UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 6-K


Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16

under Securities Exchange Act of 1934

 

For the month of December, 2019

Commission File Number 001-36671


Atento S.A.

(Translation of Registrant's name into English)


1, rue Hildegard Von Bingen, L-1282, Luxembourg
Grand Duchy of Luxembourg

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F: x Form 40-F: o

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes: o No: x

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes: o No: x

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 


 
 

ATENTO S.A.
INDEX
Financial Information
For the Three Months and Year Ended December 31, 2019

 

 

PART I - PRESENTATION OF FINANCIAL AND OTHER INFORMATION

3

SELECTED HISTORICAL FINANCIAL INFORMATION

4

SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION

5

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

12

 


 
 

PART I - PRESENTATION OF FINANCIAL AND OTHER INFORMATION

On October 7, 2014, Atento S.A. (“Atento”, the “Company”, “we” or the “Organization”) completed its IPO and issued 4,819,511 ordinary shares at a price of $15.00 per share.

Acquisition and Divestment Transactions

On May 17, 2019, the Company acquired a stake corresponding to 49.99998% of Interfile Serviços de BPO Ltda. and 49.99989% of Interservicer - Serviços em Crédito Imobiliário Ltda., now holding a 100% interest in these companies.

On June 7, 2019, the Company acquired a stake corresponding to 18.51% of the shares of R Brasil Soluções, now holding 100% of the company's shares.

On June 23, 2019, Contact US Teleservices, Inc. signed with Keepcon a first amendment to the Put&Call option agreement. In addition to this, Atento Brasil, also signed an Offer Letter with Keepcon on October 29, 2019, for the provision of certain monitoring and classification services on processes of social media and other channels, throughout 36 months as from the date of its signature.

Other Transactions

On April 4, 2019 Atento Luxco 1 S.A., a wholly-owned subsidiary of Atento S.A., closed an offering of an additional US$100 million aggregate principal amount of its 6.125% Senior Secured Notes due 2022 in a private placement transaction. The Additional Notes were offered as additional notes under the indenture, dated as of August 10, 2017, pursuant to which the Issuer previously issued US$400 million aggregate principal amount of its 6.125% Senior Secured Notes due 2022

On February 4, 2020, a general meeting of shareholders of the Company approved a new authorization by the the general meeting of the Company to the Board of Directors of the Company to acquire its own fully paid-up shares on the New York Stock Exchange or any other exchange without making an acquisition offer to the shareholders of the Company, for a period of 5 years, for a maximum number of shares to be acquired, which shall be up to 30% of the Company’s share capital, at a redemption price per share which shall represent (i) not less than 50% of the lowest closing price per share and (ii) not more than 50% above the highest closing price per share, in each case as reported by the New York edition of the Wall Street Journal, or, if not reported therein, any other authoritative sources to be selected by the Board of Directors of the Company over the ten (10) trading days preceding the date of the purchase of the shares (or the date of the commitment to purchase the shares).

Exchange Rate Information

In this Report, all references to “U.S. dollar” and “$” (USD) are to the lawful currency of the United States and all references to “Euro” or “€” are to the single currency of the participating member states of the European and Monetary Union of the Treaty Establishing the European Community, as amended from time to time. In addition, all references to Brazilian Reais or “R$” (BRL), Mexican Peso (MXN), Chilean Peso (CLP), Argentinean Peso (ARS), Colombian Peso (COP) and Peruvian Nuevos Soles (PEN) are to the lawful currencies of Brazil, Mexico, Chile, Argentina, Colombia and Peru, respectively.

The following table shows the exchange rates of the U.S. dollar to these currencies for the periods and dates indicated as reported by the relevant central banks of the European Union and each country, as applicable.

 

2017

 

2018

 

2019

 

Average

FY

 

December

31

 

Average

Q4

 

Average

FY

 

December

31

 

Average

Q4

 

Average

FY

 

December

 31

Euro (EUR)

0.89

 

0.83

 

0.88

 

0.85

 

0.87

 

0.90

 

0.89

 

0.89

Brazil (BRL)

3.19

 

3.31

 

3.81

 

3.65

 

3.87

 

4.12

 

3.94

 

4.03

Mexico (MXN)

18.92

 

19.66

 

19.85

 

19.24

 

19.65

 

19.25

 

19.25

 

18.86

Colombia (COP)

2,951.28

 

2,984.00

 

3,162.98

 

2,955.34

 

3,249.75

 

3,408.36

 

3,281.35

 

3,277.14

Chile (CLP)

648.86

 

615.22

 

679.62

 

641.38

 

695.69

 

754.86

 

702.77

 

744.62

Peru (PEN)

3.26

 

3.25

 

3.36

 

3.29

 

3.38

 

3.36

 

3.34

 

3.32

Argentina (ARS)

16.56

 

18.65

 

37.12

 

28.12

 

37.70

 

59.38

 

48.22

 

59.89

3


 
 
SELECTED HISTORICAL FINANCIAL INFORMATION

We present our selected historical financial information under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (the “IASB”) for the periods herein presented.

Rounding

Certain numerical figures set out in this Report, including financial data presented in millions or thousands and percentages, have been subject to rounding adjustments, and, as a result, the totals of the data in this Report may vary slightly from the actual arithmetic totals of such data. Percentages and amounts reflecting changes over time periods relating to financial and other data set forth in “Summary Consolidated Historical Financial Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are calculated using the numerical data in the financial statements or the tabular presentation of other data (subject to rounding) contained in this Form 6-K, as applicable, and not using the numerical data in the narrative description thereof.

4


 
 
SUMMARY CONSOLIDATED HISTORICAL FINANCIAL INFORMATION
 

The following tables present a summary of the consolidated historical financial information for the periods as of the dates indicated and should be read in conjunction with the section of this document entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Selected Historical Financial Information” included elsewhere in this document.

 

As of and for the year ended December 31,

 

Change (%)

 

Change excluding FX (%)

 

As of and for the year ended December 31,

Change (%)

 

Change excluding FX (%)

($ in millions)

2017

 

2018

 

 

 

2019 (***)

 

 

 

(audited)

 

 

 

 

 

(unaudited)

 

 

 

 

Revenue

1,921.3

 

1,818.2

 

(5.4)

 

4.3

 

1,707.3

 

(6.1)

 

2.1

(Loss)/profit for the period

(13.6)

 

20.5

 

N.M.

 

N.M.

 

(80.7)

 

N.M.

 

N.M.

