DGAP-Ad-hoc: Majorel Group Luxembourg S.A. / Key word(s): Half Year Results/Half Year Results THIS ANNOUNCEMENT RELATES TO THE DISCLOSURE OF INFORMATION THAT QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE MEANING OF ARTICLE 7(1) OF THE MARKET ABUSE REGULATION (EU) 596/2014. Press release Majorel reports strong results for H1 & positive outlook for 2022 Net revenue growth +16% (like-for-like +17%) | Operating EBITDA growth +14% Luxembourg, August 26, 2022: Majorel Group Luxembourg S.A. (Euronext Amsterdam: MAJ) ("Majorel" or the ''Company"), a leading global provider of next-generation end-to-end customer experience (CX) solutions for digital-native and vertical leading brands, today reports on its reviewed results and publishes its Half-Year Financial Report. FINANCIAL HIGHLIGHTS
BUSINESS HIGHLIGHTS
Commenting on the strong results, Thomas Mackenbrock, CEO of Majorel Group said: "Majorel's performance in the first half of 2022 was strong, and we have increased our guidance for the full year. Through our relentless focus on executing our proven strategy, we have entered nine new countries, and expanded our workforce to more than 78,000 team members. In addition, we have announced our agreement on key terms for a potential merger with Sitel, transforming two high-profile CX groups into a global industry leader. We will continue to build on our success to deliver positive outcomes for our clients, our team members, our shareholders and the local communities where we operate." FINANCIAL OVERVIEW, BUSINESS OVERVIEW, AND OUTLOOK CONTINUING MOMENTUM IN ALL BUSINESS SEGMENTS The Company reported net revenue of €976 million for H1 2022, representing YOY growth of +16% with continued momentum across its business Segments. This was driven by the strong growth in net revenue generated with existing clients, mainly in the target vertical of Global Internet, and an increase of offshore delivery. The first-time consolidation of the Turkish Mayen business, which became part of Majorel on January 1, 2022, and Alembo (June 1, 2022) contributed approximately 2 percentage points to the overall net revenue growth for H1 2022. Net revenue from non-recurring COVID-19 related business contributed €37 million (H1 2021: €59 million). Therefore, adjusted for M&A and COVID-19 related business, like-for-like growth was +17%. Net revenue and net revenue by business Segment
EASA Segment: Europe, Africa and South America The EASA Segment has delivered YOY growth in net revenue for H1 2022 of +10%. The main driver for this was the continuing strong development of the Company's near- and offshore locations in Africa, Eastern Europe, and Latin America. As outlined above, EASA also includes the COVID-19 related business and the first-time consolidation of the Turkish Mayen and Alembo businesses. Adjusted for these effects, the like-for-like growth H1 2022 in EASA was +11%. GEMS Segment: Global English, Middle East and South East Asia The GEMS Segment has delivered YOY growth in net revenue for H1 2022 of +35%. This strong increase continues to be driven by the Company's expansion with its Global Internet clients, particularly in the Philippines, Canada, the US, Malaysia, Egypt, and Kenya. CEA Segment: China and East Asia The CEA Segment has delivered YOY growth in net revenue for H1 2022 of +26%, a contribution of 5% of Group net revenue, in line with management expectations, supported by the continuing growth of digital consumer engagement services, as well as a focus on consumer products, automotive, and digital-native clients. CONTINUING STRONG PROFITABILITY IN ALL BUSINESS SEGMENTS Operating EBITDA of €175 million in H1 2022 grew by +14% compared to H1 2021 (€153 million). The main reasons for this development were: overall business growth; operational excellence; geographic expansion; more complex, value-added services; client portfolio management; improved global delivery mix; COVID-19 related services; continued work from home (WFH)[9]; and the first-time consolidation of Mayen and Alembo. Majorel's Operating EBITDA margin was 17.9% (H1 2021: 18.2%). EBIT (earnings before interest and taxes) amounted to €138 million for H1 2022, corresponding to an increase of 21% compared to the H1 2021 results of €114 million. Group Profit amounted to €102 million in the first half of 2022, representing a year-over-year increase versus €85 million generated in H1 2021. EPS was €1.01. Free cash flow[10] was €36 million (H1 2021: €85 million) and, adjusted for non-recurring items[11], the amount is €80 million. The net cash position at the end of H1 2022 was €122 million (H1 2021: €128 million). Operating EBITDA and Operating EBITDA by business Segment
