DGAP-Adhoc: Majorel Group Luxembourg S.A. : Majorel reports strong results for H1 & positive outlook for 2022

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

• Strong topline growth of +16% YOY, resulting in net revenue[1] of 976 million (H1 2021: 842 million). Adjusted for M&A[2] and COVID-19 related business[3], like-for-like[4] growth was +17% YOY.
• Continuing momentum across business Segments: GEMS (Global English, Middle East and South East Asia) at +35%; CEA (China and East Asia) at +26%; and EASA (Europe, Africa and South America) at +10%, net revenue growth.
• Strong profitability, with Operating EBITDA[5] in H1 2022 of 175 million (17.9%), compared to 153 million[6] (18.2%) in H1 2021.
• Group profit amounted to 102 million in H1 2022 compared to 85 million in H1 2021. Earnings per share (EPS)[7] was 1.01.

BUSINESS HIGHLIGHTS

• Continued successful strategy execution: geographical expansion (nine new countries); expansion with existing and new clients - net revenue retention[8] (NRR) of 114% including the reduction of COVID-19 related services (excluding this, NRR is 117%) and more than 30 new client logos won; expanded partnership with Booking.com completed; M&A (Mayen and Alembo completed; IST announced) and progress in all strategic KPIs.
• Potential merger: on June 20, 2022 Majorel announced it had agreed on key terms for a potential merger with Sitel Group® (Sitel), transforming two high-profile CX groups into a global industry leader.  Since the announcement, good progress has been made on the reciprocal due diligence and the validation of synergies between the two companies.
• Corporate responsibility (CR): in addition to its comprehensive global CR program, Majorel launched two lighthouse projects for 2022 the expansion of the Majorel Womens Leadership Program and the Majorel Global Impact Standard - and published its annual Corporate Responsibility Report for 2021.
• Industry recognition: Frost & Sullivan rated Majorel as one of the top three CX providers in the European market; Everest Group named Majorel as a Global Leader in Content Services, Trust & Safety, for the second consecutive year; and Majorel was selected as a Euronext Tech Leader.

Commenting on the strong results, Thomas Mackenbrock, CEO of Majorel Group said: "Majorels 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.

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.

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 youd 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 worlds 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
Michèle Negen
SVP, Investor Relations
ir@majorel.com

Media Relations
Andrew Slater
SVP, Global Marketing & Communications
media@majorel.com

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 Groups 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).
^[2] First time consolidation of Turkish Mayen business January 1, 2022 and Alembo June 1, 2022.
^[3] Adjusted for non-recurring COVID-19 related business in H1 2021 and H1 2022.
^[4] Like-for-like net revenue corresponds to net revenue growth year over year, adjusted for certain specific, probably non-recurring items. For H1 2022 to H1 2021 like-for-like net revenue comparison, the contribution of the first-time consolidation of the acquisition of Mayen (Turkey) and Alembo (Suriname) and COVID-related business were adjusted.
^[5] As of January 2022, the definition of Operating EBITDA has been updated: Operating EBITDA is defined as EBIT (earnings before interest and taxes) adjusted for amortization and depreciation, 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) impairment on 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, (vii) results from disposals of intangible assets and property, plant and equipment, (viii) operating realized and unrealized forex gains and losses including on derivatives (ix) expenses on long-term incentive programs and (x) further adjustments such as restructuring, acquisition-related and integration expenses, and other special items.
^[6] H1 2021 Operating EBITDA has been restated to comply with the updated EBITDA definition. Reported in 2021 154 million, restated for operating foreign exchange gains/losses and on derivatives: 153 million.
^[7] Basic earnings per share (EPS) is calculated by dividing the net profit attributable to shareholders by the weighted average number of ordinary shares in issue during the year, excluding ordinary shares purchased by the Group and held as treasury shares and the shares held under the liquidity program, if any. Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. There is currently no category of dilutive potential ordinary shares.
^[8] Net revenue retention H1 2022 is defined as net revenue generated by clients in H1 2022 divided by net revenue generated by the same cohort of clients in H1 2021 (excluding M&A in 2022). Net revenue retention H1 2021 is defined as net revenue generated by clients in H1 2021 divided by net revenue generated by the same cohort of clients in H1 2020 (excluding the China Business in 2021).
^[9] 53% work from home (WFH) rate at June 30, 2022.
^[10] Free cash flow is defined as Operating EBITDA less adjustments minus increase/plus decrease in net working capital after net cash out from pensions, payments from leases and net investments in property, plant and equipment and intangible assets excluding net payments from acquisitions and disposals of financial assets.
^[11] IPO-related bonus payments in H1 2022.
^[12] Percentage point pp.

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 Companys 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 Majorels 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 Companys 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 Companys 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 Companys 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 managements 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 Majorels 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 Majorels 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 Majorels 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 Companys management to predict all risks, nor can it assess the impact of all factors on Majorels 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 Majorels 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

Condensed Consolidated Interim Statement of Comprehensive Income

For the six months ended 30 June 

Condensed Consolidated Interim Statement of Financial Position

Condensed Consolidated Interim Statement of Cash Flow

For the six months ended 30 June 

Condensed Consolidated Interim Statement of Changes in Equity

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.