NEW YORK, May 7, 2020 /PRNewswire/ -- Atento S.A.
(NYSE: ATTO) ("Atento" or the "Company"), the largest provider of
customer-relationship management and business-process outsourcing
services in Latin America, and
among the top five providers globally, today announced its
first-quarter operating and financial results for the period ending
March 31, 2020. All comparisons in
this announcement are year-over-year (YoY) and in constant-currency
(CCY), unless noted otherwise, and may differ from the
corresponding 6-K filing due to certain intra-group
eliminations.
Q1 2020 highlights
Three Horizon
Plan continues gaining traction
- Strong Multisector
growth at higher margins
- Profitability
improvements via better revenue mix and effective cost
management
- Bulk of investments
in digital transformation completed in 2019
2019 pipeline
of acquired programs already showing results in Q1
2020
- 8.4% YoY
Multisector growth across regions
- Multisector reached
67.5% of total revenue, up 510 bps from 62.4% in Q1
2019
Reported EBITDA
improved YoY
- +10% EBITDA growth,
with EBITDA margin expanding +120 bps
- +150 bps Brazil
margin, due to Multisector growth and positive impact from certain
discontinued TEF programs
- +60 bps Americas
margin on improved revenue mix
Cash generation
improved under Three Horizon Plan and DSO
reduction
- Positive results of
transformation plan combined with new working capital management
policies
- DSO reduction from
stricter collection policy
Robust
contingency plan to protect employees and other
stakeholders
- Contributing toward
helping assure the continuity of essential services for citizens
around the world through remote and secure customer
services
- Over 60,000
work-at-home agents (WAHA), or approximately 55% of Company's call
center employees
- Solid cash position
of $163 million, reflecting strong operating cashflow and drawdown
of credit facilities to enhance financial liquidity
World leading
institutional investors HPS, GIC and Farallon to invest
independently in Atento, acquiring Bain Capital's equity stake in
the Company
- Participation
reflects confidence in Atento's Three Horizon Plan
- HPS, GIC and
Farallon have each agreed to certain transfer restrictions with
regards to their Atento shares for a period of 24
months
- HPS will have the
right to propose two directors, while GIC and Farallon will each
have the right to propose one director.
|
Message from the CEO and CFO
Carlos López-Abadia, Atento's Chief Executive Officer,
commented, "Atento responded early to the COVID-19 crisis, rapidly
implementing measures to protect our employees, reinforcing our
balance sheet, and ensuring that we continue to effectively deliver
services, some of which are mission-critical, across our markets. I
would like to thank each and every person on our teams for their
commitment during this challenging period.
Our first quarter results were largely ahead of plan, as our
transformation plan gained additional traction that further
improved revenue mix, profitability and cash flow. While the
economic effects of the crisis are impacting volumes and
utilization rates, resulting market dynamics are creating
opportunities with respect to the higher-growth in multisector
customers, such as born-digital and tech.
We have also been able to continue building out our portfolio of
next-generation services, such as digital, high-value voice,
integrated multichannel and back office, which many companies
continue purchasing as they seek to reduce costs in this difficult
economic environment. In addition to safeguarding business
continuity, our transition to a work-at-home model is providing
access to a wider pool of talent, helping reduce absenteeism and
turnover, as well as increase scale advantages and operating
leverage. We expect, therefore, to emerge from the crisis far
stronger than many of our competitors, near and far, enabling us to
secure more profitable business opportunities and capture greater
market share."
José Azevedo, Atento's Chief Financial Officer said,
"Owing to significantly improved working capital policies, enhanced
cash management, as well as stronger cost controls, we
improved our first-quarter operating cash flow, helping increase
our cash position in combination with drawdowns from Atento's
credit facilities, to navigate the pandemic crisis.
Although we have been able to further accelerate our
transformation initiatives, the bulk of related investments are now
behind us and we are being cautious and prudent in this complex
business environment, postponing non-essential capital
expenditures, further reducing indirect costs, and protecting
hard-earned margin gains. And while we have largely completed the
process of discontinuing unprofitable client programs, we will
continually review remaining programs and make any necessary
adjustments.
Looking ahead, we believe we will be able to continue
effectively executing our Three Horizon Plan, through new growth
avenues, next generation services and digital acceleration, as well
as operational improvements and financial discipline."
Institutional Investors to Acquire Bain Capital's Equity
Stake in Atento
On May 7, the Company announced
arrangements to facilitate HPS Investment Partners, GIC and an
investment fund affiliated with Farallon Capital Management's
acquisition of shares of the Company currently held indirectly by
Bain Capital in exchange for notes currently held by them.
The transaction is subject to regulatory conditions, including
anti-trust approvals in Brazil and
Mexico. Following the transaction,
Atento expects that HPS will hold approximately 25%, GIC 22% and
Farallon 15% of the shares in the Company. The institutional
investors will invest independently in Atento and will be able to
propose candidates to be nominated to the Company's Board of
Directors, subject to shareholder approval. HPS will have the right
to propose two directors, while GIC and Farallon will each have the
right to propose one director.
Each of HPS, GIC and Farallon have also agreed to certain
transfer restrictions with regards to their Atento shares for a
period of 24 months from the date of completion of the transaction.
The arrangements with these investors are intended to ensure that
there are no impacts on Atento's day-to-day business
operations.
