NEW YORK, Aug. 14, 2017 /PRNewswire/ --


    --  Focused growth strategy drove 2.4% increase in consolidated revenues and
        8.5% in multisector:
        --  Strong growth in revenue from Brazil, up 5.8%
        --  Revenues from multisector up 390bps to 60.5%
        --  Improved revenue mix, with higher value-added solutions up 330bps to
            26.3% of revenue in Q2 2017
    --  Adjusted EBITDA margin of 11.1% in Q2 2017, with year-to-date 2017
        margin of 11.3% in line with FY 2017 guidance
    --  Operating cash flow reached $30 million in Q2 2017, free cash flow
        before interest and acquisitions of $15.4 million
    --  Revised full-year 2017 guidance, highlighted by improved revenue growth
        outlook of 5% to 8%, from 1% to 5%
    --  Debt refinance estimated to reduce interest expenses by $10-15mm p.a. as
        of 2018

Atento S.A. (NYSE: ATTO), 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 2017 operating results. All comparisons in this announcement are year-over-year and in constant-currency (CCY), unless noted otherwise.

Summary



    ($ in millions except EPS)               Q2 2017         Q2 2016          CCY Growth    YTD 2017          YTD 2016            CCY Growth
    -------------------------                -------         -------          ----------    --------          --------            ----------

    Income Statement
    ----------------

    Revenue (1)                                        473.7            448.6         +2.4%            941.7               864.3                  +2.7%

    Adjusted EBITDA (3)                                 52.5             54.2         -6.1%            106.2               103.0                  -3.2%

    Adjusted EBITDA Margin (3)                         11.1%           12.1%       -1.0pp            11.3%              11.9%                -0.6pp

    Recurring Net Income (2)                             9.6              9.5         -3.0%             22.1                19.9                  +8.9%

    Recurring Earnings Per Share (2)                   $0.13            $0.13             -            $0.30               $0.26                  +7.1%

    Reported EBITDA (3)                                 46.1             46.1         -2.9%             96.4                83.4                   8.8%

    Reported Net Income (2)                            (3.7)           (8.1)       +57.5%              5.4              (12.9)                  n.m.

    Reported Earnings Per Share (2)                  ($0.05)         ($0.11)       +54.5%            $0.07             $(0.16)                  n.m.
    ------------------------------                    ------           ------         -----             -----              ------                   ----

    Cashflow, Debt and Leverage
    ---------------------------

    FCF before Interest and Acquisitions (4)            15.4             33.8                            5.8                 6.3

    Net Debt                                           400.4            459.1

    Leverage (x) (5)                                    1.8x            2.0x                          1.8x               2.0x
    ---------------                                     ----            ----                          ----               ----


             (1)    Revenue excludes Morocco which
                     was divested in September 2016.

             (2)    Reported Net Income and Earnings
                     Per Share and Adjusted EBITDA,
                     Adjusted EBITDA Margin and
                     Adjusted Earnings Per Share
                     refer only to continuing
                     operations. Reported and
                     Adjusted Earnings Per Share, for
                     the period ended June 30, 2017,
                     were calculated considering the
                     number of ordinary shares of
                     73,909,056. For the period ended
                     June 30, 2016, the number of
                     ordinary shares was 73,751,131.

             (3)    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
                     acquisition and integration
                     related costs, restructuring
                     costs, sponsor management fees,
                     asset impairments, site
                     relocation costs, financing and
                     IPO fees, and other items which
                     are 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 net income for the
                     period from continuing
                     operations.

             (4)    We define Free Cash flow before
                     interest and acquisitions as
                     operating cashflow minus Capex
                     payments and income tax
                     expenses.

             (5)    Does not consider the debt
                     refinance. On a pro-forma
                     basis, leverage ratio would be
                     1.6x.

Alejandro Reynal, Atento's Chief Executive Officer, commented, "We are pleased with our results during the first half of 2017, as we continued to deliver solid topline growth, protect profitability and generate positive operating cash flow. Our growth strategy, which has been improving our revenue mix in the last couple years, continued to contribute to commercial wins in the quarter. Our enhanced capabilities from the latest acquisitions of RBrasil and Interfile, combined with our new digital platform, will help Atento to drive future growth by expanding our portfolio of services to offer complete end-to-end solutions to our clients. Based on our results in the first half of 2017 and the strength of our commercial pipeline, we remain confident in the trajectory of our business and we are revising our full-year guidance, notably increasing our outlook for revenue growth."