EBITDA (1)

196.9

 

184.8

 

(6.2)

 

2.2

 

153.4

 

(17.0)

 

(9.9)

Adjusted EBITDA (1)

221.0

 

184.8

 

(16.4)

 

(9.2)

 

153.4

 

(17.0)

 

(9.9)

Adjusted Earnings (2)

58.4

 

59.1

 

1.1

 

42.7

 

(23.2)

 

(139.3)

 

(149.2)

Adjusted Earnings per share (in U.S. dollars) (3)

0.79

 

0.80

 

0.9

 

42.9

 

(0.32)

 

(139.9)

 

(147.4)

Adjusted Earnings attributable to Owners of the parent (2)

55.2

 

57.2

 

3.6

 

24.6

 

(23.9)

 

N.M.

 

(128.7)

Adjusted Earnings per share attributable to Owners of the parent (in U.S. dollars) (3)

0.75

 

0.77

 

3.7

 

24.6

 

(0.32)

 

N.M.

 

(128.7)

Payments for acquisition of property, plant, equipment and intangible assets (4)

(76.8)

 

(41.2)

 

(46.4)

 

(46.1)

 

(40.1)

 

(2.7)

 

9.4

Total Debt

486.3

 

459.8

 

(5.4)

 

(9.1)

 

720.6

 

56.7

 

57.5

Cash and cash equivalents

141.8

 

133.5

 

(5.8)

 

5.0

 

124.7

 

(6.6)

 

(3.5)

Net debt (5)

344.5

 

326.2

 

(5.3)

 

(6.0)

 

595.9

 

82.7

 

81.5

Balance sheet data:

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets

1,330.3

 

1,213.4

 

 

 

 

 

1,322.7

 

 

 

 

Equity

377.8

 

340.1

 

 

 

 

 

207.0

 

 

 

 

Capital stock

0.048

 

0.049

 

 

 

 

 

0.049

 

 

 

 

Number of shares

73,909,056

 

75,070,926

 

 

 

 

 

75,406,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

N.M. means not meaningful

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the three months ended December 31,

 

Change (%)

 

Change excluding FX (%)

($ in millions)

2018

 

2019 (***)

 

 

 

(unaudited)          

 

 

 

 

Revenue

421.8

  

417.2

 

(1.1)

 

4.8

(Loss)/profit for the period

15.0

    

(29.6)

 

N.M.

 

N.M.

EBITDA (1)

39.0

 

20.7

 

(46.9)

 

(41.1)

Adjusted EBITDA (1)

39.0

 

20.7

 

(46.9)

 

(41.1)

Adjusted Earnings (2)

16.2

 

(13.5)

 

N.M.

 

N.M.

Adjusted Earnings per share (in U.S. dollars) (3)

0.22

 

(0.19)

 

N.M.

 

N.M.

Adjusted Earnings attributable to Owners of the parent (2)

15.7

 

(13.5)

 

N.M.

 

N.M.

Adjusted Earnings per share attributable to Owners of the parent (in U.S. dollars) (3)

0.21

  

(0.19)

 

N.M.

 

N.M.

Payments for acquisition of property, plant, equipment and intangible assets (4)

(1.3)

 

(8.3)

 

N.M.

 

N.M.

Total Debt

459.8

 

720.6

 

56.7

 

57.5

Cash and cash equivalents

133.5

 

124.7

 

(6.6)

 

(3.5)

Net debt (5)

326.2

 

595.9

 

82.7

 

81.5

Balance sheet data:

 

 

 

 

 

 

 

Total assets

1,213.4

 

1,322.7

 

 

 

 

Equity

340.1

 

207.0

 

 

 

 

Capital stock

0.049

 

0.049

 

 

 

 

Number of shares

75,070,926

 

75,406,357

 

 

 

 

 

 

 

 

 

 

 

N.M. means not meaningful

 

 

 

 

 

 

 

 

5


 
 
(1)

In considering the financial performance of the business, our management analyzes the financial performance measures of EBITDA and Adjusted EBITDA at a company and operating segment level, to facilitate decision-making. EBITDA is defined as profit/(loss) for the period from continuing operations before net finance expense, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude certain acquisition and integration related costs, restructuring costs, sponsor management fees, asset impairments, site relocation costs, financing fees, 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.

 

We believe EBITDA and Adjusted EBITDA are useful metrics for investors to understand our results of continuing operations and profitability because they permit investors to evaluate our recurring profitability from underlying operating activities. We also use these measures internally to establish forecasts, budgets and operational goals to manage and monitor our business, as well as to evaluate our underlying historical performance. We believe EBITDA facilitates comparisons of operating performance between periods and among other companies in industries similar to ours because it removes the effect of variances in capital structures, taxation, and non-cash depreciation and amortization charges, which may differ between companies for reasons unrelated to operating performance. We believe Adjusted EBITDA better reflects our underlying operating performance because it excludes the impact of items which are not related to our core results of continuing operations.

 

EBITDA and Adjusted EBITDA measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to us, many of which present EBITDA-related performance measures when reporting their results.

 

EBITDA and Adjusted EBITDA have limitations as analytical tools. These measures are not presentations made in accordance with IFRS, are not measures of financial condition or liquidity and should not be considered in isolation or as alternatives to profit or loss for the period from continuing operations or other measures determined in accordance with IFRS. EBITDA and Adjusted EBITDA are not necessarily comparable to similarly titled measures used by other companies. These non-GAAP measures should be considered supplemental in nature and should not be construed as being more important than comparable GAAP measures.

 

See below under the heading “Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss)” for a reconciliation of profit/(loss) for the periods from continuing operations to EBITDA and Adjusted EBITDA.


(2) 

In considering the Company’s financial performance, our management analyzes the performance measure of Adjusted Earnings. Adjusted Earnings is defined as profit/(loss) for the periods from continuing operations adjusted for certain amortization of acquisition related intangible assets, restructuring costs, asset impairments and other non-ordinary expenses, site relocation costs, net foreign exchange impacts and their tax effects. Adjusted Earnings is not a measure defined by IFRS. The most directly comparable IFRS measure to Adjusted Earnings is profit/(loss) for the periods from continuing operations.

 

We believe Adjusted Earnings is a useful metric for investors and is used by our management for measuring profitability because it represents a group measure of performance which excludes the impact of certain non-cash charges and other charges not associated with the underlying operating performance of the business, while including the effect of items that we believe affect shareholder value and in-year returns, such as income tax expense and net finance costs.

