1 4Q15 Earnings Release HIGHLIGHTS 4Q15

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1 1 São Paulo, March 23, 2016: Contax Participações S.A. ( Company or Contax ) (BM&FBovespa: CTAX3, CTAX4 and CTAX11) announces today its earnings for the third quarter of The financial information in this report was prepared in accordance with the International Financial Reporting Standards (IFRS) and the accounting practices adopted in Brazil, including the Brazilian Corporate Law and the pronouncements, guidelines and interpretations issued by the Accounting Pronouncements Committee (CPC) and approved by the CVM (Brazilian Securities and Exchange Commission) applicable to the Company s operations. HIGHLIGHTS Investor Relations Daniel de Andrade Gomes Treasury and IR Director Alexandre Alves Freire IR Manager Investor Relations +55 (11) (11) ri@contax.com.br ri.contax.com.br Conference Call in Portuguese March 24, 2016 Schedule: 10:00am (Brasilia) / 9:00am (US EST) Connection Number: +55 (11) ou +55 (11) Code: Contax Webcast: Focus on the rendering of high quality services, client and employee satisfaction, operational efficiency and improvement of results. Advance in the program of capacity adaptation in Brazil, which started in the prior quarters with the vacating of 10 sites in. In 2015, the Company fully or partially ended its activities in 19 operational units, with subsequent adjustment in personnel. As a result, the idleness ratio changed from 38% in to 21% in. Maintenance in the pace of growth of Allus operations, which contributed R$262.5 million in revenue in, representing 34% of the Group s total revenue (up by 20% in and 31% in ) with 52% growth year-on-year (26% in functional currency). In the year, revenue from international operations totaled R$921.9 million, representing 29% of the group s total revenue, a 41% increase (22% in functional currency). Conclusion of discussions with the Company s creditors with the attainment of a wide consensus for the extension of the financial debt, adapting it to the operational perspective. As a result, the following was also agreed: Offer of capital increase by up to R$200 million in keeping with CVM Instruction 476, to strengthen the balance sheet and capital structure; Migration to the New Market governance level at BM&F/Bovespa; Maintenance of the sale process of Allus, now formally approved by the Company s creditors. Replay: Available until March 30, 2016 Access number: +55 (11) Code:

2 2 Message to our Shareholders We ended 2015 and started 2016 in a process of deep transformation at Contax in Brazil because of low efficiency and a high level of idleness that we had since the second quarter, resulting from the reversal of revenue expectations with our main client and other matters. Moreover, with the challenging macroeconomic environment, the Company took aim at the adjustment of capacity, search for higher efficiency, focus on commercial development and the restructuring of financial debt. The results of 2015 reflect this context and the high cost related to idleness and the capacity adjustment process. On March 15, 2016, the Company successfully concluded the extension of its financial debt after negotiating with creditors and shareholders a financing solution that includes contribution from shareholders in the form of subordinated debt and capital, a stock offer and the sale of international operations (Allus). These are among the main deliberations taken at the debenture holder meetings and debt negotiation: 1. Repayment conditions of the financial debt now have a six-year term with two years grace period for principal, one-year grace period for interest and rate of CDI or NTN B +1.25% p.a.; 2. The borrowing of subordinated debt by the holding CTX Participações S.A. for the Company in the total amount of R$45.5 million. 3. The accomplishment of an offer to increase its share capital in keeping with CVM Instruction 476, in the amount of R$200 million. 4. Early repayment of part of the debt with funds from the sale of Allus free of taxes, sales costs and cash earmarked for the Company (which will change depending on the amount raised in the capital offer). 5. Employment of best efforts to effect the migration to the special, New Market segment at BM&F Bovespa, aiming to improve its corporate governance and having a more scattered stock control. As seen in the third quarter of 2015, the Company s results remain influenced by the initiatives related to the vacating of sites and structure adjustment (operational turnaround). These initiatives aim to improve the efficiency and quality of our operations and to gradually restore margins during Regarding the idleness of our operational structure, we advanced the plan of vacating sites at a speed that is better than the original schedule, promoting the shutdown or the reduction of activities in 10 operational units in the fourth quarter of In the year, it amounted to 19 vacated sites, entirely or partially, prompting the reduction of the idleness ratio from 32% in to 21% in, measured by engaged workstations. The goal is to bring idleness levels of the physical infrastructure of our operational units to levels between 10 and 15%. In operational efficiency, due to a higher focus on the main detractors of inefficiency and quality, we reduced by over 80% the quantity of IT incidents with high impact on the operation, improving their quality and reducing the possibility of contract penalties due to unavailability and improving the efficiency of our activities. On the commercial side, we acquired a large client in telecommunication, improving our presence in an industry that has approximately 50% of the potential market for call center in Brazil and in which we had our reach limited to just two big players. On this front, we have also acted competitively in biddings for new operations and clients. In March 2016, two important changes occurred in the Company s Management. Mr. Shakhaf Wine left the position of Chief Executive Officer to take the role of Head of the Board of Directors. On the same date, Mr. Nelson 2

