Second quarter 2020 highlights
Comments by the CEO
Strong quarter in the midst of the COVID-19 pandemic
Transcom delivers a strong second quarter despite extraordinary circumstances. EBITDA excluding non-recurring items increased 19% to €11.5 million and the margin increased 1.5p.p. compared to the same period last year. Transcom’s revenue grew 11% during the quarter, adjusting for the divestment in Spain and the INPS contract discontinued in 2019.
In the COVID-19 pandemic, Transcom’s services are more relevant than ever. When consumers are distanced from physical stores, we provide essential customer services over digital channels and phone. Demand from existing clients was strong during the quarter and there was a continued intake of new contracts.
Our priorities in COVID-19 are to keep our people safe and to continue to service our clients. During Q2, approximately 60% of our employees were working at home (WAH). This also contributes to preventing further spread of the Coronavirus while we support the wheels of society turning.
However, restrictions and lockdowns due to the pandemic have rendered additional cost to uphold service for clients. In total, non-recurring cost related to COVID-19 amounts to €3.6 million during the quarter. The situation started to normalize during June and limited non-recurring cost is expected from July onward, provided no major reinstated lockdowns occur.
I want to extend my deepest appreciation to all employees of Transcom. Through an extraordinary global mobilization, we have maintained our client service. As a result, we have solidified our client relationships and we stand stronger than ever.
Transcom delivers world class customer service. We provide resilience in the new normal, through proven WAH capabilities, industry leading digital solutions and a diversified footprint across three continents. The pandemic and macro-economic situation are still uncertain. But we expect the positive momentum to continue into second half of the year, at the same time as bottlenecks and non-recurring cost related to the pandemic tamper off.
Our priorities remain. We aim for profitable growth through client focus and operational excellence, driven by great culture and leadership!
Jonas Dahlberg, President & CEO
Events after the reporting period
In Q2 2018 €8.0 million was provisioned relating to a dispute with the social security inspection in Spain. According to the inspection, certain legal professionals hired as consultants, should be considered as employees and hence render payments for social security. Subsequently, Transcom appealed the case to court. On July 14, 2020, the court ruled in favor of the social security inspection. Transcom will likely appeal the verdict.
Q2 2020 Financial Update Call
Transcom will host a conference call on Tuesday, July 21, 2020 at 9:00 CET. The presentation for the call is available on https://transcom.com/en/investor-relations.
Date/Time: Tuesday, July 21, 2020 at 9:00 CET
Online Registration link: http://emea.directeventreg.com/registration/5574908
Important note: Please register via the link above at least 5-10 minutes prior the call in order to obtain the dial-in numbers and pin code required for the call. If you register in advance, you will be sent an email reminder a day prior to the call.
This information is such that Transcom Holding AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 08:00 CET on July 21, 2020.