 

Our management uses Adjusted Earnings to (i) provide senior management with monthly reports of our operating results; (ii) prepare strategic plans and annual budgets; and (iii) review senior management’s annual compensation, in part, using adjusted performance measures.

 

Adjusted Earnings is defined to exclude items that are not related to our core results of operations. Adjusted Earnings measures are frequently used by securities analysts, investors and other interested parties in their evaluation of companies comparable to us, many of which present an Adjusted Earnings related performance measure when reporting their results.


Adjusted Earnings has limitations as an analytical tool. Adjusted Earnings is neither a presentation made in accordance with IFRS nor a measure of financial condition or liquidity and should not be considered in isolation or as an alternative to profit or loss for the period from continuing operations or other measures determined in accordance with IFRS. Adjusted Earnings is not necessarily comparable to similarly titled measures used by other companies. These non-GAAP measures should be considered supplemental in nature and should not be construed as being more important than comparable GAAP measures.

6


 
 

See below under the heading “Reconciliation of Adjusted Earnings to profit/(loss)” for a reconciliation of Adjusted Earnings to our profit/(loss) for the period from continuing operations.

 
(3)

Adjusted Earnings per share is calculated based on weighted average number of ordinary shares outstanding of 73,909,056, 73,841,447 and 72,622,844 as of December 31, 2017, 2018 and 2019, respectively. And of 73,841,447 and 69,893,848 for the three months ended December 31, 2018 and 2019, respectively.

 
(4)

Payments for acquisition of property, plant, equipment and intangible assets represent the cash disbursement for the period.


(5)

Impact on December 31, 2019 due to the application of IFRS 16 (former operating leases not related to short-term or low-value leases are now shown as debt) was $187.9 million.

 

In considering our financial condition, our management analyzes net debt with third parties, which is defined as total debt less cash, cash equivalents (net of any outstanding bank overdrafts) and short-term financial investments.

 

Net debt has limitations as an analytical tool. Net debt 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. These non-GAAP measures should be considered supplemental in nature and should not be construed as being more important than comparable GAAP measures.


See below under the heading “Financing Arrangements” for a reconciliation of total debt to net debt utilizing IFRS reported balances obtained from the financial information included elsewhere in this Interim Report. The most directly comparable IFRS measure to net debt is total debt.

 

(***)

These preliminary results are unaudited and are based on management's initial review of operations for the fourth quarter and year ended December 31, 2019 and remain subject to the completion of the Company’s customary annual closing and review procedures. Final adjustments and other material developments may arise between the date hereof and the filing of the Company's Annual Report on Form 20-F.

7


 
 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31,

 

For the three months ended December 31,

($ in millions)

 

2017

 

2018

 

2019 (***)

 

2018

 

2019 (***)

 

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

(Loss)/profit for the period

 

(13.6)

 

20.5

 

(80.7)

 

15.0

 

(29.6)

Net finance expense

 

93.5

 

55.6

 

57.1

 

(4.2)

 

6.9

Income tax expense (a)

 

12.5

 

13.4

 

36.2

 

4.6

 

2.0

Depreciation and amortization

 

104.4

 

95.2

 

140.8

 

23.6

 

41.4

EBITDA (non-GAAP) (unaudited) (*)

 

196.9

 

184.8

 

153.4

 

39.0

 

20.7

Restructuring costs (b)

 

16.8

 

-

 

-

 

-

 

-

Other (c)

 

7.3

 

-

 

-

 

-

 

-

Total non-recurring items (**)

 

24.1

 

-

 

-

 

-

 

-

Adjusted EBITDA (non-GAAP) (unaudited) (*)

 

221.0

 

184.8

 

153.4

 

39.0

 

20.7

 

(*) 

For the year ended December 31, 2019, the EBITDA was positively impacted in $58.1 million due to the first application of IFRS 16. Excluding IFRS 16 impact, the EBITDA was $95.3 million for the year ended December 31, 2019. Depreciation and finance costs were negatively impacted in $49.3 million and $17.5 million, respectively, due to the application of the IFRS 16. For the three months ended December 31, 2019, the EBITDA was positively impacted in $17.9 million due to the first application of IFRS 16. Excluding IFRS 16 impact, the EBITDA was $2.8 million for the three months ended December 31, 2019. Depreciation and finance costs were negatively impacted in $16.9 million and $4.5 million, respectively, due to the application of the IFRS 16.

(a)

For the year ended December 31, 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 $37.3 million.

Accordingly, the tax credits for losses carryforward in our financial statements for the year ended December 31, 2019, was negatively affected by $37.3 million.

(**)

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 consolidate results of operations. Non-recurring items can be summarized as demonstrated below:

(b)

Restructuring costs primarily included restructuring activities and other personnel costs that were not related to our core results of operations. Restructuring costs for the year ended December 31, 2017, primarily relate to the costs to adapt the organization in Argentina and Brazil to the lower level of activities and the investments made in Brazil, Mexico and Spain to implement a lower-cost operating model.


(c)

Other non-recurring items for the year ended December 31, 2017, mainly refer to consulting and other non-recurring costs. In 2018 and 2019 we did not have any other non-recurring items.

   

(***)

These preliminary results are unaudited and are based on management's initial review of operations for the fourth quarter and year ended December 31, 2019 and remain subject to the completion of the Company’s customary annual closing and review procedures. Final adjustments and other material developments may arise between the date hereof and the filing of the Company's Annual Report on Form 20-F.

 

8


 
 
Reconciliation of Adjusted Earnings to profit/(loss):

 

 

 

 

 

 

 

 

 

 

 

For the year ended December 31,

 

For the three months ended December 31,

($ in millions)

2017

 

2018

 

2019 (***)

 

2018

 

2019 (***)

 

(unaudited)

(Loss)/profit for the period

(13.6)

 

20.5

 

(80.7)

 

15.0

 

(29.6)

Amortization of acquisition related intangible assets (a)

22.4

    

21.2

 

20.6

 

5.1

 

5.5

Restructuring costs (b) (*)

16.8

 

-

 

-

 

-

 

-

Change in fair value of financial instruments (c)

(0.2)

 

-

 

-

 

-

 

-

Net foreign exchange gain/(loss)

23.4

 

28.8

 

9.1

 

(2.3)

 

8.4

Financial non-recurring (d)

17.7

 

-

 

-

 

-

 

-

Depreciation non-recurring (e)

2.8

 

-

 

-

 

-

 

-

Tax effect (f)

(18.2)

 

(11.3)

 

27.7

 

(1.6)

 

(2.2)

Other (g) (*)

7.3

 

 - 

 

-

 

-

 

-

Total of add-backs

72.0

 

38.7

 

57.5

 

1.2

 

16.1

Adjusted Earnings (non-GAAP) (unaudited)

58.4

 

59.1

 

(23.2)

 

16.2

 

(13.5)

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

0.79

 

0.80

 

(0.32)

 

0.22

 

(0.19)

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

55.2

 

57.2

 

(23.9)

 

15.7

 

(13.5)

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

0.75

 

0.77

 

(0.32)

 

0.21

 

(0.19)

 

(*)   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.