Mr. Reynal continued, "Our new digital business unit continues to generate value for our clients and drive broad-based growth in each of our key markets. We recently announced a partnership with Keepcon, which will further expand our digital capabilities and allow us to provide differentiated customer experience solutions to generate competitive advantages for companies and increased satisfaction for consumers."

Mauricio Montilha, Atento´s Chief Financial Officer, said, "We strengthened our balance sheet and enhanced our financial flexibility through disciplined capital allocation and vigilance over working capital. Our recent debt refinancing improves our cash flow, is accretive to our bottom line and will further increase our financial flexibility to allow us to remain focused on targeting investments aligned with our growth strategy."

Second Quarter Consolidated Operating Results

All comparisons in this announcement, unless otherwise noted, are year-over-year, in constant-currency (CCY) and exclude the effects of our divestiture of Morocco in September 2016.

We continue to deliver solid topline growth, with consolidated revenue in constant currency up 2.4%, driven by the significant 5.8% growth in Brazil. Revenues from multisector grew a strong 8.5%, mainly in Brazil and Americas. As a percentage of revenues, multisector increased 390 basis points to a record 60.5% in Q2 2017, showing stability vs Q1 2017. Revenues from Telefonica remained stable versus Q1 2017, and declined 5.8% in the quarter, driven by lower volumes in Brazil, Mexico and Argentina. The mix of revenue from higher value-added solutions increased 330 basis points to 26.3% in the quarter. On a reported basis, total revenue increased 5.6%.

Recurring net income of $9.6 million, with recurring EPS of $0.13 flat year-over-year. Adjusted EBITDA reached $52.5 million, implying an 11.1% margin. Adjusted EBITDA margin was impacted by the ramp up of new clients and lower business volumes in Mexico and Argentina.

Operating cash flow totaled $30.0 million in the quarter, and free cash flow before interest and acquisitions totaled $15.4 million, with Adjusted EBITDA to cash conversion of 29.4% in the quarter.

At the end of the second quarter, the Company had a cash position of $146.3 million with a net debt of $400.4 million. Net Debt to adjusted EBITDA improved to 1.8x from 2.0x in 2016. Important to highlight that the leverage ratio does not consider the debt refinance announced in early August. On a pro-forma basis, leverage ratio would be 1.6x.

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



    ($ in millions) Q2 2017       Q2 2016        CCY growth        YTD 2017         YTD 2016          CCY growth
    --------------  -------       -------        ----------        --------         --------          ----------

    Brazil Region

    Revenue                 233.5          202.2              5.8%            471.8             384.7              5.5%

    Operating
     Income                  13.4           10.3             26.4%             32.1              17.4             66.3%

    Adjusted EBITDA          28.7           27.1             -1.0%             63.0              52.0              6.1%

    Margin                  12.3%         13.4%                             13.4%            13.5%
    ------                   ----           ----                               ----              ----

    Americas Region

    Revenue                 185.7          189.1             -0.3%            359.1             366.3             -0.3%

    Operating
     Income                  10.4           14.3            -26.8%             17.2              28.8            -39.6%

    Adjusted EBITDA          21.7           24.3            -11.8%             39.1              47.7            -18.0%

    Margin                  11.7%         12.9%                             10.9%            13.0%
    ------                   ----           ----                               ----              ----

    EMEA Region

    Revenue                  55.1           57.8             -2.0%            111.8             114.1              1.1%

    Operating
     Income                   1.2          (1.7)             N.M.              3.1             (4.9)              N.M

    Adjusted EBITDA           3.8            3.6              8.6%              8.1               6.3             28.6%

    Margin                   6.9%          6.2%                              7.2%             5.5%
    ------                    ---            ---                                ---               ---

Brazil Region

Revenues in the region continued to present significant growth, up 5.8% in Q2 2017, primarily driven by an increase of 11.2% in revenues from multisector supported by new services and client wins, mostly Non-Telefonica Telcos and financial services. Revenues from Telefonica decreased 4.4% in the quarter, driven by volume reductions, however was stable as compared to Q1 2017 and Q4 2016. As a percentage of revenues, multisector increased 3.3 percentage points to a record of 68.8% in Q2 2017, while revenue mix from higher value-added solutions reached 36.3%. On a reported basis, revenue increased 15.5% in Q2 2017.

