Concentrix (CNXC) DEFA14AAdditional proxy soliciting materials

Marnix Lux SA (the “Company”) was incorporated in the Grand-Duchy of Luxembourg on July 19, 2019 as a public company limited by shares (société anonyme) within the definition of the Luxembourg Law of August 10, 1915. The Company has been established for an unlimited duration. The registered office is established in 2, rue Edward Steichen, L-2540 Luxembourg under the commercial register number B 236.573.

The unaudited interim condensed consolidated financial statements include the financial statements of the parent company, Marnix Lux SA referred as “the Company”, and its subsidiaries together referred to as “the Group”.

The unaudited interim condensed consolidated financial statements of the Group as of March 31, 2023 and for the three-months ended March 31, 2023 and March 31, 2022 were approved by the board of directors of Marnix Lux SA on June 21, 2023 based on the going concern assumption.

The unaudited interim condensed consolidated financial statements are presented in millions of euros, rounded to one decimal place.

These unaudited interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) .

They do not include all the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements of the company as at and for the year ended 31 December 2022.

The accounting principles applied by the Group are the same as those applied in the consolidated financial statements at 31 December 2022.

The preparation of consolidated financial statements in conformity with IFRS requires the use of estimates and assumptions which affect the amounts reported in the financial statements. Most critical accounting estimates are listed below:

The estimates are based on information available at the time of preparation of the financial statements, and may be revised, in a future period, if circumstances change, or if new information is available. Actual results may differ from these estimates.

On March 29, 2023, Webhelp and Concentrix Corporation announced they have entered into exclusive negotiations to combine. This transaction will, subject to the approval of the regulatory authorities and fulfillment of customary closing conditions (including Concentrix’ shareholders approval), create a leading global customer experience provider, crystallizing the ambition of the two groups to play a major role in the CX industry and further accelerate their respective development.

Webhelp’s revenue fluctuates with the underlying trends in its clients’ businesses and trends in the level of consumer activity. As a result, Webhelp’s margins are typically higher in the third and fourth quarters. The impact of this seasonality has been offset by Webhelp’s significant growth and geographic expansion, as well as longer term social and economic conditions and industry specific trends and conditions.

The change in the consolidation scope during the three-months ended March 31, 2023 and March 31, 2022 are not significant for the Group.

For the three-months ended March 31, 2023, revenue amounted to €678.3 million, compared with €589.5 million for the three-months ended March 31, 2022, representing an increase of 15.1%.

Purchases consumed and other external expenses amounted to €89.2 million for the three-months ended March 31, 2023, compared with €86.8 million for the three-months ended March 31, 2022, and can be broken down as follows:

Net charges to amortization, depreciation, impairment and provision don’t include amortization on customer relationships and technologies recognized in other operating income and expenses.

Net charges to amortization, depreciation, impairment and provision amounted to €40.6 million for the three-months ended March 31, 2023, compared with €36.4 million for the three-months ended March 31, 2022.

Based on the best projection at the following dates, Webhelp applied a group effective tax rate to recognize income tax as of March 31, 2022 and March 31, 2023 of 25.5% and 34.7%, respectively.

The increase in effective tax rate is mainly due to a higher proportion of financial interests concerned by the limitation of deductibility, and the non-recognition of deferred tax assets on some operating losses.

At 31 March 2023, the Group’s goodwill amounted to €2,111.2 million, compared with €2,117.5 million at 31 December 2022 due to the effect of currency translation on goodwill related to Dynamicall and OneLink acquisitions.

The Group does not believe that there is a significant potential impact arising from credit risk due to the high credit rating of the Group’s counterparties.

The Webhelp Group manages its own interest rate and foreign exchange risk. Webhelp takes no speculative positions.

The Group’s exposure to interest rate risk arises mainly from its variable-rate debt, taken out in connection with GBL’s majority investment in November 2019, which was extended in July 2021 for the OneLink acquisition.