EASA Segment: Europe, Africa and South America Operating EBITDA for the EASA Segment amounted to €122 million for H1 2022, an increase of +6% compared to €115 million in H1 2021. The Operating EBITDA margin decreased slightly from 18.1% in H1 2021, to 17.4% in H1 2022. Also in EASA, the profitability developments can be explained by: overall business growth; geographic expansion; continued operational excellence; more complex, value-added services; reduced COVID-19 related services; client portfolio management; decreasing WFH rates; and an increasing share of offshore delivery. GEMS Segment: Global English, Middle East and South East Asia Operating EBITDA for the GEMS Segment amounted to €49 million in H1 2022, increasing by 53% year-over-year from €32 million in H1 2021. The operating EBITDA margin increased from 19.6% in H1 2021 to 22.2% in H1 2022. Margin improvement in GEMS can be similarly explained by Majorel's main profitability developments. CEA Segment: China and East Asia Operating EBITDA for the CEA Segment amounted to €4 million in H1 2022, compared to €7 million in H1 2021. The Operating EBITDA margin decreased from 16.8% in H1 2021 to 7.6% in H1 2022. Despite the growth in net revenue, the CEA segment experienced some challenges in H1 2022 due to COVID-19 restrictions and the lock-down in China which affected margins, and is the main reason for the decrease of profitability. CONTINUED SUCCESSFUL STRATEGY EXECUTION Geographical expansion Majorel further extended its near and offshore capabilities and entered nine new countries in H1 2022. Three of these were through organic growth - Ghana, Greece and North Macedonia; two through acquisition - Suriname and Turkey; and four through the expanded strategic partnership with Booking.com - Japan, Lithuania, South Korea, and Thailand. This enables the Company to offer even more flexible delivery options to its clients, and means that Majorel is now present in 41 countries East-to-West on five continents (exceeding our mid-term target of more than 40 countries), supporting more than 60 languages from 160+ locations - including 23 multilingual-hubs. Growth with clients Our current client portfolio comprises more than 400 clients worldwide from a wide range of industries, with a particular focus on fast-growing Global Internet and vertical leaders across various industries. Retaining and growing their business is the bedrock of our success and remains a focus area for growth. The Company added more than 30 new client logos in H1 2022 - a solid foundation for building future long-term client relationships. Across all our verticals, we continue to work and grow with our clients in true partnership, and with deep roots built on mutual trust. In H1 2022, this resulted in net revenue retention (NNR) of 114% including the reduction of COVID-19 related services. Excluding this, NRR is 117% (H1 2021: 118%). Majorel completed its expanded strategic partnership with Booking.com in June, fulfilling the Company's strategic goal of expanding into new countries and further consolidating its existing presence in other markets too. Growth through M&A On January 1, 2022, Mayen, one of Turkey's leading nearshore CX providers, became a member of the Majorel family. In addition, the Company announced that it had signed a contract to acquire IST Networks, a leading full-service CX Technology Services provider - completion is now expected in Q3 2022. In June, Majorel completed the acquisition of Alembo, a CX and BPO company based in Suriname. Progress in all strategic KPIs In H1 2022, 49% of net revenue was from Global Internet clients (FY 2021: 45%), progressing towards our mid-term target of >50% and including 23% of net revenue from Majorel's Content Services, Trust & Safety line of business (FY 2021: 21%), in line with our mid-term target of 20-25%. Tech & Expert Services represented 9% of net revenue (FY 2021: 9%), compared to our mid-term target of 10-15% and, in line with our previous guidance, the net revenue share from the Telco sector continues to decrease, equating to 10% of group net revenues in H1 2022 (FY 2021: 12%) compared to our mid-term target of ~10%. Offshore delivery represented 42% of net revenue (FY 2021: 39%), compared to our mid-term target of 45-50%. Potential merger with Sitel On June 20, 2022, Majorel announced it had agreed on key terms for a potential merger with Sitel. In the past weeks, good progress has been made on the reciprocal due diligence and the validation of synergies between the two companies. OUTLOOK Majorel increases its guidance for the full fiscal year 2022. The outlook is based on the Company's current assessment on the development of the business in H1 2022 and the general CX market, combined with economic and labor market conditions in its geographic footprint, including expected effects from inflation. Against this background and Majorel's strong performance in H1 2022, the Company expects net revenue for the full year 2022 to grow to €1,900-2,000 million (previously €1,850-1,950 million). In addition, Majorel expects that Operating EBITDA for the full year 2022 will be in the upper half of the margin guidance of 16.0-17.0%, resulting in a correspondingly