NEW YORK, Nov. 15, 2021 /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 third quarter and first nine months operating and
financial results for the periods ending September 30, 2021. All comparisons in this
announcement are year-over-year (YoY) and in constant-currency
(CCY), unless otherwise noted.
Strong Sales (TAV) growth and solid revenue
increase
- Sales (Total Annual Value) increased 34% YTD and grew a total
of 77% in US and EMEA
- Q3 2021 revenues grew 4.1% in CCY and 4.5% on a reported basis,
fueled by strong multisector growth in the Americas region, mainly
in the US, and higher Telefónica revenues in Brazil
- Hard-currency revenues at 25% of total revenues in 9M 2021, up from 22% in 9M 2020
- US revenues of $29.2 million in
Q3 and $84.1 million YTD, a 40.5%
increase compared to 9M 2020
- Multisector revenues grew 3.4% in Q3, mainly in tech, public
services and born-digital. In 9M
2021, Multisector revenues reached 67.5% of total revenues
Sustainable EBITDA and margin expansion leading to improved
capital structure
- Consolidated EBITDA increased 14.7% to $51.3 million in Q3
- EBITDA margin reached record level for Q3 at 13.9%, a 1.2 p.p.
increase from 12.7% in Q3 2020
- EBITDA in hard currencies at 28% of total YTD, on strong US
growth
- US EBITDA of $5.8 million in Q3
and $15.4 million in 9M 2021, up 117.9% YTD and already 11% of total,
with EBITDA Margin at 20.0% in Q3 21 and 18.3% YTD, 6.5 p.p. higher
than last year
- Net leverage at 2.8x, down from 3.0x in Q2 2021 and within 2021
guidance range of 2.5 to 3.0x
- Solid cash position of $145.7
million
- Recurring Net Income of $2.0
million, with Recurring EPS of $0.14
Implementing robust ESG Plan to reinforce current practices
and expand scope
- Expanding Atento@home model and implementation of Cloud
strategy, in support of achieving carbon neutrality by 2030
- Diversity and inclusion practices continue to be company
strengths and priority to remain a top Employer in sector
October 2021 Cyber
attack
- Early detection, robust protocols and a rapid response enabled
effective response to October cyberattack, with majority of
services now restored
Summarized Consolidated Financials
($ in millions
except EPS)
|
Q3
2021
|
Q3 2020
|
CCY
Growth
(1)
|
YTD
2021
|
YTD 2020
|
CCY
Growth
(1)
|
Income
Statement (6)
|
|
|
|
|
|
|
Revenue
|
368.6
|
352.7
|
4.1%
|
1,122.0
|
1,042.7
|
9.7%
|
EBITDA
(2)
|
51.3
|
44.8
|
14.7%
|
141.1
|
107.8
|
35.6%
|
EBITDA
Margin
|
13.9%
|
12.7%
|
1.2p.p.
|
12.6%
|
10.3%
|
2.2
p.p.
|
Net Income
(3)
|
(11.7)
|
(13.1)
|
-13.8%
|
(46.6)
|
(38.9)
|
20.8%
|
Recurring Net
Income (2)
|
2.0
|
(1.2)
|
N.M.
|
(6.4)
|
(14.6)
|
63.0%
|
Earnings Per Share on
the reverse split basis (2) (3) (5)
|
($0.83)
|
($0.93)
|
-14.0%
|
($3.31)
|
($2.75)
|
21.0%
|
Recurring EPS on
the reverse split basis (2) (5)
|
$0.14
|
($0.09)
|
N.M.
