1. business and industrial

April 24, 2015
Dear Fellow Shareholders,
I am honored to write to you as Chief Executive Officer of Atento in this, our first shareholder letter
as a public company. Atento is a terrific story built over the last 16 years by an inspiring group of
people committed to make every customer interaction a unique and quality experience. We are
very proud of what we have accomplished so far, but more importantly, we are extremely excited
by the tremendous opportunities ahead.
This past year has been a milestone year for Atento as we successfully completed our initial public
offering in October, and delivered strong results for the full year. We have made significant
progress towards the execution of our comprehensive strategic initiatives to establish the
foundation for sustainable profitable growth, and ultimately to drive value creation for our
shareholders.
In this letter, we will discuss the financial highlights of 2014, provide an update on various
operational initiatives, and outline our priorities for 2015; but first, I want to provide a brief
overview of Atento as we stand today.
At Atento, we make companies successful by delivering the best customer experience for their
clients. This is the mission that inspires us every single day and what has driven our success. Over
the last 16 years, our company has become the largest provider of customer relationship
management and business process outsourcing (CRM BPO) services in Latin America and Spain, and
among the top three providers globally, based on revenues. Our business was founded in 1999 as
the CRM BPO service to the Telefónica Group. In December 2012, Atento was acquired by Bain
Capital in a successful and timely carve-out from Telefónica without any disruption to our
operations. In 2013, Atento launched a new company strategy to become the number one
customer experience solutions provider in all of our markets, while delivering high single digit
growth rates (in constant currency) with an industry leading margin profile. In October 2014, we
successfully completed our initial public offering and began trading on the NYSE under the symbol
“ATTO”. We view the IPO as a significant milestone for Atento, but not our ultimate destination.
We are the market leader in most of the countries where we operate. We have achieved our
leadership position through our dedicated focus on superior client service, our scaled and reliable
technology and operational platform, a deep understanding of our clients’ diverse local needs and
our highly engaged employee base. We offer a comprehensive portfolio of CRM BPO services and
solutions. We have long standing relationships with over 400 blue chip clients across a diverse
range of sectors such as telecommunications, financial services and multi-sector, which for us
comprises the consumer goods, services, public administration, healthcare, transportation,
technology and media industries. At the end of 2014, we had over 154,000 employees and over
86,000 workstations worldwide, with 93 contact centers in 14 countries.
1
At the heart of Atento are our four core values:




Commitment. We are committed to our clients’ success
Trust. We ensure trust, transparency and respect in all our stakeholder relationships
(clients, employees, vendor partners, society and investors)
Integrity. We behave with integrity, staying true to our values, strongly defending what we
believe in and taking responsibility for our actions
Passion. We work with passion, enthusiasm and ambition to be better every day
By embodying these core values across the entire organization, we believe we can achieve our
mission to help make our clients successful by delivering the best experience for their customers,
and our goal to significantly outperform the expected market growth by being our clients’ partner of
choice for their customer experience.
Financial Highlights
We delivered strong financial results in 2014, further strengthening our position as the leading
player in the fast-growing Latin American CRM BPO market. Revenue increased by high single digit
growth rates or 7.7% on a constant currency basis, driven by strong growth in the Americas and
Brazil regions, which combined grew at double digit growth rates despite a range of macroeconomic conditions. We continued to execute on our revenue diversification strategy with
significant customer wins in both the telco and non-telco sectors. Revenue with clients other than
Telefónica represented 53% of total revenue in 2014, an increase of 2% as compared to the prior
year, and we expect this trend to continue as we leverage our new standing as a fully independent
public company.
More importantly, we delivered profitable growth throughout the year, fueled by improved
productivity, reduced turnover and overall efficiencies. Our ongoing operational improvements
through the implementation of our margin transformational initiatives drove a 70 bps improvement
in our adjusted EBITDA margin as compared to the prior year.
We also continued to make significant progress across our regions during the year. In Brazil, our
main market, we achieved a remarkable 110 bps expansion in adjusted EBITDA margin versus the
prior year. We also delivered 8% growth on a constant currency basis, which we believe is
particularly notable when compared to the GDP growth rate in the country, and further highlights
the resilience of our business, and our ability to successfully execute despite operating in
challenging macro environments. Our Americas business also achieved solid results and delivered
revenue growth of 15%. In EMEA, we have completed a restructuring process to optimize our
operations. Finally, we continued to make great progress in reinforcing our capital structure and
enhancing our financial flexibility. During the year, we improved our liquidity position through
improved cash flow generation, and reduced our leverage to 1.4x at the end of 2014, as compared
to 2.2x at the end of 2013.
2
Strategy for Sustained Growth and Value Creation
It is our mid-term vision to become the leading customer experience solutions provider in all of our
markets, while delivering high single digit growth rates (in constant currency) with an industry
leading margin profile. To achieve our goals, we have developed a strategy for sustained growth
and strong value creation across three main pillars: 1) above market growth, 2) best-in-class
operations and 3) inspiring people.
Above Market Growth Drivers
We have implemented a series of initiatives to capture the tremendous growth potential that we
see ahead for our company.
