Atento S.A.
Q1 2020 Earnings Call Transcript

Published: 9 May 2020

[Operator:]

Good day, ladies and gentlemen, and welcome to Atento's First Quarter 2020 Results Conference Call. My name is Gerald and I'll be your operator. At this time, all participants are in a listen-only mode. We will conduct a question-and-answer session towards the end of today’s conference. [Operator Instructions] As a reminder, today's call is being recorded.Now, I'd like to turn the call over to Mr. Shay Chor, Investor Relations. Please go ahead.

[Shay Chor:]

Thank you, operator and welcome everyone to our fiscal first quarter 2020 earnings conference call. Here with us for today's call are Carlos López-Abadía, Atento's Chief Executive Officer; and José Azevedo, Atento's CFO. Following our review of Atento's financial and operating results, we will open the call for your questions.Please turn to the next slide. Before proceeding, please note that certain comments made on this call will contain financial information that has been prepared under international financial reporting standards. In addition, this call may contain information that constitutes forward-looking statements, which are not guarantees of future performance and involve risks and uncertainties.Certain results may differ materially from those in the forward-looking statements as a result of various factors. We encourage you to review our publicly available disclosure documents filed with the relevant securities regulators, and invite you to read the complete disclosure included here on the second slide of our earnings presentation. Our public filings and earnings presentation can be found at investors.atento.com. Please note that unless otherwise noted, all growth rates are on a year-over-year and constant currency basis.I will now turn the call over to Carlos.

[Carlos López-Abadía:]

Thank you, Shay and thank you, ladies and gentlemen for being with us today. I would like to take a few minutes to highlight the major business events at Atento in Q1. First, I would like to confirm to you that despite the work traffic around us our transformation plan continues to gain traction. We are achieving strong growth in multi sector with continued improvement in sale quality.We are also beginning to see the results of the operational improvements that we launched last year. We were substantially ahead of plan during January and February and it is thanks to this progress that we were able to respond rapidly to the crisis.We are responding effectively to the crisis that is still developing in many other markets. We have deployed more than 60,000 employees to work-at-home for maintaining health and safety standards in our centers, superior to all the demands of the relevant regulatory value.We have naturally prioritized, maintaining a strong cash position through the crisis to ensure the viability of our operations. I'm happy to assure you that we have developed and are maintaining a cash position ample enough to get through the crisis.We have resolved the uncertainty regarding the position of our majority shareholders with leading groups independently invested in Atento of three world-class funds. Finally, despite the still unfolding humanitarian crisis and the uncertainty of the potential subsequent economic crisis, we are convinced for the strong future for our industry and our company.Let me touch on each one of these points. Despite impact of the COVID-19 crisis, we delivered significant year-on-year multisector growth and EBITDA growth. Where we have had in the month of March, an important impact in our ability to deliver services and we have made investments in work-at-home capabilities and additional investments in health and safety measures to keep our employees safe. We have been able to continue to expand margins.And also simultaneously have improved sales with 16% total annual value on year-on-year growth and the type and quality of those sales. 55% of those sales are next generation services and the totality of those sales are 4 percentage points higher in contribution margins that last year over the same period.All of our major markets have been significantly affected by the COVID-19 crisis. Initially in many of these markets there was the lack of clarity as to which services eventually be essential. We continue to see challenges in public transportation and quite frankly an element of concern in peers and population.As a result, we have a severe immediate impact on our ability to set the volume demand from us while in some areas we have additionally significant increase in demand. We had initiated preparations ahead of the actual crisis and have increased health and safety preparedness and started planning WAHA economy. As a result, we managed to deliver from the various numbers in excess of 60,000 work-at-home employees in a matter of two weeks.We continue to increase this number and are working hard to ensure a stable production to make this an ongoing procedure of our business. We have made financial liquidity a priority of business. We have delivered $4.4 million in operational cash flow during this traditionally negative cash flow quarter.To put this into perspective, last year we had negative $40 million in cash flow --operating cash flow that is in Q1. We have developed a cash position with the safety margin substantially higher than what we have historically had, which we intend to maintain through this financial disorder.I am very happy to announce to you that we have changed qualitatively our shareholder base. We no longer have a majority shareholder, but we have introduced three new independent strategic investors

