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spk04: Good morning, and welcome to the ATENTOS third quarter 2021 results conference call. Today's call is being recorded. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star, then two. If you are at your computer, please use the submit a question box in your webcast viewer. I would now like to turn the conference over to Mr. Pablo Sanchez, Chief Marketing Officer and ESG Director for Attento. Please go ahead.
spk01: Thank you. Welcome, everyone, to a third quarter 2021 earnings conference call. Before proceeding, please note that certain comments made on this call will contain financial information that has been prepared under international financial reporting standards. In addition, this call may contain information that constitutes forward-looking statements, which are not warranties of future performance and involve risks and uncertainties. Certain results may differ materially from those in the forward-looking statements, as a result of various factors. We encourage you to review our publicly available disclosure documents filled with the relevant securities regulators, and we invite you to read the complete disclosure included here on the second slide of our earnings call presentation. Our public fillings and earnings presentation can be found at investors.atento.com. And less noted otherwise, all growth rates are on a year-over-year and constant currency basis. Here with us today's call are Carlos López Abadía, Atentos Chief Executive Officer, and José Acevedo, Chief Financial Officer. Following their prepared remarks, we will move to a Q&A session. As we have been doing in the recent calls, we will do our best to answer all questions received. We believe the Q&A session is a relevant part of the call, so we encourage you to ask your questions over the phone, through the webcast systems, or even by sending us email. I will now turn the call over to Carlos, which will do today's call from our Madrid office.
spk02: Good morning. Good afternoon. Thanks for joining us today. We would like to discuss with you today a strong set of Q3 results that reflect the continuing improvement of Atentos performance. We show continued improvement across all key financial metrics, starting with revenue, with 4.1% growth in the quarter, and EBITDA with 14.7% growth, with a margin of almost 14%, 1.2 percentage points higher year-on-year, which puts us on a solid track to meet our guidance for the year. Revenue growth has been driven by Brazil, with a very strong performance of our telephonic account, delivering 19.3% growth in the quarter and continuing growth of our U.S. operation. U.S. has grown 40% in the quarter, while more than doubling EBITDA. Our EBITDA performance continues to improve with highest EBITDA and EBITDA margin since the beginning of our transformation, with 51 million in the quarter, and 141 million in the nine months to September. We also continue to reduce leverage with net debt to EBITDA at 2.8x already within our guidance for the year. Sales performance is critical to an enterprise, but when shifting from legacy sectors to no higher potential sectors, sales are even more important in managing the transformation profitably. We continue to improve our sales engine and the shift to new economy high potential sectors. We have increased our sales results in the nine months to September by 34%. More importantly is the quality of these sales. We increased EBITDA margin of new sales three percentage points from pre-pandemic levels while improving hard currency sales by 77%. Revenue in the target sectors of media, tech and born digital represent now 11.2% of our base, up from 8.3% last year. We have added 14 new logos in Q3 and 40 in the year to date. Now, beyond financial indicators, I would like to talk to you about something very important to attend to and to myself, the impact that we have on the people and communities that we touch. We are proud to have introduced a new and stronger ESG plan to leverage more of Atento's strengths to make a difference. Our plan covers all three areas, environment, social and governance. As a company with around 150,000 employees, we probably have an opportunity to make a greater direct impact in the social arena. Let me highlight our initiatives in diversity, to skilling and in giving first job opportunities to many. We're also very proud to have joined recently the 10th Partnership for Afghan Refugees in the U.S. I am looking forward to keeping you updated on our progress and contributions in ESC. Finally, we want to reiterate our guidance for the year and give you visibility to our targets for 2022. Two years ago, around this time, in our investor conference, we shared with you our three-year objectives. Since then, we have had a pandemic and many changes in our industry and markets, but we still want to reiterate those very same objectives for 2022. We disclosed in our 6K that we suffered a cyber attack in Brazil that detected early, affected a small number of our servers. Now that we are back to normal, I want to take this opportunity to thank our clients publicly for their support. Sadly, I learned that many of them have suffered similar attacks as well. Unfortunately, a common challenge for many of us. Thank you very much. Jose, over to you.
