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Atento S.A. (NYSE:ATTO)
Q1 2020 Earnings Call
May 8, 2020, 12:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

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. [Operator Instructions]

Now, I'd like to turn the call over to Mr. Shay Chor, Investor Relations. Please go ahead.

Shay Chor -- Investor Relations

Thank you, operator and welcome everyone to our fiscal first quarter 2020 earnings conference call. Here with us for today's call are Carlos Lopez-Abadia, Atento's Chief Executive Officer; and Jose 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 Lopez-Abadia -- Chief Executive Officer

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 world crisis, around us our transformation plan continues to gain traction. We are achieving a strong growth in Multisector 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 of our 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 values.

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 shareholder [Indecipherable] been an investors in Atento of three world-class funds.

Finally, despite the still unfolding humanitarian crisis and the uncertainty on 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 proud to 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 margin at 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 is likely to be essential. There continues to be challenges in public transportation and quite frankly an element of concern and fear in the population. As a result, we have a severe immediate impact on our ability to serve the volumes demand from us, while in some areas we have additionally significant increase in demand.

We had initiated preparations ahead of the active crisis, have an increased health and safety preparedness and have started planning WAHA deployment. As a result, we managed to deliver from the various remarkable 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 deal 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 a 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 the 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, HPS, GIC and Farallon. The three of them are world-class investors, who will also participate in the Board of Directors. All three investors support Atento's vision and transformation plan and join us with a long-term investment for us.

I would like to finish my summary with our view of the future. We all know that we still have to see the end of the humanitarian crisis, COVID-19. We also expect an extreme economic crisis with a still and clear scope on line, but we are very positive about the prospects of our industry and our company. The early results of our transformation have allowed us to manage a crisis of historical proportions, while investing in work-at-home and the safety of our employees. We see the segments and services that we have prioritized in our transformation plan, will impact us, now that's over as a result of the current crisis. We still have a lot of work to do and lot of problems to resolve, but we see a bright future ahead and great opportunities. Thank you.

Jose Azevedo -- Chief Financial Officer

Thank you, Carlos. We drove Multisector sales across all three regions during the first quarter. The combination of higher-margin, higher growth in Multisector business and a much lower proportion of Telefonica 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 510 basis points year-over-year, as Telefonica sales declined 20%, mainly because we return additional unprofitable programs we disclaim. Although, we have mostly completed this process has a big ticket we are already done, we will continue the 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 transformation plan and most recently, we improved the working capital management. These included one-time collections of all the due receivables, which was substantially reduced our DSO and helped us increase our cash position.

Please move to Slide 10. In Brazil born-digital and tech companies continue to raise our 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 Telefonica programs during the quarter. This alone accounted for 130 basis points of Brazil margin improvement. The other 20 basis points resulted from an improvement in 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, internally, drove the improved revenue mix which expanded the EBITDA margin by 60 basis points. It is important to highlight that profitability improved 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 increased 840 basis points to 48%. Although Telefonica revenues represented a smaller percentage of the revenue mix, lower volumes resulted in a 360 basis points decline in 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. Our operational improvements continuing to getting set closer to the right cost structure, although there is still more work to do. This better control of working capital and cash management significantly improved operating cash flow in the quarter, which as a reminder, is essentially weak one.

During the quarter, we launched a new cost and expense reduction program, which will include the implementation of zero-based budgeting. We will also be sighting our company with regards to both operational administrative and financial stabilization shared service centers that we serve the world company.

We have adhered to government programs allowing us 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 positive operations at some of our call centers, due to reduced volumes and plan to close others, as we transition more of our employees to the WAHA model. Cloud-based operations will rapidly replace our current operating model.

Cash capex fell to 3% in the third [Phonetic] quarter and still reflects supplier payments carryover from projects in the first half of the last year. Given the impact of COVID-19 on our business to date and what we currently know about its economic effects in the Americas, we are being prudent and postponing non-essential 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, with that reducing the cost of our capex.

Please move to Slide 14. In terms of balance sheet, during the quarter, we significantly strengthened our cash position to nearly $163 million. Of this amount, $77 million was drawn from existing credit facilities. In April, we paid down a daily 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 drawn credit lines which can be rolled over if needed. 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 widely 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.