[José Azevedo:]

Thank you, Carlos. We drove Multisector sales across all three regions during the first quarter. The combination of higher-margin, higher growth Multisector business and a much lower proportion of Telefónica revenues, expanded our EBITDA margin by 130 basis points. In other words, we generated more profitable growth.As a percentage of total revenue, Multisector sales increased 570 basis points year-over-year as Telefónica sales declined in 20%, mainly because we return additional unprofitable programs we disclaim. Although, we have not completed this process as a big ticket are already done, we will continue by assessing the profitability of this and other client programs on an ongoing basis but probably with less impact.We also performed well in terms of cash flow a combination of operational improvements under our first relation plan and more recently we improved working capital management. These included one-time collections of old receivables, which was -- substantially reduces our DSO and help us increase our cash positionPlease move to slide 10. In Brazil born-digital tech companies continue to raise Multiesector sales. It stood at 76% of consolidated revenue at the end of the quarter. As you can see, Brazil is where we discontinued most of the unprofitable Telefónica programs during these two quarters. This alone accounted for 130 basis points of Brazil margin improvement. The other 20 basis points resulted from an improvement to revenue mix.Please move to slide 11. In the Americas, financials along with tech and born-digital companies drove Multiesector sales up by 8.4%. As a percentage of revenue, Multiesector expanded 360 basis points to just over 65%. Mexico and Colombia finally, drove the improved revenue mix which expanded the EBITDA margin by 60 basis points. It is important to highlight where that profitability improves in almost all countries within this segment.Please move to slide 12. EMEA is where we saw the strongest Multiesector growth at 16.5%, as part of total sales Multiesector increases 840 basis points to 48%. Although Telefónica revenues represented a smaller percentage of the revenue mix lower volumes resulted in a 306 basis points declining EMEA's EBITDA margin. This was partially offset by better control of our indirect costs in this business segment among others.Please move to slide 13 for more on our cash flow. Operational improvements continued getting closer to the right cost structure although there is still more work to do. This in better control of working capital and cash management significantly improved operating cash flow in the quarter, which as a reminder, is a stationary weak one.During the quarter, we launched a new cost and expense reduction program, which will include the implementation of utilized budget. We will also reciting our company with regards to both operational admission financial stabilization share service centers that we serve the world company. We have adhered to government program around that to defer and diluted payments for the next 10 months with a positive impact of around $20 million in our cash flow.Regarding our operations, we have solid operations at some of our call centers due to reduced volumes and plan to close others as we repositioned more of our employees to the work at home model. Cloud-based operations will rapidly replace our current operating model.Cash CapEx fell to 3% in the first quarter and still reflects supplier finance carryover from projects in the first half of last year. Given the impact of COVID-19 on our business today and what we currently know about its economic effects in the Americas, we are basing prudent and postponing nonessential CapEx. However, we are still investing in our business for the long-term and in support of our growth strategy. We are now working hard in that reducing the cost of our CapEx.Please move to slide 14. In terms of balance sheet, during the quarter we significantly strengthen our cash position to nearly $163 million. Of this amount, $77 million was drawn from existing credit facilities. In April, we paid down a value revolver and initiated a new 12-month credit line of $21.7 million. We subsequently grew up in these lines further bolstering our financial flexibility.Net debt stood at $564 million at the end of the quarter with high short-term debt reflecting the grow credit lines which can be rolled over if used. Sequentially, our leverage improved to 3.7 times from 3.9 times on lower net debt and significantly improved EBITDA. Lastly, given the economic uncertainty surrounding COVID-19, we are withdrawing our 2020 guidance. When we have sufficient information that will allow us to really forecast our business again, we will be able to share our performance outlook at that time.That concludes our review of our first quarter results. Operator, please open the call for questions.

[Operator:]

Thank you. [Operator Instructions] Our first question comes from the line of Vincent Colicchio of Barrington Research. Please proceed with your question.

[Vincent Colicchio:]

Yes, Carlos. My first question is, can you talk about your sales pipeline? Are you seeing cancellations? And then the second question is on Telefónica. Are you comfortable with where we are? Do you expect to see additional discontinuation of programs over the next six to 12 months?