Summarized Financials
($ in millions except
EPS)
|
Q1
2020
|
Q1 2019
|
CCY Growth
(1)
|
Income
Statement
|
|
|
|
Revenue
|
375.4
|
436.7
|
-2.8%
|
EBITDA
(2)
|
40.8
|
42.0
|
10.1%
|
EBITDA
Margin
|
10.9%
|
9.6%
|
1.2p.p.
|
Net Income
|
(7.4)
|
(45.6)
|
83.1%
|
Recurring Net Income
( 3)
|
(3.4)
|
(5.5)
|
50.8%
|
Earnings Per Share
(3)
|
(0.10)
|
(0.61)
|
82.4%
|
Recurring Earnings Per
Share (3)
|
(0.05)
|
(0.07)
|
43.8%
|
Cash flow, Debt
and Leverage
|
|
|
|
Net Cash (Used In)/
from Operating Activities
|
4.4
|
(39.8)
|
|
Cash and Cash
Equivalents
|
162.8
|
77.9
|
|
Net
Debt
|
564.3
|
565.2
|
|
Net
Leverage
|
3.7
|
3.2
|
|
|
|
(1)
|
Unless otherwise
noted, all results are for Q1 2020; all revenue growth rates are on
a constant currency basis, year-over-year.
|
(2)
|
EBITDA, Recurring Net
Income/Recurring EPS are Non-GAAP measures.
|
(3)
|
Reported Net Income
and Earnings per Share (EPS) attributable to Owners of the Parent
Company and includes the impact of non-cash foreign exchange
gains/losses on intercompany balances.
|
First Quarter Consolidated Operating Results
The first quarter of 2020 registered significant improvements in
growth and quality coupled with higher margins, as a result of
continued diversification of Atento's client portfolio mix toward
faster growing verticals and away from low-margin businesses,
benefiting overall profitability.
Multisector remains the core growth engine of the Company, with
sales in this segment increasing 8.4% across all regions to 67.5%
of total revenue, up 510 bps compared to Q1 2019.
In Brazil, Multisector revenues
increased 3.6%, mainly among born-digital clients and as a result
of the pipeline acquired throughout 2019. In the Americas, higher
volumes in the financials vertical, combined with the pipeline
acquired last year among mostly tech and born-digital companies,
also drove the 8.4% increase in Atento's Multisector revenues,
particularly in Mexico and
Colombia. In EMEA, Multisector
growth was driven by the pipeline acquired in 2H 2019, leading to a
mix 840 bps higher than Q1 2019.
Telefónica revenues decreased 19.9%, mainly reflecting the
discontinuation of lower margin programs in 2H 2019 in Brazil and lower volumes in EMEA.
Reported EBITDA increased 10.1% YoY to $40.8 million, with EBITDA Margin at 10.9%, a 120
bps improvement versus Q1 2019, fueled by Brazil and the Americas and extending a
positive EBITDA trend as a result of (i) customer and service mix
moving to more profitable verticals and services; (ii) operational
improvement initiatives gaining additional traction; and (iii)
exiting low-margin business.
Segment Reporting
Brazil
($ in
millions)
|
Q1
2020
|
Q1 2019
|
CCY
growth (1)
|
Brazil
Region
|
|
|
|
Revenue
|
172.0
|
218.3
|
-7.1%
|
Adjusted EBITDA
(2)
|
24.4
|
27.8
|
4.5%
|
Adjusted EBITDA
Margin
|
14.2%
|
12.7%
|
1.5p.p.
|
Operating
Income/(loss)
|
(8.2)
|
(5.9)
|
-70.3%
|
|
|
(1)
|
Unless otherwise
noted, all results are for Q1 2020; all growth rates are on a
constant currency basis and year-over-year
|
(2)
|
EBITDA and Adj.
EBITDA are Non-GAAP measures.
|
In Brazil, Atento's flagship
operation, first quarter Multisector revenue increased 3.6%,
accounting for 76.3% of Brazilian revenues in the quarter, a 580
bps expansion year-over-year, mainly with born-digital clients and
as a result of the pipeline acquired throughout 2019.
The decision to discontinue unprofitable programs in 2H 2019,
which has also contributed to improved margins, led to a 30.2%
decrease in Telefónica revenues during the quarter.
Reported EBITDA totaled $24.4
million, 4.5% higher than first quarter 2019, reflecting the
improved revenue mix. The corresponding margin expanded 150 bps to
14.2%, driven by a 130 bps positive impact from discontinuing lower
margin programs.
Americas Region
($ in
millions)
|
Q1
2020
|
Q1 2019
|
CCY
growth (1)
|
Americas
Region
|
|
|
|
Revenue
|
147.4
|
161.7
|
1.1%
|
Adjusted EBITDA
(2)
|
13.7
|
14.1
|
1.3%
|
Adjusted EBITDA
Margin
|
9.3%
|
8.7%
|
0.6p.p.
|
Operating
Income/(loss)
|
(6.9)
|
(7.6)
|
9.0%
|
|
|
(1)
|
Unless otherwise
noted, all results are for Q1 2020; all growth rates are on a
constant currency basis and year-over-year
|
(2)
|
EBITDA and Adj.
EBITDA are Non-GAAP measures.
|
First quarter revenue in the Americas region grew 1.1%
year-over-year to $147.4 million,
mainly driven by higher volumes in tech and born-digital companies,
combined with the pipeline acquired in 2019. Volumes were
particularly strong in Mexico and
Colombia, leading to an 8.4%
increase in Multisector sales, up 360 bps to 65.1% of total
revenue. TEF revenues declined 10.3%, mainly due to lower volumes
in Peru.
EBITDA in the first quarter totaled $13.7
million, up 1.3%, with a corresponding margin of 9.3%, 60
bps higher than last year's comparable quarter. Most countries in
the region reported higher profitability stemming from an improved
service mix and better margins associated with tech and
born-digital verticals, among others.
