Atento Reports Fiscal 2017 Fourth-Quarter and Full Year Results, Highlighted by Revenue and EPS Growth

($ in millions except EPS)

Q4 2017

Q4 2016

CCY
Growth

FY 2017

FY 2016

CCY
Growth

Income Statement

Revenue ⁽¹⁾

478.3

442.0

+5.7%

1,921.3

1,757.5

+5.1%

Adjusted EBITDA ⁽³⁾

55.1

58.6

-8.4%

221.0

221.9

-4.7%

Adjusted EBITDA Margin⁽³⁾

11.5%

13.3%

-1.8pp

11.5%

12.6%

-1.1pp

Recurring Net Income ⁽²⁾

15.9

13.8

+11.7%

55.2

48.1

+14.9%

Recurring Earnings Per Share ⁽²⁾

$0.21

$0.19

+11.4%

$0.75

$0.65

+14.8%

Reported EBITDA ⁽²⁾

46.1

80.9

-47.1%

196.9

213.7

-13.0%

Reported Net Income/(Loss) ⁽²⁾

(8.9)

16.7

n.m.

(13.6)

0.2

n.m.

Reported Earnings Per Share ⁽²⁾

($0.12)

$0.23

($0.18)

($0.00)

n.m.

Cashflow, Debt and Leverage

FCF before Interest and Acquisitions ^(4,5)

26.3

90.0

81.0

145.0

Net Debt

344.5

340.9

Leverage (x)

1.6x

1.5x

(1)

Revenue excludes Morocco which was divested in September 2016. Please refer to the MD&A section of the Q4 2017 6K for more details.

(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 December 31, 2017, were calculated considering the weighted average number of ordinary shares of 73,909,056. For the period ended December 31, 2016, the number of ordinary shares was 73,816,933. Recurring Earnings and EPS attributable to Owners of the parent

(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 restructuring costs, site relocation costs and other items not related to our core results of operations. EBITDA and Adjusted EBITDA are not measures defined by IFRS. The most directly comparable IFRS measure to EBITDA and Adjusted EBITDA is profit/(loss) for the year/period from continuing operations.

(4)

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

(5)

Exceptionally higher cash conversion in Q4 2016 reflected by one-off impacts from the MSA renegotiation

($ in millions)

Q4 2017

Q4 2016

CCY
growth

FY 2017

FY 2016

CCY
growth

Brazil Region

Revenue

224.5

214.4

+2.9%

944.8

816.4

+6.3%

Operating Income

(0.2)

1.3

-116.4%

13.7

3.1

n.m.

Adjusted EBITDA

29.6

35.9

-18.9%

124.7

121.0

-4.1%

Margin

13.2%

16.7%

13.2%

14.8%

Americas Region

Revenue

200.6

172.8

+14.9%

758.0

718.9

+6.1%

Operating Income

3.1

21.2

-87.2%

8.6

41.3

-80.7%

Adjusted EBITDA

20.6

19.6

+4.0%

83.5

92.0

-9.1%

Margin

10.3%

11.3%

11.0%

12.8%

EMEA Region

Revenue

56.5

55.3

-6.1%

223.4

223.9

-1.9%

Operating Income/(Loss)

(1.2)

(1.7)

-36.1%

(13.6)

(18.1)

-26.2%

Adjusted EBITDA

3.2

5.1

-46.1%

14.8

16.3

-13.4%

Margin

5.7%

9.2%

6.6%

7.3%

Guidance

Consolidated Revenue Growth (CCY)

3% to 6%

Adjusted EBITDA Margin Range (CCY)

11% to 12%

Net Interest Expense Range

$40MM to $45MM

Cash Capex (% of Revenue)

3.5% to 4.0%

Effective Tax Rate impacting Rec. Net Income

35% to 38%

Diluted Share Count

~73.9MM shares

Cash Conversion as % of Adj. EBITDA

35% to 40%

Consolidated Statements of Operations for the Years Ended December 31, 2015, 2016 and 2017

($ in millions, except percentage changes)

For the year ended
December 31,

Change
(%)

Change
excluding
FX (%)

For the year ended
December 31,

Change
(%)

Change
excluding
FX (%)

2015 ^(*)

2016

2017

(audited)

(unaudited)

Revenue

1,949.9

1,757.5

(9.9)

(1.4)

1,921.3

9.3

5.1

Other operating income

4.3

5.8

34.9

45.0

16.4

N.M.