3 3 Armbrust was appointed to the position of CEO of Contax to continue the turnaround process of the Company, drawing on his experience in the industry. These changes aim to ensure that Contax will resume revenue growth and raise its profitability, reflecting also the full commitment and trust of shareholders and board members in the future of the Company. More than ever, Contax is committed to weathering the current challenging environment, concentrating efforts on the management and recovery of its activity. This means prioritizing the activities for the delivery of services to our clients with higher quality, through the improvement of our processes and management, and greater engagement, commitment and motivation of our employees. As a result, the Company seeks to recover the capacity to generate value for its stakeholders as quickly as possible. 3

4 4 Net Operating Revenue Total Net Revenue In the fourth quarter of 2015 (), Net Operating Revenue (NOR) at the Group equaled R$762.6 million, a 12% reduction year-on-year and 4% quarter-on-quarter. The Group's total revenue remained impacted by the drop in the rendering of services seen from the start of In 2015, the Company s NOR hit R$3,209.4 million, representing a 7% reduction from prior year. (R$ million) vs. vs vs. Total % -3.6% 3, , % Contact Center & BPO % -3.1% 3, , % Customer and e-care % -1.0% 2, , % CRM Services % -10.0% % Debt Collection % -3.7% % Other Services % -6.9% % Trade Marketing % -5.1% % ICT % -24.1% % Total Net Revenue (R$mm) -7.0% -11.5% -3.6% 3,452 3,

5 5 Brazil (R$ million) vs. vs vs. Brazil % -8.4% 2, , % Contact Center & BPO % -8.1% 2, , % Customer and e-care % -6.2% 1, , % CRM Services % -15.0% % Debt Collection % -5.9% % Other Services % -8.9% % Trade Marketing % -5.1% % ICT % -24.1% % Total Net Operating Revenue from activities in Brazil reached R$500.1 million in, down by 27% compared with and 8% from. In 2015, NOR in Brazil amounted to R$2,287.5 million, an 18% decline year-on-year. We highlight the remaining points that influenced revenue change: (i) Contact Center: 28% reduction compared with and 8% from, driven by the decline in volume seen in the period. In 2015, contact center revenue equaled R$2,104.2 million, an 18% decrease year-on-year. (ii) Trade Marketing: 30% decline in compared with and 5% decrease quarter-onquarter. In 2015, revenue from trade marketing hit R$125.3 million, 18% lower than in. The result reflects mainly the economic contraction seen since last year, thus changing clients commercial strategies. (iii) ICT: 5% reduction in versus and 24% decline from due to fewer projects commissioned in the period. In 2015, these revenues totaled R$57.9 million, down by 21% compared with. 5

6 6 Latin America (excluding Brazil) (R$ million) International Business Unit vs. vs vs % 7.1% % Customer and e-care % 7.7% % CRM Services % 6.1% % Debt Collection % 4.1% % Other Services % 1.2% % Net Revenue (R$mm) Revenue in Functional Currency (R$mm) 40.8% 21.8% 51.7% 26.0% % % Net Operating Revenue from international operations reached R$262.5 million in, up by 52% (26% in functional currency) compared with the amount recorded in the same period of. Compared with, there was a 7% increase (5% in functional currency). The leading factors behind this result were: (i) Colombia: growth of 25% (16% in functional currency) compared with and 5% (stable in functional currency) over. The Company maintained a solid level of revenue with the current contact center clients and, in the commercial area, we highlight the acquisition of a new client in the telecom industry in the United States, strengthening the expansion strategy of Allus in the North American market. Revenue from the portfolio of clients abroad (offshore platform) remained significant, accounting for 16% of revenue in the country in the period, the same level seen during the past 12 months. (ii) Peru: 60% rise (20% in functional currency) compared with and 15% increase (10% in functional currency) from. The Company remained enjoying sharp growth in the 6

7 7 Peruvian operation, ending the year with a record number of employees. The portfolio of clients abroad remained relevant in the period, accounting for 61% of revenue in the country. (iii) Argentina: 79% increase in revenue compared with. In functional currency, we saw growth of 37%, mainly due to the higher volume of operations commissioned by the client base. Compared with, there was a 7% expansion (6% in functional currency). We highlight the acquisition of an important e-commerce account in the region during the quarter. Our site in Cordoba, exclusively dedicated to relationship management via social networks, kept leveraging this revenue line, which accounted for 14% of revenue in the country during the quarter. In 2015, Net Operating Revenue from international operations reached R$921.9 million in 2015, a 41% rise (22% in functional currency) compared with, in line with the consistent performance of these operations, as explained above. Gross Result, Gross Margin and Cost of Rendered Services In the charts below we present the amounts without depreciation. In Attachment III we present the compilation of the main financial indicators following this criterion. In Attachment IV we present the consolidated Income Statement in compliance with IFRS, considering depreciation. (R$ million) vs. vs vs. Net Operating Revenue % -3.6% 3, , % Cost of Services Rendered (726.7) (704.9) (688.9) 3.1% 5.5% (2,842.2) (2,755.0) 3.2% Gross Profit % -65.0% % Gross Margin 4.7% 18.2% 12.9% p.p p.p. 11.4% 20.2% -8.8 p.p. (R$ million) Cost of Services Rendered n.m. - not measurable vs. vs vs. (726.7) (704.9) (688.9) 3.1% 5.5% (2,842.2) (2,755.0) 3.2% Personnel (560.7) (574.8) (544.6) -2.5% 3.0% (2,299.4) (2,291.6) 0.3% Labor Contigencies (25.4) (19.1) (4.8) 32.6% n.m. (2.0) (38.2) -94.8% Third-Party Services (90.7) (66.9) (91.4) 35.6% -0.8% (344.8) (256.4) 34.5% Rent and Insurance (41.5) (40.9) (44.1) 1.6% -5.8% (175.1) (154.7) 13.2% Other (8.4) (3.1) (3.9) n.m % (21.0) (14.1) 48.4% 7