higher absolute Operating EBITDA outlook for the full year 2022. Naturally, Majorel will continue to keep a careful watch on the saddening events in Ukraine, the ongoing COVID-19 situation, and increased macro-economic volatility. This includes monitoring any economic consequences around the world, particularly inflation, and their potential impact on Majorel's business. Please find below in the Appendix, the primary Condensed Consolidated Interim Financial Statements: Profit and Loss; Comprehensive Income; Financial Position; Cash Flow; and Changes in Equity. INVESTOR AND ANALYST CONFERENCE CALL A webcasted conference call for investors and analysts will be hosted on Tuesday, August 30, 2022 at 14:00hrs CEST. If you would like to participate in the conference call, please pre-register by clicking here and you will then receive the dial-in details. To follow the presentation, participants of the conference call can use the following link (only slides, no audio): https://www.webcast-eqs.com/majorel20220830/no-audio If you'd like to follow the presentation without participating in the conference call, you can follow the webcast via livestream and you will receive the audio via your Internet browser. No dial-in to the conference call is required. https://www.webcast-eqs.com/majorel20220830 The presentation of the H1 2022 results is currently available on the Investor Relations section of Majorel's website (ir.majorel.com). FINANCIAL CALENDAR (INDICATIVE) Q3 2022 Trading Update - November 3, 2022 ABOUT MAJOREL We design, build and deliver next-generation end-to-end CX solutions for many of the world's most respected digital-native and vertical leading brands. Our comprehensive east-to-west global footprint in 41 countries across five continents, with more than 78,000 team members and 60 languages, allows us to deliver flexible solutions that leverage our expertise in cultural nuance, which we believe to be essential for true excellence in CX. We have deep domain expertise in tech-augmented front to-back-office CX. Additionally, we offer Digital Consumer Engagement, CX Consulting, and an innovative suite of Proprietary Digital Solutions for industry verticals. We are a global leader in Content Services, Trust & Safety. We believe the 'Majorel difference' to be our culture of entrepreneurship. CONTACT Investor Relations Media Relations NOTES [1] Net revenue for the Group corresponds to revenues as reported in our management reporting less certain direct, order-related external costs which are part of external expenses and costs of materials and consist mainly of cost of services purchased (subcontracted or outsourced services). Net revenue for each Segment corresponds to the according Segment revenues less certain direct, order-related inter-Segment and external costs. Management reporting data excludes revenues from minor activities (primarily the Sonopress Business) outside Majorel Group's core business which are reported in the Condensed Consolidated Interim Financial Statements (the "Sonopress Business" is defined as certain non-core business activities historically carried out by Arvato de Mexico, S.A. de C.V., which was wound down in 2021). DISCLAIMER This announcement is released by Majorel Group Luxembourg S.A. (the "Company" or "Majorel") and contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR). The Company's financial information presented in this announcement has been derived from the management accounts of the Company and are not presented in accordance with IFRS. Such financial measures are not measures of financial performance in accordance with IFRS and may exclude items that are significant in understanding and assessing Majorel's financial results. Therefore, these measures should not be considered in isolation or as an alternative to loss for the period or other measures of profitability, liquidity or performance under IFRS. You should be aware that the presentation of these measures may not be comparable to similarly titled measures used by other companies, which may be defined and calculated differently. This financial information is subject to updating, revision, amendment, verification, correction, completion and change without notice. It does not purport to contain all information required to evaluate the Company or the Majorel group and/or its financial position. The information does not constitute a recommendation regarding any loans or securities of the Company. In providing access to this announcement, neither the Company nor any other person undertakes any obligation to provide you with access to any additional information or to update the information as part of this announcement or to correct any inaccuracies in any such information. No representation, warranty or undertaking, express or implied, is made by the Company or any other person as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained therein or any other statement made or