[Carlos López-Abadía:]

Okay. Let me address the first one first. Pipeline. So frankly, at the moment our limitation is supply, not demand. The problem we had the fact the crisis has been one of ability to serve the demand that we have. It is true that some of the -- some campaigns in particular companies that make lot of sense during the crisis of all these magnitudes were put on hold. But a lot other type of services and sectors all the digital business food delivery, entertainment et cetera the growth has been spectacular. So our problem during the crisis has been the ability to serve demand. So from a pipeline perspective, we see a strong demand.Obviously, as I mentioned in my remarks and all of you know is anybody is getting how the economic crisis is going to develop. But from what I see right now, there is a very strong demand from the let's call it the new economy sectors. That by far offsets the decline in other sector. In terms of the strength that we couldn't hold in the crisis, we've already seen in some of the countries like for example Spain that is already ahead of the COVID-19 with respect to let's say Brazil. So we have seen the return of those volumes of those campaigns that we make center during the crisis. So from a filing perspective we haven't seen significant problems.Your second question was on the -- so you should expect anything of the magnitude that we discussed in the second half last year. Clearly, we will always continue to look at the business that we have in the portfolio for the concurrent. And those things that do not perform well they will be net to perform or discontinued in together jointly in partnership with our customers, right? That should be the normal way of operating. Your specific question is do we see anything significant answers now. We continue doing that kind of work on an ongoing basis, but nothing of material.

[Vincent Colicchio:]

And then how do you see the competitive landscape playing out assuming this is a tough couple of quarters here. The setting Telefónica side, do you see some of your smaller competitors struggling to transition? And do you think some of the financial headwinds will maybe put some of the amount of business and results in opportunity for you guys?

[Carlos López-Abadía:]

Well the feedback the early feedback we've gotten from our -- some of our largest customers and they now compete we think those customers with recover for the firms. And the people I've taken is we are outperforming better than the competition. This is early feedback, but for whatever is what? Do I expect without the possibility of taking over other biggest business. Look, I don't take anything for granted. I expect to earn every bit of business in front of us. We expect to have opportunities to do so. The best, okay? I don't take anything for granted. And I'm not banking on the misery of others. So -- but we're competing aggressively every day and whatever one of our customers or customers that we don't have and know what's up we compete aggressively with the thing. And I do expect to have those opportunities.

[Vincent Colicchio:]

Thanks you, Carlos.

[Operator:]

Our next question is coming from the line of Susana Salaru of Itaú. Please proceed with your question.

[Susana Salaru:]

Hi good morning guys. Thanks for taking our questions. We have two. The first one, you mentioned that the revenue mix improved significantly with more multisector being invaluable. If you could elaborate more? Or could you just list the two main factors that are being the key one for this growth? That would be our first question.And second question, if you could elaborate what are the segments that are being the Q1 growth? We know that we have finance that have been key for Atento. But after finance what are the other key segments of the company is focusing to support the topline growth?

[Carlos López-Abadía:]

I just take the second question but there were a lot of at least maybe I was on my line look at these maybe with my line. I couldn't get your first question. Let me answer the second question please. I'll ask Shay to repeat the first one -- the segment.So as I said in my prepared remarks, some of the sites we were prioritizing as part of our transformation have turned out to be the best-performing through the crisis for [Indiscernible] to be best performing after the crisis. Surely there's no secret here is that what we've seen here is that the current price is fundamentally crystallizing accelerating and crystallizing trends that were already in place in the society.The trends to more online services the more -- all the food delivery streaming all the bond digital companies we're already having a significant success. And if anything the current price is accelerating and crystalizing that as such. So as a result, regulation we have taken is proving to be the correct one. Those sectors are as to what we call the new digital bond company intact streaming media, the Facebooks of the World et cetera right?The -- in addition to that you can also see -- also a lot of new ones in the sense that new ones for us perhaps for example yes close to $30 million deal in the U.S. It's a senior deal with an online grocery company. So those are the fastest growing obviously. Is this very fast-growing for us as well? Can you repeat your other question?