Operating Income was $13.4 million, up 26.4% in Q2 2017. Adjusted EBITDA was $28.7 million, with an adjusted EBITDA margin of 12.3%, down 1.1 percentage points, driven by ramp up costs from newly acquired services and clients.

Americas Region

Americas revenue presented stability in Q2 2017 and year-to-date, down only 0.3% in both periods. Revenues from multisector presented a 6.5% increase in Q2 2017, driven by new client wins in Argentina, Colombia, Chile, and U.S. Nearshore. Revenues from Telefonica presented a decrease of 8.1% in Q2 2017, reflecting late 2016 volume reduction in Mexico and Argentina.

As a percentage of revenues, multisector reached 57.6% in Q2 2017, up 3.7 percentage points. The mix of revenue from higher value-added solutions increased 5.2 percentage points to historical high of 17.5%. On a reported basis, revenue declined 1.8% in Q2 2017.

Operating income was $10.4 million. Adjusted EBITDA was $21.7 million, with an adjusted EBITDA margin of 11.7%. Profitability decreased when compared to Q2 2016 due to the ramp up of new multisector clients in Argentina, Colombia and Chile, combined with volume adjustments from Telefonica in Mexico and Argentina.

EMEA Region

Revenue in EMEA decreased 2.0% in Q2 2017, driven by a 3.0% decline in revenues from Telefonica, partially offset by the stability in multisector revenues. Revenues from multisector increased 70 basis points to 35.7%, while the mix of revenue from higher value-added solutions increased 2.0 percentage points to 12.2%. On a reported basis, revenue declined 4.7% in Q2 2017.

Operating profit was $1.2 million in Q2 2017. Adjusted EBITDA was $3.8 million, with an adjusted EBITDA margin of 6.9%, up 70 basis points. The continued improvement in profitability was supported by improved business mix and lower fixed costs, as a result of cost saving initiatives implemented during 2016.

Strong Balance Sheet and Debt Refinancing Enhances Financial Flexibility

As of June 30, 2017, the Company had of $146.3 million and undrawn revolving credit facilities of EUR50 million, implying total liquidity of $203.4 million. Total net debt with third parties was $400.4 million and last twelve month (LTM) adjusted EBITDA to net debt with third parties was 1.8x compared to 2.0x at June 30, 2016. Including the debt refinancing, the pro forma leverage ratio would be 1.6x.

As announced on April 28, 2017, the Company continued the accelerated debt pay down program, with a voluntary payment of $27 million of higher-cost Brazil debentures. The $27 million payment was comprised of $20 million accelerated from Q4 2017 and $7 million from 2018.

On July 28, 2017, the Company announced that its wholly-owned subsidiary, Atento Luxco 1 S.A., issued a new Senior Secured Notes due 2022, in aggregate principal amount of US$400 million with a coupon on 6.125%. The proceeds, combined with the use of cash in hands, are being used to redeem all outstanding 7.375% Senior Secured Notes due 2020 and all the existing debentures due 2019 in Brazil. In addition, it was announced a new Revolver Credit Facility of $105 million to replace the current existing EUR50 million line. The debt refinancing reaffirms the commitment in strengthening balance sheet and improving financial flexibility. The debt refinance is estimated to reduce annual interest expense by $10-15 million as of 2018 versus the FY 2017 revised Guidance.



                            Debt Refinance - Overview
                            -------------------------

                   US$MM Actual                      Adjustments          Proforma
                   ----- ------                      -----------          --------


    Cash
     Balance                     146.3                                  -          146.3

    EUR
     RCF                          57.1                             (57.1)              -

     Undrawn
     SS
     RCF
     (Club
     Multicurrency)                  -                             +50.0            50.0

     Undrawn
     SS
     RCF
     (Bilateral
     Multicurrency)                  -                             +55.0            55.0

    (=)
     Total
     Liquidity                   203.4                               47.9           251.3

    1st
     Brazilian
     Debenture
     (CDI+3.7%)                 129.4                            (129.4)              -

    2nd
     Brazilian
     Debenture
     (CDI+3.75%)                 20.8                                  -           20.8

     7.375%
     Senior
     Secured
     Notes
     due
     2020                        304.2                            (304.2)              -

     6.125%
     Senior
     Secured
     Notes
     due
     2022                            -                            +400.0           400.0

