ATTO Atento SA

•  Multisector revenue growth across all regions. Shares of Multisector up 2.4 p.p. YTD to 63.7% of total

•  Revenue expansion driven by fast-growing verticals: born-digital companies, healthcare providers and retailers

EBITDA and profitability improvement fueled by better revenue mix and stricter cost control

Run rate EBITDA increased 5.2% YoY

• Run rate EBITDA margin expanded 120 bps QoQ and 20 bps YoY

FCF Before Interest and Acquisition funding transformation plan and share buyback program

•  3.0 million shares repurchased in Q3 for $7.2 million

•  Higher one-off working capital uses in the quarter related to specific contract renegotiation, already normalized in Q4

($ in millions except EPS)

Q3 2019

Q3 2018

CCY Growth

YTD 2019

YTD 2018

CCY Growth

Income Statement

Revenue

412.3

432.6

3.0%

1,290.1

1,396.4

2.6%

EBITDA ⁽¹⁾

48.1

46.9

4.7%

132.7

145.8

-0.6%

      EBITDA Margin

11.7%

10.9%

0.8p.p.

10.3%

10.4%

-0.2p.p.

Net Income ⁽²⁾

1.3

3.1

n.m.

(51.1)

5.4

n.m.

Recurring Net Income ⁽²⁾

2.1

18.4

n.m.

(4.1)

40.5

n.m.

Earnings Per Share ⁽²⁾

0.02

0.04

n.m.

(0.69)

0.07

n.m.

Recurring Earnings Per Share ⁽²⁾

0.03

0.25

n.m.

(0.06)

0.55

n.m.

Cash flow, Debt and Leverage

Free Cash Flow ⁽³⁾

22.6

36.7

8.7

43.7

Cash and Cash Equivalents

105.5

97.7

Net Debt

564.9

360.2

Leverage (x)

3.3

1.8

(1)

EBITDA is defined as profit/ (loss) for the period from continuing operations before net finance costs, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude restructuring costs, site relocation costs and other items not related to our core results of operations. EBITDA and Adjusted EBITDA are not measures defined by IFRS. The most directly comparable IFRS measure to EBITDA and Adjusted EBITDA is profit/ (loss) for the year/period from continuing operations.

(2)

Reported Net Income and Earnings per Share and Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Earnings per Share refer only to continuing operations. Adjusted Earnings per share is calculated based on weighted average number of ordinary shares outstanding of 73,601,478 and 72,139,539 for the three months ended in September 30, 2018 and 2019, respectively. 73,885,474 and 73,532,509, as of for the nine months ended September 30, 2018 and 2019

(3)

We define Free Cash Flow before interest and acquisitions as operating cashflow minus Capex payments and income tax expenses.

 ($ in millions)

Q3 2019

Q3 2018

CCY growth

YTD 2019

YTD 2018

CCY
growth

Brazil Region

Revenue

203.8

204.4

0.1%

632.5

664.5

3.2%

Adjusted EBITDA

27.7

24.3

14.2%

82.0

69.8

27.3%

Adjusted EBITDA Margin

13.6%

11.9%

1.7 p.p

13.0%

10.5%

2.5p.p.

Operating Income/(loss)

(4.4)

1.4

N.M.

(13.3)

(2.7)

N.M.

Americas Region

Revenue

159.6

174.1

9.6%

493.1

558.2

2.3%

Adjusted EBITDA

17.5

19.7

-3.8%

50.2

66.8

-16.6%

Adjusted EBITDA Margin

11.0%

11.3%

-0.4p.p.

10.2%

12.0%

     -1.9p.p.

Operating Income/(loss)

(1.8)

(2.8)

N.M

(9.2)

6.7

N.M.

EMEA Region

Revenue

52.1

55.7

-2.2%

175.4

181.0

3.1%

Adjusted EBITDA

5.9

5.7

9.1%

17.8

16.7

13.2%

Adjusted EBITDA Margin

11.4%

10.3%

1.1p.p.

10.1%

9.2%

0.9p.p.