First, we are focused on developing and providing high value-added customer experience solutions
to address untapped client growth opportunities and increase our share of wallet, which broadens
the depth of our client relationships, with the added benefit of achieving greater profitability. In
2014, we increased our solutions penetration to over 23% of revenue, an increase of 1.4% as
compared to last year. In Brazil where we initially launched this initiative, over 30% of sales come
from higher value-added solutions. We believe this provides an indication of the growth potential
ahead in Brazil as well as our other markets. We believe this will be an important growth driver for
Atento going forward, as we expand our business with existing customers and attract new
customers.
Second, we are aggressively growing our client base with a focus on leveraging our strong telco
credentials to expand our penetration within this vertical. As a fully independent company from
Telefónica, we have seen a significant increase in interest from the number of telco companies
seeking to partner with us. In fact, last year, we were awarded contracts with a leading Latin
America regional telco company for over 2,000 workstations in five countries, including a sizeable
operation in Colombia. We have also achieved success outside of the telco vertical, where we have
significant customer wins representing over 3,200 workstations, including a large carve-out with a
leading retailer in Brazil of over 1,000 workstations. We are confident that we can sustain the
positive momentum we have generated with this initiative.
Finally, we have identified the U.S. near-shore market as a high potential opportunity for Atento.
While we have only just started to address this market in 2014, we are very focused on expanding
our market penetration. Our commitment to this business is reflected in our investments in a
dedicated commercial sales team with significant experience in the near-shore market and the build
out of two dedicated world-class facility delivery centers in Guatemala and El Salvador. We have
added nearly 500 workstations to serve five premier U.S. clients in several verticals, including telco,
retail, and consumer goods. We are extremely encouraged by our early success thus far.
Best-in-Class Operations to Enhance Productivity
During the year, we implemented a series of initiatives focused on enhancing our efficiency and
productivity by increasing the consistency of our operations through planning and forecasting
process improvement, and leveraging our scale to set the standard for competitiveness within the
industry. This effort was facilitated by the build out of a state-of-the-art Command Center to
3
centralize the management of our operations in Brazil, as well as host a highly specialized analytics
unit and an HR service center unit. We are extremely pleased with our productivity gains from this
initiative, and we believe we can replicate this model in our other geographies to drive further
synergies. Our HR effectiveness initiatives have helped us to reduce our turnover ratio by 1%
through improved sourcing, selection and training processes. Within our initiatives to enhance
productivity, the implementation of a global centralized procurement model during the year
allowed us to leverage our scale to increase our bargaining power with our main suppliers to reduce
overall costs. Finally, we also continued to focus on our site footprint optimization program, which
have been an ongoing effort since 2012. In 2014 in Brazil, we completed the first phase of our site
relocation initiative with over 1,400 workstations (or 53% of all workstations) being moved into
more competitive tier 2 cities.
Inspiring People Leading a High Performance Organization
During the year, we executed a series of initiatives aimed at driving our culture, people and
organization to the next level to consistently meet and exceed the needs of our clients and their end
customers. We further strengthened our executive team with the addition of a number of worldclass hires, resulting in a robust mix of tenured professionals and new high profile talent. In 2014,
we also completed the relocation of our headquarters to be closer to our operations. We now have
corporate teams operating in Sao Paulo, Mexico City and Madrid, which allows us to run a truly
globally integrated enterprise.
We continue to receive industry recognition for the strong culture and workplace environment that
we have been able to provide to our people. For the second consecutive year, we were recognized
as one of the world’s top 25 best multinationals to work by the Great Place to Work Institute – in
addition, 10 of our country organizations were also recognized as Best Workplaces. This is a clear
illustration of the high levels of employee satisfaction and engagement that we have attained at
Atento. We are extremely proud of the unique culture that we have built at Atento, and we truly
view our people and our organization as the linchpin to our continued success.
I am convinced that we have built a strong foundation and implemented the right strategic
initiatives for Atento to reach its full potential and, therefore, to deliver superior earnings growth
and drive sustainable value creation for our shareholders. It is our goal to become the number one
customer experience solutions provider in all of the markets where we operate. Our unrivaled
market leadership in Latin America and our blue chip client base positions us very favorably to
capture the expected growth in the region. We remain extremely focused on capturing the
opportunities to expand into new clients, gaining share of wallet for increasingly complex customer
experience solutions, addressing the attractive U.S. near-shore market, and reaping the full benefits
from our margin expansion and enhanced productivity initiatives.
In closing, I would like to reiterate that we are extremely proud of our performance in 2014. We
further strengthened our position as the leading player in the fast-growing Latin America CRM BPO
market, despite a range of adverse macro-economic conditions, and we delivered high single digit
growth rates and an industry-leading profitability.
4
The Atento team is comprised of more than 154,000 dedicated and talented people worldwide,
unified by the singular vision to become the customer experience solutions provider that all clients
aspire to work with. As an organization, we are committed to driving Atento to achieve its full
potential as a fully independent public company. We remain focused on executing the strategy we
have communicated in order to deliver sustainable growth and strong value creation for our
shareholders. I´m convinced that our business benefits from very solid business fundamentals. Our
solid commercial pipeline and client wins achieved in 2014, combined with the strong momentum
of our on-going efficiency programs, provide us with good visibility to achieve our objectives in
2015.
To my fellow shareholders, thank you for your continued support and investment in Atento.
Sincerely,
Alejandro Reynal
Chief Executive Officer
5