Atento S.A. Ordinary Shares

Good morning, and welcome to the Attento third quarter 2022 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 touch-tone 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. Hernan Von Waveren, Investor Relations Director for Attento. Please go ahead.

Thank you, Operator, and welcome everyone to our fiscal third quarter 2022 earnings call to discuss Attento's financial and operating results. Here with us for today's call are Carlos Lopez Abadía, ATENTOS Chief Executive Officer, and Sergio Pasos, Chief Financial Officer. Following a review of ATENTOS financial and operating results, we will open the call for your questions. 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 guarantees 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 filed 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 filings and earnings presentation can be found at investors.attento.com. Please be advised that unless noted otherwise, all growth rates are on a year-over-year and constant currency basis. I will now turn the call over to Carlos.

Thank you, Nan. Good morning to all of you. Good afternoon. has proven to be a more difficult year than we expected initially. However, I'm happy to report that the measures that we've taken during the first half of the year are beginning to show results. We are focused on five key areas. Continue to build our sales capabilities, accelerate operational efficiencies, improve our cost structure, advance inflation pass-through management, and significantly improve our cybersecurity. As a result, we have improved evident margins sequentially by 3.3 percentage points, grown sales by 10.3%, initiating our expansion to the Philippines and locked up the commitment of our major shareholders. We expect these actions to continue to impact positively the business into Q4, with evident margin between 14% to 15%. Despite this improvement, we have seen some of our customers to reduce some volumes in Q3 and Q4 due to uncertainties in the business environment, particularly in Brazil. This leads us to expect an overall EBITDA margin for the year in the range of 10.5% to 11%. While we're just beginning to see the impact of our actions in the results of the second half of 2022, we do expect to have a significant ongoing effect and position as well for a much stronger 2023, continuing the trend and the exit rate of the second half of 2022. Let me take you through the actions taken and the impact expected. As a key component of our transformation plan, expanding our sales capabilities is essential to grow into the right segments and geographies. Among other things, we have started a new partner channel. We have started an inside sales program. We have improved account management with a particular focus on platinum accounts. As a result, we've seen an improvement of 10.3% growth year-on-year after a record Q2. We expect to finish Q4 with sales in excess of 60 million total annual value, placing us in a much better position to start 2023. As you also know, We place significant emphasis on the continued improvement of our delivery capabilities. In addition to efficiencies of 27 million achieved during 2022, which are focused on program-level improvements, we have launched a new phase of operational improvements with broader focus on areas such as attrition, absenteeism, or shrinkage. We call it project breakthrough. We've tested the node processes in 10 centers, showing improvements between 1 to 2 percentage points of EBITDA margins. We expect the full rollout of this program to be completed before the end of Q2 next year. I want to emphasize that these improvements are not simply cost take-up. They represent genuine operational improvements resulting in better service to customers as well as higher margins. We have completed our consolidation of three regions with a reduction of more than 700 support roles and have improved our vendor management. As I mentioned in our Q2 call, we took a lot of the one-time costs of these measures in Q1 and Q2, while the bulk of the benefits are beginning to accrue now in Q3, Q4, and beyond. We have also accelerated the improvement of our inflation pass-through, reaching close to 90% as we call it. All new contracts now have standard IPT clauses, and we have improved our management of the negotiations of those legacy contracts that do not have these clauses yet. Finally, making virtue out of necessity, our investments in cyberinfrastructure have been noticed externally and publicly. You can look us up on sites such as Security Scorecard, a security rating company where we figure significantly ahead of the competition. And also very happy to announce the launch of a new operation in the Philippines on the back of new demand of existing clients and Philippine-specific new clients. We expect revenue in the first year to be between $20 million to $30 million. also this quarter we announced the lockup commitment of our major shareholders representing more than 70 percent of the company ownership now 2023 will be our last year of abnormally high financial expenses we have a 2023 business plan that should sufficiently cover our financial obligations But in order to provide additional assurance to customers and investors of our ample liquidity, we are evaluating a number of offers for financing alternatives from existing investors and also from international banks. The proceeds, in addition to provide additional liquidity if needed, could be used to improve our capital structure, including repaying or repurchasing part of our existing debt, taking advantage of current market prices. We expect to make an announcement on this over the next few weeks. I would not like to finish without sharing with you our progress in ESG. This continues to be an ongoing priority for Atento, where we measure our progress month to month and quarter to quarter. You can check us out with independent parties such as Surtain Analytics that already positions Atento as a leader in the industry. Now let me turn this over to Sergio, who is going to add additional detail. Sergio, over to you.