Operating Income/(loss)

0.0

0.7

-117.5%

0.1

1.5

-94.7%

Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss):

For the three months
ended September 30,

For the nine months
ended September 30,

($ in millions)

2018

2019

2018

2019

(unaudited)

(Loss)/profit from continuing operations

1.3

5.4

Net finance expense

18.3

13.8

59.8

50.2

Income tax expense (a)

3.8

2.3

8.9

34.2

Depreciation and amortization

21.8

30.8

71.7

99.4

EBITDA (non-GAAP) (unaudited)

46.9

48.1

145.8

132.7

Adjusted EBITDA (non-GAAP) (unaudited)

46.9

48.1

145.8

132.7

(*)

For the three months ended September 30, 2019, the EBITDA was positively impacted in $10.6 million due to the first application of IFRS 16. Excluding IFRS 16 impact, three months ended September 30, 2019 EBITDA was $37.6 million. Depreciation and finance costs were negatively impacted in $9.5 million and $3.8 million respectively due to the application of the IFRS 16. For the nine months ended September 30, 2019, the EBITDA was positively impacted in $40.3 million due to the first application of IFRS 16. Excluding IFRS 16 impact, the nine months ended September 30, 2019 EBITDA was $92.5 million. Depreciation and finance costs were negatively impacted in $32.4 million and $13.0 million respectively due to the application of the IFRS 16.

(a)

In first quarter of 2019, in the context of a global Tax Audit of the periods 2013-2016, Atento Spain, as the representative company of the tax group comprised of the Spanish direct subsidiaries of Atento S.A., signed a tax agreement with the Spanish tax authorities. The criteria adopted by the Tax Administration was in connection with certain aspects, among others, of the deductibility of certain specific intercompany financing and operating expenses originated during the acquisition of Atento Spain, which was different from the tax treatment applied by the Company. As a result of this discrepancy, the amount of the tax credits of the Spanish tax group, together with the corresponding effects in subsequent tax periods, has being reduced in an amount of $37.8 million. 

Accordingly, the tax credits for losses carryforward in our financial statements for the first quarter of 2019, was negatively affected by $37.8 million.

Reconciliation of Adjusted Earnings to profit/(loss):

For the three months
ended September 30,

For the nine months
ended September 30,

($ in millions)

2018

2019

2018

2019

(unaudited)

(Loss)/profit from continuing operations

3.1

1.3

5.4

(51.1)

Amortization of acquisition related intangible assets ^(a)

5.1

3.7

16.1

15.1

Change in fair value of financial instruments ^(b)

5.9

-

-

-

Net foreign exchange gain/(loss)

9.3

(1.0)

31.1

2.1

Tax effect (c)

(4.6)

(1.3)

(10.7)

30.3

Other

-

(0.6)

-

-

Total of add-backs (*)

15.7

0.8

36.5

47.5

Adjusted Earnings (non-GAAP) (unaudited)

18.7

2.0

41.9

(3.5)

Adjusted Earnings per share (in U.S. dollars) ^(**) (unaudited)

0.25

0.03

0.57

(0.05)

Adjusted Earnings attributable to Owners of the parent (non-GAAP)
(unaudited)

18.4

2.0

40.5

(4.1)

Adjusted Earnings per share attributable to Owners of the parent (in U.S.
dollars) ^(**) (unaudited)

0.25

0.03

0.55

(0.06)

We define non-recurring items as items that are limited in number, clearly identifiable, unusual, are unlikely to be repeated in the near future in the ordinary course of business and that have a material impact on the consolidated results of operations. Non-recurring items can be summarized as demonstrated below:

a)

Amortization of acquisition related intangible assets represents the amortization expense of customer base, recorded as intangible assets. This customer base represents the fair value (within the business combination involving the acquisition of control of Atento Group) of the intangible assets arising from service agreements (tacit or explicitly formulated in contracts) with Telefónica Group and with other customers.

b)

Since April 1, 2015, the Company designated the foreign currency risk on certain of its subsidiaries as net investment hedges using financial instruments as the hedging items. As a consequence, any gain or loss on the hedging instrument, related to the effective portion of the hedge is recognized in other comprehensive income (equity) as from that date. The gains or losses related to the ineffective portion are recognized in the statements of operations and for comparability, and those adjustments are added back to calculate Adjusted Earnings.

c)

The tax effect represents the impact of the taxable adjustments based on tax nominal rate by country. For the three months ended September 30, 2018 and 2019, the effective tax rate after moving non-recurring items was 31.0% and 61.7%, respectively. For the nine months ended September 30, 2018 and 2019, the effective tax rate after moving non-recurring items is 31.9% and 1012,7%, respectively.