spk00: Thank you, Carlos, and good day, everyone. I will start by presenting in more detail how we continue to deliver on our turnaround plan and why we are on the path to achieve our 2021 guidance targets. As we continue executing the last phase of our transformation, we have focused more on accelerating the profitable growth we have been able to achieve to date. Going to the numbers on slide 10, you can see our key third-quarter figures. All regions performed very well year over year, with total revenue growing 4% boosted by both U.S. multi-sector growth and higher telephonic revenue in Brazil. The 3.5% growth in multi-sector sales was mainly driven by the Americas due to U.S. client wins, mainly in public services. U.S. revenues totaled 29 million in the quarter and 84 million in the nine months, a 40% increase compared to the last year. Importantly, we continue generating profitable growth. In fact, we delivered the best third quarter EBITDA since we initiated the transformation plan. Also, we delivered growth across all regions. Our strong performance reflects the client wins in the US and Brazil, combined with the success of the efficiency initiatives that we began implementing in 2019. Looking ahead, the 51 million of EBITDA that we delivered in Q3 put us on track to meet our ABTDA margin guidance for the year. Our consolidated ABTDA margin was 13.9% for the quarter, with Brazil being the highlight. Its margin increased to 17.6% from 16.2% in last year's quarter. In the Americas, we expected margins to continue expanding as we continue growing in the U.S. market. Of note, U.S. programs had EBITDA margins around 20% in the Q3 2021. Moving to the next slides, our nine months results were strong too, also attesting the success of Pytentos transformation. We'd like also to highlight that U.S. growth was 40% on the nine months and is consistent with our strategy to expand the 10% currency revenues, which now represents 25% of total revenue, with 28% of EBITDA being in art currencies. But the key message I want to deliver here is the 12.6% EBITDA margin that we achieved in the nine months, which has already put us within our guidance range for the year. And because Q4 is essentially stronger, we are confident in our ability to meet our full year guidance. As Carlos mentioned, we expected to finish the year within the guidance range or better, especially in terms of top-line growth, particularly given the high demand for CX services we are seeing currently. As I said at the beginning of my remarks, the main challenge now is to use the solid foundation we have built to accelerate profitable growth. And the main ways to accomplish that are to continue expanding our U.S. business and increasing our exposure to art currencies even more. Now let's take a look at our cash flow, which also represented our best performance since launching the transformation plan. We generated $26 million of operating cash flow and nearly $7 million of free cash flow, also a record for the third quarter. I would like to point out that the positive free cash flow was achieved despite it being a quarter in which we made one interest payments. For the nine months, free cash flow was negative 30 million. As we advise on last quarter's call, this was mainly due to 16 million in tax payments that we were postponed from 2020 under government pandemic relief programs, and $2.11 million in one-off expenses related to the debt refinancing. Excluding these one-offs and growth-related expenses, working capital and capex, run rate free cash flow was approximately $40 million in nine months 2021. Cash capex was 3.2% of revenues in nine months 2021, as compared to 2.6% in the same period last year. The increase mainly reflects investments in IT to allow for an acceleration in growth in the future. Finally, at Tentos Capital Structure, we ended the quarter with net debts $550 million and a strong cash position of $146 million. Our leverage was 2.8 times already within our full year guidance range of 2.5 to 3 times. This is a direct result of the consistent improvement in ABTDA that we have delivered in the recent quarters. As we have been saying since our investor day in November 2019, improving the capital structure is one of the key elements of our re-rating process. In addition to 2021, we are confident in our ability to deliver even more and reach out target net leverage of between 2 to 2.5 times by end of 2022. I would like to take the opportunity to reinforce that we maintain the guidance for 2021 and the guidance for 2022 as we presented in the three-year plan. This concludes my prepared remarks. Thank you for your interest and support. Let's go back to Carlos for his closing remarks.