     BNDES
     Credit
     Facility                     59.4                                  -           59.4

     Other
     Borrowings                   32.9                                  -           32.9

    (=)
     Total
     Debt                        546.7                              -33.6           513.1

    (=)
     Net
     Debt                        400.4                                             366.8

    Net
     Leverage
     (Net
     Debt
     /
     LTM
     Adj.
     EBITDA)              1.8x                                                     1.6x

Revising Fiscal 2017 Guidance

The Company is revising its guidance for Fiscal 2017, notably increasing its revenue growth target to 5% to 8%, on a constant currency basis, and reducing its net interest expense target to reflect the debt refinancing starting as of Q4 2017. The increase in effective tax rate to ~39%.



    Guidance                                  New                Prior
    --------                                  ---                -----

    Consolidated Revenue Growth (CCY)               5% to 8%           1% to 5%
    --------------------------------                 -------             -------

    Adjusted EBITDA Margin Range (CCY)            11% to 12%         11% to 12%
    ---------------------------------              ---------           ---------

    Net Interest Expense Range                $55MM to $60MM      $60MM to $65MM
    --------------------------                --------------      --------------

    Cash Capex (% of Revenue)                          ~3-4%              ~3-4%
    ------------------------                            ----                ----

    Effective Tax Rate                                  ~39%               ~34%
    ------------------                                   ---                 ---

    Diluted Share Count                 ~73.9MM shares       ~73.9MM shares
    -------------------                 --------------       --------------

    Cash Conversion as % of Adj. EBITDA                 ~40%               ~40%

This guidance assumes no change in the current operating environment, capital structure or exchange rates movements on the translation of our financial statements into U.S. dollars except where noted.

Conference Call

The Company will host a conference call and webcast for analysts on Tuesday, August 15, 2017 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 conference call will also be webcasted through a link on the Investor Relations website at investors.atento.com. A web-based archive of the conference call will also be available at the above website.

About Atento

Atento 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

Forward-Looking Statements

This 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.

SELECTED FINANCIAL DATA

The following selected financial information should be read in conjunction with the interim consolidated financial statements and the section entitled "Management's Discussion and Analysis of Financial Condition and Results of Operations" presented elsewhere in the Form 6-K.


                                                                                                           Consolidated Income Statements for the Three and Six Months Ended June 30, 2016 and 2017


    ($ in millions, except percentage changes)                                                             For the three months                   Change                  Change excluding           For the six months ended
                                                                                                              ended June 30,                                                                                 June 30,            Change      Change excluding
                                                                                                           --------------------                                                                     ------------------------

                                                 2016 (*)                                                                  2017                     (%)                         FX (%)                      2016 (*)               2017             (%)            FX (%)
                                                  -------                                                                  ----                     ---                          -----                        -------                ----             ---             -----

                                                                                                               (unaudited)                                                                                 (unaudited)

    Revenue                                                                                                               448.6                      473.7                               5.6                                 2.4       864.3                 941.7            9.0          2.7

    Other operating income                                                                                                  0.7                        8.3                              N.M.                               N.M.        1.5                   9.1           N.M.        N.M.

    Operating expenses:

    Supplies                                                                                                             (14.9)                    (17.5)                           (17.4)                             (15.9)     (29.9)               (34.3)        (14.7)       (9.2)

    Employee benefit expenses                                                                                           (338.3)                   (355.1)                            (5.0)                              (1.8)    (651.1)              (700.8)         (7.6)       (1.7)

    Depreciation                                                                                                         (11.8)                    (11.1)                              5.9                                 9.8      (22.4)               (22.9)         (2.2)         5.4

    Amortization                                                                                                         (13.3)                    (12.3)                              7.5                                10.9      (23.9)               (25.9)         (8.4)       (1.6)

    Changes in trade provisions                                                                                               -                       0.2                              N.M.                               N.M.      (0.3)                    -         100.0        100.0

    Other operating expenses                                                                                             (50.0)                    (63.5)                           (27.0)                             (22.1)    (101.1)              (119.3)        (18.0)       (9.1)
                                                                                                                          -----                      -----                             -----                               -----      ------                ------          -----         ----

    Total operating expenses                                                                                            (428.3)                   (459.3)                            (7.2)                              (3.9)    (828.7)              (903.2)         (9.0)       (2.7)
                                                                                                                         ------                     ------                              ----                                ----      ------                ------           ----         ----