(b)

Restructuring costs primarily included restructuring activities and other personnel costs that were not related to our core results of operations. Restructuring costs for the year ended December 31, 2017, primarily relate to the costs to adapt the organization in Argentina and Brazil to the lower level of activities and the investments made in Brazil, Mexico and Spain to implement a lower-cost operating model.

(c)

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.

(d)

Financial non-recurring relates to the costs incurred in the debt refinance process occurred in August 2017, which includes: (i) 2020 Senior Secured Notes call premium of $11.1 million and amortization of issuance costs of $4.9 million; (ii) Brazilian debentures due 2019 penalty fee of $0.7 million and remaining balance of the issuance cost of $1.0 million. In 2018 and 2019 we did not have any non-recurring financial expenses.

(e)

Non-recurring depreciation relates to the provision for accelerated depreciation of fixed assets in Puerto Rico and Mexico, due to the natural disasters. In 2018 and 2019 we did not have any non-recurring depreciation.

(f)

The tax effect represents the impact of the taxable adjustments based on tax nominal rate by country. For the year ended December 31, 2017, 2018 and 2019, the effective tax rate after moving non-recurring items was 34.5%, 30.5% and 57.4%, respectively. For the three months ended December 31, 2018 and 2019, the effective tax rate after moving non-recurring items was 31.4% and 0.8%, respectively.

          

9


 
 

For the year ended December 31, 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 $37.3 million.

Accordingly, the tax credits for losses carryforward in our financial statements for the year ended December 31, 2019, was negatively affected by $37.3 million.

(g)

Other non-recurring items for the year ended December 31, 2017, mainly refer to consulting and other non-recurring costs. In 2018 and 2019 we did not have any other non-recurring items.

(**)

Adjusted Earnings per share is calculated based on weighted average number of ordinary shares outstanding of 73,909,056, 73,841,447 and 72,622,844 as of December 31, 2017, 2018 and 2019, respectively. And of 73,841,447 and 69,893,848 for the three months ended December 31, 2018 and 2019, respectively.

(***) These preliminary results are unaudited and are based on management's initial review of operations for the fourth quarter and year ended December 31, 2019 and remain subject to the completion of the Company’s customary annual closing and review procedures. Final adjustments and other material developments may arise between the date hereof and the filing of the Company's Annual Report on Form 20-F.

 

10


 
 

Financing Arrangements 

Only our Senior Secured Notes agreement contain financial ratios as instrument to monitor the Company’s financial condition to pay interest expenses and dividends. The following is a brief description.

1.       Fixed Charge Coverage Ratio (applies to Atento S.A.) – measures the Company’s ability to pay interest expenses and dividends (fixed charges) in relation to EBITDA, as described in the debt agreements. The contractual ratio indicates that the EBITDA for the last twelve months should represent at least 2 times the fixed charge of the same period. As of December 31, 2019, the current ratio was 3.7 times. This financial covenant applies only as a restriction for certain actions (e.g. issue a new debt) and, if breached, will not trigger a default or an event of default.

The Company regularly monitors the financial ratios under the debt agreement. As of December 31, 2019, we were in compliance with the terms of our covenants.

Net debt as of December 31, 2017, 2018 and 2019 is as follow:

 

As of December 31,

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

2017

 

2018

 

2019 (***)

 

(audited)

 

(unaudited)

Cash and cash equivalents

141.8

 

133.5

 

124.7

Debt:

 

 

 

 

 

     Senior Secured Notes

398.3

 

400.0

 

501.9

     Brazilian Debentures

21.1

 

14.7

 

-

     BNDES

50.4

 

24.0

 

1.2

     Financial leases (3)

10.5

 

5.5

 

194.8

     Other Borrowings

6.0

 

15.5

 

22.8

Total Debt

486.3

 

459.8

 

720.6

Net Debt (1) (unaudited)

344.5

 

326.2

 

595.9

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

221.0

 

184.8

 

153.4

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

1.6x

 

1.8x

 

3.9x

 

(1)

In considering our financial condition, our management analyzes Net debt, which is defined as total debt less cash and cash equivalents. Net debt is not a measure defined by IFRS and it has limitations as an analytical tool. Net debt 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 and other items not related to our core results of operations. Excluding IFRS 16, impairment of goodwill and extraordinary items, the Net Debt is $408.0 million and EBITDA LTM is $155.9 million, so leverage was 2.6x.

(3)

Consider the impact in December 31, 2019 of application of IFRS 16 (former operating leases not related to short-term or low-value leases are now shown as debt) was $187.9 million and $6.9 million of other financial leases.

(***)

These preliminary results are unaudited and are based on management's initial review of operations for the fourth quarter and year ended December 31, 2019 and remain subject to the completion of the Company’s customary annual closing and review procedures. Final adjustments and other material developments may arise between the date hereof and the filing of the Company's Annual Report on Form 20-F.

 

11


 
 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS 

This Form 6-K providing quarterly and annual information contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995, relating to our operations, expected financial position, results of operation, and other business matters that are based on our current expectations, assumptions, and projections with respect to the future, and are not a guarantee of performance. In this Report, when we use words such as “may,” “believe,” “plan,” “will,” “anticipate,” “estimate,” “expect,” “intend,” “project,” “would,” “could,” “target,” or similar expressions, or when we discuss our strategy, plans, goals, initiatives, or objectives, we are making forward-looking statements.

We caution you not to rely unduly on any forward-looking statements. Actual results may differ materially from what is expressed in the forward-looking statements, and you should review and consider carefully the risks, uncertainties and other factors that affect our business and may cause such differences.

The forward-looking statements are based on information available as of the date that this Form 6-K furnished with the United States Securities and Exchange Commission (“SEC”) and we undertake no obligation to update them. Such forward–looking statements are based on numerous assumptions and developments that are not within our control. Although we believe these forward-looking statements are reasonable, we cannot assure you they will turn out to be correct.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of our financial condition and the results of operations is based upon and should be read in conjunction with the consolidated financial information of Atento.