N.M.

Other gains and own work capitalized ⁽¹⁾

-

41.8

N.M.

N.M.

0.4

(99.1)

(99.2)

Operating expenses:

Supplies

(77.6)

(65.6)

(15.5)

(7.0)

(74.9)

14.2

10.1

Employee benefit expenses

(1,410.5)

(1,309.9)

(7.1)

1.7

(1,429.1)

9.1

5.0

Depreciation

(50.1)

(46.4)

(7.4)

(0.4)

(49.2)

6.1

0.8

Amortization

(51.4)

(50.9)

(1.0)

6.3

(55.2)

8.4

3.3

Changes in trade provisions

(1.3)

(1.9)

46.2

46.2

(0.6)

(67.0)

(68.5)

Other operating expenses

(241.5)

(214.0)

(11.4)

(4.8)

(236.6)

10.6

5.3

Total operating expenses

(1,832.4)

(1,688.7)

(7.8)

0.6

(1,845.7)

9.3

5.0

Operating profit

121.8

116.4

(4.4)

7.5

92.4

(20.6)

(25.4)

Finance income

15.5

7.2

(53.5)

(49.7)

7.9

9.1

2.5

Finance costs ⁽¹⁾

(75.5)

(59.2)

(21.6)

(17.3)

(78.1)

32.0

28.1

Change in fair value of financial instruments

17.5

0.7

(96.0)

(96.0)

0.2

(67.2)

(66.0)

Net foreign exchange loss ⁽¹⁾

(3.9)

(56.5)

N.M.

N.M.

(23.4)

(58.5)

(61.6)

Net finance expense

(46.4)

(107.8)

132.3

N.M.

(93.5)

(13.3)

(17.8)

Profit/(loss) before income tax

75.4

8.6

(88.6)

(87.3)

(1.0)

(112.0)

(110.1)

Income tax expense

(23.2)

(5.2)

(77.6)

(74.5)

(12.5)

141.0

144.1

Profit/(loss) from continuing operations

52.2

3.4

(93.5)

(92.8)

(13.6)

N.M.

N.M.

Discontinued operations:

Loss from discontinued operations

(3.1)

(3.2)

3.2

6.7

-

(100.0)

(100.0)

Profit/(loss) for the year

49.1

0.2

(99.6)

(99.6)

(13.6)

N.M.

N.M.

Profit/(loss) attributable to:

Owners of the parent

49.1

0.1

(99.8)

(99.8)

(16.8)

N.M.

N.M.

Non-controlling interest

-

0.1

N.M.

N.M.

3.2

N.M.

N.M.

Other financial data:

EBITDA ⁽²⁾ (unaudited)

223.3

213.7

(4.3)

5.4

196.9

(7.9)

(13.0)

Adjusted EBITDA ⁽²⁾ (unaudited)

249.7

221.9

(11.1)

(3.6)

221.0

(0.4)

(4.7)

(1) The year ended December 31, 2016 contains the impacts of the CVI termination. The reversal of the principal amount of $41.7 million was recognized in
"Other gains", the interest reversal of $19.9 million was recognized in "Finance costs" and the loss of $35.4 million on the conversion of Argentine pesos to
U.S. dollars was recognized in "Net foreign exchange loss".

(2) See section "Summary Consolidated Historical Financial Information - Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss)" for a reconciliation of
our profit/(loss) to EBITDA and Adjusted EBITDA.

(*) Exclude discontinued operations - Morocco.