8 8 During 2015, the Company s result was materially affected by some adaptation costs related to the capacity adjustment at Contax, considering the new level of volume demanded by clients. This adaptation is very important to restore margins to levels compatible with the most important players in our industry and has an impact mainly on personnel, rent and third-party services. In, this spending represented an addition of R$24.4 million to the cost of rendered services and R$3.7 million to selling, general and administrative expenses. In the year, these expenses represented an addition of R$108.7 million to the cost of rendered services and R$12.1 million in expenses. The Company speeded the process of vacating sites in, promoting the total or partial closing of 10 units in Brazil. These measures aim to reduce idle capacity, a process that should continue, even at lower intensity, throughout The Cost of Rendered Services totaled R$726.7 million in, up by 3% from and 5% over. Gross Income in reached R$35.8 million compared with R$156.9 million in and R$102.2 million in. Adjusting the adaptation costs in the quarter s result, Gross Income hit R$65.5 million, with a 7.9% margin (compared with 16.5% in and 18.2% versus ). In 2015, the Cost of Rendered Services totaled R$2,842.2 million, a 3% rise from. Adjusting these costs in the result for the year, Gross Income hit R$481.1 million, with a gross margin of 14.8% versus 20.5% in. Personnel R$14.1 million reduction or 2% compared with mainly due to lower costs from payroll stemming from the volume reduction and the subsequent process of operational adaptation in the Contact Center & BPO segment in Brazil. Compared with, there was a R$16.1 million increase or 3% due to a rise in the base of employees in the period because of an operation with new clients from. The Company ended the quarter with 87.6 thousand employees (104.4 thousand in and 85.7 thousand in ), of whom 65.5 thousand in Brazil. In 2015, personnel cost was stable, increasing just R$7.7 million or 0.3% from. This change stems from an additional spending of R$42.6 million related to employee termination. This effect was partially compensated by the decrease of 16.2 thousand employees during the year. Third-Party Services increase of R$23.8 million or 36% from mainly because of (i) addition of infrastructure services related to the Company s vacating process (ii) cost with the hiring of consultancies to help the operating and financial restructuring of the Company, (iii) increase of electricity cost due to a hike in the tariff in the period. Quarter over quarter, there was a R$0.7 million reduction or 1% from mainly because of lower spending on telecommunication and electricity due to fewer sites. In 2015, these costs rose R$88.5 million or 35% compared with mainly due to (i) higher costs with infrastructure services from the capacity adaptation process at the Company and (ii) higher costs with electricity because of a rise in the tariff during the year. 8

9 9 Rent and Insurance cost of R$41.5 million in the quarter, basically stable from. The minor increase stems from the expansion of the international operation with new sites introduced during Quarter-over-quarter, we saw a R$2.6 million reduction or 6%, already due to the reduction in the number of sites in the period. In 2015, the cost rose R$20.4 million or 13% from due to the expansion of the international operation and the cost from the transition to the build-to-suit model with new sites introduced in Brazil in the first half of the year. Labor Contingencies cost of R$25.4 million in compared with R$19.1 million in and R$4.8 million in. This increase compared with the same period of stems from a rise in the number of terminations during 2015 due to the adaptation process at the Company. Compared with the previous quarter, there is an effect of (i) continuous calibration of the provisioning methodology adopted since 2Q15 and (ii) strike the judiciary and the post office, which impounded the inflow of new processes in. In 2015, these costs totaled R$2.0 million, which compares with R$38.2 million in. The reduction is related to the improvement of estimates for the provision of labor contingencies that resulted in a reversal of R$31.4 million in booked costs in 2Q15. Total Expenses (R$ million) vs. vs vs. SG&A (94.8) (79.8) (90.9) 18.8% 4.2% (338.0) (307.9) 9.8% Other Operating Expenses % n.m n.m. Total Expenses (82.5) (47.3) (89.5) 74.2% -7.8% (265.9) (284.5) -6.5% Total Expenses (% NOR) 10.8% 5.5% 11.3% 5.3 p.p p.p. 8.3% 8.2% 0.0 p.p. n.m. - not measurable Selling, General and Administrative Expenses (SG&A) in totaled R$94.8 million, up by 19% from and 4% over. During the quarter, SG&A expenses accounted for 12.4% of NOR, which compares with 9.3% and 11.5% in and. Compared with, growth was mainly due to the expenses related to the Company s adaptation. Compared with, growth was mainly due to (i) increase in personnel expenses because of the expansion of international operations and (ii) expenses with rental contract penalties due to the vacating of sites. In 2015, SG&A expenses totaled R$332.9 million, up by 8% from. Total Expenses in amounted to R$82.5 million, which compare with R$47.3 million in and R$89.5 million in. Year-over-year, the growth seen in Total Expenses is mainly explained by (i) reversal of contingency provisions related to a R$ 21.5 million tax proceeding in booked in Other Operating Income (Expenses) and (ii) rise in SG&A. Compared with, the decline in expenses is 9