spk02: Thank you very much to all of you. I think we covered the results, some ideas that we have for the future, and Other than thanking you for your attendance and participation, I would like to invite you for your questions and having the dialogue. They always enjoy much more than they prefer remarks.
spk04: We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star, then two. If you are at your computer, please use the submit a question box in your webcast viewer. At this time, we will pause momentarily to assemble our roster. I would like to turn the call over to Mr. Pablo Sanchez for the questions received via webcast.
spk01: Thank you very much. We will start with some questions we have already received. So first one is U.S. sales have been strong. How sustainable is this growth, and do you have a long-term market position in mind?
spk02: Well, they have been strong, for sure, and we expect it to continue to be. Do we have a long-term target? We continue to grow. We start from a relatively low base, and... There's always an advantage to be a relatively small player coming in. We expect to continue to grow at a very fast pace. We got 40% growth in revenues, as you saw this quarter. We expect to continue at a high growth rate. And quite frankly, from a market positioning perspective, one of the things that we've learned competing in the U.S. market is that we seem to be, some of the clients tell us that we seem to be the best kept secret of the U.S. market, a company that is in the top five worldwide and is virtually unknown. I expect that as we
spk01: more credentials we are better known in the us to even have a better opportunity to serve clients and to continue to grow thanks let's go to the next one and do you expect to expand your base of tech media and more digital clients at the same pace or can you accelerate it
spk02: Well, we are very happy with the pace at which we're growing. Obviously, we would like to accelerate it. As I mentioned in my remarks, and you've seen in the slides, we've gone from 8.3% of our base to 11.2% of our base. We expect this expansion to continue. These are sectors that are highly attractive to us. We chose them for a reason or for several reasons, one of them being that they are naturally high growth themselves. So you start working with companies in these sectors and there is a lot of potential to grow with them. In addition to that, they tend to be companies that place a higher emphasis or higher value on higher value services, higher quality, et cetera, allows us to deliver more value to them and to get better margins ourselves. So there will be a continued emphasis in these sectors and expect to continue to grow in these sectors.
spk01: Next is, can you comment more on main drivers of the margin expansion in Brazil? Is there more room to improve there in terms of cost structure and in the other markets?
spk02: Well, there's always opportunity for improvement. We are happy with the results and the margins that we get in Brazil, but there's always opportunity to do more as there is everywhere else in Atento. So, yes, we do expect and we will continue to to expand margins in Brazil and elsewhere, particularly in some markets where we have even higher opportunity to expand margins. There's two components to that. One is the cost base. And sometimes when people talk about efficiencies, they're thinking about just cutting costs. What we have been deploying and we will continue to deploy is better ways to do business, methods, practices, and technology that allow us to deliver the same or higher quality service at a lower cost point, not simply just cut costs. Cutting costs has a natural end to it, but improving the way you operate has the potential of continuing to give us incremental improvements year on year on year. That's one component, and we still have opportunities to do so across Atento. The other component is the revenue component of the margin, the natural margin of what we sell. We have improved not only in the amount of sales, the sales growth, but also the quality of those sales. And part of that is reflected on higher margin, selling higher margin services in higher margin sectors. I also mentioned in the prepared remarks that we have grown three percentage points in sold margins. So that shows as well that there is opportunity to improve also from the sales side or from the revenue side. So the short answer to that is yes, we expect to continue to improve.
spk01: Thank you. Next is, what are your medium and long-term targets for hard currency revenues?
spk02: We don't have any specific or hard target for hard currency, if I can use hard twice in the same sentence. We expect to continue to grow our share of hard currency revenue and margin. We're doing that, and we expect to continue to do that. Is there a target? Clearly, we will continue to grow hard currency sales at a disproportionate large share of our total sales. And we expect to continue to do so significantly over the next decade. foreseeable future. Particularly, I mean, for us, the hard currency markets tend to be EMEA and U.S., particularly the U.S. We're seeing, I would expect to see continued growth at a very high margin.