N.M. means not meaningful

Consolidated Statements of Operations for the Three Months Ended December 31, 2016 and 2017

($ in millions, except percentage changes)

For the three months ended
December 31,

Change (%)

Change excluding
FX (%)

2016

2017

(unaudited)

Revenue

442.0

478.3

8.2

5.7

Other operating income

2.4

2.6

7.3

0.6

Other gains and own work capitalized ⁽¹⁾

41.8

0.3

(99.3)

(99.3)

Operating expenses:

Supplies

(18.6)

(19.8)

6.6

3.4

Employee benefit expenses

(329.5)

(359.1)

9.0

6.6

Depreciation

(12.0)

(11.9)

(0.5)

(3.0)

Amortization

(13.4)

(14.1)

5.3

1.9

Changes in trade provisions

(1.5)

(0.6)

(59.0)

(58.7)

Other operating expenses

(55.7)

(55.6)

(0.3)

(2.6)

Total operating expenses

(430.7)

(461.1)

7.1

4.7

Operating profit

55.5

20.1

(63.8)

(67.1)

Finance income

2.8

1.8

(34.6)

(34.6)

Finance costs ⁽¹⁾

0.6

(10.1)

N.M.

N.M.

Change in fair value of financial instruments

0.1

2.9

N.M.

N.M.

Net foreign exchange loss ⁽¹⁾

(41.2)

(19.3)

(53.2)

(57.9)

Net finance expense

(37.7)

(24.7)

(34.5)

(39.3)

Profit/(loss) before income tax

17.8

(4.6)

(126.1)

(123.0)

Income tax expense

(1.1)

(4.3)

N.M.

N.M.

Profit/(loss) from continuing operations

16.7

(8.9)

N.M.

N.M.

Profit/(loss) for the period

16.7

(8.9)

N.M.

N.M.

Profit/(loss) attributable to:

Owners of the parent

16.7

(9.9)

N.M.

N.M.

Non-controlling interest

-

1.0

N.M.

N.M.

Other financial data:

EBITDA ⁽²⁾ (unaudited)

80.9

46.1

(43.0)

(47.1)

Adjusted EBITDA ⁽²⁾ (unaudited)

58.6

55.1

(5.9)

(8.4)

(1) The three months ended December 31, 2016 contains the impacts of the CVI termination. The reversal of the principal amount of $41.7 million was
recognized in "Other gains", the interest reversal of $19.9 million was recognized in "Finance costs" and the loss of $35.4 million on the conversion of Argentine
pesos to U.S. dollars was recognized in "Net foreign exchange loss".

(2) See section "Summary Consolidated Historical Financial Information - Reconciliation of EBITDA and Adjusted EBITDA to profit/(loss)" for a reconciliation of
our profit/(loss) to EBITDA and Adjusted EBITDA.

N.M. means not meaningful

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

For the year ended
December 31,

For the three months ended
December 31,

($ in millions)

2015

2016

2017

2016

2017

(unaudited)

Profit/(loss) from continuing operations

52.2

3.4

(13.6)

16.7

(8.9)

Net finance expense

46.4

107.8

93.5

37.7

24.7

Income tax expense

23.2

5.2

12.5

1.1

4.3

Depreciation and amortization

101.5

97.3

104.4

25.4

26.0

EBITDA (non-GAAP) (unaudited)

223.3

213.7

196.9

80.9

46.1

Acquisition and integration related costs ^(a)

0.1

-

-

-

-

Restructuring costs ^(b)

15.8

33.7

16.8

14.7

6.5

Site relocation costs ^(c)

3.4

9.3

-

2.8

-

Financial fees ^(d)

0.3

-

-

-

-

Contingent Value Instrument ^(e)

-

(41.7)

-

(41.7)

-

Asset impairments and Other ^(f)

6.8

6.9

7.3

1.9

2.5

Total non-recurring items ^(*)

26.4

8.2

24.1

(22.3)

9.0

Adjusted EBITDA (non-GAAP) (unaudited)

249.7

221.9

221.0

58.6

55.1

(*)  

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 can be summarized as demonstrated below:

a) 