Questions and Answers:

Operator

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

Vincent Colicchio -- Barrington Research -- Analyst

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

Carlos Lopez-Abadia -- Chief Executive Officer

So, let me take the first one first. Pipeline. Quite frankly, at the moment, the -- our limitation is supply, not demand. The problem we had with the crisis has been one of ability to serve the demand that we have. It's true that some of the -- some companies, particular companies that will make lot of sense during the crisis of this magnitudes were put on hold. But a lot older tech and services and sectors, all the digital business, food delivery, entertainment, the streaming media, etc., 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 pipeline coming out.

Obviously, as I mentioned in my remarks and all of you know is, anybody's reaction is 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 sectors.

In terms of the strength that were -- 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 companies that will make sense during the crisis. So from a pipeline perspective, we happened to see significant problems.

The second question was on the -- do you 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, telecom currently and those things that do not perform well, there we'll need 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 is no. We continue doing that kind of work on an ongoing basis, but nothing of material offsets.

Vincent Colicchio -- Barrington Research -- Analyst

And then, how do you see the competitive landscape playing out, assuming this is a tough couple of quarters here? Setting all the [Phonetic] performance aside, 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 Lopez-Abadia -- Chief Executive Officer

Well, yeah, the feedback -- the early feedback we've gotten -- getting from our -- some of our largest customers, few of them were now in compete, we think those customers will recover or the firms. And the people -- I gotten, it is that we are performing better than the competition. This is early feedback, but for whatever is what?

Do I expect the possibility of taking over other -- all the 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, OK? 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 now [Indecipherable] we compete aggressively through stepping. And I do expect to have those opportunities.

Vincent Colicchio -- Barrington Research -- Analyst

Thanks you, Carlos.

Operator

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

Susana Salaru -- Itau -- Analyst

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 the Company is focusing to support the top line growth?

Carlos Lopez-Abadia -- Chief Executive Officer

Yeah. I just take the second question, but there were a lot of -- at least -- maybe it was on my line, lot of clicking on the line. I couldn't get your first question, only first question. Let me answer the second question and please, I'll ask you to repeat the first one.

The segment, so as I said in my prepared remarks, some of the -- we were prioritizing as part of our transformation have turned out to be the best-performing through the crisis. Quite frankly has happened to be the best performing after the crisis. Surely there's no secret here, meaning that, what we've seen here is that the current crisis 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 born-digital companies we're already having a significant success. And if anything, the current crisis is accelerating and crystalizing that a touch. So as a result, the duration we have taken is proving to be the correct one. Those sectors, what we call, these digital-born companies impacts streaming media, the Facebooks of the world, etc., right? The -- in addition to that, you can also see a lot of new ones in the sense that new ones for us, perhaps. For example, we just closed a $30 million -- our deal in the US. It's a senior deal with online grocery company. So those are the fastest growing that we see. This is very fast-growing for us as well.

Could you repeat your other question?

Susana Salaru -- Itau -- Analyst

Maybe that it seems to do the 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, Atento used to pass-through two-thirds of the inflation to the contract. And just also wondering what kind of level of inflation pass-through you are working now?

Carlos Lopez-Abadia -- Chief Executive Officer

Yes, we're just sticking to improve our 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 Q2 event. But now is that business improve on -- as to from sequential numbers.

Susana Salaru -- Itau -- Analyst

Thank you.

Operator

Our next question comes from the line of Akshay Sharma. Please proceed with your questions.

Akshay Sharma -- Analyst

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

Carlos Lopez-Abadia -- Chief Executive Officer

I apologize, maybe my line have most of difficulty, can you repeat the question? I apologize.

Akshay Sharma -- Analyst

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

Carlos Lopez-Abadia -- Chief Executive Officer

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

Akshay Sharma -- Analyst

Yes. Given the last two, three quarters --

Carlos Lopez-Abadia -- Chief Executive Officer

Akshay, I lost you completely. Maybe --

Akshay Sharma -- Analyst

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

Carlos Lopez-Abadia -- Chief Executive Officer

Akshay, [Technical Issues] I only heard very clearly, no? [Indecipherable] when do you I -- some line with Telefonica, but you disappeared completely at the beginning. Can I ask you again, please?