EMEA Region
($ in
millions)
|
Q1
2020
|
Q1 2019
|
CCY
growth (1)
|
EMEA
Region
|
|
|
|
Revenue
|
57.5
|
62.1
|
-4.8%
|
Adjusted EBITDA
(2)
|
3.7
|
6.3
|
-39.2%
|
Adjusted EBITDA
Margin
|
6.5%
|
10.1%
|
-3.6p.p.
|
Operating
Income/(loss)
|
(0.6)
|
(4.0)
|
85.8%
|
|
|
(1)
|
Unless otherwise
noted, all results are for Q1 2020; all growth rates are on a
constant currency basis and year-over-year
|
(2)
|
EBITDA and Adj.
EBITDA are Non-GAAP measures.
|
Multisector sales grew 16.5% during the first quarter, driven by
a pipeline of clients acquired during 2H 2019. Multisector sales
represented 48.1% of total revenue, 840 bps higher when compared to
Q1 2019.
TEF revenues decreases 18.5%, due to lower volumes, which led to
a decrease of 4.8% in total revenues.
EMEA's reported EBITDA totaled $3.7
million in the first quarter, down 39.2% year-over-year. The
corresponding margin was 6.5%, 360 bps lower versus Q1 2019 as a
result of decreased TEF volumes, partially offset by a margin
recovery associated with Multisector customers and stricter control
of indirect costs.
Cash Flow
($ in
millions)
|
Q1
2020
|
Q1
2019
|
Consolidated Cash
Flow Statement
|
|
|
Cash and cash
equivalents at beginning of period
|
124.7
|
133.5
|
Net Cash (used in)
from Operating activities
|
4.4
|
(39.8)
|
Net Cash used in
Investing activities
|
(11.3)
|
(16.7)
|
Net Cash provided by
Financing activities
|
58.8
|
1.8
|
Net
(increase/decrease) in cash and cash equivalents
|
51.9
|
(54.6)
|
Effect of changes
in exchanges rates
|
(13.9)
|
(1.0)
|
Cash and cash
equivalents at end of period
|
162.8
|
77.9
|
Operational improvements under the transformation plan, along
with enhanced contract and working capital management policies, led
to a significant improvement in working capital during the first
quarter, with net cash flow generated from operating activities
totaling $4.4 million , compared to
an outflow of $39.8 during the prior
year's comparable period. Among the improvements in working capital
was a reduction in days sales outstanding (DSO) resulting from a
stricter collection that led to one-off overdue collection, which
were highlighted during Atento's fourth quarter earnings conference
call.
Cash capex was 3.0% of first quarter revenue, compared to 3.8%
in Q1 2019, and still reflects the supplier payments carry-over
related to projects executed in the 2H 2019, per the Company's Q4
2019 financial results materials. Due to risks associated with the
COVID-19 pandemic, the company is postponing, for the foreseeable
future, all non-essential capex.
Capital Structure
($ in
millions) as of March 31, 2020
|
Maturity
|
Interest
Rate
|
Outstanding
Balance Q1 20
|
Indebtedness
|
|
|
|
Senior Secured
Notes
|
2022
|
USD 6.125%
|
495.3
|
Super Senior Credit
Facility
|
2020
|
USD 5.223%
|
50.0
|
Other Credit
Facilities
|
2020
|
CDI +
2.40%
|
29.9
|
Other borrowings and
leases
|
2023
|
Variable
|
9.8
|
BNDES
(BRL)
|
2022
|
TJLP +
2.0%
|
0.8
|
Debt with third
parties
|
585.8
|
Leasing
(IFRS16)
|
141.3
|
Gross Debt (third
parties + IFRS16)
|
727.1
|
Cash and Cash
Equivalents
|
162.8
|
Net
Debt
|
564.3
|
At March 31, 2020, cash and cash
equivalents totaled $162.8 million,
which included a drawdown of approximately $77 million from available revolving credit
lines. Additionally, on April 6,
2020, Atento paid down a daily revolver line of $8.6 million, as part of a negotiation to
increase the credit line to $21.7
million for a 12-month period, which was subsequently drawn
upon on April 9th,
bolstering the Company's cash position and financial
flexibility.
Net debt was $564.3 million at the
end of the first quarter, which included an additive effect of
$141.3 related to IFRS16. Atento's
total debt with third parties has an average maturity of 2.1 years
and an average LTM cost of 7.0% per annum. At the end of the first
quarter, reported net debt-to-EBITDA was 3.7x, compared to 3.9x in
Q4 2019. Approximately $502 million,
or 85.5% of the Company's debt with third parties, will mature in
August 2022.
Update On COVID-19 Response: Executing on Immediate Plan and
Preparing the Company for the Post-crisis
As a socially responsible company, Atento is fully committed to
helping ensure that many essential services remain available to
citizens around the world through remote and secure customer
services. This commitment includes the implementation of a robust
plan to protect the health and safety of Atento employees and to
ensure business continuity, in response to the COVID-19 pandemic.
The national governments of many of the countries in which the
company operates have designated Atento's services as essential,
three of which are using the Company's services to facilitate
information management and delivery during the pandemic.
Currently, Atento has over 60,000 work-at-home agents (WAHA), or
approximately 55% of the Company's call center employees. For
agents still working at Atento facilities, distances between
workstations have been increased and personal work equipment
(individual headset, keyboard, mouse, etc.) made available. The
implementation of strict health and safety measures in all
operations has allowed Atento to keep almost all of its work sites
open, which gives the Company broad capacity to meet the needs of
all clients. The transition to Telework by Atento employees has
been facilitated by the digital transformation process underway
since last year, which has included re-skilling and digital
recruiting, among other forms of employee development that are
being strengthened under the Company's transformation plan.
While limited on-site capacity in most countries has been
partially offset by expanding WAHA operations, slowing economies
across markets have resulted in lower volumes. On the other hand,
relevant changes in market dynamics are taking place and are
expected to create medium- and long-term opportunities.