10 10 explained mainly by revision toward possible loss of a lawsuit related to the calculation methodology of the index for Accident Prevention Factor ( FAP ). This revision resulted in a partial revision of the provision for this contingency in 2015 which had a positive impact on Other Operating Revenue (Expenses). In the year, Total Expenses hit R$265.9 million, down by 6.5% over. This reduction comes mainly from the reversal of provision for the contingency related to FAP. Depreciation/Amortization The depreciation and amortization balance reached R$59.4 million in, a 92% rise from and 11% compared with. In 2015, the depreciation balance reached R$200.7 million, a 16.0% rise from. The rise seen in these periods is due to the vacated sites and the adaptation of sites to be vacated, which were conducted in The vacating of sites results from the process of adapting the Company s capacity, aiming to adjust it mainly to the reduction of noticed demand. This process should continue until 2016, even with a lower intensity, not only as a consequence of the lower volume of commissioned services but also of the improvement in the planning of operations, allowing the optimization of the use of installed capacity at the Company. EBITDA In, EBITDA was negative by R$46.7 million, which compares with positive balances of R$109.6 million in and R$12.7 million in. The worsening of the result reflects mainly the mismatch between revenue and costs driven by the decrease in volume and subsequent process of structure adaptation. This process began in the first half of 2015 to meet the new level of demand at the Company, to restore its margins to levels seen in the industry. In 2015, EBITDA totaled R$101.3 million with a 3.2% margin. Without the above mentioned adaptation costs, EBITDA reached R$222.0 million, with a 6.9% margin (12.0% in ). 10

11 11 (R$ million) vs. vs vs. Net Operating Revenue % % 3, , % Cost of Services Rendered (726.7) (704.9) 3.1% (688.9) 5.5% (2,842.2) (2,755.0) 3.2% Gross Profit % % % SG&A (94.8) (79.8) 18.8% (90.9) 4.2% (338.0) (307.9) 9.8% Other Operating Expenses % 1.4 n.m n.m. EBITDA (46.7) n.m n.m % EBITDA Margin -6.1% 12.7% n.m. 1.6% n.m. 3.2% 12.0% -8.8 p.p. Depreciation and amortization (59.4) (30.8) 92.4% (53.5) 11.0% (200.7) (173.5) 15.7% EBIT (106.0) 78.7 n.m. (40.8) n.m % EBIT Margin -13.9% 9.1% n.m. -5.2% n.m. 0.8% 6.9% -6.2 p.p. n.m. - not measurable Net financial income (expenses) In, net financial expenses reached R$62.1 million, which compare with revenue of R$ 0.4 million in and expense of R$ 54.4 million in. Year-on-year, this change reflects (i) positive nonrecurring effects of R$ 25.9 million in and (ii) interest and currency variation of the balance of the loan taken by the Company s subsidiary in Colombia in and (iii) increase of interest rates on the debentures resulting from the rise in inflation and interest rates (IPCA e CDI). Quarter-on-quarter, there was a 37% rise in net financial expenses. This increase mainly reflects the items (ii) and (iii) above. During the year, net financial expenses reached R$194.8 million, which compare with R$93.9 million in. Such growth stems mainly from higher interest rates on debentures due to (i) increase of gross debt due to 3rd issue of Debentures in August, representing a shorter period of interest-related expenses in compared with 2015 and borrowing of R$116.2 million taken out in the period by a Colombian subsidiary (ii) rise in inflation and interest rates in the period: IPCA inflation (6.4% in and 10.7% in 2015) and CDI rate (10.8% in and 13.2% in 2015). 11