Factors which could cause or contribute to such difference, include, but are not limited to, those discussed elsewhere in this Report, particularly under “Cautionary Statement with respect to Forward-Looking Statements” and the section entitled “Risk Factors” in the Form 20-F.

Overview

Atento is the largest provider of customer-relationship management and business-process outsourcing (“CRM BPO”) services and solutions in Latin America (“LatAm”) and Spain, and the third largest provider by revenue globally. Atento’s tailored CRM BPO solutions are designed to enable our client’s ability to deliver a high-quality product by creating a best-in-class experience for their customers, enabling our clients to focus on operating their core businesses. Atento utilizes its industry expertise commitment to customer care, and consultative approach, to offer superior and scalable solutions across the entire value chain for customer care, customizing each solution to the individual client’s needs.

We offer a comprehensive portfolio of customizable, and scalable, solutions including front and back-end services ranging from sales, applications-processing, customer care and credit-management. We leverage our deep industry knowledge and capabilities to provide industry-leading solutions to our clients. We provide our solutions to over 400 clients via over 149,000 highly engaged customer care specialists facilitated by our best-in-class technology infrastructure and multi-channel delivery platform. We believe we bring a differentiated combination of scale, capacity for processing client’s transactions, and industry expertise to our client’s customer care operations, which allow us to provide higher-quality and lower cost customer care services than our clients could deliver on their own.

We operate in 13 countries worldwide and organize our business into three geographic markets: (i) Brazil, (ii) Americas, excluding Brazil (“Americas”) and (iii) EMEA. For the year ended December 31, 2019, Brazil accounted for 48.5% of our revenue, Americas accounted for 38.7% of our revenue and EMEA accounted for 13.6% of our revenue (in each case, before holding company level revenue and consolidation adjustments). For the three months ended December 31, 2019, Brazil accounted for 46.7% of our revenue, Americas accounted for 40.0% of our revenue and EMEA accounted for 13.8% of our revenue (in each case, before holding company level revenue and consolidation adjustments).

Our number of workstations increased from 92,271 as of December 31, 2018 to 92,572 as of December 31, 2019.

12


 
 

The following table shows the number of workstations and delivery centers in each of the jurisdictions in which we operated as of December 31, 2018 and 2019:

 

Number of Workstations

 

Number of Service Delivery Centers (1)

2017

 

2018

 

2019

 

2017

 

2018

 

2019

Brazil

48,933

 

49,185

 

49,486

 

35

 

34

 

33

Americas

37,773

 

37,610

 

37,765

 

51

 

52

 

48

Argentina (2)

4,220

 

4,455

 

4,363

 

12

 

12

 

12

Central America (3)

2,433

 

2,424

 

2,319

 

4

 

4

 

3

Chile

2,571

 

2,948

 

2,595

 

3

 

4

 

4

Colombia

8,643

 

8,477

 

9,006

 

10

 

10

 

9

Mexico

9,849

 

9,384

 

9,800

 

15

 

15

 

14

Peru

9,004

 

8,569

 

8,479

 

4

 

4

 

3

United States (4)

1,053

 

1,353

 

1,203

 

3

 

3

 

3

EMEA

5,558

 

5,476

 

5,321

 

14

 

15

 

15

Spain

5,558

 

5,476

 

5,321

 

14

 

15

 

15

Total

92,264

 

92,271

 

92,572

 

100

 

101

 

96

 

(1)

Includes service delivery centers at facilities operated by us and those owned by our clients where we provide operations personnel and workstations.

(2)

Includes Uruguay.

(3)

Includes Guatemala and El Salvador.

(4)

Includes Puerto Rico.

 

For the years ended December 31, 2017, 2018 and 2019, revenue generated from our 15 largest client groups represented 76.4%, 75.2% and 73.8% of our revenue, respectively. Excluding revenue generated from the Telefónica Group, for the years ended December 31, 2017, 2018 and 2019, our next 15 largest client groups represented 38.2%, 38.1% and 39.3%, respectively.

For the three months ended December 31, 2018 and 2019, revenue generated from our 15 largest client groups represented 75.2% and 71.0% of our revenue, respectively. Excluding revenue generated from the Telefónica Group, for the three months ended December 31, 2018 and 2019, our next 15 largest client groups represented 38.7% and 39.4%, respectively.

For the years ended December 31, 2017, 2018 and 2019, telecommunications represented 46.7%, 45.8% and 41.1% of our revenue, respectively, and financial services represented 31.7%, 34.8% and 35.9%, respectively. Additionally, during the years ended December 31, 2017, 2018 and 2019 the sales by service were:

 

For the year ended December 31,

2017

 

2018

 

2019

Customer Service

48.4%

 

50.7%

 

52.8%

Sales

16.8%

 

17.7%

 

16.6%

Collection

8.8%

 

8.2%

 

7.5%

Back Office

12.9%

 

12.9%

 

12.7%

Technical Support

9.1%

 

6.9%

 

6.4%

Others

4.0%

 

3.6%

 

4.0%

Total

100.0%

 

100.0%

 

100.0%

 

13


 
 

During the three months ended December 31, 2018 and 2019, telecommunications represented 44.5% and 37.3% of our revenue, respectively, and financial services represented 36.8% and 35.7% of our revenue, respectively. Additionally, during the three months ended December 31, 2018 and 2019 the sales by service were:

 

For the three months ended December 31,

2018

 

2019

Customer Service

50.3%

 

54.6%

Sales

18.5%

 

15.6%

Collection

8.8%

 

7.1%

Back Office

12.5%

 

13.0%

Technical Support

6.3%

 

5.9%

Others

3.6%

 

3.8%

Total

100.0%

 

100.0%

 

Average headcount

The average headcount in the Atento Group in the years ended December 31, 2017, 2018 and 2019, is presented as follows:

 

December 31,

 

2017

 

2018

 

2019

Brazil

78,015

 

81,158

 

79,430

Central America

4,940

 

5,020

 

4,916

Chile

5,438

 

5,902

 

5,524

Colombia

9,809

 

8,742

 

8,843

Spain

10,534

 

11,345

 

12,267

Mexico

18,409

 

17,128

 

17,323

Peru

15,515

 

14,550

 

12,303

Puerto Rico

739

 

455

 

620

United States

732

 

512

 

408

Argentina and Uruguay

7,609

 

8,154

 

7,420

Corporate

77

 

72

 

75

Total

151,817

 

153,038

 

149,129

14


 
 
Consolidated Statements of Operations for the Year Ended December 31, 2017, 2018 and 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions, except percentage changes)

For the year ended December 31,

 

Change (%)

 

Change excluding FX (%)

 

For the year ended December 31,

 

Change (%)

 

Change excluding FX (%)

2017

 

2018

 

 

 

2019 (***)

 

 

 

(audited)

 

 

 

 

 

(unaudited)

 

 

 

 

Revenue

1,921.3

 

1,818.2

 

(5.4)

 

4.3

 

1,707.3

 

(6.1)

 

2.1

Other operating income

16.4

 

19.4

 

17.9

 

40.0

 

4.5

 

(76.6)

 

(76.3)

Other gains and own work capitalized

0.4

 

0.2

 

(51.7)

 

(46.6)

 

10.5

 

N.M.