|
$0.45
|
($1.04)
|
62.9%
|
Cash Flow, Debt
and Leverage
|
|
|
|
|
|
|
Net Cash Used in
Operating Activities
|
26.8
|
10.7
|
|
41.1
|
68.2
|
|
Cash and Cash
Equivalents
|
145.7
|
196.6
|
|
|
|
|
Net Debt
(4)
|
550.1
|
514.2
|
|
|
|
|
Net Leverage
(4)
|
2.8x
|
4.0x
|
|
|
|
|
|
|
(1)
|
Unless otherwise
noted, all results are for Q3; all revenue growth rates are on a
constant currency basis, year-over-year; (2) EBITDA, Recurring Net
Income/Recurring Earnings per Share (EPS) are Non-GAAP measures;
(3) Reported Net Income and Earnings per Share (EPS) include the
impact of non-cash foreign exchange gains/losses on intercompany
balances; (4) Includes IFRS 16 impact in Net Debt and Leverage; (5)
Earnings per share and Recurring Earnings per share in the reverse
split basis is calculated with weighted average number of ordinary
shares outstanding. (6) The following selected financial
information are unaudited.
|
Message from the CEO and CFO
It is gratifying to report such strong Q3 2021 results. We
maintained a steady and profitable growth trajectory, delivering
Atento's best third-quarter EBITDA and Free Cash Flow since
initiating our Three Horizon Plan in early 2019. Further, solid
revenue growth and a still expanding EBITDA margin resulted in
record Free Cash Flow in a Q3 perspective.
As we further penetrated the US market under the third phase of
our growth plan, revenues there rose to $29.2 million in Q3 and drove 9M 2021 40% higher to $84.1 million. The increase led Atento's
nine-month hard currency revenue and EBITDA to grow 21% and 125%,
respectively. Also, during the first nine months, the total annual
value of our US Nearshore and EMEA sales increased 77%, driving a
34% increase on a consolidated basis. We added 14 new clients as
well, with revenue from fast-growing media, tech and born-digital
clients now representing more than 11% of Atento's consolidated
revenue, an increase of nearly three percentage points over last
year's nine-month period.
We are also exceptionally proud of our IT team's response to
last month's cyberattack against our Brazil operations. As always, clients were our
immediate priority and every decision taken at the time was to
protect them. Early detection, robust protocols and a rapid
response enabled us to effectively isolate and ringfence the
attack, allowing Atento to resume the majority of affected services
within two weeks while also preventing the attack from reaching
client systems.
Following the recent appointment of an ESG director, we are
proceeding with a robust sustainability strategy and plan to
achieve carbon neutrality by 2030 while continuing to lead our
sector on the social front. Over 32% of Atento's energy supply now
comes from renewable sources, while we reduced water consumption by
26% between 2019 and 2020. And as we move more of our operations to
the Cloud and transition additional employees to the Atento@Home
model, who now number over 80,000, we expect to accelerate Atento's
progress toward carbon neutrality. Diversity & Inclusion
remains at the heart of our company's culture. We are proud to say
that approximately 64% of our colleagues and 53% of Atento's
managers are women. Fifty-five percent of our employees are under
the age of 30, and for many of them a position at Atento is their
first formal job, giving them access to training and benefits such
as healthcare.
Looking ahead to the remainder of the year, we continue tracking
well to full-year guidance, with nine-month revenue growth
exceeding guidance while Atento's EBITDA margin and leverage are
already within our target range. Our strong performance
year-to-date also reinforces our confidence in meeting the
ambitious 2022 performance targets we set in 2019. The renewed
operational and financial strength of our company, combined with
our expanding talent base and portfolio of innovative technological
solutions, mean Atento is well positioned to capitalize on
accelerating demand for high-value CX among companies around the
world that continue to rapidly digitize their businesses.
Carlos
López-Abadía
|
José
Azevedo
|
Chief Executive
Officer
|
Chief Financial
Officer
|
Third Quarter Consolidated Financial Results
Atento's revenue increased 4.1% to $368.6
million in Q3 2021, driven by US multisector growth and an
increase in Telefónica revenue in Brazil. For 9M
2021, hard currencies reached 25% of total revenues.
Telefónica revenues rose 5.5%, reflecting the full impact of a
client program won in Brazil in Q1
as well as higher volumes in the majority of South America countries. At the end of the
quarter, Telefónica revenues had neared 2019 levels and were higher
than pre-pandemic levels.