spk01: I think that we have one question on the phone.
spk04: And that question is from Vincent Colicchio with Barrington Research. Please go ahead.
spk05: Yes, thanks for taking my questions. Carlos, I'm curious, in terms of the cyber attack, do you have insurance for that? And do you get those revenue losses get recovered? How does that work?
spk02: We do have insurance. And as I mentioned, Well, I didn't mention in the remarks, but I think we alluded to in the press release when the 6K, when it happened. The impact in terms of the number of servers was relatively small. We detected very early. We have, just to give you a sense, about 67,000 machines in Brazil only. and only about in the 20s, 20-something machines were affected. We detected very early. We cleaned it up essentially in the first 24 hours. So I'm very happy with the speed at which it was detected and corrected. I also, if you allow me, Vincent, I want to take the opportunity to thank our customers again. As I mentioned earlier, it was a surprise. I can't say it was a pleasant surprise, but it was a surprise to learn how many of our customers have been affected, some of them multiple times in the very recent past. And I just can thank them enough both from the public and the moral support that we received. But as I mentioned, we don't expect to, I think I mentioned on the presentation, that we don't expect to affect the guidance that we're giving you for the year.
spk05: And then in terms of the Telefonica relationship, Do you have a healthy – what does the pipeline look like of new deals? Is that healthy, and are the margins on those deals similar to the recent margins you've gotten on telephonic deals?
spk02: The pipeline is very healthy. We still have to win this business. As you know, pipeline doesn't equate sales always. But I'm very happy with the Telefónica relationship. As you've seen, we've grown this year. We don't expect that to go on forever. As you know, my intention, our expectation is to grow the multi-sector that for us is the non-Telefónica part of the business. to grow it faster than the market growth rate, and that to make more than make up the overtime decrease of the Telefonica business. We expect to do that. I think it's healthy for our customer mix. In the meantime, and in response to your, in terms of the margins, we'll continue to focus on business that is very valuable to both Telefonica and ourselves. And as I mentioned many times, the only way to get good margins, decent margins in any business is to make sure that you are delivering significant value to the customer. So the answer to your question is, Yes, we have a good pipeline. We still have to win it. We may be making some announcements in the near future. But in general, I'm happy with what I see with Telefonica. We've seen, and I want to be clear, we've seen a long-term picture in which we grow more the rest of the business than Telefonica.
spk05: And, Jose, one housekeeping question. For the nine months, what was the constant currency revenue growth?
spk00: In constants, we are close by 5%.
spk05: For the nine months, revenue growth is 5%. Yeah. Is that right? Okay, thank you. And just one more, if I may, for Carlos. Sure. So the manpower relationship, is there anything to update us there, or is it too early to comment on?
spk02: No, it's a bit too early. I expect to push in the multilingual business. It's a long-term play for us, so we'll be updating you mostly through next year. That's where the manpower relationship is playing out.
spk00: Okay.
spk02: Thanks for answering my questions.
spk00: Sorry, let me correct. Only the 5% is for Q3. The 10% is the 9-month. I'm sorry, because I answer only for the Q3.
spk05: No worries. Thanks for that correction, and thanks for answering my questions.
spk04: Thank you, Vincent. Again, if you have a question, please press star, then 1. If you are at your computer, please use the Submit a Question box in your webcast viewer. Please stand by as we poll for questions.
spk01: Great. Let's go on with some of the written questions we are getting here. Carlos, can you tell us why the company has been successful in winning born-digital US-based business?
spk02: Sorry, to grow born-digital business?
spk01: In winning born-digital U.S.-based business.
