Transcom: Interim report 1 January – 30 September 2015
”Transcom’s positive profitability trend continued in Q3. Our EBIT margin development on a rolling 12-month basis is steadily improving towards our mid-term target of at least five percent.”
Johan Eriksson, President & CEO of Transcom
Key highlights Q3 2015
- Organic revenue growth was 1.8%, mainly driven by higher volumes in the North Europe region
- EBIT margin, excluding non-recurring items, improved from 3.6% to 4.1%. Including a €1.0 million provision for a class action lawsuit in North America, the EBIT margin in Q3 2015 was 3.5%.
- Profitability improvements in the North Europe and North America & Asia Pacific regions.
- Net debt/EBITDA 0.6, well within our target.
Q3 2015 financial highlights
- Net revenue €151.8 million, a 4.0% increase compared to Q3 2014 (€146.0 million). Organic revenue growth was 1.8%.
- Gross margin excluding non-recurring items 20.5% compared to 20.8% in the same period 2014.
- EBIT excluding non-recurring items €6.2 million compared to €5.3 million in Q3 2014. EBIT including non-recurring items in Q3 2015 was €5.3 million.
- EPS 7.4 Euro cents compared to 10.4 Euro cents in Q3 2014.
YTD 2015 financial highlights
- Net revenue €469.7 million, a 2.5% increase compared to the same period 2014 (€458.1 million). Organic revenue growth was 2.2%.
- Gross margin excluding non-recurring items 19.8% compared to 20.3% in the same period 2014.
- EBIT excluding non-recurring items €16.9 million compared to €12.1 million in the same period 2014. EBIT including non-recurring items was €15.9 million in the first nine months of 2015.
- EPS 32.2 Euro cents compared to 11.9 Euro cents in the same period 2014.
Comments from the President and CEO
Transcom’s positive performance trend towards our mid-term financial targets was maintained in Q3. Our EBIT margin development on a rolling 12-month basis continued to strengthen, driven by improvements in the North Europe and North America & Asia Pacific regions.
CONTINUED ORGANIC REVENUE GROWTH
Organic revenue growth in Q3 2015 amounted to €2.7 million (+1.8%). This was mainly driven by growth with clients in the North Europe region.
The reported €5.8 million revenue increase in the quarter is comprised of:
- €+2.7 million: Growth in North Europe and, to a lesser extent, in Iberia & Latam and North America & Asia Pacific drove the increase. Transcom’s previously disclosed decision not to bid for a renewed public sector client agreement in Italy had a €3.3 million negative impact on the revenue comparison with Q3 2014.
- €-1.4 million: Divested CMS units.
- €+4.5 million: Positive currency impact.
IMPROVED EBIT MARGIN
Transcom’s EBIT margin in Q3 2015, excluding non-recurring items, was 4.1%, compared to 3.6% in Q3 2014. Performance improvements in the North Europe and North America & Asia Pacific regions drove the increase.
Reported EBIT in Q3 2015 was impacted by a €1.0 million provision for the settlement of a class action lawsuit in North America. While the final settlement amount is uncertain, it is estimated not to exceed €1.0 million.
I am pleased to report that Transcom’s EBIT margin development on a rolling 12-month basis continues to strengthen. We can see a steady improvement towards our mid-term target of at least five percent. Our objective going forward is to increase revenue organically, while continuing to improve our operational efficiency in order to strengthen margins further.
Johan Eriksson, President and CEO of Transcom
The interim report is also available for download on www.transcom.com
Results Conference Call and Webcast
Transcom will host a conference call at 10:30am CET (09:30am UK time) on Wednesday, October 21, 2015. The conference call will be held in English and will also be available as webcast on Transcom’s website, www.transcom.com.
To ensure that you are connected to the conference call, please dial in a few minutes before the start in order to register your attendance. No pass code is required.
Sweden: +46 8 505 564 74
UK: +44 203 364 5374
US: +1 855 753 2230
For a replay of the results conference call, please visit www.transcom.com to view the recorded webcast of the event.
Transcom WorldWide AB (publ) discloses the information provided herein pursuant to the Securities Market Act and/or the Financial Instruments Trading Act. The information was submitted for publication on October 21, 2015 at 08:00 AM CET.
For further information please contact:
Johan Eriksson, President and CEO +46 70 776 80 22
Ulrik Englund, CFO +46 70 286 85 92
Stefan Pettersson, Head of Group Communications +46 70 776 80 88