Atento Reports Fiscal 2021 Second Quarter and First Half Results

• Record sales (+148% YoY) and revenue growth (+17.6% YoY constant currency and 21.7% current currency)
• Consolidated EBITDA in Q2 2021 up 123% to $51 million YoY, with margin reaching 13.3%
• Reiterating FY 2021 guidance

NEW YORK, August 4, 2021 – 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 second quarter and first half operating and financial results for the period ending June 30, 2021. All comparisons in this announcement are year-over-year (YoY) and in constant-currency (CCY), unless otherwise noted.  

Record sales and solid revenue growth

• Q2 2021 revenues grew 17.6% YoY in CCY and 21.7% on a reported basis, fueled by full impact of programs won in Brazil and US in Q1 2021. Revenues in hard-currency at 25% of total in H1 2021, up from 21% in H1 2020
• New sales with Total Annual Value of $226 million, up 148% from Q2 2020
• US revenues increased 33.1% in Q2 and 40.8% in H1 2021
• Multisector revenues grew 13.6% in Q2, continue focusing on fast-growing verticals such as, media, tech and born-digital verticals and targeting to increase penetration with Global Accounts. In H1 2021, Multisector revenues reached 67.4%

Sustainable EBITDA and margin expansion leading to improved capital structure

• Consolidated EBITDA in Q2 2021 expanded 123.2% to $50.7 million YoY
• EBITDA margin of 13.3% vs 7.1% in Q2 2020
• EBITDA in hard currencies already at 30% of total, on strong US growth
• US EBITDA up 53.3% YoY, already 11% of total
• Margins expanded in all regions, highlighting Brazil, where margin went up sequentially to 15.5% from 12.0%
• Net leverage at 3.0x, down from 3.3x in Q1 2021 and 4.0x in Q2 2020, already within 2021 guidance range of 2.5 to 3.0x
• Solid cash position of $153.8 million
• Positive Recurring EPS of $0.11 in the quarter

Transformation entering last phase: accelerating growth

• Key areas of growth remain NGS for Multisector and US business
• Investing in innovation and partnerships to accelerate growth: Atento Next, Innovation Hub, Interfile organizational restructuring and partnership with ManpowerGroup
• 70% of FY growth capex budget already deployed in H1 in new programs with high returns
• Right structure in place: new Global CIO, CHRO and Transformation Director appointed, increasing management diversity, and focusing on preparing talent and technology for new expansion phase

Summarized Consolidated Financials

(1) Unless otherwise noted, all results are for Q2; 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 by applying the ratio of conversion of 5.027090466672970 used in the reverse split into the previous weighted average number of ordinary shares outstanding. (6) The following selected financial information are unaudited.

Message from the CEO and CFO

We are proud to report a quarter with very strong results. In Q2 we have continued our growth trajectory with significant improvements in revenue, EBITDA and continued cash flow discipline, leading leverage to be already within full year guidance.  With half of the year behind us, we are even more confident in our ability to deliver on our commitments for 2021, the same way we have done in 2019 and 2020.

We can definitely state that the most critical phases of our transformation plan have been delivered, and the focus now is on accelerating growth, as the world heads out of the pandemic and demand for high value CX services is skyrocketing.

Growth remains strong in Multisector, especially with Global Accounts and with fast growing verticals such as born-digital, media and tech. In terms of geographies, our US revenues went up 33% in the quarter, in line with the objective of increasing exposure to hard currencies, which now represent 25% of revenues and 30% of EBITDA. In addition, our business with Telefónica has also resumed growth on the back of a recent win in Q1 which was fully implemented in Q2. After several quarters of volatile revenue contributions mostly related to lower volumes from the pandemic, Telefonica revenues are now back to 2019 levels. The strong increase in revenues in the quarter, of 26.5%, attests to the great relationship developed with Telefónica, in which we remain the leader in the share of wallet for CX services.

We are also collecting the benefits of well-executed efficiency initiatives – that is boosting our margins. Our EBITDA more than doubled in Q2, up by +123% to $51 million, with margin reaching 13.3%, compared to 7.1% in Q2 2020, the quarter that was most adversely impacted by the pandemic. H1 2021 EBITDA margin, of 11.9%, is the higher EBITDA margin for an H1 since the implementation of the Three Horizon Plan, in the beginning of 2019. All regions are reporting double-digit EBITDA margin, with US programs already reaching almost 20% margin.

Atento is very well positioned to ride the wave of increased demand for customer experience services. The pandemic forced companies all over the world accelerate or initiate deep digital transformations, to reinvent themselves, and CX was one of their main priorities. It demands from providers a mix of talent and technology, and for this reason, we recently strengthened both areas by bringing in a new CPO and appointing a CIO and a Transformation Officer. They will work together to improve the quality of leadership, accelerating our transformation process through technology and human talent, with innovation as a key pillar of our successful journey. We have also appointed a new ESG Director. While we feel we have done a lot in the past in this area, especially on the people front, we did not have a formal program at the right level. Therefore, we have now structured a formal ESG program under a new leader and have elevated the visibility to the BOD under a new Compensation and Sustainability committee. We expect to present our ESG plan and commitments publicly in the coming months.

While we expect these changes to be critical to the last phase of our transformation, we are already seeing opportunities to accelerate growth. We have signed in H1 contracts that require 70% of the growth capex we have budgeted for full year. We have also deployed IT-related capex that will pave the way for future growth. Other initiatives that we are assessing include partnerships, such as the strategic alliance with ManpowerGroup to offer multilingual and robotic process automation services from centers located in the Iberian Peninsula – one of the European regions with the highest demand for these offerings. ManpowerGroup is a leading people solutions company globally, and we expect to enable more than 2,000 customer service positions with the partnership, and at the same time help drive productivity, improve operational efficiency, reduce costs and speed up turnaround times for our clients.

Consumers are demanding creativity and innovation from businesses, who in turn look to CX providers to enchant their clients. We are happy to report that we were awarded the ISO 56002 Certification for innovation management, for the second consecutive year. Atento was the first in its sector in the world to receive this certification, which is currently held by only 100 companies worldwide. The renewal of this certification attest to Atento’s commitment to driving innovation and to constantly evolve in line with market trends, something we believe is the basis for our future business growth. This ensures we can continue providing the best customer service for our clients, while delivering returns to our shareholders.

Carlos López-Abadía                                                   José Azevedo

Chief Executive Officer                                               Chief Financial Officer