 

N.M.

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplies

(74.9)

 

(70.8)

 

(5.5)

 

6.6

 

(66.4)

 

(6.2)

 

(0.6)

Employee benefit expenses

(1,429.1)

 

(1,365.2)

 

(4.5)

 

5.4

 

(1,301.0)

 

(4.7)

 

3.8

Depreciation (2)

(49.2)

 

(36.6)

 

(25.7)

 

(19.8)

 

(83.6)

 

128.5

 

143.6

Amortization

(55.2)

 

(58.7)

 

6.3

 

15.6

 

(57.2)

 

(2.5)

 

4.7

Changes in trade provisions

(0.6)

 

(1.0)

 

64.3

 

102.2

 

(3.7)

 

N.M.

 

N.M.

Impairment charges

-

 

-

 

N.M.

 

N.M.

 

(30.9)

 

N.M.

 

N.M.

Other operating expenses

(236.6)

 

(215.9)

 

(8.8)

 

0.8

 

(166.8)

 

(22.7)

 

(16.2)

Total operating expenses

(1,845.7)

 

(1,748.2)

 

(5.3)

 

4.5

 

(1,709.7)

 

(2.2)

 

6.2

Operating profit

92.4

 

89.5

 

(3.2)

 

5.9

 

12.6

 

(85.9)

 

(84.5)

Finance income (3)

7.9

 

18.8

 

139.8

 

18.2

 

20.0

 

6.4

 

46.1

Finance costs (4)

(78.1)

 

(45.6)

 

(41.6)

 

(40.6)

 

(68.1)

 

49.3

 

56.4

Change in fair value of financial instruments

0.2

 

-

 

(100.0)

 

(100.0)

 

-

 

N.M.

 

N.M.

Net foreign exchange loss

(23.4)

 

(28.8)

 

23.1

 

43.8

 

(9.1)

 

(68.5)

 

(58.1)

Net finance expense

(93.5)

 

(55.6)

 

(40.5)

 

(25.7)

 

(57.1)

 

2.7

 

10.9

(Loss)/profit before income tax

(1.0)

 

33.9

 

N.M.

 

N.M.

 

(44.5)

 

N.M.

 

N.M.

Income tax expense

(12.5)

 

(13.4)

 

7.0

 

11.9

 

(36.2)

 

N.M.

 

N.M.

(Loss)/profit for the period

(13.6)

 

20.5

 

N.M.

 

N.M.

 

(80.7)

 

N.M.

 

N.M.

(Loss)/profit attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the parent

(16.8)

 

18.5

 

N.M.

 

N.M.

 

(81.3)

 

N.M.

 

N.M.

Non-controlling interest

3.2

 

1.9

 

(39.6)

 

(26.5)

 

0.6

 

(68.5)

 

N.M.

(Loss)/profit for the period

(13.6)

 

20.5

 

N.M.

 

N.M.

 

(80.7)

 

N.M.

 

N.M.

Other financial data:

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (1) (unaudited)

196.9

 

184.8

 

(6.2)

 

2.2

 

153.4

 

(17.0)

 

(9.9)

Adjusted EBITDA (1) (unaudited)

221.0

 

184.8

 

(16.4)

 

(9.2)

 

153.4

 

(17.0)

 

(9.9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 $49.3 million for year ended December 31, 2019.

(3) For the years ended in December 31, 2018 and 2019 there is an impact of $10.6 million and $17.8 million, respectively, 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.

(4) Due to the initial application of IFRS 16 the finance costs was negatively impacted in $17.5 million for the year ended December 31, 2019.

(***) These preliminary results are unaudited and are based on management's initial review of operations for the fourth quarter and year ended December 31, 2019 and remain subject to the completion of the Company’s customary annual closing and review procedures. Final adjustments and other material developments may arise between the date hereof and the filing of the Company's Annual Report on Form 20-F.

N.M. means not meaningful

 

15


 
 
Consolidated Statements of Operations for the Three Months Ended December 31, 2018 and 2019

 

 

 

 

 

 

 

 

($ in millions, except percentage changes)

For the three months ended December 31,

 

Change

(%)

 

Change excluding FX (%)

2018

 

2019 (***)

 

 

 

(unaudited)

 

 

 

 

Revenue

421.8

 

417.2

 

(1.1)

 

4.8

Other operating income

4.2

 

1.9

 

(55.6)

 

(55.1)

Other gains and own work capitalized

0.2

 

3.5

 

N.M.

 

N.M.

Operating expenses:

 

 

 

 

 

 

 

Supplies

(16.6)

 

(17.1)

 

3.4

 

6.0

Employee benefit expenses

(318.9)

 

(314.3)

 

(1.4)

 

4.1

Depreciation (2)

(4.7)

 

(24.1)

 

N.M.

 

N.M.

Amortization

(18.8)

 

(17.3)

 

(8.2)

 

(3.0)

Changes in trade provisions

(0.6)

 

(0.3)

 

(46.9)

 

(43.8)

Impairment charges

-

 

(30.9)

 

N.M.

 

N.M.

Other operating expenses

(51.1)

 

(39.2)

 

(23.4)

 

(19.5)

Total operating expenses

(410.8)

 

(443.3)

 

7.9

 

13.7

Operating profit

15.4

 

(20.7)

 

N.M.

 

N.M.

Finance income (3)

16.7

 

15.4

 

(7.4)

 

31.9

Finance costs (4)

(14.7)

 

(14.0)

 

(5.3)

 

(2.6)

Net foreign exchange gain/(loss)

2.3

 

(8.4)

 

N.M.

