Atento Reports Fiscal 2019 Third Quarter Results

• Strong 9.4% Multisector growth YoY drove a 3.0% consolidated revenue expansion
• EBITDA and profitability improvement fueled by better revenue mix and stricter cost control
• FCF Before Interest and Acquisition funding transformation plan and share buyback program

November 13, 2019

NEW YORK – 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 ended September 30, 2019 operating and financial results. All comparisons in this announcement are year-over-year (YoY) and in constant-currency (CCY), unless noted otherwise, and may differ from the 6-K due to certain intra-group eliminations. Summary

• EBITDA is defined as profit/ (loss) for the period from continuing operations before net finance costs, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA adjusted to exclude restructuring costs, site relocation costs 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.
• Reported Net Income and Earnings per Share and Adjusted EBITDA, Adjusted EBITDA Margin and Adjusted Earnings per Share refer only to continuing operations. Adjusted Earnings per share is calculated based on weighted average number of ordinary shares outstanding of 73,601,478 and 72,139,539 for the three months ended in September 30, 2018 and 2019, respectively. 73,885,474 and 73,532,509, as of for the nine months ended September 30, 2018 and 2019
• We define Free Cash Flow before interest and acquisitions as operating cashflow minus Capex payments and income tax expenses.

 Message from the CEO and CFOCarlos López-Abadia, Atento´s Chief Executive Officer, commented, “We are pleased with our third quarter results, highlighted by robust multisector revenue growth across all regions and continued sequential EBITDA margin expansion. Our results demonstrate that our Three Horizon Plan is gaining traction and reinforce the confidence in our strategy to lead the next generation of customer experience in the regions we operate. The recent appointments of Jose Antonio de Souza Azevedo as Chief Financial Officer and Gustavo Tasner as Chief Operating Officer have significantly strengthened our ability to continue executing against our strategic priorities to significantly improve long-term growth, profitability and shareholder value. I look forward to sharing more details about our market opportunity and growth plan during our Investor Day on November 18^th.”   Third Quarter Consolidated Operating ResultsConsolidated revenue increased 3.0% to $412.3 million in the third quarter of 2019, with Multisector sales up 9.4% reflecting growth in all regions, partially offset by lower Telefónica revenue. On a regional basis, Brazil revenue was essentially flat compared to the third quarter of 2018, while Americas revenue increased 9.6% and EMEA sales decreased 2.2%. For the nine months ended September 30, 2019, consolidated revenue increased 2.6% to $1,290.1 million, with Multisector sales up 6.5%. By region, Brazil revenue grew 3.2%, while Americas and EMEA revenues increased 2.3% and 3.1%, respectively. Total Multisector revenue increased 9.4% in the third quarter of 2019, and 6.5% YTD, further diversifying Atento’s revenue stream and reaching 63.7% of total sales for the first nine months of the year. Multisector revenue growth in the third quarter of 2019 was fueled by a 3.7% increase in Brazil, 18.6% growth in the Americas, and 15.1% growth in EMEA. On a sequential basis, total Multisector revenue increased 3.5%. Revenue from Telefónica declined 7.3% in the third quarter of 2019 due to a decrease of 8.6% in Brazil, 3.1% in the Americas and 13.9% in EMEA. For the first nine months of 2019, revenues from Telefónica decreased 3.7%. In the third quarter of 2019, reported EBITDA increased 4.7% YoY to $48.1 million and includes a $10.6 million positive effect related to IFRS 16 and a negative $4.5 million impact from extraordinary items related to the transformation plan. EBITDA margin was 11.7%, a 0.8 p.p. increase on a YoY basis. Excluding the effects of IFRS 16 and extraordinary items, normalized EBITDA grew 5.2% YoY, with the transformation plan gaining traction. Normalized EBITDA margin was 10.2%, an improvement of 1.2 p.p. QoQ and 0.2 p.p. YoY, with Brazil, the Americas and EMEA at 12.0%, 12.4% and 7.6%, respectively. Reported EBITDA on a nine-month YTD basis decreased 0.6% to $132.7 million and includes a $40.2 million positive effect related to IFRS 16 and a negative $25.9 million impact from extraordinary items. Earnings per share was $0.02 in the third quarter of 2019, with recurring EPS of $0.03. When also excluding the negative $4.5 million of extraordinary items, recurring EPS was positive $0.10. Adjusted earnings, adjusted EBITDA and adjusted earnings per share are non-GAAP financial measures and are reconciled to their most directly comparable GAAP measures in the accompanying financial tables.  Segment Reporting