Accordingly, management is adjusting certain elements of the Three
Horizon Plan to effectively capture these emerging market
opportunities and enable Atento to emerge from the COVID-19 crisis
as a stronger company. With regard to pursuing new growth avenues
within the CRM-BPO market, greater emphasis is being placed on
global accounts, while continuing to attract born-digital and other
Multisector clients and expanding in the US market. With respect to
expanding Atento's portfolio of next-generation services and
accelerating the development of related digital capabilities, WAHA
is a new key capability that will hasten and facilitate the
transformation of the Company's services portfolio. Additionally,
as initiatives under the operational excellence plan continue to be
implemented, improving financial and cost controls as well the
performance of client programs will play an even greater role in
Atento leading Next Generation Customer Experience in its
markets.
Share Repurchase Program
On February 26, 2020, Atento's
Board of Directors approved a new share buyback program, following
approval at the Ordinary General Meeting of Shareholders on
February 4, 2020. Under the program,
the Company is authorized to repurchase up to $30 million of Atento shares for a period of 12
months, beginning March 10, 2020. The
Company did not repurchase shares during the first quarter.
Conference Call
The Company will host a conference call and webcast on
Friday, May 8, 2020 at 10:00 am ET to discuss its financial results. The
conference call can be accessed by dialing: +1 (877) 407-3982 toll
free domestic, UK: (+44) 0 800 756 3429 toll free, Brazil: (+55) 0800 891 6221 toll free, or
Spain: (+34) 900 834 236 toll
free. All other international callers can access the conference
call by dialing: +1 (201) 493-6780 toll free. No passcode is
required. Individuals who dial in will be asked to identify
themselves and their affiliations. The live webcast of the
conference call will be available on Atento's Investor Relations
website at investors.atento.com. A web-based archive of the
conference call will also be available at the website.
About Atento
Atento is the largest provider of customer relationship
management and business process outsourcing (CRM BPO) solutions in
Latin America, and among the top
five providers globally, based on revenues. Atento is also a
leading provider of nearshoring CRM/BPO services to companies that
carry out their activities in the United
States. Since 1999, the company has developed its business
model in 13 countries where it employs 150,000 people. Atento has
over 400 clients to whom it offers a wide range of CRM/BPO services
through multiple channels. Atento's clients are mostly leading
multinational corporations in sectors such as telecommunications,
banking and financial services, health, retail and public
administrations, in addition to born-digital ones, among others.
Atento´s shares trade under the symbol ATTO on the New York Stock
Exchange (NYSE). In 2019, Atento was named one of the World's
25 Best Multinational Workplaces and one of the Best Multinationals
to Work for in Latin America by
Great Place to Work®. For more information
visit www.atento.com.
|
Investor
Relations
|
Investor
Relations
|
Media
Relations
|
Shay Chor
|
Fernando
Schneider
|
Pablo Sánchez
Pérez
|
+ 55 11
3293-5926
|
+ 55 11
3779-8119
|
+34
670031347
|
shay.chor@atento.com
|
fernando.schneider@atento.com
|
pablo.sanchez@atento.com
|
|
|
|
Forward-Looking Statements
This press release contains forward-looking statements.
Forward-looking statements can be identified by the use of words
such as "may," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "intends," "continue" or
similar terminology. These statements reflect only Atento's current
expectations and are not guarantees of future performance or
results. Forward-looking statements by their nature address matters
that are, to different degrees, uncertain, such as statements about
the potential impacts of the COVID-19 pandemic on our business
operations, financial results and financial position and on the
world economy. These statements are subject to risks and
uncertainties that could cause actual results to differ materially
from those contained in the forward-looking statements. These risks
and uncertainties include, but are not limited to, competition in
Atento's highly competitive industries; increases in the cost of
voice and data services or significant interruptions in these
services; Atento's ability to keep pace with its clients' needs for
rapid technological change and systems availability; the continued
deployment and adoption of emerging technologies; the loss,
financial difficulties or bankruptcy of any key clients; the
effects of global economic trends on the businesses of Atento's
clients; the non-exclusive nature of Atento's client contracts and
the absence of revenue commitments; security and privacy breaches
of the systems Atento uses to protect personal data; the cost of
pending and future litigation; the cost of defending Atento against
intellectual property infringement claims; extensive regulation
affecting many of Atento's businesses; Atento's ability to protect
its proprietary information or technology; service interruptions to
Atento's data and operation centers; Atento's ability to retain key
personnel and attract a sufficient number of qualified employees;
increases in labor costs and turnover rates; the political,
economic and other conditions in the countries where Atento
operates; changes in foreign exchange rates; Atento's ability to
complete future acquisitions and integrate or achieve the
objectives of its recent and future acquisitions; future
impairments of our substantial goodwill, intangible assets, or
other long-lived assets; and Atento's ability to recover consumer
receivables on behalf of its clients. In addition, Atento is
subject to risks related to its level of indebtedness. Such risks
include Atento's ability to generate sufficient cash to service its
indebtedness and fund its other liquidity needs; Atento's ability
to comply with covenants contained in its debt instruments; the
ability to obtain additional financing; the incurrence of
significant additional indebtedness by Atento and its subsidiaries;
and the ability of Atento's lenders to fulfill their lending
commitments. Atento is also subject to other risk factors described
in documents filed by the company with the United States Securities
and Exchange Commission.
These forward-looking statements speak only as of the date on
which the statements were made. Atento undertakes no obligation to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or otherwise.