Acquisition and integration related costs incurred in 2015 are costs associated with the post-acquisition process in connection with a full strategy review and our SAP IT transformation project. These projects were substantially completed by the end of 2015.

b) 

Restructuring costs incurred in 2015 and 2016 primarily included several restructuring activities and other personnel costs that were not related to our core result of operations. Restructuring costs incurred for year ended December 31, 2015 are primarily related to headcount restructuring activities in Spain. In addition, we incurred restructuring costs not related to our core results of operations in Argentina and Peru of $4.8 million, $2.5 million in Chile of restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica, and certain changes to the executive team, and an additional $0.7 million related to the relocation of our corporate headquarters. Restructuring costs for the three months and year ended December 31, 2016 and 2017 are compounded of two main concepts: i) investments to lower our variable cost structure, which is mostly labor and ii) investments to drive a more sustainable lower-cost and competitive operating model. Both were direct response to the exceptional and severe adverse macroeconomic conditions in key markets such as Spain, Argentina, Brazil, Mexico and Puerto Rico, which drove significant declines in volume. The restructuring program carried out in 2017 to adjust the indirect costs structure has been finalized in the fourth quarter of 2017.

c) 

Site relocation costs incurred in the year ended December 31, 2015 and 2016 include costs associated with our strategic initiative to relocate call centers from tier 1 cities to tier 2 cities in Brazil to achieve efficiencies through lower rental costs, attrition and absenteeism. Site relocation costs incurred for three months and year ended December 31, 2016 are related to the 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. We have not invested in this program for the three months and year ended December 31, 2017 as it was completed in 2016.

d) 

Financing fees for the year ended December 31, 2015 primarily relate to non-core professional fees incurred during the IPO process, including advisory, auditing and legal expenses.

e) 

On November 8, 2016 the CVI nominal value of ARS666.8 million, or $135.6 million, was terminated. As a result, during the fourth quarter we recognized a gain of $41.7 million in "Other gains" representing the principle amount of the CVI.

f)  

Asset impairments and other costs incurred for the year ended December 31, 2015 mainly relate to the impairment of goodwill and other intangible assets in the Czech Republic (divested in December 2014) of $3.7 million and Spain of $28.8 million, offset by the amendment of the MSA with Telefónica, by which the minimum revenue commitment for Spain was reduced against a $34.5 million penalty fee paid by Telefónica. Other non-recurring items for three months and year ended December 31, 2016 refer mainly to other costs with the sale of Morocco operation related to the accrual of the reserve in amount of $3.1 million as guarantee to the buyer for potential indemnity related to eventual liability assessed from the period before the sale. For 2017 non-recurring items relates mostly to the recognition of the costs incurred or expected to be incurred to recover the operations in Mexico and Puerto Rico affected by recent natural disasters. These estimated costs of $3.2 million are related to third quarter of 2017 and includes costs that were incurred but could not be charged to customers (mainly salaries and benefits) and other extraordinary costs related to the natural disasters. In addition, there were costs incurred on the secondary offer process occurred in November.

Reconciliation of Adjusted Earnings to profit/(loss):

For the year ended
December 31,

For the three months ended
December 31,

($ in millions)

2015

2016

2017

2016

2017

(unaudited)

Profit/(loss) from continuing operations

52.2

3.4

(13.6)

16.7

(8.9)

Acquisition and integration related costs ^{(a) (*)}

0.1

-

-

-

-

Amortization of acquisition related intangible assets ^(b)

27.5

24.2

22.4

6.3

5.6

Restructuring costs ^{(c) (*)}

15.8

33.7

16.8

14.7

6.5

Site relocation costs ^{(d) (*)}

3.4

9.3

-

2.8

-

Financing fees ^{(e) (*)}

0.3

-

-

-

-

Asset impairments and Other ^{(f) (*)}

6.8

6.9

7.3

1.9

2.5

DTA adjustment in Spain ^(g)

1.5

-

-

-

-

Net foreign exchange gain on financial instruments ^(h)