12 12 Investments (CAPEX) In, investments totaled R$47.8 million compared with R$89.8 million in and R$30.8 million in. Capital expenditure in the period was mainly earmarked for the acquisition and renewal of software and ERP infrastructure. In 2015, investments totaled R$154.0 million compared with R$184.9 million in. The quarterly (versus ) and annual declines were mainly due to (i) higher investment in new sites made in the prior year, (ii) rationalization of the investments in maintenance and (iii) reduction of the number of operating and administrative units in the period (75 at the end of and 63 at the end of 2015). Capex/NOR Capex 5.4% 4.8% 10.4% % 6.3% Income Tax and Social Contribution In, IRPJ/CSLL at the Company had a credit balance of R$30.0 million, which compares with a R$ 29.3 million balance due in and credit balance of R$30.4 million in. This result had the contribution of total settlement of tax credit related to premium from the acquisition of Ability, impacting the deferred income tax booked in the quarter. In 2015, the current income tax and social contribution on net income (IR/CSLL) amounted to a credit balance of R$ 61.4 million, compared with a R$ 48.8 million due balance in the previous year. This change is mainly explained by (i) the amount booked in that reflected almost entirely in the registration of the deferred tax asset due to the loss in the period, generating a future tax benefit, also deductible of the eventual asset sale forecasted by the Company and (ii) effect of premium settlement in. (R$ million) vs. vs vs. Result before Taxes n.m. 76.6% n.m. Inc. Tax & Social Contr of Current Period Inc. Tax & Social Contr Deferred Total Income Tax & Social Contribution % -62.6% % n.m % n.m n.m. -1.4% n.m. Effective Tax Rate - % % - n.m. n.m. 22.9% 33.5% p.p. 12

13 13 Net Income The Company had a Net Loss of R$138.1 million in, which compares with a Net Income of R$49.8 million in and net loss of R$64.8 million in. Compared with, this result was brought about mainly by (i) revenue reduction in the period and (ii) worsening of net financial result. Quarter-onquarter, the worsening of the net result stems from (i) revenue reduction and (ii) higher costs with labor contingencies, as explained before. In 2015, the Company booked a Net Loss of R$226.8 million, compared with a Net Income of R$96.6 million in. Debt The Company ended on March 15, 2016 an important step in the renegotiation process with its creditors. In accordance with corporate actions published previously, general debenture holders meetings were held (AGDs) of the 1 st, 2 nd and 3rd debentures issues at the Company, at which the conditions for the Company s debt extension were confirmed, which will have unified final maturities in December Therefore, the numbers and charts presented below related to the close of and were significantly changed due to this renegotiation. Consolidated Net Debt at the end of was R$1,202.8 million, higher by R$161.0 million compared with the amount at the end of and higher by R$175.2 million compared with net debt in the previous quarter. Gross Debt at Contax reached R$1,572.3 million in, a R$158.9 million rise from, mainly due to the borrowing of an amount corresponding to R$116.2 million in by a subsidiary in Colombia, as we highlighted in previous documents. This borrowing operation aimed to pass on the proceeds to Contax-Mobitel for the coverage of debts, capital expenditure and the financing of its operations. Compared with, there was a R$37.3 million rise basically because of interest accrual on debentures pegged to the CDI (37% of total debt) and IPCA (27% of total debt). These rates in the period were 3.3% and 2.8%, respectively. At the end of, 45.1% of the Company s debt was due in the long term. Debt in foreign currency makes up 11.4% of the total and the Company s average debt cost was 14.0% per year. (R$ million) vs. On December 31, 2015, the Company s consolidated net current capital was negative by R$725.9 million (R$56.9 million on December 31, ). The increase in the net current capital negative amount reflects mainly the maturities of the debentures issued on August 29,. These debentures, pursuant to their vs. (-) Gross Debt (1,572.3) (1,413.4) 11.2% (1,535.1) 2.4% Short Term (860.1) (375.3) 129.1% (700.9) 22.7% Long Term (712.3) (1,038.1) -31.4% (834.2) -14.6% (+)Cash and equivalents % % Short term % % Long Term - - n.m. - n.m. Net Cash/(Debt) (1,202.8) (1,041.8) 15.5% (1,027.6) 17.1% 13

14 14 agreement, are classified as short term due to their maturity and payment schedule. However, on January 19, 2016, a debenture holders agreement was signed and the maturities were changed to longterm. Therefore, we present below the Company s net current capital position before and after the profile change. (R$ million) 12/31/2015 (Before restructuring debt) 12/31/2015 (After restructuring debt) Current Assets Current Liabilities 1, ,589.8 (-) Debentures restructuring 0.0 (696.8) Total (725.9) (29.1) Debt Breakdown and Distribution per Index 12% 18% 2% 12% 27% 70% 37% 21% BNDES Debentures Other CPI (IPCA) TJLP CDI SELIC Other Average Cost of Debt CDI CDI ( as end of period) Average cost of debt 9.3% 8.7% 9.8% 9.6% 10.6% 10.0% 10.8% 10.1% 10.8% 10.7% 11.1% 10.8% 12.6% 12.1% 13.6% 13.4% 14.1% 12.6% 14.1% 14.0% 3Q13 4Q13 1Q14 2Q14 3Q14 1Q15 2Q15 14

15 15 Debt Amortization Schedule R$ MM Before restructuring After restructuring Cash onwards Cash onwards 15