    Operating profit                                                                                                       21.0                       22.7                               8.1                                 6.1        37.1                  47.6           28.3         22.4
                                                                                                                           ----                       ----                               ---                                 ---        ----                  ----           ----         ----

    Finance income                                                                                                          0.7                        1.5                             114.3                               114.3         2.2                   3.6           63.6         44.0

    Finance costs                                                                                                        (19.9)                    (16.0)                             19.6                                23.1      (37.8)               (33.5)          11.4         17.5

    Change in fair value of financial instruments                                                                           0.2                      (0.3)                             N.M.                               N.M.        0.7                 (0.3)       (142.9)     (142.9)

    Net foreign exchange gain/(loss)                                                                                      (9.2)                     (4.3)                             53.3                                52.7      (12.9)                (0.9)          93.0         93.0
                                                                                                                           ----                       ----                              ----                                ----       -----                  ----           ----         ----

    Net finance expense                                                                                                  (28.2)                    (19.1)                             32.3                                34.1      (47.8)               (31.1)          34.9         38.2
                                                                                                                          -----                      -----                              ----                                ----       -----                 -----           ----         ----

    (Loss)/profit before tax                                                                                              (7.2)                       3.6                             150.0                               147.4      (10.7)                 16.5           N.M.        N.M.
                                                                                                                           ----                        ---                             -----                               -----       -----                  ----           ----        ----

    Income tax expense                                                                                                    (0.6)                     (7.3)                 N.M.                                           N.M.      (1.5)               (11.1)          N.M.        N.M.

    (Loss)/profit from continuing operations                                                                              (7.8)                     (3.7)                             52.6                                56.0      (12.2)                  5.4          144.3        141.9

    Discontinued operations:

    Loss from discontinued operations                                                                                     (0.3)                         -                            100.0                               100.0       (0.7)                    -         100.0        100.0

    (Loss)/profit for the period                                                                                          (8.1)                     (3.7)                             54.3                                57.5      (12.9)                  5.4          141.9        139.7

    (Loss)/profit attributable to:

    Owners of the parent                                                                                                  (8.1)                     (3.9)                             51.9                                55.2      (12.9)                  5.1          139.5        137.5

    Non-controlling interest                                                                                                  -                       0.2                              N.M.                               N.M.          -                  0.3           N.M.        N.M.

    Other financial data:

    EBITDA (1) (unaudited)                                                                                                 46.1                       46.1                                 -                              (2.9)       83.4                  96.4           15.6          8.8

    Adjusted EBITDA (1) (unaudited)                                                                                        54.2                       52.5                             (3.1)                              (6.1)      103.0                 106.2            3.1        (3.2)


    (1)  For reconciliation with IFRS as issued by IASB, see section "Summary Historical Consolidated Financial Information - Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss)".

    (*) Restated, excluding discontinued operations - Morocco.

    N.M. means not meaningful



    Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss):


                                                                                                                                                                    For the three                    For the six

                                                                                                                                                                    months ended                     months ended

                                                                                                                                                                      June 30,                         June 30,
                                                                                                                                                                      --------                         --------

    ($ in millions)                                                                                                                                                            2016                             2017                               2016   2017
                                                                                                                                                                               ----                             ----                               ----   ----

                                                                                                                                                                         (unaudited)


    (Loss)/profit from continuing operations (*)                                                                                                                              (7.8)                           (3.7)                            (12.2)   5.4
                                                                                                                                                                               ----                             ----                              -----    ---

    Net finance expense (*)                                                                                                                                                    28.2                             19.1                               47.8   31.1

    Income tax expense (*)                                                                                                                                                      0.6                              7.3                                1.5   11.1

    Depreciation and amortization (*)                                                                                                                                          25.1                             23.4                               46.3   48.8
                                                                                                                                                                               ----                             ----                               ----   ----

    EBITDA (non-GAAP) (unaudited)                                                                                                                                              46.1                             46.1                               83.4   96.4
                                                                                                                                                                               ----                             ----                               ----   ----

    Restructuring costs (a)                                                                                                                                                     6.7                              5.5                               12.9    8.9

    Site relocation costs (b)                                                                                                                                                   0.2                                -                               5.9      -

    Asset impairments and Other (c)                                                                                                                                             1.2                              0.9                                0.8    0.9
                                                                                                                                                                                ---                              ---                                ---    ---

    Total non-recurring items (**)                                                                                                                                              8.1                              6.4                               19.6    9.8
                                                                                                                                                                                ---                              ---                               ----    ---

    Adjusted EBITDA (non-GAAP) (unaudited)                                                                                                                                     54.2                             52.5                              103.0  106.2
                                                                                                                                                                               ----                             ----                              -----  -----


    (*) The amounts of June 30, 2016, were restated excluding discontinued operations - Morocco.