[Susana Salaru:]

Maybe that seems to be a follow-up on your explanation. In these new contracts are you guys being able to pass-through? What percentage of the inflation? Because remember that in the past attempting to pass-through two-thirds of the inflation to the customer. Just also wondering what kind of level of inflation pass-through you are working now?

[Carlos López-Abadía:]

Yes we stick into to improve our investment on how inflation pass-through metrics from years before. But I think that we will -- some of these things equal to the year. So we'll see the results better when we have this [Technical Difficulty]. But now is the business to improve on crisis from sequential numbers.

[Susana Salaru:]

Thank you.

[Operator:]

Our next question comes from the line of Akshay Shah [ph] of INR [ph]. Please proceed with your question.

[Unidentified Analyst:]

Hi, gentlemen. Good morning. Quite a lot to applaud in this report. Carlos, question for you around the Telefónica development coming up on Vincent's question. Clearly, declined 20% down overall, 30% in Brazil. I guess, what might have been the subtext to the earlier question was, is there a baseline level of revenues that will continue to persist at the end of this? And how do you think about that…

[Carlos López-Abadía:]

I apologize maybe my line is having difficulty, can you repeat the question? I apologize.

[Unidentified Analyst:]

Absolutely. Is this better? Can you hear me now?

[Carlos López-Abadía:]

Yes. So, there could be some clicking, probably in my line, [Technical Difficulty] the question.

[Unidentified Analyst:]

Yes. Given the last two, three quarters

[Carlos López-Abadía:]

Let's say, I lost him completely. Maybe definitely.

[Unidentified Analyst:]

When do you expect that decline to continue until, at what point do we reach that core Telefónica service provision that is valuable to you and valuable to them?

[Carlos López-Abadía:]

Thanks. [Technical Difficulty] some line in Telefónica, but you disappeared completely at the beginning. Can I ask you again please?

[Unidentified Analyst:]

Let me try one more time. Otherwise, I'll hang up and dial back.

[Carlos López-Abadía:]

[Technical Difficulty]

[Unidentified Analyst:]

So the question is -- so for the Telefónica revenue conclude and reach that baseline level of revenue that makes sense for you and makes sense for them, because over the last few quarters you've been vocal. You're quite happy to walk away from business that doesn't make sense for you. It doesn't make sense for the customer.

[Carlos López-Abadía:]

Yes. So also there was some bits missing. Let me repeat and tell me whether I got the question. You asking for a baseline business with Telefónica. What do I think that baseline business is? Is that correct?

[Unidentified Analyst:]

Exactly. Thank you.

[Carlos López-Abadía:]

Yes. Sorry. I've got difficulty. Look, let's put aside Telefónica for a second, right? Telecom as a sector it's not a growth sector in our industry. Some companies have even set out of all that. So our growth, as I said many times in this call, it does -- we have a very, very healthy growth in other sectors. In many ways, this is good, because that diversified our revenue base. But we continue to have very good relationships with Telefónica. We continue to do well with them.Would I see that baseline? I expect to continue to be the -- healthcare provider if not a major provider to Telefónica. Every day we compete to make sure that we are the best at what we have and that is my continued expectation. We have growing and we have some agreements with them, multi-year agreement, 20 years at least for certain volumes.So one high answer to that question is at the very least the volume including agreement and we can give you that ISOS numbers. So I expect at all times to be above that number, because I don't believe it's a good practice to just rely on a volume commitment. I believe in turning every business that any client give us. So does that make sense? We can give you a specific number that is in Atento?

[Operator:]

Our next questions come from the line of Beltran Palazuelo of Santalucia. Please proceed with your question.