spk02: U.S.-based business. Well, in general, let me try to answer in two pieces. Winning born-digital was a question of putting our mind and our backs into it. We decided to focus on a number of segments, and born-digital being one of them, as I mentioned earlier on our question, because they have natural benefits. characteristics that are very attractive to us, you know, higher natural growth, you know, interest in higher value added services, et cetera, right? So clearly we put our mind to it and our backs into it, and obviously the results are there. Particularly in the U.S., it was a combination also I think I mentioned earlier, a combination of, you know, we're focusing on the right segments. We focus into it. We execute it. We built a very strong team that we didn't have a couple of years ago, and we continue to build it as we expand. And in addition to that, as I mentioned earlier, we had a little bit of the David versus Goliath advantage, you know, with the small guys that in the U.S. that actually are part of a much larger company that actually has a lot of credentials, ability, and capabilities. And several customers have told us that we're the best-kept big secret in the U.S. We will continue to exploit that and continue to grow very fast, particularly in those sectors, but in general in those and other sectors.
spk01: Thanks. We have two questions about 2022. Let me try to put together. So first one is if you can comment on the expectations for growth for 2022. The second one is a bit more specific, asking about the EBITDA margins as laid out in the investor day presentation at the beginning of the plan. And if we, can you review those margins again and tell us why you feel confident in achieving them for the next year?
spk02: Well, let me start with that. First, we are confident to achieve them. And part of that is because we as a management team made the commitment of delivering those and pandemic or other disasters being no excuse to do that. So we feel very strongly, the whole team feel very strongly about delivering those. But beyond our confidence, we have done a number of things that makes us feel more confident. So one is we have introduce a lot of changes in terms of our ability to serve our customers in a more efficient way. We are changing. We haven't finished yet. There is still quite a bit to achieve. But we have been introducing methods, practices, technology common across countries. our regions and trying to institute best practices across them all. As I said, we have started. There's still a lot to be achieved, but you can already see that we are delivering at a higher contribution margin than before. Those improvements that are obviously recurring and additional improvements, as I mentioned, we believe we have only started down the route, should help us to if we were confident a couple of years ago, to be more confident than we were two years ago now. In addition to that, on the revenue side, as you can see, not only we keep on improving our sales capabilities every year, but also we're selling at higher quality, better margins. So again, what two years ago was a plan, a vision, I think now we have two years of track record that gives us the confidence that we will meet the commitments that we put out there for all of you.
spk01: Next one is, can you simply remove the currency hedge or would there be a large financial penalty for doing that?
spk02: Well, I think the specifics of that are probably for Jose, but I'll tell you that we're looking at different options that we have on the currency hedge. with any such hedges, you know, depending on the macro movements, can go in different directions for or against you. But clearly we're looking at the options that we have to make sure that we maximize the positive impacts of the hedge and minimize the negative ones. Jose, anything else?
spk00: No, it's exactly that, Carlos. We're looking for options that we have. The simple answer for that is normally all instruments like this one, we have to pay the market to market. But as you mentioned, we keep on looking for opportunities to change the structure.
spk01: Next one is, as we head into 2022, would the company consider buying some shares back in the open market, especially considering how cheap the stock is relatively to the value of the business?
spk02: Well, you know, anything is possible. But at the moment, I have no intention. I don't foresee anything. buying shares or having the use of cash to be dedicated to buying shares. Much higher priority. As always, I think I mentioned this from the beginning, the highest priority is the expansion and improvement of the business. And there's two particular areas where we're emphasizing the use of cash. As we move from a a legacy customer base to a new set of customers, we need CapEx to grow the new customers. That's a high priority for us. That's the essence of the transformation of Atento. In addition to that, as we introduce Better technology, higher technology, new services, new capabilities, and the renewal of the technology base is also a high priority for us. So for us, I prioritize those particular uses of cash way before any share buybacks.
spk01: Next one, saying congratulations on strong results and margins. Growth in Brazil slowed down this quarter. Are we seeing any improvement as things are starting to open up again?