    (**) We define non-recurring items as items that are limited in number, clearly identifiable, unusual, are unlikely to be repeated in the near future in the ordinary course of business and that have a material impact on the consolidated
     results of operations. Non-recurring items fall mainly into three categories of investment:


     The first includes investments to lower our variable
      cost structure, which is mostly labor, in response to
      the exceptional and severe adverse macroeconomic
      conditions in key markets such as Brazil, Spain and
      Mexico, which drove significant declines in volume.
      For the three months ended June 30, 2016 and 2017 we
      invested $3.2 million and $1.4 million, respectively,
      in these activities. Considering the six months ended
      June 30, 2016 and 2017, we invested $8.0 million and
      $3.8 million respectively in these activities.

     The second includes investments in Brazil, to relocate
      and consolidate our sites from higher to lower costs
      locations. This program started in 2014 when 53
      percent of our sites were in Tier 2 cities. For the
      three and six months ended June 30, 2016 we invested
      $0.1 million and $5.7 million in these activities. We
      have not invested in this program for the three and
      six months ended in June 30, 2017 as it was
      substantially completed in 2016. We ended the three
      months period at June 30, 2017 with 63.9% of our sites
      in Tier 2 cities.

     The third includes investments to drive a more
      sustainable lower-cost and competitive operating
      model, especially considering the exceptional adverse
      macroeconomic circumstances and associated declines in
      volume referenced above. For the three months ended
      June 30, 2016 and 2017 we invested $3.5 million and
      $4.1 million, respectively, in these activities.
      Considering the six months ended June 30, 2016 and
      2017, we invested $4.8 million and $5.1 million
      respectively in these activities. We expect that these
      adjustments continue until the third quarter of 2017,

    a)                  Restructuring costs for the three and
                        six month ended June 30, 2016, are
                        primarily related to costs to adapt the
                        organizations in EMEA and Brazil to
                        lower levels of activity and other
                        minor restructurings in the Americas.
                        Restructuring costs incurred in three
                        and six months ended June 30, 2017, are
                        primarily related to the costs of
                        adapting the organization in Argentina
                        and Brazil to the lower level of
                        activities and the investments made in
                        Brazil, Mexico and Spain to implement a
                        lower-cost operating model.


    b)                  Site relocation costs incurred for the
                        three and six months ended June 30,
                        2016 are related to the anticipation of
                        site closures in Brazil in connection
                        with the site relocation program.


    c)                  Asset impairments and other costs
                        incurred for the three months ended
                        June 30, 2016 and 2017 mainly refer to
                        consulting and other non-recurring
                        costs.


    Reconciliation of Adjusted Earnings to profit/(loss):


                                                                                                                                                                   For the three                     For the six

                                                                                                                                                                   months ended                     months ended

                                                                                                                                                                     June 30,                         June 30,
                                                                                                                                                                     --------                         --------

    ($ in millions)                                                                                                                                               2016                   2017                   2016                   2017
                                                                                                                                                                  ----                   ----                   ----                   ----

                                                                                                                                                                               (unaudited)

    (Loss)/profit from continuing operations (*)                                                                                                                 (7.8)                 (3.7)                (12.2)                   5.4
                                                                                                                                                                  ----                   ----                  -----                    ---

    Amortization of acquisition related intangible assets (a)                                                                                                      6.2                    4.3                   11.4                   11.1

    Restructuring costs (b) (**)                                                                                                                                   6.7                    5.5                   12.9                    8.9

    Site relocation costs (c) (**)                                                                                                                                 0.2                      -                   5.9                      -

    Asset impairments and Other (d) (**)                                                                                                                           1.2                    0.9                    0.8                    0.9

    Net foreign exchange gain on financial instruments (e)                                                                                                       (0.2)                   0.3                  (0.7)                   0.3