purported to be made in connection with the Company or any of the Company's respective affiliates, for any purpose whatsoever, including but not limited to any investment considerations. In addition, no duty of care or otherwise is owed by the Company or any of the Company's respective affiliates to recipients of the information within this announcement or any other person in relation to the information. This announcement include(s) forward looking statements. All statements other than statements of historical or current facts contained in this announcement, including statements regarding the Company's future results of operations and financial position, industry dynamics, business strategy and plans and its objectives for future operations, are forward-looking statements. These statements represent management's opinions, expectations, assumptions, beliefs, intentions, estimates or strategies regarding the future, which may not be realized. Forward looking statements are often indicated by terms such as "anticipate," "believe," "could," "estimate," "expect," "forecast," "goal," "intend," "look forward to," "may," "plan," "potential," "predict," "project," "should," "target" "will," "would" and/or the negative of these terms or other similar expressions that are intended to identify forward-looking statements. The forward-looking statements included in this announcement are based largely on Majorel's current expectations and projections about future events and financial trends that Majorel believes may affect its financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements involve known and unknown risks, uncertainties and assumptions that are difficult to predict or are beyond Majorel's control, and actual results may differ materially from those expected or implied as forward looking statements. For a detailed description of these factors and uncertainties, please refer to the "Risk Factors" section of Majorel's Prospectus, available at https://www.bourse.lu/issuer/MajorelGroupSA/105258. Majorel undertakes no obligation to publicly update or revise any of these forward looking statements. Moreover, new risks emerge from time to time. It is not possible for the Company's management to predict all risks, nor can it assess the impact of all factors on Majorel's business or the extent to which any factor, or combination of factors, may cause actual results to differ from those contained in any forward-looking statements. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this announcement may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Majorel cautions you therefore against relying on these forward-looking statements, and Majorel qualifies all of its forward-looking statements by these cautionary statements. The forward-looking statements included in this announcement are made only as of the date hereof. Although Majorel believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Neither Majorel nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Moreover, neither Majorel nor any other person undertakes any obligation to update any forward-looking statement to reflect events or circumstances after the date of this announcement or otherwise. You should read this announcement with the understanding that Majorel's actual future results, levels of activity, performance and events and circumstances may materially differ from what Majorel expects. This announcement does not constitute an offer of securities for sale or a solicitation of an offer to purchase the securities described in this announcement in the United States. In particular, any securities referred to in this announcement have not been and will not be registered under the US Securities Act of 1933 (the Securities Act), or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold or delivered, directly or indirectly, in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offering of securities in the United States. APPENDIX Condensed Consolidated Interim Financial Statements Condensed Consolidated Interim Statement of Profit and Loss For the six months ended 30 June
For the six months ended 30 June
For the six months ended 30 June
For the six months ended 30 June
a) As of June 30, 2022 and December 31, 2021, the subscribed capital amounts to €1 million. As of June 30, 2021 and December 31,2020, the subscribed capital amounted to €404 000.
26-Aug-2022 CET/CEST The DGAP Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. |
| Language: | English |
| Company: | Majorel Group Luxembourg S.A. |
| 18, boulevard de Kockelscheuer | |
| L-1821 Luxembourg | |
| Luxemburg | |
| Phone: | +352 42 142 56 11 |
| E-mail: | michele.negen@majorel.com |
| Internet: | www.majorel.com |
| ISIN: | LU2382956378 |
| WKN: | A3C3EP |
| Listed: | Regulated Unofficial Market in Berlin, Dusseldorf, Frankfurt, Munich, Stuttgart; Amsterdam |
| EQS News ID: | 1429555 |
| End of Announcement | DGAP News Service |
1429555 26-Aug-2022 CET/CEST