In first quarter of 2019, in the context of a global Tax Audit of the periods 2013-2016, Atento Spain, as the representative company of the tax group comprised of the Spanish direct subsidiaries of Atento S.A., signed a tax agreement with the Spanish tax authorities. The criteria adopted by the Tax Administration was in connection with certain aspects, among others, of the deductibility of certain specific intercompany financing and operating expenses originated during the acquisition of Atento Spain, which was different from the tax treatment applied by the Company. As a result of this discrepancy, the amount of the tax credits of the Spanish tax group, together with the corresponding effects in subsequent tax periods, has being reduced in an amount of $37.8 million. 

Accordingly, the tax credits for losses carryforward in our financial statements for the first quarter of 2019, was negatively affected by $37.8 million.

(**)

Adjusted Earnings per share is calculated based on weighted average number of ordinary shares outstanding of 73,601,478 and 72,139,539 for the three months ended in September 30, 2018 and 2019, respectively. 73,885,474 and 73.532.509, as of for the nine months ended September 30, 2018 and 2019.

As of September 30,

($ in millions, except Net Debt/Adj. EBITDA LTM)

2018

(unaudited)

Cash and cash equivalents

97.7

105.5

Debt:

     Senior Secured Notes

393.3

493.5

     Brazilian Debentures

16.2

-

     BNDES

27.9

1.2

    Financial Lease Payables (3)

6.2

148.2

     Other Borrowings

14.3

27.5

Total Debt

458.0

670.4

Net Debt with third parties ⁽¹⁾ (unaudited)

360.2

564.8

   Adjusted EBITDA LTM ⁽²⁾ (non-GAAP) (unaudited)

200.9

171.7

Net Debt/Adjusted EBITDA LTM (non-GAAP) (unaudited)

1.8x

3.3x

1.

In considering our financial condition, our management analyzes Net debt with third parties, which is defined as total debt less cash and cash equivalents. Net debt with third parties is not a measure defined by IFRS and it has limitations as an analytical tool. Net debt with third parties is neither a measure defined by or presented in accordance with IFRS nor a measure of financial performance and should not be considered in isolation or as an alternative financial measure determined in accordance with IFRS. Net debt is not necessarily comparable to similarly titled measures used by other companies.

2.

Adjusted EBITDA LTM (Last Twelve Months) is defined as EBITDA adjusted to exclude restructuring costs, site relocation costs and other items not related to our core results of operations. Excluding IFRS 16 and extraordinary items, the Net Debt is $419.8 million and EBITDA LTM $167.4 million, so leverage was 2,5x.

3.

Consider the impact in September 30, 2019 of application of IFRS 16 (former operating leases not related to short-term or low-value leases are now shown as debt) was $145.1 million and $3.1 million of other financial leases.

Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2019

($ in millions, except percentage changes)

For the three
months ended
September 30,

Change
(%)

Change
excluding
FX (%)

For the nine months
ended September
30,

Change
(%)

Change
excluding
FX (%)

2018

2019

2018

2019

(unaudited)

(unaudited)

Revenue 

432.6

412.3

(4.7)

3.0

1,396.4

1,290.1

(7.6)

2.6

Other operating income

7.2

8.2

13.3

13.7

15.1

9.6

(36.3)

(35.8)

Operating expenses:

Supplies

(19.5)

(17.4)

(10.8)

(6.6)

(54.2)

(49.3)

(9.1)

(2.6)

Employee benefit expenses

(321.5)

(312.7)

(2.7)

5.9

(1,046.3)

(986.7)

(5.7)

5.1

Depreciation ⁽²⁾

(12.3)

(17.8)

44.5

50.5

(31.8)

(59.4)

86.9

101.6

Amortization

(9.4)

(13.1)

39.0

45.0

(39.8)

(39.9)

0.3

8.7

Changes in trade provisions

(0.3)

(1.9)

N.M.

N.M.

(0.4)

(3.4)

N.M.

N.M.

Other operating expenses ⁽³⁾

(51.5)

(40.3)

(21.8)

(14.9)

(164.8)

(127.6)

(22.6)

(13.7)

Total operating expenses 

(414.7)

(403.1)

(2.8)

5.4

(1,337.4)

(1,266.4)

(5.3)

5.2

Operating profit

25.2

17.3

(31.2)

(32.0)

74.1

33.3

(55.0)

(52.0)

Finance income ⁽⁴⁾

0.8

0.2

(80.1)

(80.3)

2.2

4.6

109.3

128.8

Finance costs ⁽⁵⁾

(3.9)

(15.0)

N.M.

N.M.

(30.9)

(52.7)

70.5

85.2

Change in fair value of financial instruments

(5.9)

-

(100.0)

(100.0)

-

-

N.M.