    Net foreign exchange impacts (f)                                                                                                                               9.2                    4.3                   12.9                    0.9

    Tax effect (g)                                                                                                                                               (6.0)                 (2.0)                (11.1)                 (5.4)
                                                                                                                                                                  ----                   ----                  -----                   ----

    Total of add-backs                                                                                                                                            17.3                   13.3                   32.1                   16.7
                                                                                                                                                                  ----                   ----                   ----                   ----

    Adjusted Earnings (non-GAAP) (unaudited)                                                                                                                       9.5                    9.6                   19.9                   22.1
                                                                                                                                                                   ---                    ---                   ----                   ----

    Adjusted basic Earnings per share (in U.S. dollars) (***) (unaudited)                                                                                         0.13                   0.13                   0.26                   0.30
                                                                                                                                                                  ----                   ----                   ----                   ----


    (*) The amounts of June 30, 2016 were restated excluding discontinued operations - Morocco.

    (**) We define non-recurring items as items that are limited in number, clearly identifiable, unusual, are unlikely to be repeated in the near future in the ordinary course of business and that have a material impact on the consolidated
     results of operations. Non-recurring items fall primarily into three categories of investment:


     The first includes investments to lower our variable
      cost structure, which is mostly labor, in response to
      the exceptional and severe adverse macroeconomic
      conditions in key markets such as Brazil, Spain and
      Mexico, which drove significant declines in volume.
      For the three months ended June 30, 2016 and 2017 we
      invested $3.2 million and $1.3 million, respectively,
      in these activities. Considering the six months ended
      June 30, 2016 and 2017, we invested $8.0 million and
      $3.7 million respectively in these activities.

     The second includes investments in Brazil, to relocate
      and consolidate our sites from higher to lower costs
      locations. This program started in 2014 when 53
      percent of our sites were in Tier 2 cities. For the
      three and six months ended June 30, 2016 we invested
      $0.1 million and $5.7 million in these activities. We
      have not invested in this program for the three and
      six months ended in June 30, 2017 as it was
      substantially completed in 2016. We ended the three
      months period at June 30, 2017 with 63.9% of our sites
      in Tier 2 cities.

     The third includes investments to drive a more
      sustainable lower-cost and competitive operating
      model, especially considering the exceptional adverse
      macroeconomic circumstances and associated declines in
      volume referenced above. For the three months ended
      June 30, 2016 and 2017 we invested $3.5 million and
      $4.0 million, respectively, in these activities.
      Considering the six months ended June 30, 2016 and
      2017, we invested $4.8 million and $5.0 million
      respectively in these activities. We expect that these
      adjustments continue until the third quarter of 2017,

    a)                   Amortization of acquisition related
                         intangible assets represents the
                         amortization expense of customer base,
                         recorded as intangible assets. This
                         customer base represents the fair
                         value (within the business combination
                         involving the acquisition of control
                         of Atento Group) of the intangible
                         assets arising from service agreements
                         (tacit or explicitly formulated in
                         contracts) with Telefonica Group and
                         with other customers.


    b)                   Restructuring costs for the three and
                         six month ended June 30, 2016, are
                         primarily related to costs to adapt
                         the organizations in EMEA and Brazil
                         to lower levels of activity and other
                         minor restructurings in the Americas.
                         Restructuring costs incurred in three
                         and six months ended June 30, 2017,
                         are primarily related to the costs of
                         adapting the organization in Argentina
                         and Brazil to the lower level of
                         activities and the investments made in
                         Brazil, Mexico and Spain to implement
                         a lower-cost operating model.


    c)                   Site relocation costs incurred for the
                         three and six months ended June 30,
                         2016 are related to the anticipation
                         of site closures in Brazil in
                         connection with the site relocation
                         program.


    d)                   Asset impairments and other costs
                         incurred for the three months ended
                         June 30, 2016 and 2017 mainly refer to
                         consulting and other non-recurring
                         costs.


    e)                   Since April 1, 2015, the Company
                         designated the foreign currency risk
                         on certain of its subsidiaries as net
                         investment hedges using financial
                         instruments as the hedging items. As a
                         consequence, any gain or loss on the
                         hedging instrument, related to the
                         effective portion of the hedge is
                         recognized in other comprehensive
                         income (equity) as from that date. The
                         gains or losses related to the
                         ineffective portion are recognized in
                         the income statements and for
                         comparability, and those adjustments
                         are added back to calculate Adjusted
                         Earnings.


    f)                   Since 2015, our management analyzes the
                         Company financial condition
                         performance excluding net foreign
                         exchange impacts, which eliminates the
                         volatility of foreign exchange
                         variances from our operational
                         results.


    g)                   The tax effect represents the impact of
                         the taxable adjustments based on tax
                         rate of 13.1% for the three months
                         period ended June 30, 2017, 30.4% for
                         the same period ended June 30, 2016,
                         24.4% for the six month period ended
                         June 30, 2017 and 29.4% for the same
                         period ended June 30, 2016.