SELECTED FINANCIAL DATA:
The following selected financial information should be read in
conjunction with the interim consolidated financial statements
presented elsewhere in the Form 6-K.
|
|
For the three
months ended
March 31,
|
($ in
millions)
|
|
2019
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
(Loss)/profit for
the period
|
|
(45.6)
|
|
(7.4)
|
Net finance
expense
|
|
17.3
|
|
16.9
|
Income tax
expense
|
|
(2.9)
|
|
(0.2)
|
Write-off of deferred
tax assets
|
|
37.8
|
|
-
|
Depreciation and
amortization
|
|
35.3
|
|
31.5
|
EBITDA (non-GAAP)
(unaudited)
|
|
42.0
|
|
40.8
|
Adjusted EBITDA
(non-GAAP) (unaudited)
|
|
42.0
|
|
40.8
|
|
|
|
|
For the three
months ended
March 31,
|
($ in
millions)
|
|
2019
|
|
2020
|
|
|
|
|
|
(Loss)/profit for
the period
|
|
(45.6)
|
|
(7.4)
|
Amortization of
acquisition related intangible assets (a)
|
|
5.1
|
|
5.0
|
Net foreign exchange
gain/(loss) (b)
|
|
1.6
|
|
3.5
|
Tax effect
(c)
|
|
33.2
|
|
(4.5)
|
Other
|
|
0.6
|
|
-
|
Total of
add-backs
|
|
40.8
|
|
4.0
|
Adjusted Earnings
(non-GAAP) (unaudited) (*)
|
|
(5.1)
|
|
(3.4)
|
Adjusted Earnings
per share (in U.S. dollars) (unaudited) (**)
|
|
(0.07)
|
|
(0.05)
|
Adjusted Earnings
attributable to Owners of the parent (non-GAAP)
(unaudited)
|
|
(5.5)
|
|
(3.4)
|
Adjusted Earnings
per share attributable to Owners of the parent (in U.S. dollars)
(**) (unaudited)
|
|
(0.07)
|
|
(0.05)
|
|
|
(*)
|
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 March 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 $33.2 million.
|
|
|
(**)
|
Adjusted Earnings per
share is calculated based on weighted average number of ordinary
shares outstanding of 74,300,199 and 71,179,765 for the three
months ended December 31, 2018 and 2019, respectively.
|
Financing
Arrangements
|
Net debt with third
parties as of March 31, 2019 and 2020 is as follow:
|
|
($ in millions,
except Net Debt/Adj. EBITDA LTM)
|
|
On March 31,
2019
|
|
On March 31,
2020
|
|
|
|
|
|
Cash and cash
equivalents
|
|
77.9
|
|
162.8
|
Debt:
|
|
|
|
|
Senior Secured
Notes
|
|
394.5
|
|
495.3
|
Super Senior Credit
Facility
|
|
0.0
|
|
50.0
|
Brazilian
Debentures
|
|
15.0
|
|
0.0
|
BNDES
|
|
19.0
|
|
0.8
|
Lease Liabilities
(3)
|
|
179.9
|
|
146.1
|
Other Borrowings
|
|
34.8
|
|
35.03
|
Total Debt
|
|
643.2
|
|
727.1
|
Net Debt with
third parties (1) (unaudited)
|
|
565.2
|
|
564.3
|
EBITDA
LTM (2) (non-GAAP) (unaudited)
|
|
177.0
|
|
152.2
|
Net Debt/Adjusted
EBITDA LTM (non-GAAP) (unaudited)
|
|
3.2x
|
|
3.7x
|
|
|
(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)
|
EBITDA LTM (Last
Twelve Months)
|
|
|
(3)
|
Consider the impact
in March 31, 2020 of application of IFRS16 (former operating leases
not related to short-term or low-value leases are now shown as
debt) was $141.3 million and $4.8 million of other financial
leases.
|
Consolidated
Statements of Operations for the Three Months Ended March 31, 2019
and 2020
|
|
($ in millions,
except percentage changes)
|
For the three
months ended
March 31,
|
|
Change
(%)
|
|
Change
excluding FX (%)
|
2019
|
|
2020
|
|
|
|
(unaudited)
|
|
|
|
|
Revenue
|
436.7
|
|
375.4
|
|
(14.0)
|
|
(2.8)
|
Other operating
income
|
0.6
|
|
0.9
|
|
35.4
|
|
43.0
|
Other gains and own
work capitalized
|
-
|
|
-
|
|
30.1
|
|
33.9
|
Operating
expenses:
|
|
|
|
|
|
|
|
Supplies
|
(16.8)
|
|
(16.7)
|
|
(0.6)
|
|
11.0
|
Employee benefit
expenses
|
(339.3)
|
|
(289.0)
|
|
(14.8)
|
|
(3.6)
|
Depreciation
|
(21.8)
|
|
(19.8)
|
|
(9.3)
|
|
1.6
|
Amortization
|
(13.5)
|
|
(11.7)
|
|
(13.6)
|
|
(3.1)
|
Changes in trade
provisions
|
-
|
|
(0.5)
|
|
N.M.
|
|
N.M.
|
Impairment
charges
|
-
|
|
-
|
|
N.M.
|
|
(150.0)
|
Other operating
expenses
|
(39.2)
|
|
(29.3)
|
|
(25.3)
|
|
(15.9)
|
Total operating
expenses
|
(430.6)
|
|
(367.0)
|
|
(14.8)
|
|
(3.7)
|
Operating
profit
|
6.7
|
|
9.3
|
|
38.7
|
|
68.3
|
Finance
income
|
2.4
|
|
2.4
|
|
2.1
|
|
40.7
|
Finance
costs
|
(18.1)
|
|
(15.9)
|
|
(12.6)
|
|
(4.0)
|
Net foreign exchange
loss
|
(1.6)
|
|
(3.5)
|
|
118.7
|
|
N.M.
