Material Fact – Premises regarding future financial performance
São Paulo, July 28, 2017. Contax Participações S.A. (“Company”; CTAX3), pursuant to article 157, paragraph 4 of Law 6404/1976 and CVM Instruction 358/2002, hereby informs its shareholders, investors and the market in general, in addition to the material facts released by the Company on March 23, 2017, May 19, 2017, June 5, 14, 19, 24 and 28, 2017, and July 6 and 10, 2017, that, during the negotiations with its financial creditors, certain premises were presented regarding the Company‘s future financial performance, which were used as basis for the preparation of the complementary proposals related to the Company‘s 1st, 2nd and 3rd debenture issues published on July 6 and 10, 2017.
With the sole purpose of ensuring its shareholders and the market in general full access to the same information shared with its financial creditors, the Company presents below the premises used for negotiating with its financial creditors:
(i) With regard to Net Operating Revenue (NOR):
• For 2017: nominal reduction in Net Operating Revenue (NOR) by between 5% and 15%;
• For the 2018-2022 five-year period: nominal increase in Net Operating Revenue (NOR) by between 8% and 12% p.a.;
• For the long term: continuous 5% annual nominal increase in Net Operating Revenue (NOR).
(ii) With regard to EBITDA:
• For 2017: EBITDA of between R$70 million and R$120 million;
• For the 2018-2019 two-year period: nominal increase in EBITDA by between 30% and 50% p.a.;
• For the 2020-2022 three-year period: nominal increase in EBITDA by between 15% and 25% p.a.;
• For the long term: continuous 5.0% annual nominal increase in EBITDA, in line with revenue growth.
The Company clarifies that this information is disclosed exclusively under the context of the renegotiation of its financial debt, and it does not have and does not undertake any obligation to update or complement said information at any time.
This material fact includes premises on the financial trends which affect the Company‘s activities and involve risks and uncertainties and, therefore, should not be considered a promise or declaration of future events and do not indicate or constitute guarantee of future results.
Said premises are largely based on current expectations regarding future events and operating and financial trends which affect or may affect the Company‘s sector of operation, its market share, reputation, business, financial situation, operating results, margins and/or cash flow. These premises are subject to several risks and uncertainties and were prepared solely based on information currently available to the Company and, therefore, do not constitute any guarantee of future results.
Several factors, in addition to those discussed in the Company‘s Reference Form, may adversely impact these premises and, therefore, said premises may not be achieved. Effective results may materially differ from those presented here. The Company, its executive officers, employees and representatives do not undertake any responsibility related to or resulting from the use of said premises.
Cristiane Barretto Sales
Chief Financial and Investor Relations Officer