Akshay Sharma -- Analyst

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

Carlos Lopez-Abadia -- Chief Executive Officer

I can hear you. Now, I can hear you. Go ahead.

Akshay Sharma -- Analyst

So the question is, for the Telefonica 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 and doesn't make sense for the customer, right?

Carlos Lopez-Abadia -- Chief Executive Officer

Yes. So although there was some bits missing, let me repeat and tell me whether I got the question. You're asking for a baseline business with Telefonica. What do I think that baseline business is? Is that correct?

Akshay Sharma -- Analyst

Exactly. Thank you.

Carlos Lopez-Abadia -- Chief Executive Officer

Yes. Sorry. Lot of difficulty. Look, let's put aside Telefonica for a second, right? Telecom as a sector is not a growth sector in our industry. Some companies have even stepped out of all that. So our growth, as I said many times in this call, is [Indecipherable]. We're having 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 Telefonica. We continue to do well with them.

Would I see that baseline? I expect to continue to be the -- end care provider if not a major provider to Telefonica. Every day we compete to make sure that we are the best at what they have and that is my continued expectation. We have -- as you probably know, we have some agreements with them, multi-year agreement that currently agrees certain volume. So one high answer to that question is at the very least, the volumes [Indecipherable] and we can give you that those 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 earning every business that any client gives us. So does that make sense? We can give you a specific number [Indecipherable].

Operator

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

Beltran Palazuelo -- SANTALUCIA -- Analyst

Good morning Carlos, Jose, 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 until 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 if that situation 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, your cost is much more competitive or more developed dollar financial markets, but you were -- 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 your 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 of 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, Jose and Shay.

Carlos Lopez-Abadia -- Chief Executive Officer

Okay. Yeah, thank you. It's always great to hear from you. And I think about your question. I think you have like 24 questions. 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. So some of the questions are about the crisis going forward. Look, it's very difficult right now to draw any convictions in the environmental that we are in, right? I think most of us expect -- well, first of all, we're are still -- including in Spain, I would say is coming out of the virus part of the crisis. Still ongoing the same lockdowns, etc., right?

Other countries are even on earlier 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 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 -- can give the 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 have had some of the largest impacts at some point, we're -- 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 at higher than 80% capacity and moving 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 going to get worse before they get back, for example, I think, in earlier stages. Having said that, the government and definitely us, have learned a lot from the last few weeks, right? And our ability to deal with the new set of circumstances has increased day-to-day, week-to-week. So, I feel much, 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 [Technical Issues] etc., at this point, I think it would do lack of credibility, given where we are in the second. As I mentioned earlier, I still feel confident, first of all, in our ability to our liquidity, our ability to get through the crisis and the potential of the market and our clients base, because we don't see a lot of declining in traditional business. The growth that we've seen in the digital realm is phenomenal. So I expect 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 answered?

Beltran Palazuelo -- SANTALUCIA -- Analyst

Thank you for your explanation, Carlos, for the future. I know that future 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 to word, still not a 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 Lopez-Abadia -- Chief Executive Officer

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 WAHA, just 60,000. We have essentially no WAHA 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. 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, Jose 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 all capacity, which had a single-digit, I think its 3% or 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 is probably good as mine.

What I can tell you with confidence is that 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 -- SANTALUCIA -- Analyst

Thank you, Carlos. Sorry, for the last question. Maybe, you on -- I'm sorry, if I mention it, because it looks clear that the plan you laid that you're clearly hitting the 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 Lopez-Abadia -- Chief Executive Officer

Look, everything is possible opportunistically. But our -- we're not concerned with -- on the bond, we have that 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 -- I'm not -- that is not a concern to us. So, Jose, would you guys like to comment on Beltran's question?