[Beltran Palazuelo:]

Good morning Carlos, José, Shay. I would like to thank you for the hard work. I would also like to thank all the employees attending for the hard work in these difficult times. I have a couple of questions. I think you commented that you were over the business plan into, let's say, mid- of March. Constant currency growth was minus 2.8 at the end of the quarter and margins were 10.9. If you could give us a little color what exactly was your margin profile and your constant currency growth since that happened?Then if you could give us a little color exactly you're telling us utilization rates around 80% and probably they were lower. So let's say currently revenues are minus 20%. Would that be a good guess? And then, if you could also give us exactly more or less what costs are you incurring? More or less what margins are we going to find ourselves in that situation, if it occurs or maintains all through the second quarter?Follow-up question I have. I know this is a difficult one because ForEx is always very tricky. But of course you have all your debt in dollars. The rationale was because even though maybe the real and other currencies fell, the cost is much more competitive or more developed in the dollar, in the financial market.But in what -- maybe what interest rates are in Brazil. At what moment it makes sense, that you change part of your debt to real. When your revenues there do not lose every time your revenue is in real is lower. And the debt is in hard currency. So, is there a possibility of that?And then, maybe if you could give us a little question, you're saying, you're cutting CapEx and you're cutting costs. What is the free cash flow generation profile or let's say these 40 days? Or are you able not to burn cash and then maybe for -- I know its complex for the rest of the year. Do you think that, Atento will be able not to burn cash, during the 2020? So thank you all of you, Carlos, José and Shay.

[Carlos López-Abadía:]

Thank you. It's always great to hear from you and particularly a question, is that you have like 24 questions so let me take a crack and we can try to answer some of those and those that I have not addressed at least let me try. So some of the questions are about the prices going forward.Look, it's very difficult right now to draw any convictions in the environmental win right? I think most of us expect -- well first of all, we're extremely idle including in Spain. I would say is coming out of the virus -- virus part, the price point still ongoing still ongoing et cetera, right?Other countries are even early points on that curve. It's very difficult to -- we all have different projections regarding the potential or likely economic crisis that is coming up on us after the virus spread. So it's very -- I think, very -- we have very low credibility for me to do -- to start making specific projections for the next three months. We're going to have to see I can give you directional -- my directional views on that.But what I can tell you is in terms of what we've seen so far, the impact -- the marketing in which we operate. We have had some of the largest impacts by the virus spread, in the world. At some point, our -- we're ahead -- our capacity dropped to 54%. We've moved up the curve very quickly, managed both in the centers with a lot of work at home.We are increasing the capacity. We already had higher than 80% capacity and moving to in fact to regain 100% of capacity and hopefully beyond. But how the crisis will evolve in the next few months, I personally expect that in some countries things are going to get worse from virus -- from a biological perspective than getting worst before getting better for example, I think, in earlier stages. Having said that, the government and therefore have learned a lot from the last few weeks right?And our ability to deal with the new set of responses has increased day-to-day week to week. So, we are still much, much more confident than a few weeks ago. So I know we'll come out of this crisis even stronger than we were. But to give you specific numbers of cash flow in et cetera at this point, I think, I would do lack of credibility given where we are in the sector.As I mentioned earlier, I still feel confident first of all, in our ability to our liquidity, our ability to get to the crisis and the potential of the market and our clients, because we don't see a lot of declining in traditional business. The growth that we've seen in the digital is phenomenal.So I expect -- I said a bright future for the industry and Atento, over the next few months to give specific macro guidance is extremely difficult. But you had some questions there? Is there anything that we have not addressed for you?

[Beltran Palazuelo:]

Thank you for your explanation Carlos, for the future. I know that piece is very, very difficult with utilization rates more or less I have an idea of revenue where it was and where it is now and where we are moving forward.But just to see because the long-term plan that was put together not do not surprise, not many people believe it, just to see exactly how in fact we were on it before the crisis hit. For example, we were expecting low single-digit revenue growth and the margins between 12 to 13. What has been the impact? What is the constant currency growth look like before the crisis hitting?