 

N.M.

Net finance expense

4.2

 

(6.9)

 

N.M.

 

N.M.

Profit/(loss) before income tax

19.6

 

(27.6)

 

N.M.

 

N.M.

Income tax (expense)/benefit

(4.6)

 

(2.0)

 

(55.1)

 

(45.7)

Profit/(loss) for the period

15.0

 

(29.6)

 

N.M.

 

N.M.

Profit/(loss) attributable to:

 

 

 

 

 

 

 

Owners of the parent

14.6

 

(29.6)

 

N.M.

 

N.M.

Non-controlling interest

0.5

 

-

 

(100.0)

 

N.M.

Profit/(loss) for the period

15.0

 

(29.6)

 

N.M.

 

N.M.

Other financial data:

 

 

 

 

 

 

 

EBITDA (1) (unaudited)

39.0

 

20.7

 

(46.9)

 

(41.1)

Adjusted EBITDA (1) (unaudited)

39.0

 

20.7

 

(46.9)

 

(41.1)

 

 

 

 

 

 

 

 

 

(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 $16.9 million for three months ended in December 31, 2019.

(3) For the three months ended in December 31, 2018 and 2019 there is an impact of $10.6 million and $15.9 million, respectively, 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.

(4) Due to the initial application of IFRS 16 the finance costs was negatively impacted in $4.5 million for the three months ended December 31, 2019.

(***) These preliminary results are unaudited and are based on management's initial review of operations for the fourth quarter and year ended December 31, 2019 and remain subject to the completion of the Company’s customary annual closing and review procedures. Final adjustments and other material developments may arise between the date hereof and the filing of the Company's Annual Report on Form 20-F.

N.M. means not meaningful

 

16


 
 

Consolidated Statements of Operations by Segment for the Year Ended December 31, 2017, 2018 and 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ in millions, except percentage changes)

For the year ended December 31,

 

Change (%)

 

Change Excluding  FX (%)

 

For the year ended December 31,

 

Change (%)

 

Change Excluding  FX (%)

2017

 

2018

 

 

 

2019 (***)

 

 

 

(audited)

 

 

 

 

 

(unaudited)

 

 

 

 

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

944.8

 

877.7

 

(7.1)

 

5.9

 

827.3

 

(5.7)

 

2.1

Americas

758.0

 

708.7

 

(6.5)

 

3.5

 

660.1

 

(6.9)

 

2.8

EMEA

223.4

 

240.9

 

7.8

 

2.7

 

232.8

 

(3.3)

 

2.0

Other and eliminations (1)

(5.0)

 

(9.1)

 

82.4

 

83.0

 

(12.9)

 

42.5

 

49.7

Total revenue

1,921.3

 

1,818.2

 

(5.4)

 

4.3

 

1,707.3

 

(6.1)

 

2.1

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

(899.2)

 

(847.6)

 

(5.7)

 

7.4

 

(807.4)

 

(4.7)

 

3.2

Americas

(734.6)

 

(701.4)

 

(4.5)

 

6.1

 

(679.5)

 

(3.1)

 

6.6

EMEA

(226.8)

 

(240.2)

 

5.9

 

1.1

 

(244.1)

 

1.6

 

7.5

Other and eliminations (1)

15.0

 

41.0

 

N.M.

 

N.M.

 

21.4

 

(47.8)

 

(42.2)

Total operating expenses

(1,845.7)

 

(1,748.2)

 

(5.3)

 

4.5

 

(1,709.7)

 

(2.2)

 

6.2

Operating profit/(loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

55.5

 

33.1

 

(40.3)

 

(32.2)

 

21.1

 

(36.3)

 

(31.7)

Americas

31.5

 

21.5

 

(31.5)

 

(31.4)

 

(18.2)

 

N.M.

 

N.M.

EMEA

(1.8)

 

2.5

 

N.M.

 

N.M.

 

1.2

 

(52.8)

 

(49.3)

Other and eliminations (1)

7.2

 

32.3

 

N.M.

 

N.M.

 

8.6

 

(73.5)

 

(70.9)

Total operating profit

92.4

 

89.5

 

(3.2)

 

5.9

 

12.6

 

(85.9)

 

(84.5)

Net finance expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

(33.0)

 

(30.3)

 

(8.3)

 

5.2

 

(46.5)

 

53.4

 

66.4

Americas

(13.2)

 

(5.5)

 

(58.1)

 

28.5

 

(5.6)

 

1.4

 

35.8

EMEA

(16.8)

 

(1.6)

 

(90.4)

 

(90.7)

 

(1.4)

 

(12.7)

 

(6.6)

Other and eliminations (1)

(30.4)

 

(18.1)

 

(40.3)

 

(38.7)

 

(3.6)

 

(80.2)

 

(80.0)

Total net finance expense

(93.5)

 

(55.6)

 

(40.5)

 

(25.7)

 

(57.1)

 

2.7

 

10.9

Income tax benefit/(expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

(8.8)

 

(1.4)

 

(83.9)

 

(81.8)

 

7.4

 

N.M.

 

N.M.

Americas

(9.7)

 

(2.1)

 

(78.8)

 

(84.6)

 

(2.0)

 

(0.3)

 

(7.1)

EMEA

5.0

 

(0.9)

 

(117.8)

 

(118.5)

 

(22.0)

 

N.M.

 

N.M.

Other and eliminations (1)(3)

0.9

 

(9.0)

 

N.M.

 

N.M.

 

(19.6)

 

116.7

 

129.0

Total income tax (expense)/benefit

(12.5)

 

(13.4)

 

7.0

 

11.9

 

(36.2)

 

N.M.

 

N.M.

Profit/(loss) for the period:

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

13.7

 

1.4

 

(89.7)

 

(88.5)

 

(18.0)

 

N.M.

 

N.M.

Americas

8.6

 

13.9

 

62.5

 

(53.4)

 

(25.9)

 

N.M.

 

N.M.

EMEA

(13.6)

 

-

 

100.2

 

(100.2)

 

(22.2)

 

N.M.

 

N.M.

Other and eliminations (1)

(22.2)

 

5.1

 

(123.0)

 

(123.1)

 

(14.6)

 

N.M.

 

N.M.

(Loss)/profit for the period

(13.6)

 

20.5

 

N.M.

 

N.M.

 

(80.7)

 

N.M.

 

N.M.

Profit/(loss) attributable to:

 

 

 

 

 

 

 

 

 

 

 

 

 

Owners of the parent

(16.8)

 

18.5

 

N.M.

