Q4 2019 Presentation

February 14, 2020

Today’s presenter

Jonas Dahlberg President & Chief Executive Officer Transcom 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

• Q4 highlights • Company and strategy • Financial performance • Summary

Q4 highlights

• Continued positive trajectory on key financials – EBITDA, E/O items, operating cash flow, leverage

• Strong inflow of new business in Q4 and early 2020 – Mitigating INPS contract ended November 30

• Continued expansion in near/offshore – Ramping up additional capacity in Zagreb (Croatia) and new site in Tunis (Tunisia), sites in Cairo (Egypt) and Davao (Philippines) under development

• Gearing up for next phase for Transcom – Profitable growth through client focus and operational excellence, supported by strong leadership and culture

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

27,000 customer experience specialists

serving customers via

Services & utilities

Commerce & Logistics

Auto- motive

Logistics Retail/ e-commerce

IT/Tech White- goods

Telco & Cable

Social media Messaging Telco Cable

6

Where we do it: Western Europe and Global English markets – Through international delivery

7

Europe Global English

Markets • Delivery across

Europe • 33 languages

• US • UK • Philippines

Delivery model • On-shore in 9

countries • Near- /off-shore

from 8 countries

• Off-shore from the Philippines

• Work-at-home in the US

Share of total revenue

2019FY

66% 34% Europe

Global English

Site locations Serviced geographies

Solid foundation as basis for profitable growth

8

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

Closing the books on PPP – 33 MEUR savings achieved in OH and administration

9

2017 Target

11.0

2018 2019

21.0

33.0 33.1

5.0

6.0 10.8

8.4

1.8

16.0

12.2

4.8

12.3

10.6

10.2

English speaking region Europe Central functions

Headcount reductions in support functions, transfer to Shared service centers, and procurement

Headcount reduction through delayering, ratio optimization, and transfer of services to Shared service centers

Headcount reduction through delayering, ratio optimization, and transfer of services to Shared service centers

Actual run-rate

Gross of investments, ca. EUR 1.5m in 2018 and ca. EUR 1.0m in 2019. Some Central functions savings shifted to Europe and English

EUR m

Transcom is growing in attractive customer segments

10 Note: FY 2017 is consolidated at Issuer level, adjusted for EO items and full year adjusted for the acquisitions of TWW group and Xzakt group. 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. EBITA% per industry includes allocation of unallocated/group-wide expenses.

Developments during the quarter

5.1%

6.4%

10.7%

EBITA 2019

Revenue by industry segment, EUR m

99 130 155

214 206

208

271 208 179

2017 2018 2019

Telco & Cable

Service & Utilities

Commerce & Logistics

584 544 541

• Ramping up Danske bank • New utility client • Exiting INPS

• Further optimization of Telco portfolio

• Adding several new small and mid-sized e-com clients

Transcom is shifting towards profitable delivery locations

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Revenue by type of delivery (%), EUR m Q4 2019 • Ramping up additional capacity in Zagreb

and new site in Tunis • Developing new sites in Cairo (Egypt) and

Davao (Philippines) – Ready for clients end Q1

Q3 2019

• New site in Pasig, Philippines • New site in Elblag, Poland

Q2 2019 • Acquisition of ASA Informationsdienste

Q1 2019

• Divesting operations in Chile • New site in Novi Sad, Serbia • New site in Zagreb, Croatia

Nearshore 544

2017 2018 2019

Offshore

Onshore

584 541

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

8%

19%

2%

EBITA 2019

74% 71% 65%

18% 20% 25%

8% 9% 10%

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

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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

Financial performance

Q4 – Solid improvement of financials

• Profitability – Q4 EBITDA ex EO • 16.6 MEUR, +1.0 MEUR • 11.7%, +0.8pp

• Significantly lower EO items: Q4 -0.5 MEUR (-3.6)

• Improved operating cash flow: Q4 21.2 MEUR (3.5)

• Net debt/EBITDA 4.2x (5.3) 1)

14 1) Net debt / EBITDA 2019 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 47.4m (not including non-recurring items in excess of 15% of EBITDA) and Net Interest Bearing Debt of EUR 198.3m (excluding Subordinated Loans and pension liabilities)

Continued trajectory of improved profitability

15 1) 2014 – 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 is fully including recording of IFRS 16 Leases, no retroactive calculation done for comparison periods.