 BrazilAtento’s flagship operation generated revenue of $203.8 million in the third quarter of 2019, essentially flat YoY, with a 3.7% increase in Multisector revenue offset by decreased Telefónica revenues. For the nine months ended September 30, 2019, revenue increased 3.2% to $632.5 million, with Multisector. sales up 6.5% and expanding 2.2 p.p. to 71.6% of total revenue in Brazil. Multisector revenue growth in Q3 and YTD was driven by higher volumes in existing contracts and ramp-up of new contracts with born-digital and healthcare companies. Revenue from Telefónica decreased 8.6% in the third quarter of 2019 and 4.1% YTD and represented 28.4% of total revenue in Brazil in the first nine months of 2019. Reported Adjusted EBITDA was $27.7 million, representing 13.6% adjusted EBITDA margin in Q3, up from 11.9% in the prior year’s third quarter. Excluding the effects of IFRS 16 and extraordinary items, normalized Adjusted EBITDA margin was 12.0% in Q3 2019, up 0.1 p.p. YoY. On a sequential basis, normalized Adjusted EBITDA margin increased 0.5 p.p. reflecting positive impacts of new revenue with better profitability from programs with born-digital companies.  For the nine months ended September 30, 2019, reported Adjusted EBITDA was $82.0 million, representing a 13.0% margin.   Americas RegionThird quarter 2019 revenue in the Americas region increased 9.6% YoY to $159.6 million, with Multisector growth accelerating to 18.6% YoY.  Multisector revenue growth in the third quarter was primarily driven by higher volumes from new contracts in Mexico and Colombia. For the nine months ended September 30, 2019, revenue in the Americas region increased 2.3% to $493.1 million, with Multisector revenue up 6.9%. The mix of Multisector revenue in the Americas was 62.0% of total regional revenue for the nine months ended September 30, 2019, a 2.8 p.p. increase versus the prior year’s period. Telefónica revenues decreased 3.1% in Q3 and 4.4% YTD, mainly due to lower volumes in Peru and Chile. Reported Adjusted EBITDA in the third quarter was $17.5 million, with the adjusted EBITDA margin declining modestly by 0.4 p.p. YoY to 11.0%. For the nine months ended September 30, 2019, Adjusted EBITDA in the Americas was $49.8 million, compared with $66.8 million in the prior year. Excluding the effects of IFRS 16 and extraordinary items, normalized Adjusted EBITDA margin was 12.4% in the third quarter, an increase of 3.1 p.p. YoY. This increase was primarily due to better profitability from Multisector customers, mainly in Colombia, partially offset by lower Telefónica volumes in Peru and Chile.   EMEA RegionRevenue in the EMEA region declined 2.2% in the third quarter of 2019 to $52.1 million. Third quarter EMEA revenue performance reflects 15.1% growth YoY in Multisector sales driven by higher volumes mainly in the utilities sector and with new contracts with existing customers, offset by a 13.9% decline in revenue from Telefónica, due to an unusual volume decline, which is not expected to continue. For the nine months ended September 30, 2019, EMEA revenue increased 3.1% to $175.4 million primarily driven by 10.5% growth in Multisector sales, partially offset by a 1.7% decrease in revenue from Telefónica. As a percentage of total sales in the region, YTD Multisector revenues increased 2.8 p.p. to 42.2%. Reported Adjusted EBITDA for the EMEA region was $5.9 million in the third quarter, an increase of 9.1%, with the corresponding margin at 11.4%. For the nine months ended September 30, 2019, adjusted EBITDA was $17.8 million, up 13.2% YoY. Excluding the effect of IFRS 16 and extraordinary items, normalized Adjusted EBITDA margin was 7.6% in the third quarter of 2019, compared with 10.3% in the prior year period, reflecting the ramp-up of newly acquired contracts with multisector clients and the unusually low volume at Telefónica.   Cash Flow and Capital StructureDuring the third quarter, free cash flow before interest and acquisitions totaled $22.6 million, compared with $24.6 million in the second quarter of 2019 and $36.7 million in the third quarter of 2018. Third quarter 2019 cash flow before interest and acquisitions was impacted by higher one-off working capital uses from a specific contract renegotiation, already normalized in Q4, as well as lower EBITDA, which includes the negative impact of extraordinary items related to operational improvements under the transformation plan. For the nine months ended September 30, 2019 cash flow before interest and acquisitions was $8.7 million, compared with $43.7 million for the corresponding nine months last year, with the decline mainly reflecting the same factors that impacted third quarter 2019. Cash capex totaled 2.6% of revenue for the nine months ended September 30, 2019, tracking below the corresponding annual guidance of 3.5% to 4.5% of revenue, as company re-evaluates priorities under the transformation plan. At September 30, 2019, Atento held cash and cash equivalents of $105.5 million, which combined with approximately $95.0 million in revolving credit facilities (out of approximately $90.0 million were undrawn), represented total liquidity of approximately $200 million. Atento’s net debt was $419.8 million, excluding the $145.1 million effect of IFRS 16, or $564.9 million under IFRS 16. Reported net leverage was 3.3x, or 2.5x when excluding the effects of IFRS 16 and extraordinary items.   Conference CallThe Company will host a conference call and webcast on Thursday, November 14, 2019 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) 0 800 891 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 above website.  Atento 2019 Investor Day: Leading Next Generation CXThe Company will host an Investor Day on Monday, November 18, 2019. Presenting will be Carlos Lope-Abadia, CEO and Jose Azevedo, CFO, amongst other members of the global leadership team. Discussion topics will include the Company´s business strategy, current industry trends, new developments and growth initiatives.  About AtentoAtento 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, among others. Atento´s shares trade under the symbol ATTO on the New York Stock Exchange (NYSE). In 2016, Atento was named one of the World´s 25 Best Multinational Workplaces by Great Place to Work® for a fourth consecutive year. For more information visit www.atento.com  Investor Relations Shay Chor + 55 11 3293-5926 shay.chor@atento.com  Fernando Schneider + 55 11 3779-8119 fernando.schneider@atento.com Forward-Looking StatementsThis 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. 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. Fonte: Atento