(17.5)

(0.7)

(0.2)

(0.1)

(2.9)

Net foreign exchange impacts ⁽ⁱ⁾

4.0

21.1

23.4

5.8

19.3

Contingent Value Instrument ^(j)

-

(26.2)

-

(26.2)

-

Financial non-recurring ^(k)

-

-

17.7

-

-

Depreciation non-recurring ^(l)

-

-

2.8

-

-

Tax effect ^(m)

(16.2)

(23.5)

(18.2)

(8.1)

(5.2)

Total of add-backs

25.7

44.8

72.0

(2.9)

25.8

Adjusted Earnings (non-GAAP) (unaudited)

77.9

48.2

58.4

13.8

16.9

Adjusted Earnings per share (in U.S. dollars) ^(**) (unaudited)

1.06

0.65

0.79

0.19

0.23

Adjusted Earnings attributable to Owners of the parent (non-GAAP)
(unaudited)

77.9

48.1

55.2

13.8

15.9

Adjusted Earnings per share attributable to Owners of the parent
(in U.S. dollars) ^(**) (unaudited)

1.06

0.65

0.75

0.19

0.21

(*) 

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 can be summarized as demonstrated below:

a) 

Acquisition and integration related costs incurred in 2015 are costs associated with the post-acquisition process in connection with a full strategy review and our SAP IT transformation project. These projects were substantially completed by the end of 2015.

b) 

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 Telefónica Group and with other customers.

c) 

Restructuring costs incurred in 2015 and 2016 primarily included several restructuring activities and other personnel costs that were not related to our core result of operations. Restructuring costs incurred for year ended December 31, 2015 are primarily related to headcount restructuring activities in Spain. In addition, we incurred restructuring costs not related to our core results of operations in Argentina and Peru of $4.8 million, $2.5 million in Chile of restructuring expenses incurred in connection with the implementation of a new service delivery model with Telefónica, and certain changes to the executive team, and an additional $0.7 million related to the relocation of our corporate headquarters. Restructuring costs for the three months and year ended December 31, 2016 and 2017 are compounded of two main concepts: i) investments to lower our variable cost structure, which is mostly labor and ii) investments to drive a more sustainable lower-cost and competitive operating model. Both were direct response to the exceptional and severe adverse macroeconomic conditions in key markets such as Spain, Argentina, Brazil, Mexico and Puerto Rico, which drove significant declines in volume. The restructuring program carried out in 2017 to adjust the indirect costs structure has been finalized in the fourth quarter of 2017.

d) 

Site relocation costs incurred in the year ended December 31, 2015 and 2016 include costs associated with our strategic initiative to relocate call centers from tier 1 cities to tier 2 cities in Brazil to achieve efficiencies through lower rental costs, attrition and absenteeism. Site relocation costs incurred for three months and year ended December 31, 2016 are related to the 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. We have not invested in this program for the three months and year ended December 31, 2017 as it was completed in 2016.

e) 

Financing fees for the year ended December 31, 2015 primarily relate to non-core professional fees incurred during the IPO process, including advisory, auditing and legal expenses.

f) 

Asset impairments and other costs incurred for the year ended December 31, 2015 mainly relate to the impairment of goodwill and other intangible assets in the Czech Republic (divested in December 2014) of $3.7 million and Spain of $28.8 million, offset by the amendment of the MSA with Telefónica, by which the minimum revenue commitment for Spain was reduced against a $34.5 million penalty fee paid by Telefónica. Other non-recurring items for three months and year ended December 31, 2016 refer mainly to other costs with the sale of Morocco operation related to the accrual of the reserve in amount of $3.1 million as guarantee to the buyer for potential indemnity related to eventual liability assessed from the period before the sale. For 2017 non-recurring items relates mostly to the recognition of the costs incurred or expected to be incurred to recover the operations in Mexico and Puerto Rico affected by recent natural disasters. These estimated costs of $3.2 million are related to third quarter of 2017 and includes costs that were incurred but could not be charged to customers (mainly salaries and benefits) and other extraordinary costs related to the natural disasters. In addition, there were costs incurred on the secondary offer process occurred in November.