 

N.M.

 

(81.3)

 

N.M.

 

N.M.

Non-controlling interest

3.2

 

1.9

 

(39.6)

 

(26.5)

 

0.6

 

(68.5)

 

N.M.

Other financial data:

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

112.4

 

83.5

 

(25.7)

 

(15.5)

 

96.9

 

16.0

 

25.2

Americas

69.1

 

56.2

 

(18.6)

 

(14.2)

 

30.7

 

(45.3)

 

(40.5)

EMEA

7.6

 

12.3

 

61.8

 

44.4

 

17.0

 

38.5

 

46.7

Other and eliminations (1)

7.8

 

32.8

 

N.M.

 

N.M.

 

8.8

 

(73.1)

 

(70.4)

Total EBITDA (unaudited)

196.9

 

184.8

 

(6.2)

 

2.2

 

153.4

 

(17.0)

 

(9.9)

Adjusted EBITDA (2):

 

 

 

 

 

 

 

 

 

 

 

 

 

Brazil

124.7

 

99.4

 

(20.3)

 

(12.0)

 

111.7

 

12.4

 

21.1

Americas

83.5

 

73.5

 

(12.0)

 

(9.7)

 

32.4

 

(55.9)

 

(51.9)

EMEA

14.8

 

19.5

 

31.6

 

36.3

 

21.8

 

11.9

 

18.3

Other and eliminations (1)

(2.0)

 

(7.6)

 

N.M.

 

N.M.

 

(12.6)

 

65.5

 

61.5

Total Adjusted EBITDA (unaudited)

221.0

 

184.8

 

(16.4)

 

(9.2)

 

153.4

 

(17.0)

 

(9.9)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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)".

(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.

(***) These preliminary results are unaudited and are based on management's initial review of operations for the fourth quarter and year ended December 31, 2019 and remain subject to the completion of the Company’s customary annual closing and review procedures. Final adjustments and other material developments may arise between the date hereof and the filing of the Company's Annual Report on Form 20-F.

N.M. means not meaningful

17


 
 
Consolidated Statements of Operations by Segment for the Three Months Ended December 31, 2018 and 2019

 

 

 

 

 

 

 

 

($ in millions, except percentage changes)

For the three months ended December 31,

 

Change

 (%)

 

Change Excluding  FX (%)

2018

 

2019 (***)

 

 

 

 (unaudited)

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Brazil

213.2

 

194.8

 

(8.6)

 

(1.2)

Americas

150.6

 

167.0

 

10.9

 

15.5

EMEA

59.8

 

57.4

 

(4.1)

 

(1.1)

Other and eliminations (1)

(1.8)

 

(2.0)

 

13.8

 

19.8

Total revenue

421.8

 

417.2

 

(1.1)

 

4.8

Operating expenses:

 

 

 

 

 

 

 

Brazil

(202.4)

 

(191.1)

 

(5.6)

 

2.1

Americas

(160.6)

 

(193.8)

 

20.7

 

25.1

EMEA

(61.7)

 

(64.5)

 

4.6

 

7.7

Other and eliminations (1)

13.9

 

6.1

 

(56.1)

 

(49.7)

Total operating expenses

(410.8)

 

(443.3)

 

7.9

 

13.7

Operating profit/(loss):

 

 

 

 

 

 

 

Brazil

11.2

 

4.5

 

(59.6)

 

(56.7)

Americas

(7.7)

 

(26.4)

 

N.M.

 

N.M.

EMEA

(1.2)

 

(2.8)

 

136.2

 

134.7

Other and eliminations (1)

13.1

 

4.0

 

(69.7)

 

(65.1)

Total operating profit

15.4

 

(20.7)

 

N.M.

 

N.M.

Net finance expense:

 

 

 

 

 

 

 

Brazil

(3.6)

 

(10.5)

 

N.M.

 

N.M.

Americas

12.7

 

8.9

 

(30.0)

 

4.1

EMEA

0.1

 

(0.6)

 

N.M.

 

N.M.

Other and eliminations (1)

(5.0)

 

(4.7)

 

(5.5)

 

(4.5)

Total net finance expense

4.2

 

(6.9)

 

N.M.

 

N.M.

Income tax benefit/(expense):

 

 

 

 

 

 

 

Brazil

(3.5)

 

1.3

 

(138.1)

 

(140.7)

Americas

2.2

 

0.7

 

(67.2)

 

(72.8)

EMEA

(0.3)

 

(18.8)

 

N.M.

 

N.M.

Other and eliminations (1)(3)

(3.0)

 

14.7

 

N.M.

 

N.M.

Total income tax (expense)/benefit

(4.6)

 

(2.0)

 

(55.1)

 

(45.7)

Profit/(loss) for the period:

 

 

 

 

 

 

 

Brazil

4.1

 

(4.7)

 

N.M.

 

N.M.

Americas

7.3

 

(16.7)

 

N.M.

 

N.M.

EMEA

(1.4)

 

(22.3)

 

N.M.

 

N.M.

Other and eliminations (1)

5.2

 

14.0

 

N.M.

 

N.M.

(Loss)/profit for the period

15.0

 

(29.6)

 

N.M.

 

N.M.

Profit/(loss) attributable to:

 

 

 

 

 

 

 

Owners of the parent

14.6

 

(29.6)

 

N.M.

 

N.M.

Non-controlling interest

0.5

 

-

 

(100.0)

 

N.M.

Other financial data:

 

 

 

 

 

 

 

EBITDA (2):

 

 

 

 

 

 

 

Brazil

23.9

 

26.7

 

11.7

 

20.2

Americas

1.0

 

(13.1)

 

N.M.

 

N.M.

EMEA

1.1

 

3.1

 

N.M.

 

N.M.

Other and eliminations (1)

13.0

 

4.0

 

(68.9)

 

(64.2)

Total EBITDA (unaudited)

39.0

 

20.7

 

(46.9)

 

(41.1)

Adjusted EBITDA (2):

 

 

 

 

 

 

 

Brazil

29.5

 

29.8

 

0.8

 

7.9

Americas

6.7

 

(11.2)

 

N.M.

 

N.M.

EMEA

2.8

 

4.1

 

42.7

 

49.5

Other and eliminations (1)

(0.1)

 

(1.9)

 

N.M.

 

56.1

Total Adjusted EBITDA (unaudited)

39.0

 

20.7

 

(46.9)

 

(41.1)