Majorel announces strong preliminary results for FY 2021 with +31% growth in net revenue, execution of strategy fully on track

Luxembourg, February 22, 2022 – Majorel Group Luxembourg S.A. (Euronext Amsterdam ticker symbol: MAJ) (“Majorel”, the ‘’Company”), a leading global provider of next-generation end-to-end customer experience (CX) solutions for digital-native and vertical leading brands, today announces selected preliminary results for the fiscal year 2021[i] ended December 31, 2021.

BUSINESS HIGHLIGHTS

• Net revenue[ii] of €1,752 million (+31% YOY) coming in at the top end of the latest guidance of €1,700-€1,750 million with all three Segments contributing to Majorel’s strong development in 2021.
• Operating EBITDA[iii] of €315 million (+61% YOY) is above of the latest guidance of €290-€310 million; Operating EBITDA as a percentage of net revenues is at 18.0% (2020: 14.6%) and thereby in line with the provided guidance to be above 16.5%-17.0%.
• Organic expansion and M&A are well under way: Successful launch of three new countries in the recent months (Croatia, North Macedonia and Ghana) and one of Turkey’s leading independent CX providers, Mayen, became a member of the Majorel family on January 1, 2022.
• Continued strong momentum for digital: 45% of net revenue is generated from Global Internet clients, including Content Services, Trust & Safety that is contributing 21% to net revenues. Tech & Expert Services is 9% of net revenues during 2021.
• Sustainable growth with existing clients: Net revenue retention[iv] of 116% (2020: 113%)

OVERVIEW

Continued strong top-line growth momentum at top end of latest guidance

Net revenue for 2021 amounted to €1,752 million, representing an increase of +31% compared to the previous year’s net revenue of €1,340 million. This development was driven by the strong growth in net revenue coming from Global Internet clients, continued growth with existing clients while also winning new logos. Net revenue in 2021 was also impacted by special effects from the Covid-19 related business
(€102 million) and the first-time consolidation of the China business contributing €98 million to group net revenue. The China operations became part of the Majorel Group as of January 1, 2021. Without the two afore mentioned special effects, like-for-like net revenue growth was +16%[v].

• Europe, Africa & South America (EASA) Segment

With an increase of 19%, the EASA Segment has seen strong YOY growth in net revenue for 2021, reaching €1,290 million in 2021 (2020: €1,086 million). Main drivers for this development were: the continued expansion with Global Internet and BFSI clients; as well as the contribution of Covid-19 related services, which was accounted for in this Segment.

• Global English, Middle East & South East Asia (GEMS) Segment

The GEMS Segment made a significant contribution to the Company’s success with an annual growth in net revenue of 44%. Net revenue for GEMS was €364 million in 2021 compared to
€253 million in 2020. This strong increase has been driven by Majorel’s continued expansion with Global Internet Clients, particularly in the Philippines, Canada, the US, Malaysia, India, and Kenya.

• China & East Asia (CEA) Segment

The CEA Segment reported net revenue of €98 million for the year 2021 – in line with the Company’s guidance that the CEA segment would contribute 5-7% of group net revenue. The positive contribution from this regional segment 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.

Strong Operating EBITDA above latest guidance

Operating EBITDA³ of €315 million exceeded the latest, increased guidance from November 4, 2021 (€290-€310 million) and grew strongly by 61% compared to 2020 (€196 million). The drivers of this positive development were: operational excellence; more complex, value-added services; client portfolio management; improved global delivery mix; Covid-19 related services; and continued high work-from-home (WFH) rate of 63%⁸. Majorel’s Operating EBITDA margin expanded by 340bps to 18.0%, compared to 14.6% in 2020.

Continued global expansion

The Company delivered on its strategy to further increase its geographic footprint through M&A and organic expansion. Following the November 2021 announcement of the acquisition of Mayen, one of Turkey’s leading independent CX providers with more than 3,500 team members, it became a member of the Majorel family as of January 1, 2022. Mayen’s contribution will be accounted for in the Company’s EASA Segment.

With the launch of new service centers in Croatia (December 2021), North Macedonia and Ghana (January 2022), the Company strengthens its global delivery network. The new site in Ghana adds to Majorel’s already leading position in Africa, where the Company has around 20,000 team members. All three new countries will be accounted for in the Company’s EASA Segment.

With the latest additions, Majorel now has a presence in 35 countries⁶ worldwide, advancing towards its mid-term target of 40 countries. During 2021, Majorel expanded its workforce by around 13,000 and had around 69,000 team members as of December 31, 2021. 

Continued strong momentum for digital

45% of the Company’s net revenue in 2021 was from Global Internet Clients (approaching the Company’s mid-term guidance of >50%) and 21% of net revenue from Content Services, Trust & Safety (already within the Company’s mid-term guidance of 20%-25%). In addition, Tech & Expert Services represented 9% of net revenue – fully in line with Majorel’s stated intention to increase the contribution from this business line to 10%-15% in the mid-term.

Sustainable growth with existing clients and adding new logos

Majorel serves more than 400 clients around the world, many of them in long-term partnerships. The strategy to retain and expand its business with existing clients is demonstrated in the net revenue retention⁴ figure of 116%.

On February 10, 2022, Majorel announced that it had entered into an agreement with Booking.com to transfer 12 of Booking.com’s 14 internal CX service centers in Europe, Asia Pacific and the Americas to Majorel. The new partnership agreement is expected to commence in the second quarter of 2022 after the transfer of the service centers from Booking.com to Majorel takes place, which is subject to customary closing conditions, including regulatory approvals and completion of works council consultations.

Further to deepening and extending its long-term partnerships with existing clients, Majorel also succeeded in adding more than 40 new logos to its client portfolio during 2021.

Majorel is delighted to bring forward the release date of its audited full year 2021 results to March 17, 2022 as opposed to March 30, 2022 as previously communicated. Please see herewith the updated indicative financial calendar for 2022:

FINANCIAL CALENDAR (INDICATIVE)

Audited Full Year 2021 Results: March 17, 2022

Q1 2022 Results: May 5, 2022

Annual General Meeting: June 20, 2022

H1 2022 Results: August 30, 2022

Q3/9M Results: 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 35 countries[vi] across five continents, with around 69,000 team members[vii] 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

Insa Calsow

EVP, Investor Relations

ir@majorel.com

Media Relations

Andrew Slater

SVP, Global Marketing & Communications

media@majorel.com

DISCLAIMER

All financial information in this announcement is preliminary, unaudited and not reviewed, partially based on management reporting. 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 the 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 https://www.bourse.lu/issuer/MajorelGroupSA/105258. The Company undertakes no obligation to publicly update or revise any of these forward-looking statements.

[i] All financials are preliminary, unaudited and not reviewed, partially based on management reporting.

[ii] "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 was wound down in 2021).

[iii] “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 charges, and specific periodic outcomes to enhance comparability of results over periods. 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 effects subject to certain thresholds will be considered for the purpose of calculating Operating EBITDA. The Sonopress Business contributed with low single-digit millions to the preliminary Operating EBITDA numbers for 2021.

[iv] Net revenue retention” means net revenues generated by clients in 2021 divided by net revenues generated by the same cohort of clients in 2020 (excluding China business).

[v] Excluding Covid-19 business and the China business

[vi] As per February 18, 2022

[vii] As per December 31, 2021

⁸ WFH rate is based on productive team members working at home divided by the total number of productive team members.