PR Newswire
NEW YORK, Aug. 3, 2022
Demanding quarter, but management believes positive inflection point has been reached with strong 2H trend underway
Record June sales of $34 million, growing to 60% in hard currency, and Total Annual Value of Sales in Q2 increasing 16.4% to $54.7 million
Accelerated 2022 cost efficiency program, realizing $15 million cost reductions by year-end, or $25 million on an annualized basis.
Cash position rose 6.1% to healthy $103 million, with strong free cash flow turnaround to positive $5 million, versus negative $26 million in 2Q21 and negative $65 million in 1Q22
Working capital improved to positive $9 million in 2Q22, versus negative $25 million in 2Q21
Due to uncertain macroeconomic conditions, annual guidance revised to flat revenue growth, EBITDA margin of 11.5% to 12.5%, and leverage ratio of 3.0x to 3.5x
Strong year-end exit rate forecasted, based on sales momentum and improving cost structure
NEW YORK, Aug. 3, 2022 /PRNewswire/ -- Atento S.A. (NYSE: ATTO) ("Atento" or the "Company"), one of the five largest providers of Customer Relationship Management and Business Process Outsourcing (CRM / BPO) services worldwide and sector leader in Latin America, announced today its second quarter operating and financial results for the period ending June 30, 2022. All comparisons in this announcement are year-over-year (YoY) and in constant-currency (CCY), unless otherwise noted.
Volume recovery slower than expected
EBITDA impacted by reduced volumes, additional one-time severance costs and higher inflation
Healthy cash position
Additional cost reduction initiatives
Summarized Consolidated Financials
($ in millions except EPS) | Q2 2022 | Q2 2021 | CCY | YTD 2022 | YTD 2021 | CCY |
Income Statement (5) | | | | | | |
Revenue | 363.8 | 382.7 | -4.0 % | 720.4 | 753.3 | -3.2 % |
EBITDA | 28.5 | 50.7 | -44.2 % | 63.5 | 89.8 | -29.5 % |
EBITDA Margin | 7.8 % | 13.3 % | -5.4 p.p. | 8.8 % | 11.9 % | -3.1 p.p. |
Net Loss (2) | (12.1) | (14.7) | -19.0 % | (82.6) | (34.9) | -134.7 % |
Earnings Per Share on the reverse split basis (2) (4) | ($0.83) | ($1.05) | N.M. | ($5.66) | ($2.48) | N.M. |
Cash Flow, Debt and Leverage | | | | | | |
Net Cash Used in Operating Activities | (15.6) | 14.4 | | 27.5 | 14.9 | |
Cash and Cash Equivalents | 102.9 | 153.8 | | 102.9 | 153.8 | |
Net Debt (3) | 633.1 | 589.5 | | 633.1 | 589.5 | |
Net Leverage (3) | 5.3x | 4.0x | | 5.3x | 4.0x | |
Net Leverage (w/o Cyber Q4-2021) (3) | 3.8x | 4.0x | | 3.8x | 4.0x | |
(1) Unless otherwise noted, all results are for Q2; all revenue growth rates are on a constant currency basis, year-over-year; (2) Reported Net Loss and Earnings per Share (EPS) include the impact of non-cash foreign exchange gains/losses on intercompany balances; (3) Includes IFRS 16 impact in Net Debt and Leverage; (4) Earnings per share on the reverse split basis is calculated with weighted average number of ordinary shares outstanding. (5) The following selected financial information are unaudited. |
Message from Management
The second quarter was a challenging one, as the recovery in volumes was slower than our expectations, with continued higher inflation across our markets and one-off costs on accelerating structural efficiency programs.
However, based on strong sales in June and July and a growing pipeline, we are expecting 2022 to be the fourth consecutive year of record sales. Moreover, with the investments that we made in further reducing Atento's cost structure, we expect to reap the benefits of $25 million in annualized cost savings, as revenues rise and we continue ramping up new client programs during the remainder of the year and into 2023.
A new account management structure combined with expanding partnerships and effective channel marketing are enabling us to sell more, sell better and sell what we want, namely delivering higher-value services to higher-growth, higher-margin clients. A more effective sales organization also means increasing hard currency revenues, which represented 60% of sales in Q2, versus 37% last year.
Also encouraging was the nearly $5 million in free cash flow that we generated in the quarter, which allowed us to finish with healthy cash position. The cash flow reflects not just a leaner cost structure, but also greater efficiencies, including significantly better working capital management, thanks to new processes and systems that have been implemented to improve the core of our organization. After passing the halfway mark, we remain ahead of plan with regard to inflation pass-through, which we still expect to be approximately 80% of total contract value by year-end.
Given the uncertain macroeconomic conditions, annual guidance was revised to flat revenue growth, EBITDA margin of 11.5% to 12.5%, and a leverage ratio of 3.0 to 3.5x. Although we have revised guidance downward, we still forecast a healthy exit rate at the end of the year, in terms of revenue growth and EBITDA margin, putting us back on a course for much-improved cash flow and debt leverage in 2023.
Carlos López-Abadía | Sergio Passos |
Chief Executive Officer | Chief Financial Officer |
Second Quarter Segment Reporting
Brazil
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