Jose Azevedo -- Chief Financial Officer

Yeah. Thank you, Beltran, and thank you, Carlos. You have to remember, Beltran, that 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 US 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 swapped 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 bullets to the services/CRM, BPO companies. So it's a matter of begin opportunistic. We're always looking into liability management in a way to roll over and not take chances with letting the debt comes to close to the maturity.

Beltran Palazuelo -- SANTALUCIA -- Analyst

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

Carlos Lopez-Abadia -- Chief Executive Officer

Thank you, Beltran.

Operator

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

Vitor Tomita -- Goldman Sachs -- Analyst

Hi. Good morning all and thanks for taking our questions. I apologize if any of the 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 how operating metrics trended in April and May? And on what percentage of their size are the exit currency? And our second question following up on segments, is that since earning release sites there are relevant improvements in volumes from digital and born-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 it from our side. Thanks you.

Carlos Lopez-Abadia -- Chief Executive Officer

Vitor. Let me answer the second question. I'm going to ask you in a second to repeat the first. I don't know it was your line and line again. I couldn't understand very well. Your second question which I think I understood to be about the sectors, segment that where we see growth. I mentioned earlier that what we born-digital companies -- the companies that are very happy in digital -- digital economy are one of our largest growth, technology as well. Some of the retail that again are more on the online type of retailers, significant growth. I mentioned a $30 million deal that we've done with -- in the US with an online grocery retailer of the year. Those type of companies are really, really delivering very highly our services, streaming media, etc.

Healthcare is another sector. Technology is another sector. Those sectors are, we've seen very, very significant growth and demand. Some of it, 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 we've seen 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 is just accelerating and crystallizing those definitive changes. Those are the sectors where we see the fastest growth and the highest mark.

I'd say, you have mentioned that it was on the slides 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 high growth sectors and 55% of the sales tend to be the next-generation services rather than our traditional services.

To think what it means from having, let's say, a $1 million sale in a high-growth company versus the segment that maybe is shrinking, you can get a very large contract in a traditional or shrinking segment and fight for the next years for crisis and volume declines or just a smaller deal in some of these high growth segments, and grow with your clients both in volumes and margin. It's more of a fact that those sectors are not just with the demand for these, but they need to be much more attractive increasingly for us.

And if you can repeat the first question, I couldn't get it at all.

Vitor Tomita -- Goldman Sachs -- Analyst

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

Carlos Lopez-Abadia -- Chief Executive Officer

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

Vitor Tomita -- Goldman Sachs -- Analyst

Margins are --

Carlos Lopez-Abadia -- Chief Executive Officer

Operating margins?

Jose Azevedo -- Chief Financial Officer

It was operating margin and metrics.

Carlos Lopez-Abadia -- Chief Executive Officer

Metrics, the results in April. Again, obviously, we don't have the results of -- we don't have the results of April that they're not still closed. What I can tell you is what I've said before right? The result that we see is continued -- it could be share operationally in March. The crisis could have raised suddenly. I don't know if you recall I forget to make any loss [Phonetic] in market, everything started to impact in multiple countries at the same time. And I'm talking about the society level starting with Spain and many of -- Israel, etc.

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 [Indecipherable]. At the beginning, there was a lot of chaos and things that now -- and 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 low point.

At that low point, I don't know if you are were here 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 -- Goldman Sachs -- Analyst

Perfect. Thank you.

Carlos Lopez-Abadia -- Chief Executive Officer

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 Lopez-Abadia -- Chief Executive Officer

I wanted to thank you for being here today. Apologies for the technical difficulties. I think most of us are probably at home and on cell lines, I am and I apologize for not being 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 stay safe. And I know that the same thing I said about Atento, I'd say about our societies and follow the path. 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 few months. Thank you.

Operator

[Operator Closing Remarks]

Duration: 52 minutes

Call participants:

Shay Chor -- Investor Relations

Carlos Lopez-Abadia -- Chief Executive Officer

Jose Azevedo -- Chief Financial Officer

Vincent Colicchio -- Barrington Research -- Analyst

Susana Salaru -- Itau -- Analyst

Akshay Sharma -- Analyst

Beltran Palazuelo -- SANTALUCIA -- Analyst

Vitor Tomita -- Goldman Sachs -- Analyst

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