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

627 586 584

544 541

32 31 38 39 49

5,2% 5,3% 6,5% 7,2%

9,0%

2015A 2016A 2017A 2018A 2019A

EURm

Sales Adj. EBITDA Adj. EBITDA %

(11.6%)

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

EURm 2015 2016 2017 2018 2019 2018 Q4 2019 Q4

Sales 626.5 586.1 584.0 543.6 541.5 143.0 141.8

Cost of sales -492.7 -458.7 -456.3 -419.3 -399.3 -105.8 -101.1

D&A2) -8,9 -8.0 -8.2 -7.7 -10.9 -2.1 -4.1

D&A leasing -0.4 -0.1

Gross profit 125.0 119.4 119.5 116.7 130.9 35.1 36.5

% margin 19.9% 20.4% 20.5% 21.5% 24.2% 24.5% 25.8%

SG&A -101.6 -96.2 -89.5 -85.1 -79.3 -21.7 -20.5

D&A leasing -12.5 -3.3

Adj. EBITA 1) 23.4 23.1 30.0 31.6 39.0 13.5 12.7

% margin 3.7% 3.9% 5.1% 5.8% 7.2% 9.4% 9.0%

Adj. EBITDA 1) 62.8 20.2

% margin 11.6% 14.3%

Adj. EBITDA excl. IFRS 164) 32.3 31.2 38.2 39.4 48.8 15.6 16.6

% margin 5.2% 5.3% 6.5% 7.2% 9.0% 10.9% 11.7%

E/O items trending downwards

Non recurring items, EUR millions LTM By quarter

Q4 non recurring items totaled EUR -0.5 million

• Of which EUR -0.3 million operational

• Of which EUR -0.2 million transactional

E/O continued to decline and totaled EUR 8.4 million for 2019

Note: FY 2017 is consolidated at Issuer level and full year adjusted for the acquisitions of TWW group and Xzakt group. 16

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

3.1 2.2

Q3 2019

0.8

11.5

0.5

8.4

Q4 2019

Improved operating cash flow

• 2019 operational cash flow improved to EUR 51.4 million (2.5)

• Q4 operating cash flow improved to EUR 21.2 million (3.5)

• Q4 working capital improved EUR 8.4 million (-0.8)

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EURm 2018 2019 2018

Q4 2019

Q4

Profit/loss before tax -32,226 2,143 2,636 4,496

Adjustments for non cash items 30,050 33,429 -752 5,717

Net financial items 19,674 17,565 3,861 4,973

Income taxes paid -2,288 -7,456 -1,513 -2,382

Changes in working capital -12,716 5,684 -774 8,417

Operating cash flow 2,495 51,366 3,459 21,220

Investments -8,803 -16,522 -2,162 -6,738

Acquisitions/disposals of business, net of cash -34,033 -1,101 -1,046 -

Other 1,048 -560 791 -476

Cash flow from investing activities -41,788 -18,183 -2,416 -7,213

Cash flow form financing activities 34,072 -32,055 -4,450 -12,165

Cash flow for the period -5,222 1,127 -3,407 1,841

Q4 working capital in line with normal variations

Note: 2014–2016 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.

Non recurring items, EUR millions

18

-120-100

-80-60-40-20

020406080

100120140160

6,5

8,5

3,5

0,0

3,0

0,5

7,5 7,0

1,5

5,0

1,0

8,0

5,5

2,0

6,0

2,5

4,0 4,5 4.3

6.1

Q3 2018

Q4 2018

Q2 2016

21

5.4 5.4

Q4 2017

Q1 2017

Q1 2019

Q2 2019

6.5 6.3

Q1 2015

5.3

3.4

24

Q2 2015

Q3 2015

4.7 4.8

Q4 2015

4.9

Q1 2016

3.0

40

Q3 2016

Q4 2016

4.0

Q2 2017

Q3 2017

Q1 2018

6.4 5.5

18

Q2 2018

5.3 5.5

34 30 30 31 31

3.9

26 27 31

22 29 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

33

Q3 2019

Q4 2019

5.6

30

Summary

• Solid quarter ending a strong year

• Strong order intake, mitigating loss of INPS • Gearing up for profitable growth

Summary

Thank you.