Majorel Group Luxembourg S.A. : Trading Update for Q3/9M 2021November 04, 2021
Company Talk: Majorel Group Luxembourg S.A. : Trading Update for Q3/9M 2021
DGAP-News: Majorel Group Luxembourg S.A. / Key word(s): 9 Month figures/9 Month figures
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.
- Continuing strong top-line net revenue growth: +33% YOY (9M 2021)
- Continuing growth with existing clients and digital services, net revenue retention of 116% (9M 2021)
- Further regional expansion: three additional countries in preparation, leading to 34 countries in total
- Increased top line and operating EBITDA guidance for current fiscal year 2021
Continued strong top-line growth momentum
Q3 2021: The Company reported net revenues of €440m for Q3 2021, YOY growth of +30%. This growth was driven by: Clients in the Global Internet (+54% YOY) and BFSI (Banking, Financial Services and Insurance +13% YOY) verticals; special effects from the Covid-19 business (€23m); and first-time consolidation of the China business (€27m). Like-for-like net revenue growth was +15%.
9M 2021: Net revenues in the nine months to September 30, 2021 were €1,282m, +33% YOY. This growth was driven by: Clients in the Global Internet (+58% YOY) and BFSI (+14% YOY) industry sectors; continued healthy growth with existing clients; special effects from the Covid-19 business (€83m); and first-time consolidation of the China business (€68m). Like-for-like net revenue growth was +17%.
Continued growth of digital services
As of September 30, 2021 44% of net revenues were from Global Internet Clients, including 21% of net revenues from Content Services, Trust & Safety. In addition, Tech & Expert services represented 9% of net revenues. In line with our midterm guidance, net revenues from the Telco sector decreased to 13% of group net revenues.
Continued geographic expansion
Three new countries are in preparation: Croatia, North Macedonia, and Ghana. Once the setups are completed, Majorel expects to be operating in 34 countries worldwide. During the nine month period to September 30, 2021, net revenues from offshore delivery have grown by +50% YOY. 38% of 9M group net revenues, have been generated from offshore delivery. As of September 30, 2021, Majorel had more than 66,800 team members worldwide.
Thomas Mackenbrock, CEO of Majorel Group said:
"I'm pleased to report that Majorel has maintained its strong growth momentum, underpinned by our deep long-term client relationships, together with the expertise and passion of our team members across the world.
In the first nine months of 2021, we've delivered year-on-year growth in net revenues of +33%. This has been driven by strong organic growth resulting from increased demand primarily from our Global Internet and BFSI clients. Covid-19 related businesses and the first time consolidation of our China business supported this strong top line growth."
GROUP REVENUES, GROUP NET REVENUES AND NET REVENUES BY SEGMENT
Europe, Africa & South America (EASA)
The EASA Segment has seen strong YOY growth in net revenues for Q3 (+15%) and the nine months to September 30, 2021 (+21%). Main drivers for the development have been continued expansion with Global Internet and BFSI Clients, contribution of Covid-19 related services and the continuation of active portfolio management.
Global English, Middle East & South East Asia (GEMS)
The GEMS Segment has seen strong YOY growth in net revenues for Q3 (+52%) and the nine months to September 30, 2021 (+45%). This has been driven by continued expansion with Global Internet Clients, particularly in the Philippines, Canada, the US, Malaysia, India, and Kenya.
China & East Asia (CEA)
The CEA Segment has delivered net revenues for Q3 of €27m and for the nine months to September 30, 2021, of €68m. Given that the China business was consolidated for the first time on January 1, 2021, there are no comparable figures for the previous year. The positive contribution from CEA has been driven by further expansion of the footprint in China, the continuing growth of digital consumer engagement services, and the focus on Consumer Products and digital clients. The positive contribution from CEA is in line with management expectations.
Given these positive developments, the management is confident to increase its previous guidance for the full fiscal year, ending December 31, 2021. The Company now expects net revenues to be in the range of €1,700m to €1,750m (previous guidance, €1,650m to €1,700m) and operating EBITDA of €290m to €310m (previous guidance, €280m to €300m). The existing guidance for the midterm remains unchanged.
CONFERENCE CALL WITH ANALYSTS AND INVESTORS
Thursday, November 4, 2021 at 15:00hrs CET
A presentation of the Q3/9M Trading Update is currently available on the Investor Relations section of Majorel's website (www.majorel.com).
FINANCIAL CALENDAR (INDICATIVE)
Full Year 2021 Results March 30, 2022
Q1 2022 Results May 5, 2022
H1 2022 Results August 30, 2022
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 31 countries across five continents, with more than 66,800 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.
All financial information in this announcement is unaudited and preliminary. It does not purport to contain all information required to evaluate the Company and/or its financial position. All forward-looking statements are based on Company's present expectations of future events and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. For a detailed description of these factors and uncertainties, please refer to the "Risk Factors" section of our Prospectus, available at the www.bourse.lu/cssf-approvals. Company undertakes no obligation to publicly update or revise any of these forward-looking statements.
 "Net Revenues" for the group correspond 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 Revenues for each segment correspond to the according segment revenues less certain direct, order-related intersegment and external costs. Management reporting data exclude revenues from minor activities (primarily the Sonopress Business) outside the Majorel Group's core business which are reported in the consolidated income statement (the "Sonopress Business" is defined as certain non-core business activities historically carried out by Arvato de Mexico, S.A. de C.V., which is currently being wound down).
 "Operating EBITDA" is defined as EBIT (earnings before interest and taxes) adjusted for depreciation / amortization, impairment and reversal on intangible assets, property, plant and equipment and right-of-use assets, adjusted for (i) impairment on goodwill and other intangible assets with indefinite useful life as well as gains from business combinations, (ii) carrying amounts on assets held for sale, (iii) impairment/reversals on other financial assets at amortized cost, (iv) impairment/reversals on investments accounted for using the equity method, (v) results from disposals of investments, (vi) fair value measurement of investments, and (vii) restructuring and other special items. We use Operating EBITDA to assess the operating performance of our business as Operating EBITDA shows our EBIT as adjusted for depreciation and amortization, which are non-cash effective charges, and one-off effects for the relevant period. When comparing Operating EBITDA with peer group data, it should be taken into account that the total adjustments in a given year do not represent the full amount of all special effects incurred in a given year, as rather only material non-recurring effects subject to certain thresholds will be considered for the purpose of calculating Operating EBITDA.
 "China business" means the acquisition of Shanghai Bertelsmann Commercial Services Co. Ltd, Shanghai Bertelsmann - arvato Information Services Co. Ltd. and Bertelsmann-Arvato Commercial Services (Shanghai) Co., Ltd
 Net Revenues from offshore locations generated from the following countries, which include our nearshore locations and may also include certain onshore business carried out in these countries: Morocco, Ivory Coast, Senegal, Togo, Poland, Romania, Estonia, Georgia, Armenia, Mexico, Philippines, Malaysia, India, Kenya, Portugal, Peru, Colombia, and Egypt.