|
Net finance
(expense)/benefit
|
(17.3)
|
|
(16.9)
|
|
(2.5)
|
|
16.8
|
Loss before income
tax
|
(10.6)
|
|
(7.6)
|
|
(28.5)
|
|
(15.1)
|
Income tax
(expense)/benefit
|
(35.0)
|
|
0.2
|
|
(100.5)
|
|
(100.5)
|
Loss for the
period
|
(45.6)
|
|
(7.4)
|
|
(83.7)
|
|
(83.1)
|
Loss attributable
to:
|
|
|
|
|
|
|
|
Owners of the
parent
|
(46.0)
|
|
(7.4)
|
|
(83.8)
|
|
(83.1)
|
Non-controlling
interest
|
0.4
|
|
-
|
|
(100.0)
|
|
N.M.
|
Loss for the
period
|
(45.6)
|
|
(7.4)
|
|
(83.7)
|
|
(83.1)
|
Other financial
data:
|
|
|
|
|
|
|
|
EBITDA
(1) (unaudited)
|
42.0
|
|
40.8
|
|
(3.0)
|
|
10.1
|
Adjusted EBITDA
(1) (unaudited)
|
42.0
|
|
40.8
|
|
(3.0)
|
|
10.1
|
|
N.M. means not
meaningful
|
Consolidated
Statements of Operations by Segment for the Three Months Ended
March 31, 2019 and 2020
|
|
|
|
|
|
|
|
|
($ in millions,
except percentage changes)
|
For the three
months ended March 31,
|
|
Change
(%)
|
|
Change
Excluding FX
(%)
|
2019
|
|
2020
|
|
|
|
(unaudited)
|
Revenue:
|
|
|
|
|
|
|
|
Brazil
|
218.3
|
|
172.0
|
|
(21.2)
|
|
(7.1)
|
Americas
|
161.7
|
|
147.4
|
|
(8.8)
|
|
1.1
|
EMEA
|
62.1
|
|
57.5
|
|
(7.5)
|
|
(4.8)
|
Other and
eliminations (1)
|
(5.4)
|
|
(1.5)
|
|
(73.0)
|
|
(71.8)
|
Total
revenue
|
436.7
|
|
375.4
|
|
(14.0)
|
|
(2.8)
|
Operating
expenses:
|
|
|
|
|
|
|
|
Brazil
|
(215.1)
|
|
(167.8)
|
|
(22.0)
|
|
(8.0)
|
Americas
|
(164.8)
|
|
(149.2)
|
|
(9.5)
|
|
0.7
|
EMEA
|
(61.8)
|
|
(58.4)
|
|
(5.5)
|
|
(2.7)
|
Other and
eliminations (1)
|
11.1
|
|
8.4
|
|
(24.0)
|
|
(8.7)
|
Total operating
expenses
|
(430.6)
|
|
(367.0)
|
|
(14.8)
|
|
(3.7)
|
Operating
profit/(loss):
|
|
|
|
|
|
|
|
Brazil
|
3.3
|
|
4.3
|
|
29.7
|
|
46.2
|
Americas
|
(2.9)
|
|
(1.5)
|
|
(47.5)
|
|
(26.0)
|
EMEA
|
0.7
|
|
(0.4)
|
|
N.M.
|
|
N.M.
|
Other and
eliminations (1)
|
5.7
|
|
7.0
|
|
22.3
|
|
71.4
|
Total operating
profit
|
6.7
|
|
9.3
|
|
38.7
|
|
68.3
|
Net finance
expense:
|
|
|
|
|
|
|
|
Brazil
|
(12.1)
|
|
(16.5)
|
|
37.0
|
|
63.6
|
Americas
|
(5.3)
|
|
(4.1)
|
|
(21.5)
|
|
(6.4)
|
EMEA
|
(0.7)
|
|
-
|
|
(97.9)
|
|
(97.8)
|
Other and
eliminations (1)
|
0.7
|
|
3.8
|
|
N.M.
|
|
N.M.
|
Total net finance
expense
|
(17.3)
|
|
(16.9)
|
|
(2.5)
|
|
16.8
|
Income tax
benefit/(expense):
|
|
|
|
|
|
|
|
Brazil
|
2.9
|
|
4.0
|
|
40.0
|
|
71.4
|
Americas
|
0.6
|
|
(1.2)
|
|
N.M.
|
|
N.M.
|
EMEA
|
(4.0)
|
|
(0.2)
|
|
(96.0)
|
|
(95.9)
|
Other and
eliminations (1)
|
(34.5)
|
|
(2.5)
|
|
(92.8)
|
|
(92.6)
|
Total income tax
benefit/(expense)
|
(35.0)
|
|
0.2
|
|
(100.5)
|
|
(100.5)
|
Profit/(loss) for
the period:
|
|
|
|
|
|
|
|
Brazil
|
(5.9)
|
|
(8.2)
|
|
39.5
|
|
70.3
|
Americas
|
(7.6)
|
|
(6.9)
|
|
(9.8)
|
|
9.0
|
EMEA
|
(4.0)
|
|
(0.6)
|
|
(86.1)
|
|
(85.8)
|
Other and
eliminations (1)
|
(28.1)
|
|
8.3
|
|
(129.4)
|
|
(128.5)
|
(Loss)/profit for
the period
|
(45.6)
|
|
(7.4)
|
|
(83.7)
|
|
(83.1)
|
(Loss)/profit
attributable to:
|
|
|
|
|
|
|
|
Owners of the
parent
|
(46.0)
|
|
(7.4)
|
|
(83.8)
|
|
(83.1)
|
Non-controlling
interest
|
0.4
|
|
-
|
|
(100.0)
|
|
N.M.