spk02: Yeah, we had a couple of one-offs in Brazil this quarter. One had to do with some tax adjustments and another one on some reason that we chose to exit because of the low margins. But yes, we have high expectations in Brazil. We did very well in Brazil. Telefónica has performed vivo in the case of Brazil. performed very well for us this year. But I expect to resume the growth in multi-sector Q4 and on. I have high expectations for Brazil. It's a great economy. Obviously, we have the uncertainty of elections next year, but that's nothing that we're not used to managing through. And at the end of the day, as the pandemic ends and hopefully We've seen the last waves of it. The positive impact of economies that come back up to speed, as we've seen in the U.S. and in some other places, will also come to Brazil and other economies in Latin America. And that will be good for the economies, will be good for the industry, will be good for us as well.
spk01: Next is, do you anticipate any financial effects from the cyber attack in October? And what are your target run rate, leverage and EBITDA margin over the next three years?
spk02: That's a multi-part question. So I think I answered the first part on the cyber attack.
spk01: What was the second? The second one, what are your target run rate, leverage and EBITDA margin for the next three years?
spk02: We have not prepared to disclose those today. Actually, this gives me the opportunity to recommend to you guys not only to do that disclosure, but to do it in the context of industry uh or investor day uh that it was probably over the week uh we moved within council we moved the the investor that initially we're thinking about uh november time frame um we probably would do it in in spring so it's not that we've cancelled in any way shape or form but i think we owe that to you i think is is not only something that we owe that uh to our investor base but something i find particularly particularly beneficial to engage in a more direct discussion with many of you, get your views, and also give us the opportunity to give you an expanded, perhaps or hopefully an expanded understanding of what this management team is planning to do. So stay tuned. We'll announce the date that we're looking at sometime in the early spring of next year.
spk01: Next one is asking, can you provide some additional color on the contracts which have been executed in Brazil?
spk02: Probably not today. I will have to think about what is disclosable and what is not. So I'd rather stay quiet. By the way, they're not huge or dead material. I mean, it's... relatively small in material to the overall Brazil business or dental.
spk01: Let me ask, I don't know, let me check and ask if we have some questions on the phone.
spk04: We have no questions on the phone at this time.
spk01: Yeah.
spk04: But pardon me, we just got one in. The next question, one moment, please. The next question is from Eriko Miyazaki-Ross with Global Evolution. Please go ahead.
spk03: Hi there, thanks for taking the question and congratulations on the earnings. Just wanted to quickly follow up. I think you mentioned at the time of the bond roadshow that you were expecting to get to marginally positive annual free cash flow over the next couple of years. Can you just elaborate whether you actually expect to hit that target, I guess, for FY21, considering, I guess, the fact that you've talked about how Q4 is typically seasonally stronger And then I guess kind of what you're anticipating for FY22 as well on the free cash flow side of things.
spk02: I don't think we're making a providing guidance for 2022 on cash flow. But I just say on 2021, where do we stand?
spk00: Yeah, we expect to be in the break even. And we talked about to be positive by 2020. Around 10 million. What we have is we invest a bit more in terms of capex because we got some new business that we have to invest into. But the expectation is by breakeven or positive by around 5 million. That is the expectation that we have. And for next year, we spoke sometimes about the free cash flow. We maintain the same. It will be a positive one.
spk03: Great. That's helpful. And then just to clarify, with respect to the sort of break-even or slightly positive free cash flow that you're expecting for FY21, is that including some of those one-off items that you mentioned before? So, for example, I guess on the tax and the refinancing, et cetera?
spk00: Yeah, no, that will be with everything, yeah, included.
spk03: Okay. That's very helpful. Thank you.
spk00: Thank you.
spk01: So let's go on with the greeting questions. Carlos, we have, I'm happy to see the investor day is scheduled for April. Why was this moved from November? Was it related to the COVID?