g) 

Deferred tax asset adjustment as a consequence of the tax rate reduction in Spain from 30% to 28% in 2015 and to 25% in 2016.

h) 

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. For comparability, these adjustments are added back to calculate Adjusted Earnings.

i) 

Since 2015, our management analyzes the Company financial condition performance excluding non-cash net foreign exchange impacts related to intercompany loans which eliminates the volatility of foreign exchange variances from our operational results with third parties. The net impact to equity is zero since the current translation adjustments of the balance sheet to the subsidiaries with local denominated currencies other than the USD is registered at Equity.

j) 

On November 8, 2016 the CVI nominal value of ARS666.8 million, or $135.6 million was terminated. As a result, during the fourth quarter we recognized a gain of $41.7 million in "Other gains" representing the principle amount of the CVI.

k) 

Financial non-recurring relates to the costs incurred in the debt refinance process occurred in August 2017, which includes: (i) 2020 Senior Secured Notes call premium of $11.1 million and amortization of issuance costs of $4.9 million; (ii) Brazilian debentures due 2019 penalty fee of $0.7 million and remaining balance of the issuance cost of $1.0 million.

l) 

Non-recurring depreciation relates to the provision for accelerated depreciation of fixed assets in Puerto Rico and Mexico, due to the recent natural disasters (See "Cautionary note regarding forward looking statements").

m) 

The tax effect represents the impact of the taxable adjustments based on tax nominal rate by country. For 2017, the effective tax rate after removing non-recurring items is 34.5%.

(**) 

Adjusted Earnings per share is calculated based on the weighted average number of ordinary shares outstanding of 73,909,056, 73,816,933 and 73,648,760 as of December 31, 2017, 2016 and 2015, respectively.

Financing Arrangements

Net debt with third parties as of December 31, 2015, 2016 and 2017 is as follow:

As of December 31,

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

2015

2016

2017

(unaudited)

Cash and cash equivalents

184.0

194.0

141.8

Debt:

     Senior Secured Notes

301.7

303.3

398.3

     Brazilian Debentures

168.1

156.6

21.1

     Contingent Value Instrument ⁽¹⁾

26.3

-

-

     Finance Lease Payables

4.7

3.6

10.5

     BNDES

74.7

71.4

50.4

     Other Borrowings

0.1

-

6.0

Total Debt

575.6

534.9

486.3

Net Debt with third parties ⁽²⁾ (unaudited)

391.6

340.9

344.5

   Adjusted EBITDA LTM ⁽³⁾ (non-GAAP) (unaudited)

249.7

221.9

221.0

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

1.6x

1.5x

1.6x

1)

The CVI was terminated on November 8, 2016 as part of the Telefónica MSA renegotiation.

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 acquisition and integration related costs, restructuring costs, site relocation costs, financial fees, asset impairments and other items not related to our core results of operations.

Free Cash Flow:

For the three months ended
December 31,

For the year ended
December 31,

($ in millions)

2016

2017

2016

2017

Operating Cash Flow ⁽¹⁾

108.2

57.0

235.7

162.7

Cash Capex ⁽²⁾

(13.2)

(25.0)

(66.4)

(61.2)

Income Tax Paid

(5.0)

(5.7)

(24.3)

(20.6)

Free Cash Flow before interest and acquisitions

90.0

26.3

145.0

81.0

Adjusted EBITDA to cash conversion (%)

153.6%

47.7%

65.3%

36.6%

Acquisitions

0.0

(1.5)

(8.6)

(29.8)

Net Interest Paid ⁽³⁾

(19.4)

(8.1)

(69.5)

(27.5)

Free Cash Flow (FCF)

70.6

16.7

66.9

23.7

(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

(3)

Net interest paid includes $46.0 million gain from unwind hedging instruments related to the old bond, partially offset by $21.6 million expenses related to the refinancing, occurred in Q3 2017.