[Carlos López-Abadía:]

Yes. So we were significantly ahead of plans, January and February. As I mentioned in my remarks, part of that allowed us to make additional investments, which we have made in work at home, in Guará we get 60,000. We have essentially know Guará to start with, although we had already developed plans as part of our transformation. We didn't have -- unlike other players, we didn't have anything significant on work at home.We deployed very rapidly very successfully over 60,000 employees to work at home. So we made some investments there as well as we started, even before March, making investments in additional health and safety measures in our centers. So thanks to the fact that we were ahead on the plan, we have been able to make those investments and still improve margins.In terms of impact, I'm sure, José also will correct me hopefully there if I'm wrong. I think that for mainly the month of March we had an impact on the top line, as I mentioned to you. Fundamentally, we were supply constraint right, in the low teens decline in terms of our ability to do restructuring again, mostly on all capacity related, which had a single digit, I think, a 3% and 4% for the quarter.Next few quarters, in terms of projections, beyond that, although, again, in our year forecast, that's probably as good as mine in terms of how much the crisis is going to affect Brazil or how quickly spend is going to get back to normal. It's difficult to forecast at this stage. But yours be probably good as mine.What I can tell you with confidence is our ability to handle around the situation, again, even if this is societal deterioration in one or some those countries. Our ability to deal with that is much, much, much better than at the beginning of forecast. So I'm pretty confident to deal with what the world has to throw at us.

[Beltran Palazuelo:]

Thank you, Carlos. Sorry, for the last question. Maybe, you on -- and just to say that I'm sorry, if I mention it, because it looks clear that the plan you laid that you're clearly hitting above target. It's clearly a difficult situation. And clearly the company is tackling the problems and being stronger. But the thing is, of course, a currency, ForEx, well, no one controls it.So the thing is all your debt is in – or the majority percent of your debt is in the 2022 bond. And it seems -- and we can see that the banks will support you. So what are -- when you see that and you see more possible risks that come, maybe imagine, of course, that the real has been the worst currency in the whole world. It looks like Brazil doesn't have the reserves. It's plunging every day.Is there a possibility that you repurchase part of the bond and put part of your hedging in reals to try and mitigate the possible downturn of more of the real? Because, clearly, the revenue was nearly $2 billion or more years past, it was more than $2 billion and then we are seeing that the revenue, due to the currency going down. So it would be good to, I don't know, to maybe, of course, you have had this for the interest. But is there a possibility of doing something to mitigate part of that currency risk of the debt?

[Carlos López-Abadía:]

Look, everything is possible opportunistically. But our -- we're not concerned with -- on the bond, we have but fully hedged. Clearly, having -- clearly, the foreign exchange has not been kind to us. But my concern on the point since it's not on the angle of the -- that is not a concern to us. So, Jose, would you like to comment on Beltran's question?

[José Azevedo:]

Yes. Thank you, Beltran, and thank you, Carlos. You have to remember that to understand, we always think of the debt in local currency. So it's a matter of being opportunistic. We look all the time into market opportunities, to check what is available to us. So -- and why it is in local currency, because when we're looking to a debt in U.S. dollars, as we did, we always look into a combination of how much costs to swap to local currency. So at the time that we issued the debt was way better from a maturity perspective that we have a bullet five-years sourced to reals, which was not available to us in Brazil.Now once we get out the crisis and there are new windows and if the market allows us to go for a long-term in Brazil. Because the problem we had with issuing debt in Brazil is that for the past couple of years it was not available long lines likes five years who let to the services/CRM, DTO companies. So it's a matter of begin opportunistic. We’re always looking into liability management in a way to roll over updated with letting debt funds to close to the maturity.

[Beltran Palazuelo:]

Okay. Thank you very much all of you for questions and work all across from Santalucia from our part. Thank you very much.

[Carlos López-Abadía:]

Thank you, Beltran.

[Operator:]

[Operator Instructions] Our next question comes from the line of Vitor Tomita of Goldman Sachs. Please proceed with your question.

[Vitor Tomita:]

Hi. Good morning. Thanks for taking our questions. Some of my questions are already answered at some point because I got disconnected for a few minutes. So first question on our side is whether you could elaborate a bit more on our operating metrics trended in April and May? And on what percentage of their size or work solutions are exit currency? And our second question following up on segment is that since earning release how relevant improvements in volumes from digital and some on online clients in the first quarter when COVID was not yet that much of an issue, do you see a relevant further improvement in volumes from this type of clients in the second quarter with some digital services growing due to social isolation measures and that's given out [indiscernible].