Multisector revenues grew 3.4% in the quarter, mainly in the
Americas, where sales were boosted by a strong 40.1% increase in Q3
2021 in US revenues. In 9M 2021,
sales in the public services sector continued to accelerate along
with those in fast-growing verticals such as born-digital,
technology and media, which in the aggregate already represent
11.2% of total revenues compared to 8.3% a year ago. Also, in the
nine months, Multisector revenues reached 67.5% of total sales.
Consolidated EBITDA increased 14.7% to $51.3 million in Q3 2021, the highest "Q3"since
the implementation of the Three Horizon plan, while the
corresponding margin expanded 120 basis points to 13.9%, also the
highest Q3 level during this period. In 9M 2021, the EBITDA margin was 12.6%, rising to
within the FY guidance range and evidencing the effectiveness of
the Company's turnaround under the growth plan. The margin
expansion reflects major client wins in the US and Brazil, a greater proportion of next
generation services in the revenue mix, and the cost reduction
program that has been successfully implemented since 2020. In
addition, growing business with US clients increased EBITDA in hard
currency to $40.2 million in
9M 2021, representing 28% of total
EBITDA in this period.
Recurring EPS was $0.14 in Q3,
compared to negative $0.09 in the
same period last year. Reported EPS, which was -$0.83 for the quarter, was negatively impacted by
$16.7 million in non-cash
mark-to-market adjustments to hedging instruments.
Atento continued to maintain a comfortable level of financial
liquidity at the end of the quarter and, as EBITDA continued to
expand, net leverage decreased to 2.8x, within the Company's FY
guidance range. Operational FCF was also a record for Q3 since
2019, reaching $25.9 million, with
FCF at $6.7 million, another record
during this period. FCF was positive despite bond interest payments
made during the quarter. FCF for the 9M 2021 was negative $30.4
million, mainly due to $16.1
million in tax payments that had been postponed from 2020
under government pandemic relief programs and to $10.9 million in one-off expenses related to debt
refinancings. Excluding these effects and growth-related expenses
(working capital and capex), run-rate FCF was approximately
$13.6 million in 9M 2021.
Atento's average headcount was 142,085 employees in 9M 2021, with revenue per employee increasing
2.6% on 9.7% revenue growth.
Segment Reporting
Brazil
($ in
millions)
|
Q3
2021
|
Q3 2020
|
CCY
growth
|
YTD
2021
|
YTD 2020
|
CCY
Growth
|
Brazil
Region
|
|
|
|
|
|
|
Revenue
|
152.4
|
145.2
|
2.0%
|
457.3
|
452.5
|
7.3%
|
Adjusted
EBITDA
|
26.9
|
23.5
|
11.3%
|
69.0
|
58.5
|
25.9%
|
Adjusted EBITDA
Margin
|
17.7%
|
16.2%
|
1.5 p.p.
|
15.1%
|
12.9%
|
2.2 p.p.
|
Profit/(loss) for the
period
|
(1.2)
|
(5.2)
|
-78.4%
|
(5.6)
|
(21.4)
|
-72.3%
|
Revenue in Brazil, Atento's
flagship operation, increased 2.0% during the quarter to
$152.4 million, fueled by 19.3%
growth in Telefónica sales that reflect the full impact of a client
program won in Q1 2021. Multisector revenues decreased 3.0%, as a
result of the Company's focus on maintaining high profitability
contracts and forgoing renewals of low profitability contracts in
order to continue expanding the business' EBITDA margin.
Brazil's EBITDA margin
increased 150 bps and also 220 bps sequentially to 17.7% from 15.5%
in the previous quarter. Coupled with the revenue increase,
EBITDA grew 11.3% to $26.9
million.