With regard to foreign exchange risk, transactions carried out by Webhelp are denominated, whenever possible, in the same currency as the functional currency of the entity undertaking the transaction. The foreign exchange risk arises from intercompany transaction between offshore contact centers and commercial entities who billed the customers. To hedge this transactional currency risk, Webhelp uses currency forwards and non-deliverable forwards. In compliance with IFRS 9, the hedging relationship has been classified as a cash flow hedge. As of March 31, 2023, an aggregate fair value of -€4.4 million was recognized on the balance sheet with offsetting entries of -€4.0 million in other comprehensive income and -€0.4 million in income statement respectively.

The Group’s exposure to foreign exchange rate risk arises also from the portion of its variable-rate debt denominated in GBP and USD. The following sensitivity testing did not show any major risk: at 31 March 2023, a 1,000 basis point rise or fall in the euro (to the GBP and USD) would only have a limited effect on the Group’s net debt, estimated at -2.4% and +2.9%, respectively.

Webhelp’s cash forecasts between the drawdown date and the date of repaying debt should allow the Group to honor its repayments when they fall due.

To manage its non-current financial liabilities as well as the debt that it has taken on with regard to its suppliers and other creditors, at 31 March 2023, the Group had €350.1 million in net cash and cash equivalents including €197.7 million of restricted cash related to LogBox liabilities at Webhelp Payment Services (see Note 18 “Cash and debt”) and €350.2 million in available credit lines at 31 March 2023, comprised of the following:

At 31 December 2022, the Group had €340.0 million in net cash and cash equivalents including €176.2 million of restricted cash related to Logbox liabilities at Webhelp Payment Services (see Note 18 “Cash and debt”) and €356.7 million in available credit lines comprised of the following:

The Webhelp Group has set up several factoring schemes to finance its working capital requirement. The factoring agreements are non-recourse, except for one contract set up with ING in the Netherlands for a maximum €8.0 million unused as of March 31, 2023 and one contract set up with RBS in the United Kingdom for up to GBP 12.5 million of which GBP 5.6 million used. The receivables subject to non-recourse factoring are derecognized based on IFRS 9 derecognition criteria.

The non-recourse factoring agreements include factoring and reverse factoring schemes that the Webhelp Group has set up with some of its customers. The maximum financing amount at 31 March 2023 is €210 million, of which €182 million used; at 31 December 2022 is €210 million, of which €200 million used.

In connection with the acquisition by Groupe Bruxelles Lambert (GBL), a new loan “Term loan B” was taken out by Marnix SAS in 2019, as the previous loan had been paid back early under the “change of control” clause in the previous banking documents. This loan was extended in 2021 for the OneLink acquisition. The principal amount and interest rate for each credit facility at 31 March 2023 were as follows:

The euro-denominated revolving credit facility (RCF) amounted to €311,6 million, the full amount of which was available at 31 March 2023 bearing interest on variable reference rate (Euribor index) and a margin of 2.5% subject to margin ratchet mechanism.

Given the payment activity and in accordance with Article L. 522-17 of the French Monetary and Financial Code, funds received by the Group on behalf of its clients are credited to bank accounts opened specifically for this purpose, which are called holding accounts. The amounts held in such accounts were recognized at the reporting date as cash and cash equivalents.

In the Group’s financial statements, this restricted cash is classified within “cash and cash equivalents”, i.e. it is held to handle the entity’s short-term cash commitments. An equivalent liability of €197.7 million is recognized in “other current liabilities” as of March 31, 2023, which is extinguished in the short term (a few days) when the amounts received by WPS are paid out.

At 31 March 2023, share capital amounted to €13.6 million, comprising 1,359,924,724 shares each with a nominal value of €0.01, all of the same category. At 31 December 2022, share capital amounted to €13.6 million, comprising 1,359,707,274 shares each with a nominal value of €0.01, all of the same category.

Marnix Lux SA purchased during 2022 own shares for an amount of €0.2 million related to service-based free share plans set up for Webhelp employees and corporate (no purchase during the first quarter 2023). All amounts have been deducted from equity.