[Carlos López-Abadía:]

Let me answer the second question. I'm going to ask you – to repeat the first. I don't know your line unwind again. I couldn't understand very well. Your second question which I think I understood to be about the sectors – segments that where we see growth. I mentioned earlier that what we on these companies – the companies that are very happy individual digital economy are one of our largest growth technologies as well. Some of the retail that again are more on the online type of retailers significant growth. I mentioned taking even or deal that we've done with – in the U.S. with an online grocery retailer of the year. Those type of companies Fintechs are really, really delivering very highly our services, Streaming Media et cetera.Health care is another sector. Technology is – is another sector. Those sectors are – we've seen very, very significant growth and demand. Some of them you could see that, it could be a bit of a spike on the because of the COVID-19 crisis. But to be honest a lot of these was already happening before the crisis. Some of these companies that seen a spike right now but I think our anticipation, I think the company's anticipation and probably everybody's I think is that they have a bright future after the spike. In other words, they're going to continue to grow, if anything – this is going to accelerate as the behaviors of consumers probably – they were changing already and this practice accelerating and crystallizing. Those are the sectors where we see the fastest growth and the highest mark.I'd say, you have mentioned that you are on the slide. And the – a lot of the sales that we're having happen to be the write-back of sales in a sense, right? Not only we've seen higher growth in sales, total in our annual revenue of 16% growth over the same period last year. But 30% of those sales tend to be in these hydro sectors. And 55% of the sales seems to be in the next-generation services rather than our traditional. Do you think that it means from a let's say a $1 million sale in a high-growth company versus the segment that's maybe you're shrinking. You can get a very large contract in a traditional or strengthening segment and five for the next year's price and volume declines for just a smaller deal in the high growth segment, and grow with your clients both in volumes and margin. Smart factor those sectors are not just where the demand is – they need to be much more active And if you can repeat the first question I couldn't get it at all.

[Vitor Tomita:]

All right. So on the first question is if you could elaborate a bit more on how operating metrics extended in April and on what percentage of sites or workstations currently?

[Carlos López-Abadía:]

Okay, operating what margins in April? I didn't...

[Vitor Tomita:]

Margins.

[Carlos López-Abadía:]

I didn't understand. Operating margins and then metrics. Metrics. Again obviously we don't have the results of – we don't have the results of April. They're not still closed. What I can tell you is what I've said before right? The result that we see is continued at operationally in March. The crisis could have been summary. I don't know if you recall I forget [Indiscernible] in market everything started to impact in multiple countries at the same time. And I'm talking about the supplier level starting with Spain and many of the sale.The – from that low point we have had a continued improvement in terms of our ability to manage the situation. But quite frankly I think it's a continued improvement in the management of the situation in the countries. We obviously depend on public transportation and many of the things in the societies that we operate.So look the credit is presuming even though there was a lot of cases and things that have now much more restrictions. So although we have not seen the worst of it in some countries, my expectation is that our impact is going to continue to decline from a level of time.At Atento I don't know if you were really when I mentioned we were when things hit as pull forward we were in the 50-some-percent of capacity all of a sudden. Since then we've recovered through better management of all the centers keeping – we have essentially older centers open managing better the centers as well as 60,000 people work-at-home. We've managed to increase steadily that capacity. We're better than 80% at the moment and we continue to improve every day, every week. So although we haven't seen the work yet, I feel that we are much, much better able to manage what comes to down the road.

[Vitor Tomita:]

Perfect. Thank you

[Carlos López-Abadía:]

You are welcome.

[Operator:]

[Operator Instructions] That concludes the question-and-answer session of today's call. I would like to turn the call back over to Mr. Lopez Abadia for closing remarks.

[Carlos López-Abadía:]

I'd like to thank you in for being here today. Apologies for the technical difficulties. I think most of us are probably at home and on certain lines. I know I am and I'm sorry I haven't been able to understand you guys as clearly as I would have liked to understand the difficulties.In the current situation I wish everyone the best. And let's stay safe. And I know that the same thing I said about Atento I say about our societies that follow us. I know that we're all living difficult times but there's a bright future ahead and stay very safe and looking forward to talking with you over the next few weeks and a few months.

[Operator:]

Thank you so much. This does conclude today's conference. You may disconnect your lines at this time.