plan: Review of travel policies.
Transcom is a signatory of UN Global Compact
35
Stay up-to-date on Transcom
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www.transcom.com blog.transcom.com
Thank you!
Questions?
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