N.M.

Net foreign exchange loss

(9.3)

1.0

(111.2)

(114.2)

(31.1)

(2.1)

(93.1)

(91.0)

Net finance expense

(18.3)

(13.8)

(24.8)

(3.6)

(59.8)

(50.2)

(16.0)

(0.3)

Profit before income tax

6.9

3.5

(48.3)

(80.8)

14.3

(16.9)

N.M.

N.M.

Income tax (expense)/benefit

(3.8)

(2.3)

(39.9)

(51.8)

(8.9)

(34.2)

N.M.

N.M.

(Loss)/profit for the period

3.1

1.3

(59.2)

(105.2)

5.4

(51.1)

N.M.

N.M.

(Loss)/profit attributable to:

Owners of the parent

2.7

1.3

(53.1)

(104.3)

4.0

(51.7)

N.M.

N.M.

Non-controlling interest

0.4

-

(100.0)

(100.0)

1.5

0.6

(59.1)

N.M.

(Loss)/profit for the period

3.1

1.3

(59.2)

(105.2)

5.4

(51.1)

N.M.

N.M.

Other financial data:

EBITDA ⁽¹⁾ (unaudited) 

46.9

48.1

2.7

4.7

145.8

132.7

(9.0)

(0.6)

Adjusted EBITDA ⁽¹⁾ (unaudited) 

46.9

48.1

2.7

4.7

145.8

132.7

(9.0)

(0.6)

(1)

For the reconciliation of these non-GAAP measures to the closest comparable IFRS measure, see section "Summary Consolidated Historical Financial Information - Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss)".

(2)

Due to the initial application of IFRS 16 the depreciation was negatively impacted in $9.5 million and $32.4 million for three months and nine months ended in September 30, 2019, respectively.

(3)

Due to the initial application of IFRS 16 the other operating costs was positive impacted in $10.6 million and $40.2 million for three months and nine months ended in September 30, 2019, respectively.

(4)

For the three months and nine months ended in September 30, 2019 contains an impact of $1.3 million and $1.2 million due to the application of the IAS 29 - Financial Reporting in Hyperinflationary Economies and related impacts under the application of IAS 21 - The Effects of Changes in Foreign Exchange Rates for Argentina, respectively.

(5)

Due to the initial application of IFRS 16 the finance costs were negatively impacted in $3.8 million and $13.0 million for the three and nine months ended, respectively.

N.M. means not meaningful

Consolidated Statements of Operations by Segment for the Three and Nine Months Ended September 30, 2018 and 2019

($ in millions, except percentage changes)

For the three months
ended September 30,

Change
(%)

Change
Excluding FX
(%)

For the nine months
ended September 30,

Change
(%)

Change
Excluding FX
(%)

2018

2019

2018

2019

(unaudited)

Revenue:

Brazil

204.4

203.8

(0.3)

0.1

664.5

632.5

(4.8)

3.2

Americas

174.1

159.6

(8.3)

9.6

558.2

493.1

(11.7)

2.3

EMEA

55.7

52.1

(6.5)

(2.2)

181.0

175.4

(3.1)

3.1

Other and eliminations ⁽¹⁾

(1.5)

(3.2)

113.9

127.0

(7.3)

(10.9)

49.3

57.0

Total revenue

432.6

412.3

(4.7)

3.0

1,396.4

1,290.1

(7.6)

2.6

Operating expenses:

Brazil

(196.0)

(196.5)

0.2

0.6

(645.2)

(616.3)

(4.5)

3.6

Americas

(172.8)

(155.8)

(9.9)

8.0

(540.8)

(485.7)

(10.2)

4.1

EMEA

(54.5)

(58.2)

6.7

11.7

(177.9)

(179.6)

1.0

7.4

Other and eliminations ⁽¹⁾

8.7

7.3

(16.1)

(17.8)

26.5

15.3

(42.2)

(38.6)

Total operating expenses

(414.7)

(403.1)

(2.8)

5.4

(1,337.4)

(1,266.4)

(5.3)

5.2

Operating profit/(loss):

Brazil

10.9

7.6

(29.8)

(29.6)

22.0

16.6

(24.5)

(19.0)

Americas

5.7

4.1

(28.5)

(29.5)

29.2

8.1

(72.1)

(71.4)

EMEA

1.5

1.4

(3.8)

(1.3)

3.8

4.0

5.9

12.9

Other and eliminations ⁽¹⁾

7.1

4.2

(41.2)

(43.3)

19.2

4.6

(76.2)

(74.5)

Total operating profit

25.2

17.3

(31.2)

(32.0)

74.1

33.3

(55.0)

(52.0)

Net finance expense:

Brazil

(8.4)

(15.1)

79.4

80.6

(26.7)

(36.0)

34.7

46.2

Americas

(7.9)

(4.9)

(37.3)

16.2

(18.3)

(14.5)

(20.6)

26.1

EMEA

(0.7)

-

(100.6)

(100.6)

(1.7)

(0.8)

(51.9)

(48.1)

Other and eliminations ⁽¹⁾

(1.3)

6.3

N.M.