spk02: We had so many things going on around the same time, and we had a, If you have a scale of one of these, you'll see that the windows are relatively small. If you have Thanksgiving in one end, a variety of other events that you don't want to clash with. At the end of the day, we ended up with very few windows and with a lot of work in Atento. We thought we would be better. We collectively, ourselves, yourself, would be better served if we moved it too early in the year.
spk01: Next one is, can margins in Americas and EMEA get as high as Brazil?
spk02: Yes, actually, the U.S. margins are already ahead of those of Brazil, so that's already a fact. EMEA, the markets there are a bit more complicated, but I believe that they can go as high and potentially higher. In EMEA, the The key is to provide, there's a number of levers, but one very important one is to be able to provide services to customers in Europe and serve them from Latin America or offshore to a significant near shore or offshore to a significant degree. A lot of our business in EMEA is out of Spain. We've been improving significantly the margins in Spain. In EMEA, we are closing the year, we'll be closing the year with a record margin, EBITDA margin in EMEA. We're very happy that we have proven that existing business can be run at a higher margin. It can, to get a significant higher, one of the levers is the near shore, the other levers is, as I mentioned, the multilingual component that we will be not only exploring but pushing through 2022.
spk01: Most of them have already been answered. And the last one is, without providing 2023 guidance, do you think you might be able to increase the margins even further in 2023? Absolutely.
spk02: I think one of, I don't know if that question comes from the same investor that put that to me on an email not too long ago and something that I took note to cover at length in our investor conference. The answer is yes. I think some people, and again, I don't know where the mentality of capped returns, EBITDA, could possibly come from, I have a mentality of, hey, you know, our job is to expand any barrier perceived or otherwise to performance. As I mentioned, you know, the efficiency improvements we're introducing are not, in case somebody had that impression, are not about, hey, let's cut costs, let's do, you know, let's run... Work harder, run faster, you know, sell the furniture. Those kind of efficiencies are short-lived and absolutely limited. The efficiencies that we've been achieving and deploying, and by the way, I insist, there's a lot more than we can do. We have only started today. Our efficiency is based on doing the work in a better way, with better processes, better methods, better technology, using best practices. The variance that we had was significant. significant from the best performing center to the worst performing center. We have reduced those. We still have a long way to go in terms of improvement. That improvement is ongoing. It's recurring, and you can build on top of that. The improvement that also comes from better contracts, better sales, participating in higher margin markets, such as, for example, the U.S., that is also recurring. And because compared to other competitors or the large companies, we have very little exposure to those inherently higher markets. higher margin markets, we have a lot to go, a lot to improve from that perspective as well. So the answer in terms of our capability to continue to improve margins, margin expansion, as well as growth, particularly margin expansion, is, you know, I don't see any limitation in the near future. The only limitation is execution, is how quickly can we implement those changes. We have been already doing so. Again, nothing that I'm saying here is something that I'm making up. Just take a look at what we've done over the last two, three years, and you can extrapolate or make your own conclusions. But anything that I I'm telling you something that we already are delivering. What I'm telling you is that not only are we going to continue to do that, but we're going to improve on it. So the answer is a categorical yes. We can significantly improve our performance, particularly in terms of margin and margin expansion.
spk01: One last minute one. Why do you think you are winning business in the USA? Is it new bids or is it winning business from competitors?
spk02: I'm not sure what the difference is, but the answer is the same. We have very small presence in the US. So the vast majority of what we're winning is new customers, new logos. We're expanding in the new areas, in many cases, new segments. I don't know if... I announced in this group we have opened two new centers in the US, one in Myanmar in Florida, the other one in Salt Lake City. So we continue to expand the business and gaining new logos, new sectors, and sometimes even new industries. If there's nothing else, Pablo, he's giving me the sign of we're done here. I would like to thank you all again for participating. As I mentioned, I always enjoy more the Q&A and then they prepare remarks. So please keep your questions coming. Thank you very much.
spk04: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
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