Americas Region
($ in
millions)
|
Q3
2021
|
Q3 2020
|
CCY
growth
|
YTD
2021
|
YTD 2020
|
CCY
Growth
|
Americas
Region
|
|
|
|
|
|
|
Revenue
|
157.8
|
148.8
|
8.8%
|
476.6
|
426.1
|
13.2%
|
Adjusted
EBITDA
|
19.3
|
16.6
|
21.9%
|
56.3
|
44.3
|
27.9%
|
Adjusted EBITDA
Margin
|
12.2%
|
11.2%
|
1.1p.p.
|
11.8%
|
10.4%
|
1.4p.p.
|
Profit/(loss)
for the period
|
2.3
|
(0.8)
|
N.M
|
0.6
|
(8.0)
|
N.M
|
In the Americas, Atento's revenues increased 8.8% to
$157.8 million, with Multisector
sales increasing 9.8%, mainly in the US. Telefónica revenues
increased 8.1%, with most of the increase generated across South
American countries, such as Colombia, Peru and Argentina.
The region's Adjusted EBITDA was $19.3
million in the quarter, up 21.9%, mainly due to higher
EBITDA in the US coupled with the cost reduction program
implemented since 2020. The EBITDA margin expanded 110 bps to
12.2%.
Consistent with Atento's strategy to expand its presence in the
US market and increase exposure to hard currencies, third quarter
EBITDA from the US reached $5.8
million, while the EBITDA margin expanded to 20.0%. In
9M 2021, US revenues grew 40.5% and
EBITDA increased 117.9%. The Company's strong US performance
resulted in hard currency sales growing to 25% of total revenue
during this period, while EBITDA generation of $40.2 million accounted for 28% of consolidated
EBITDA.
EMEA Region
($ in
millions)
|
Q3
2021
|
Q3 2020
|
CCY
growth
|
YTD
2021
|
YTD 2020
|
CCY
Growth
|
EMEA
Region
|
|
|
|
|
|
|
Revenue
|
59.4
|
60.5
|
-2.6%
|
192.2
|
168.5
|
7.3%
|
Adjusted
EBITDA
|
7.5
|
7.3
|
1.9%
|
24.8
|
10.8
|
122.0%
|
Adjusted EBITDA
Margin
|
12.6%
|
12.1%
|
0.5 p.p.
|
12.9%
|
6.4%
|
6.5 p.p.
|
Profit/(loss) for the
period
|
(0.6)
|
2.6
|
N.M
|
1.2
|
(1.3)
|
N.M
|
In EMEA, a 6.6% increase in Multisector sales was driven by
utilities, transportation, a recovery in tourism as well as by
government services related to providing information to citizens
during the pandemic. However, lower volumes during the third
quarter led to a 9.3% decrease in Telefónica revenues, resulting in
a 2.6% decrease in the region's revenues, which totaled
$59.4 million.
EMEA's Adjusted EBITDA increased 1.9% to $7.5 million, while the corresponding margin
expanded 0.5 bps to 12.6%, a result of improved operational
efficiencies.
Cash Flow
Cash Flow
Statement ($ in millions)
|
Q3
2021
|
Q3
2020
|
YTD
2021
|
YTD
2020
|
Cash and cash
equivalents at beginning of period
|
153.8
|
207.2
|
209.0
|
124.7
|
Net Cash from
Operating activities
|
26.8
|
10.7
|
41.1
|
68.2
|
Net Cash used in
Investing activities
|
-10.3
|
-8.7
|
-35.8
|
-27.4
|
Net Cash (used in)/
provided by Financing activities
|
-14.7
|
-21.1
|
-58.0
|
36.2
|
Net
(increase/decrease) in cash and cash equivalents
|
1.8
|
-19.1
|
-52.7
|
77.0
|
Effect of changes in
exchanges rates
|
9.9
|
8.5
|
-10.6
|
-5.1
|
Cash and cash
equivalents at end of period
|
145.7
|
196.6
|
145.7
|
196.6
|
Operational FCF was a Q3 record since 2019, reaching
$25.9 million, with FCF at
$6.7 million, also a record for this
period. The positive FCF was achieved despite being a quarter in
which bond interest payments were made.