N.M.

(13.2)

1.1

(108.3)

(108.4)

Total net finance expense

(18.3)

(13.8)

(24.8)

(3.6)

(59.8)

(50.2)

(16.0)

(0.4)

Income tax benefit/(expense):

Brazil

(1.1)

3.1

N.M.

N.M.

2.0

6.1

N.M.

N.M.

Americas

(0.7)

(1.0)

44.5

(36.4)

(4.3)

(2.8)

(35.6)

(47.2)

EMEA

-

(1.5)

N.M.

N.M.

(0.6)

(3.1)

N.M.

N.M.

Other and eliminations ⁽¹⁾⁽³⁾

(2.0)

(2.8)

40.7

46.4

(6.0)

(34.3)

N.M.

N.M.

Total income tax (expense)/benefit

(3.8)

(2.3)

(39.9)

(51.8)

(8.9)

(34.2)

N.M.

N.M.

Profit/(loss) for the period:

Brazil

1.4

(4.4)

N.M.

N.M.

(2.7)

(13.3)

N.M.

N.M.

Americas

(2.8)

(1.8)

(34.6)

149.3

6.7

(9.2)

N.M.

N.M.

EMEA

0.7

(0.1)

(118.5)

(117.5)

1.5

0.1

(95.0)

(94.7)

Other and eliminations ⁽¹⁾

3.8

7.7

101.6

81.7

-

(28.7)

N.M.

N.M.

(Loss)/profit for the period

3.1

1.3

(59.2)

(105.2)

5.4

(51.1)

N.M.

N.M.

Profit/(loss) attributable to:

Owners of the parent

2.7

1.3

(53.1)

(78.8)

4.0

(51.7)

N.M.

N.M.

Non-controlling interest

0.4

-

(100.0)

(100.0)

1.5

0.6

(59.1)

N.M.

Other financial data:

EBITDA ⁽²⁾:

Brazil

22.2

23.9

7.6

7.9

59.6

70.2

17.7

27.3

Americas

13.7

15.3

11.6

20.5

55.2

43.5

(21.2)

(11.9)

EMEA

3.8

4.7

24.0

29.5

11.2

13.9

24.1

32.1

Other and eliminations ⁽¹⁾

7.2

4.3

(41.0)

(43.2)

19.8

5.1

(74.0)

(72.2)

Total EBITDA (unaudited)

46.9

48.1

2.7

4.7

145.8

132.7

(9.0)

(0.6)

Adjusted EBITDA ⁽²⁾:

Brazil

24.3

27.7

13.8

14.2

69.8

82.0

17.4

27.3

Americas

19.7

17.5

(11.2)

(3.8)

66.8

49.8

(25.4)

(16.6)

EMEA

5.7

5.9

4.3

9.1

16.7

17.8

6.3

13.1

Other and eliminations ⁽¹⁾

(2.8)

(3.0)

5.7

58.6

(7.5)

(16.8)

124.2

N.M.

Total Adjusted EBITDA (unaudited)

46.9

48.1

2.7

4.7

145.8

132.7

(9.0)

(0.6)

(1)

Included revenue and expenses at the holding-company level (such as corporate expenses and acquisition related expenses), as applicable, as well as consolidation adjustments.

(2)

For the reconciliation of these non-GAAP measures to the closest comparable IFRS measure, see section "Summary Consolidated Historical Financial Information - Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss)".

N.M. means not meaningful

(3)

In first quarter 2019, in the context of a global Tax Audit of the periods 2013-2016, Atento Spain, as the representative company of the tax group comprised of the Spanish direct subsidiaries of Atento S.A., signed a tax agreement with the Spanish tax authorities. The criteria adopted by the Tax Administration was in connection with certain aspects, among others, of the deductibility of certain specific intercompany financing and operating expenses originated during the acquisition of Atento Spain, which was different from the tax treatment applied by the Company. As a result of this discrepancy, the amount of the tax credits of the Spanish tax group, together with the corresponding effects in subsequent tax periods, has being reduced in an amount of $37.8 million. 