    (***)                Adjusted Earnings per share, is
                         calculated based on the weighted
                         average number of ordinary shares
                         outstanding of 73,909,056 as of June
                         30, 2017. For the period ended June
                         30, 2016 the weighted average number
                         of ordinary shares outstanding was
                         73,751,131.

Financing Arrangements


                                                          As of June 30,
                                                          --------------

    ($ in millions, except Net Debt/Adj. EBITDA LTM)         2016         2017
                                                             ----         ----

                                                          (unaudited)

    Cash and cash equivalents                               159.5        146.3

    Debt:

         7.375% Senior Secured Notes due 2020               302.5        304.2

         Brazilian Debentures                               204.9        150.2

         Contingent Value Instrument (1)                     23.9            -

         Finance Lease Payables                               4.1          9.1

         Other Borrowings                                    83.2         83.2
                                                             ----         ----

    Total Debt                                              618.6        546.7
                                                            -----        -----

    Net Debt with third parties (2) (unaudited)             459.1        400.4
                                                            -----        -----

       Adjusted EBITDA LTM (3) (*) (non-GAAP) (unaudited)   232.1        225.2
                                                            -----        -----

    Net Debt/Adjusted EBITDA LTM (non-GAAP) (unaudited)      2.0x        1.8x
                                                             ----        ----


    (*)                Restated, excluding discontinued
                       operations - Morocco.

    (1)                The CVI was terminated on
                       November 8, 2016.

    (2)                In considering our financial
                       condition, our management
                       analyzes Net debt with third
                       parties, which is defined as
                       total debt less cash and cash
                       equivalents. Net debt with third
                       parties is not a measure defined
                       by IFRS and it has limitations
                       as an analytical tool. Net debt
                       with third parties is neither a
                       measure defined by or presented
                       in accordance with IFRS nor a
                       measure of financial
                       performance, and should not be
                       considered in isolation or as an
                       alternative financial measure
                       determined in accordance with
                       IFRS. Net debt is not
                       necessarily comparable to
                       similarly titled measures used
                       by other companies.

    (3)                Adjusted EBITDA LTM (Last Twelve
                       Months) is defined as EBITDA
                       adjusted to exclude
                       restructuring costs, site
                       relocation costs, asset
                       impairments and other items not
                       related to our core results of
                       operations.

Free Cash Flow:


                                              Q2                 YTD

    Free Cash Flow (FCF) US$ MM          2017       2016     2017        2016
    ---------------------------          ----       ----     ----        ----

    Operating Cash Flow (1)              30.0       62.1     40.1        60.2

    Cash Capex (2)                     (10.1)    (20.6)  (24.2)     (39.7)

    Income Tax Paid                     (4.4)     (7.7)  (10.1)     (14.2)

    Free Cash Flow before interest and
     Acquisitions                        15.4       33.8      5.8         6.3
    ----------------------------------   ----       ----      ---         ---

    Adj. EBITDA to Cash Conversion (%) 29.4%     62.3%    5.4%       6.1%

    Acquisitions                       (27.1)       0.0   (27.1)        0.0

    Net Interest Paid                  (14.8)    (21.7)  (28.5)     (36.1)

    Free Cash Flow (FCF)               (26.5)      12.1   (49.9)     (29.8)
    -------------------                 -----       ----    -----       -----


    (1)              We define Operating Cash flow
                     as Net Cash flow from/(used
                     in) operating activities (as
                     per 6K) adding back net
                     interest and income tax
                     expenses.

    (2)             Does not consider acquisitions

View original content with multimedia:http://www.prnewswire.com/news-releases/atento-reports-fiscal-2q17-results-highlighted-by-continuation-of-topline-growth-300504215.html

SOURCE Atento S.A.