16 16 Shareholder Structure as of 12/31/2015 Stake in Total Equity Shareholders dec/14 sep/15 dec/15 Controlling Shareholders ¹ 24.31% 24.31% 24.31% CTX Participações 22.73% 22.73% 22.73% Grupo Andrade Gutierrez ² 44.91% 44.91% 44.91% Grupo Jereissati ² 44.91% 44.91% 44.91% Fundação Atlântico ² 10.18% 10.18% 10.18% Fundação Atlântico 1.58% 1.58% 1.58% Treasury 1.96% 1.98% 1.98% FREE FLOAT 73.73% 73.71% 73.71% ¹ Control Group holds 56.3% of common shares issued by the Company. ² Stakes in CTX Participações S.A. Subsequent Events 1. According to the material fact of January 19, 2016, general debenture holder meetings were held for the 1 st, 2 nd and 3 rd debenture issues of the Company, at which the conditions of the financial debt extension were confirmed, subject to the fulfillment of efficacy conditions. On February 4, 2016, the conditions for the debentures extension originally issued by CTX were approved, which were fully assumed by Contax Participações S.A. Following the approval of the extension by the debenture holders of the 2 nd issuance, the debentures of the 1 st, 2 nd and 3 rd issues will have unified maturities in December 2021, while (i) the debentures of 1 st and 3 rd issues will be repaid in 16 quarterly installments starting in March 2018 and (ii) the debentures of 2nd issue will be repaid in 48 monthly and successive installments starting on January 15, Moreover, the debenture holders of the 1 st debenture issue decided to postpone the maturities of principal and interest on the debentures from January 20, 2016 to February 26, On February 24, 2016 a new meetings the debenture holders of the 1 st issue of debentures decided to postpone the maturities to March 21, 2016 and the debenture holders of the 3 rd issue of debentures decided to postpone the maturities to March 22, On March 15, 2016, the Company announced in a material fact that it verified the fulfillment of efficacy conditions, and with the re-profiling of debt, the amount related to these payments were incorporated to the total re-profiled amount. 2. On February 18, 2016, the Company informed its shareholders, investors and the market that its Board of Directors approved to submit to and request approval of the Extraordinary General Meeting, to be called and held opportunely, a proposal of grouping the total of common and preferred shares representing the Company s share capital. The Board of Directors proposal consists in the grouping of the total of 345,767,870 entry shares of the Company, all with no par value, of which 119,725,707 are common shares and 22,604,163 are preferred shares, in the ratio of 100 shares of each type for 1 share of the respective type, without change to the Company s share capital amount, in accordance with article 12 of Law no. 6,404/ As per the Notice to the Market published on March 23, 2016, on March 14, 2016 the Company took out with its direct controlling shareholder CTX Participações S.A., a subordinated loan totaling R$45,460. The Debt will be subordinated, in order of payment, to all other financial obligations of the Company, having a preference solely over the payments to the Company s shareholders, given that the amount of the Subordinated Debt or any other instruments to which the Subordinated Debt may be converted in the future, duly restated in accordance with the remuneration presented below, will be amortized in a single installment on December 31, The Subordinated Debt will be subject to restatement, as of the date of its disbursement, based on remuneration equivalent to the accumulated variation of one hundred percent (100%) of the daily average rate of Interbank Deposits (DI) of one (1) day, "over extragrupo", expressed as a percentage p.a., based on two hundred and fifty two (252) business days, calculated and published daily by CETIP S.A. Mercados Organizados in the information bulletin available on its website, accrued exponentially of a spread or surcharge of 1.25% p.a., pro rata die. The payment of compensatory interest will be made in a single installment, on the maturity date of the Subordinated Debt mentioned above. 16

17 17 Attachment I Financial Indicators (R$ million) vs. vs vs. Gross Operating Revenue % -3.6% 3, , % Net Operating Revenue % -3.6% 3, , % Gross Profit % -65.0% % Gross Margin 4.7% 18.2% 12.9% p.p p.p. 11.4% 20.2% -8.8 p.p. EBITDA (46.7) n.m. n.m % EBITDA Margin -6.1% 12.7% 1.6% n.m. n.m. 3.2% 12.0% -8.8 p.p. EBIT (106.0) 78.7 (40.8) n.m. n.m. (99.4) % EBIT Margin -13.9% 9.1% -5.2% n.m. n.m. -3.1% 6.9% n.m. Net Profit (138.1) 49.8 (64.8) n.m % (226.8) 96.6 n.m. Net Margin -18.1% 5.8% -8.2% n.m. n.m. -7.1% 2.8% n.m. Unit Profit - R$ (1.10) 0.35 (0.61) n.m. 81.7% (2.07) 1.41 n.m. Price/Profit - R$ (0.12) 8.87 (4.65) % -97.3% (0.12) % * Return on Average Assets - % -8.2% 3.6% -1.4% n.m. n.m. 2.6% 3.6% -1.0 p.p. * Return on Average Capital- % -67.5% 22.3% -9.9% n.m. n.m. 16.5% 22.3% -5.8 p.p. * Return on Capital Invested - % -14.7% 6.5% -2.7% n.m. n.m. 5.0% 6.5% -1.6 p.p. Firm Value/ EBITDA* n.m. n.m % Net Debt 1, , , % 17.1% 1, , % Net Debt/ EBITDA* n.m. n.m n.m. Capex % 54.2% % Capex/Net Revenue - % 6.3% 10.4% 3.9% -39.9% 59.9% 4.8% 5.4% -0.6 p.p. *Past 12 months Annualized or average ** n.m. - not measurable 17