Accordingly, the tax credits for losses carryforward in our financial statements for the first quarter of 2019, was negatively affected by $37.8 million.

ATENTO S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2018 and September 30, 2019

(In thousands of U.S. dollars, unless otherwise indicated)

ASSETS

Notes

December 31,

September
30,

2018

2019

(audited)

(unaudited)

NON-CURRENT ASSETS

716,886

747,287

Intangible assets

211,202

164,517

Goodwill

154,989

135,733

Property, plant and equipment

123,940

255,267

Non-current financial assets

95,531

85,815

Trade and other receivables

10

19,148

19,836

Other non-current financial assets

10

65,070

54,018

Derivative financial instruments

11

11,313

11,963

Other taxes receivable

6,061

5,683

Deferred tax assets

125,163

100,272

CURRENT ASSETS

496,467

549,094

Trade and other receivables

342,075

412,725

Trade and other receivables

10

315,654

385,456

Current income tax receivable

26,421

27,269

Derivative financial instruments

11

-

19

Other taxes receivable

19,975

29,764

Other current financial assets

10

891

1,051

Cash and cash equivalents

10

133,526

105,535

TOTAL ASSETS

1,213,353

1,296,381

The accompanying notes are an integral part of the interim condensed consolidated financial information.

ATENTO S.A. AND SUBSIDIARIES

INTERIM CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As of December 31, 2018 and September 30, 2019

(In thousands of U.S. dollars, unless otherwise indicated)

EQUITY AND LIABILITIES

Notes

December 31,

September
30,

2018

2019

(audited)

(unaudited)

TOTAL EQUITY

340,092

230,773

EQUITY ATTRIBUTABLE TO:

NON-CONTROLLING INTEREST

8,541

-

OWNERS OF THE PARENT COMPANY

331,551

230,773

Share capital

9

49

49

Reserve for acquisition of non-controlling interest

9

(23,531)

-

Share premium

615,288

619,461

Treasury shares

9

(8,178)

(15,960)

Retained losses

(16,325)

(81,511)

Translation differences

(257,122)

(295,473)

Hedge accounting effects

11

8,404

(6,811)

Stock-based compensation

12,966

11,019

NON-CURRENT LIABILITIES

528,869

685,009

Deferred tax liabilities

30,221

20,562

Debt with third parties

11

408,426

596,188

Derivative financial instruments

11

682

916

Provisions and contingencies

12

51,174

51,126

Non-trade payables

14,391

13,437

Option for the acquisition of non-controlling interest

20,830

-

Other taxes payable

3,145

2,779

CURRENT LIABILITIES

344,392

380,599

Debt with third parties

11

51,342

74,184

Derivative financial instruments

11

-

-

Trade and other payables

274,000

285,643

Trade payables

76,912

67,601

Income tax payables

10,615

10,308

Other taxes payables

78,511

87,124

Other non-trade payables

107,962

120,610

Provisions and contingencies

12

19,050

20,772

TOTAL EQUITY AND LIABILITIES

1,213,353

1,296,381

The accompanying notes are an integral part of the interim condensed consolidated financial information.

For the three months
ended September 30,

For the nine months
ended September 30,

($ in millions)

2019

2018

2019

2018

(unaudited) ^(***)

(unaudited) ^(***)

Operating Cash Flow ⁽¹⁾

36.2

48.5

59.8

94.7

Cash Capex ⁽²⁾

-10.6

-9.6

-33.8

-38.8

Income Tax Paid

-2.9

-2.2

-17.3

-12.7

Free Cash Flow before interest and acquisitions

22.6

36.7

8.7

43.7

Acquisitions

0.0

-0.0

-14.9

-0.0

Net Financial Expenses ⁽³⁾

-21.1

-18.4

-44.1

-44.6

Free Cash Flow (FCF)

1.5

18.3

-50.3

-1.0

(1)

We define Operating Cash flow as Net Cash flow from/(used in) operating activities (as per 6K) adding back net interest and income tax expenses.

(2)

Does not consider acquisitions

(3)

Interest payments related to the 2022 SSN are done every February and August, until Bond maturity in August 2022. Therefore, settlement of hedging instruments will impact Q1 and Q3 Net Financial Expenses cashflow of each year.