|
Other financial
data:
|
|
|
|
|
|
|
|
EBITDA:
|
|
|
|
|
|
|
|
Brazil
|
22.4
|
|
21.0
|
|
(6.3)
|
|
9.7
|
Americas
|
9.9
|
|
10.1
|
|
2.5
|
|
2.2
|
EMEA
|
3.9
|
|
2.6
|
|
(35.0)
|
|
(32.8)
|
Other and
eliminations (1)
|
5.8
|
|
7.0
|
|
22.0
|
|
70.2
|
Total EBITDA
(unaudited)
|
42.0
|
|
40.8
|
|
(3.0)
|
|
10.1
|
Adjusted
EBITDA:
|
|
|
|
|
|
|
|
Brazil
|
27.8
|
|
24.4
|
|
(12.1)
|
|
4.5
|
Americas
|
14.1
|
|
13.7
|
|
(3.0)
|
|
1.3
|
EMEA
|
6.3
|
|
3.7
|
|
(41.0)
|
|
(39.2)
|
Other and
eliminations (1)
|
(6.2)
|
|
(1.1)
|
|
(82.7)
|
|
(82.1)
|
Total Adjusted
EBITDA (unaudited)
|
42.0
|
|
40.8
|
|
(3.0)
|
|
10.1
|
|
(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.
|
|
|
N.M. means not
meaningful
|
Revenue Mix by
Service Type
|
|
|
For the three
months ended March 31,
|
2019
|
|
2020
|
Customer
Service
|
51.7%
|
|
56.4%
|
Sales
|
17.0%
|
|
13.3%
|
Collection
|
7.9%
|
|
7.1%
|
Back
Office
|
12.8%
|
|
13.5%
|
Technical
Support
|
6.7%
|
|
6.1%
|
Others
|
3.9%
|
|
3.6%
|
Total
|
100.0%
|
|
100.0%
|
Number of
Workstations and Delivery Centers
|
|
|
Number of
Workstations
|
|
Number of Service
Delivery Centers (1)
|
Q1
2019
|
|
Q1
2020
|
|
Q1
2019
|
|
Q1
2020
|
Brazil
|
49,547
|
|
49,821
|
|
34
|
|
33
|
Americas
|
37,423
|
|
39,659
|
|
51
|
|
48
|
Argentina
(2)
|
4,475
|
|
4,358
|
|
12
|
|
12
|
Central America
(3)
|
2,338
|
|
2,516
|
|
4
|
|
3
|
Chile
|
2,878
|
|
2,549
|
|
4
|
|
4
|
Colombia
|
8,854
|
|
9,087
|
|
10
|
|
9
|
Mexico
|
9,203
|
|
11,437
|
|
15
|
|
14
|
Peru
|
8,322
|
|
8,475
|
|
3
|
|
3
|
United States
(4)
|
1,353
|
|
1,237
|
|
3
|
|
3
|
EMEA
|
5,471
|
|
5,376
|
|
15
|
|
15
|
Spain
|
5,471
|
|
5,471
|
|
15
|
|
15
|
Total
|
92,441
|
|
94,856
|
|
100
|
|
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.
|
FX
Rates
|
|
|
2019
|
|
2019
|
|
2020
|
|
Average
FY
|
|
December
31
|
|
Average
Q1
|
|
March
31,
|
|
Average
Q1
|
|
March
31,
|
Euro (EUR)
|
0.89
|
|
0.89
|
|
0.88
|
|
0.89
|
|
0.91
|
|
0.91
|
Brazil
(BRL)
|
3.94
|
|
4.03
|
|
3.77
|
|
3.90
|
|
4.46
|
|
5.20
|
Mexico
(MXN)
|
19.25
|
|
18.86
|
|
19.20
|
|
19.38
|
|
20.00
|
|
23.48
|
Colombia
(COP)
|
3,281.35
|
|
3,277.14
|
|
3,135.29
|
|
3,190.94
|
|
3,534.22
|
|
4,064.81
|
Chile
(CLP)
|
702.77
|
|
744.62
|
|
667.01
|
|
681.09
|
|
802.78
|
|
846.30
|
Peru (PEN)
|
3.34
|
|
3.32
|
|
3.32
|
|
3.32
|
|
3.40
|
|
3.44
|
Argentina
(ARS)
|
48.22
|
|
59.89
|
|
39.05
|
|
43.35
|
|
61.55
|
|
64.47
|
Balance Sheet ($
Thousands)
|
|
ASSETS
|
|
|
|
|
|
|
|
December
31,
|
|
March
31,
|
|
|
2019
|
|
2020
|
|
|
|
(audited)
|
|
(unaudited)
|
NON-CURRENT
ASSETS
|
|
|
765,839
|
|
621,770
|
|
|
|
|
|
|
Intangible
assets
|
|
|
160,041
|
|
113,371
|
Goodwill
|
|
|
119,902
|
|
100,746
|
Right-of-use
assets
|
|
|
181,564
|
|
140,346
|
Property, plant
and equipment
|
|
|
116,893
|
|
94,012
|
Non-current
financial assets
|
|
|
82,158
|
|
75,101
|
Trade and other
receivables
|
|
|
22,124
|
|
17,200
|
Other non-current
financial assets
|
|
|
54,652
|
|
42,811
|
Derivative financial
instruments
|
|
|
5,382
|
|
15,090
|
Other taxes
receivable
|
|
|
5,650
|
|
4,639
|
Deferred tax
assets
|
|
|
99,631
|
|
93,555
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
538,772
|
|
528,757
|
|
|
|
|
|
|
Trade and other
receivables
|
|
|
388,308
|
|
341,711
|
Trade and other
receivables
|
|
|
359,599
|
|
318,176
|
Current income tax
receivable
|
|
|
28,709
|
|
23,535
|
Derivative
financial instruments
|
|
|
-
|
|
1,335
|
Other taxes
receivable
|
|
|
24,664
|
|
21,719
|
Other current
financial assets
|
|
|
1,094
|
|
1,233
|
Cash and cash
equivalents
|
|
|
124,706
|
|
162,759
|
|
|
|
|
|
|
TOTAL
ASSETS
|
|
|
1,304,611
|
|
1,150,527
|
|
|
|
|
|
|
|
EQUITY AND
LIABILITIES
|
|
|
December
31,
|
|
March
31,
|
|
|
2019
|
|
2020
|
|
|
|
(audited)
|
|
(unaudited)
|
|
|
|
|
|
|
TOTAL
EQUITY
|
|
|
