Convergys is conversant in the languages of customer satisfaction. The company provides business services designed to maximize customer service, acquisition, and retention. Convergys' call center agents handle customer service interactions such as account service, billing inquiries, and technical support. The company targets customers in industries such as communications, financial services, technology, retail, healthcare, and government. All total it has about 70 customer contact centers. Convergys was formed as a division of Cincinnati Bell and spun off in 1998.
Convergys operates in the US, Canada, the Philippines, India, Costa Rica, Colombia, and the UK. It also operate two primary data centers, in Orlando, Florida, and the other in Cincinnati, Ohio. The company gets about 90% of its sales from the North American clients.
Convergys has been working to restructure and streamline its operations to improve efficiency and reduce costs. Previously it operated through three segments: Customer Management, Information Management, and Human Resources Management. However, within the last two years it has made major divestitures in order to focus on its primary Customer Management operations, which accounted for approximately 85% of total revenues in 2011.
In 2012 the company sold its Information Management business -- which included solutions for cable, satellite, and telecommunications operators -- for $449 million in cash to Japan's NEC. The previous year AT&T bought Convergys' interests in two wireless operations in the Cincinnati, Ohio area for about $320 million in cash. And in 2010 Convergys sold its HR unit, which provided human resources BPO services, to NorthgateArinso for about $85 million at closing and another $15 million over three years.
Sales and Marketing
The company continues to depend on a concentrated number of clients for the majority of its revenue. Its top three customers -- AT&T, Comcast, and DIRECTV -- collectively accounted for almost 50% of its sales. Convergys’ largest customer ( AT&T) accounted for about 23% of the total sales while Comcast and DIRECTV each contributed more than 12% of total sales in fiscal 2012.
The company's revenue increased by 2% in fiscal 2013 compared to fiscal 2012. It reported $2.046 billion in revenue for fiscal 2013 after claiming $2.005 billion for fiscal 2012. The relatively small spike was mainly due to the acquisition of Datacom and new programs with existing clients.
Despite the increased revenue, the company's net income fell nearly 30% in fiscal 2013 compared to the previous year. The drop was largely due to increased income tax expenses. Convergys reported net income of $60.9 million in fiscal 2013 after reporting $100.6 million in net income for fiscal 2012.
The company's net cash flow remains healthy. It increased by $97 million, up to $210 million in fiscal 2013 from $113 million in fiscal 2012.
Mergers and Acquisitions
Early in 2014 the company agreed to acquire Stream Global Services for about $820 million. Upon completion of the deal, Convergys will nearly double in size and scope, making it the second-largest customer management services provider.
In 2013 Convergys agreed to acquire New Zealand-based Datacom's contact center operations in Kuala Lumpur, Malaysia, and Manila, Philippines. Datacom will add 15 Asian languages to Convergys' language capabilities and approximately 1,000 employees, working in three Southeast Asia contact centers, to Convergys's global operations. The integration of the two organizations is expected to take between six and nine months.
The addition of Datacom's contact center operations is in line with Convergys' acquisition strategy, allowing it to expand its language capabilities and global footprint.