18 18 Attachment II Operating Indicators Quantity vs. vs. Workstations - Installed % -17.8% Argentina % -0.2% Brazil % -23.1% Colombia % 3.7% Peru % 0.0% Workstations - Planned % -1.8% Argentina % -6.5% Brazil % -1.4% Colombia % -2.7% Peru % 1.1% Employees % 2.2% Contact Center % 2.7% Argentina % 10.8% Brazil % 2.2% Colombia % 1.7% Peru % 2.9% Trade Marketing % -6.7% ICT % -5.4% Administrative % -1.9% Occupied Area- m % -13.0% Argentina % -2.0% Brazil % -17.2% Colombia % 1.9% Peru % 32.3% 18

19 19 Attachment III Financial Performance (R$ million) vs. vs vs. Net Operating Revenue % -3.6% 3, , % Cost of Rendered Services (726.7) (704.9) (688.9) 3.1% 5.5% (2,842.2) (2,755.0) 3.2% Personnel (560.7) (574.8) (544.6) -2.5% 3.0% (2,299.4) (2,291.6) 0.3% Provisions for Labor Contigencies (25.4) (19.1) (4.8) 32.6% n.m. (2.0) (38.2) -94.8% Third-Party Services (90.7) (66.9) (91.4) 35.6% -0.8% (344.8) (256.4) 34.5% Rent and Insurance (41.5) (40.9) (44.1) 1.6% -5.8% (175.1) (154.7) 13.2% Other (8.4) (3.1) (3.9) n.m % (21.0) (14.1) 48.4% Gross Result % -65.0% % Expenses (82.5) (47.3) (89.5) 74.2% -7.8% (265.9) (284.5) -6.5% Commercial (6.2) (6.1) (3.1) 2.0% 102.3% (15.3) (17.5) -12.7% General and Administrative (88.5) (73.6) (87.9) 20.2% 0.8% (322.7) (290.4) 11.1% Other Operating Expenses and Revenues % n.m n.m. EBITDA (46.7) n.m. n.m % Depreciation/Amortization (59.4) (30.8) (53.5) 92.4% 11.0% (200.7) (173.5) 15.7% EBIT (106.0) 78.7 (40.8) n.m. n.m. (99.4) n.m. Net Financial Result (62.1) 0.4 (54.4) n.m. 14.0% (194.8) (93.9) 107.5% Income Before Income Tax (168.1) 79.1 (95.2) n.m. 76.6% (294.2) n.m. Inc. Tax & Social Contr (29.3) 30.4 n.m. -1.4% 67.4 (48.8) n.m. Non-controlling Shareholders Interest n.m. n.m. - - n.m. Net Income (loss) (138.1) 49.8 (64.8) n.m % (226.8) 96.6 n.m. n.m. not measurable 19

20 20 Attachment IV Income Statement Consolidated IFRS (R$ million) vs. vs vs. Gross Revenue % % 3, , % Deductions of Gross Revenue (53.7) (68.2) -21.4% (55.4) -3.1% (235.6) (275.7) -14.5% Net Revenue % % 3, , % Cost of Rendered Services (775.1) (730.4) 6.1% (732.3) 5.8% (3,007.9) (2,899.6) 3.7% Gross Profit (12.5) % % % Commercial (6.3) (6.1) 3.5% (3.1) 102.0% (15.5) (17.5) -11.9% General and Administrative (99.4) (79.0) 25.9% (97.9) 1.6% (357.5) (319.3) 12.0% Financial Results (62.1) 0.4 n.m. (54.4) 14.0% (194.8) (93.9) 107.5% Financial Revenue % % % Financial Expenses (100.2) (34.9) n.m. (70.9) 41.2% (280.5) (158.3) 77.2% Other Operating Revenues % 3.3 n.m % Other Operating Expenses (34.7) (4.7) n.m. (1.8) n.m. (39.5) (26.8) 47.4% Income Before Taxes (168.1) 79.1 n.m. (95.2) 76.6% (294.2) n.m. Income Tax & Social Contribution 30.0 (29.3) n.m % 67.4 (48.8) n.m. Interest of non-controlling Shareholders - - n.m. - n.m. - - n.m. Net Income (loss) (138.1) 49.8 n.m. (64.8) 113.2% (226.8) 96.6 n.m. Number of Shares Excluding Treasury (in '000) n.m. not measurable % % % 20