207,020
|
|
99,149
|
EQUITY
ATTRIBUTABLE TO:
|
|
|
|
|
|
OWNERS OF THE
PARENT COMPANY
|
|
|
207,020
|
|
99,149
|
|
|
|
|
|
|
Share
capital
|
|
|
49
|
|
49
|
Share
premium
|
|
|
619,461
|
|
613,647
|
Treasury
shares
|
|
|
(19,319)
|
|
(11,012)
|
Retained
losses
|
|
|
(127,070)
|
|
(136,063)
|
Translation
differences
|
|
|
(271,273)
|
|
(339,328)
|
Hedge accounting
effects
|
|
|
(8,872)
|
|
(39,188)
|
Stock-based
compensation
|
|
|
14,044
|
|
11,044
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
718,989
|
|
663,079
|
|
|
|
|
|
|
Deferred tax
liabilities
|
|
|
20,378
|
|
16,772
|
Debt with third
parties
|
|
|
633,498
|
|
595,755
|
Derivative financial
instruments
|
|
|
2,289
|
|
4,490
|
Provisions and
contingencies
|
|
|
48,326
|
|
34,669
|
Non-trade
payables
|
|
|
11,744
|
|
9,330
|
Other taxes
payable
|
|
|
2,754
|
|
2,063
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
378,602
|
|
388,290
|
|
|
|
|
|
|
Debt with third
parties
|
|
|
87,117
|
|
132,716
|
Derivative
financial instruments
|
|
|
167
|
|
-
|
Trade and other
payables
|
|
|
272,547
|
|
233,330
|
Trade
payables
|
|
|
71,676
|
|
72,590
|
Income tax
payables
|
|
|
12,671
|
|
13,480
|
Other taxes
payables
|
|
|
93,765
|
|
72,265
|
Other non-trade
payables
|
|
|
94,435
|
|
74,995
|
Provisions and
contingencies
|
|
|
18,771
|
|
22,253
|
TOTAL EQUITY AND
LIABILITIES
|
|
|
1,304,611
|
|
1,150,527
|
Cash Flow ($
thousand)
|
|
|
|
For the three
months ended
March 31,
|
|
|
2019
|
|
2020
|
|
|
(unaudited)
|
Operating
activities
|
|
|
|
|
Profit before
income tax
|
|
(10,624)
|
|
(7,593)
|
Adjustments to
reconcile profit before income tax to net cash flows:
|
|
|
|
|
Amortization and
depreciation
|
|
35,324
|
|
31,454
|
Changes in trade
provisions
|
|
3
|
|
537
|
Share-based payment
expense
|
|
565
|
|
585
|
Change in
provisions
|
|
9,555
|
|
4,108
|
Grants released to
income
|
|
(239)
|
|
(183)
|
Losses on disposal of
property, plant and equipment
|
|
45
|
|
216
|
Losses on disposal of
financial assets
|
|
(2)
|
|
-
|
Finance
income
|
|
(2,391)
|
|
(2,441)
|
Finance
costs
|
|
18,138
|
|
15,861
|
Net foreign exchange
differences
|
|
1,595
|
|
3,490
|
Changes in other
(gains)/losses and own work capitalized
|
|
9,475
|
|
(1,266)
|
|
|
72,068
|
|
52,361
|
Changes in working
capital:
|
|
|
|
|
Changes in trade and
other receivables
|
|
(71,637)
|
|
(37,249)
|
Changes in trade and
other payables
|
|
(2,531)
|
|
10,235
|
Other
assets
|
|
4,604
|
|
3,159
|
|
|
(69,564)
|
|
(22,393)
|
|
|
|
|
|
Interest
paid
|
|
(18,338)
|
|
(19,645)
|
Interest
received
|
|
(45)
|
|
9,728
|
Income tax
paid
|
|
(3,703)
|
|
(7,148)
|
Other
payments
|
|
(9,567)
|
|
(915)
|
|
|
(31,653)
|
|
(17,980)
|
Net cash flows
(used in)/from operating activities
|
|
(39,773)
|
|
4,395
|
Investing
activities
|
|
|
|
|
Payments for
acquisition of intangible assets
|
|
(15,060)
|
|
(124)
|
Payments for
acquisition of property, plant and equipment
|
|
(3,324)
|
|
(10,932)
|
Payments for
financial instruments
|
|
(243)
|
|
(269)
|
Proceeds from sale of
PP&E and intangible assets
|
|
1,959
|
|
-
|
Net cash flows
used in investing activities
|
|
(16,668)
|
|
(11,325)
|
Financing
activities
|
|
|
|
|
Proceeds from
borrowing from third parties
|
|
36,575
|
|
77,621
|
Repayment of
borrowing from third parties
|
|
(21,094)
|
|
(9,370)
|
Payments of lease
liabilities
|
|
(13,672)
|
|
(9,402)
|
Net cash flows
provided by financing activities
|
|
1,809
|
|
58,849
|
Net
(decrease)/increase in cash and cash equivalents
|
|
(54,632)
|
|
51,919
|
Foreign exchange
differences
|
|
(964)
|
|
(13,866)
|
Cash and cash
equivalents at beginning of period
|
|
133,526
|
|
124,706
|
Cash and cash
equivalents at end of period
|
|
77,930
|
|
162,759
|
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SOURCE Atento S.A.