FCF for the 9M 2021 was negative
$30.4 million, mainly due to
$16.1 million in tax payments that
had been postponed from 2020 under government pandemic relieve
programs and to $10.9 million in
one-off expenses related to debt refinancings. Excluding
these one-offs and growth-related expenses (working capital and
capex), run-rate FCF was approximately $13.6
million in 9M 2021.
Cash Capex was 3.2% of revenues in 9M 2021, compared to 2.6% in the same period of
2020, mainly reflecting investments in IT to support an
acceleration in the Company's growth.
Indebtedness & Capital Structure
US$MM
|
Maturity
|
Interest
Rate
|
Outstanding
Balance Q3 2021
|
SSN (1)
(USD)
|
2026
|
8.0%
|
493.4
|
Super Senior Credit
Facility
|
2021
|
4.5%
|
25.0
|
Other Revolving
Credit Facilities
|
2021
|
CDI + 2.7
|
21.4
|
Other Borrowings and
Leases
|
2025
|
Variable
|
14.3
|
BNDES
(BRL)
|
2022
|
TJLP +
2.0%
|
0.3
|
Debt with Third
Parties
|
|
|
554.4
|
Leasing (IFRS
16)
|
|
|
141.3
|
Gross Debt (Debt
with Third Parties + IFRS 16)
|
|
|
695.8
|
Cash and Cash
Equivalents
|
|
|
145.7
|
Net
Debt
|
|
|
550.1
|
(1)
|
Notes are protected
by certain hedging instruments, with the coupons hedged through
maturity, while the principal is hedged for a period of 3 years.
The instruments consist mainly of cross-currency swaps in BRL, PEN
and Euro.
|
At end of Q3 2021, Atento's gross debt was $695.8 million, which included $141.3 million in leasing obligations under IFRS
16. Atento ended the quarter with cash and cash equivalents of
$145.7 million. Approximately
$80 million in revolving credit
facilities were available at the end of the quarter, of which
$50 million were drawn
down.
Net leverage was 2.8x, down from 3.0x in Q2 2021 and 4.0x in Q3
2020, reflecting Atento's 35.6% EBITDA growth year-to-date and
within the 2021 guidance range of 2.5 to 3.0x. Management
reiterates its confidence in continuing to deleverage the Company's
balance sheet in order to reach the target of 2.0x-2.5x by the end
of 2022.
Fiscal 2021 Guidance
|
FY
2021
|
YTD 2021
Reported
|
Revenue growth (in
constant currency)
|
Mid-single
digit
|
9.7%
|
EBITDA
margin
|
12.5%-13.5%
|
12.6%
|
Leverage
(x)
|
2.5x-3.0x
|
2.8x
|
Cash Capex as % of
Revenues
|
4.0-4.5%
|
3.2%
|
Share Repurchase Program
During the quarter, Atento repurchased 2,391 shares under its
Share Repurchase Program, at a cost of $0.06
million, and sold 54,507 shares for $0.5 million in relation to management
compensation programs. At the end of September 2021, the Company held 888,366 Atento
shares in treasury.
Conference Call
The Company will host a conference call and webcast on
Tuesday, November 16, 2021 at
10:00 am ET to discuss its financial
results. The conference call can be accessed by dialing:
USA: +1 (866) 807-9684; UK: (+44)
20 3514 3188; Brazil: (+55) 11
4933-0682; Spain: (+34) 91 414
9260; or International: (+1) 412 317 5415. 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 (Click here). 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") services in
Latin America, and among the top
five providers globally. 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 approximately 140,000 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, 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®. Also,
in 2021 Everest named Atento as a star performer Gartner named the
company as a leader in the 2021 Gartner Magic Quadrant. For more
information visit www.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.
Media inquiries
Press@atento.com
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SOURCE Atento S.A.