21 21 Attachment V Consolidated Balance Sheet Assets 12/31/ /31/ 9/30/2015 Total Assets 2, , ,896.2 Current Assets ,106.7 Cash and equivalents Restricted cash Accounts Receivable Deferred and recoverable taxes Escrow Deposits Prepaid expenses and other assets Total Non Current Assets 1, , ,789.4 Long Term Assets Escrow deposits Restricted cash Deferred and Recoverable Taxes Credits receivable Prepaid expenses and other assets Fixed Assets 1, , ,163.6 Fixed Assets Intangible Assets Liabilities 12/31/ /31/ 9/30/2015 Total Liabilities 2, , ,896.2 Current Liabilities 1, , ,528.4 Loans and financings Debentures and Promissory Notes Suppliers Suppliers restructuring program Payroll, taxes and social benefits Taxes payable Provisions Dividends payable Transfer to Shareholders Contingent consideration Other Obligations Non Current Liabilities , ,018.5 Loans and financings Debentures and Promissory Notes Provisions Contingent consideration Deferred taxes Other Shareholders Equity Capital Capital reserve Other comprehensive income Profit reserve Other reserve (33.2) (33.2) (33.2) Treasury stock (20.1) (23.3) (20.1) Accrued Income (40.3) - (88.7) Interest of non-controlling Shareholders

22 22 Attachment VI Consolidated Cash Flow (R$ million) 12/31/ /31/ 9/30/2015 Net Income (138.1) 49.8 (64.8) Depreciation/Amortization Gains / (Loss) with interest and net monetary variation Contingencies and Other Provisions (21.3) (26.7) 0.4 Instrument Sheet for Share-based Compensation 0.1 (0.2) 0.1 Deferred Income Tax/Social Contribution Tax (34.2) 18.3 (41.8) Non-controlling interest Gains (Losses) from the Sale of Fixed Assets Increase (Decrease) in Accounts Receivable Suppliers restructuring program (74.2) Other Assets Judicial deposits 7.6 (13.4) (11.6) Increase (Decrease) in Payroll and Related Charges (63.2) (88.2) (4.7) Increase / (Decrease) in Suppliers 16.0 (1.0) 9.0 Other Liabilities 45.5 (9.6) (19.7) Net Cash Position - Operating Activities (52.0) Sale of Fixed Assets - - (0.8) Acquisition of Fixed Assets (47.8) (89.8) (31.0) Financial Investments Held to Maturity Restricted cash Net Cash used in Investing Activities (47.8) (89.8) (31.8) Leasing Payments 0.3 (0.1) (0.3) Financing Obtained Financing Payments (39.9) (48.2) (40.0) Debentures Promissory Note Debentures and Promissory Note Amortization (2.6) (7.9) (7.9) Receipt on splitting investment Goodwill on equity transaction Investment Acquisition Interest paid (6.5) (47.2) (35.2) Dividend Payment - (102.0) - Repurchase of Shares - (14.0) - Sell of Shares Net Cash used in Financing Activities (11.9) (204.0) 41.4 Exchange Difference on cash and cash equivalents (26.3) Cash and Cash Equivalents - Beginning of Period Cash and Cash Equivalents - End of Period Increase (Reduction) in Cash and Equivalents (138.0) (281.0)

23 23 Attachment VII - EBITDA Reconciliation (R$ million) vs. vs vs. Net Income (loss) (138.1) 49.8 n.m. (64.8) 113.2% (226.8) 96.6 n.m. (-) Interest of non-controlling Shareholders - - n.m. - n.m. - - n.m. (+) Inc. Tax & Social Contr. (30.0) 29.3 n.m. (30.4) -1.4% (67.4) 48.8 n.m. Income Before Taxes (168.1) 79.1 n.m. (95.2) 76.6% (294.2) n.m. (+) Financial Expenses n.m % % (-) FinancialRevenue (38.1) (35.2) 8.2% (16.5) 130.9% (85.7) (64.5) 33.0% (+) Depreciation/Amortization % % % EBITDA (46.7) n.m n.m % n.m. not measurable 23

24 24 Contax Group is one of the largest global groups specializing, in a broad way, in customer relationship management. With a customized operation, Contax Group offers different communication channels to serve, understand and please the end consumer of its clients. Currently, the Company operates predominantly in Customer Service and e-care, CRM Services, Debt Collection, Back-office, Technology Services and Trade Marketing. Our business strategy seeks the development of long-term relationships with its clients, large companies in diverse market industries including telecommunications, finance, air transport, utilities, services, government, healthcare and retail. In December 2015, Contax Group had physical operations in Brazil, Colombia, Argentina and Peru, providing offshore services for Chile, Ecuador, Panama, U.S., Canada and Spain, having approximately 87 thousand employees. The information contained in this document relating to the business prospects, estimates of operating and financial results, and growth prospects of Group Contax are merely projections and as such are based exclusively on Management s expectations concerning the future of the business. These forward-looking statements depend materially on changes in market conditions, the performance of the Brazilian economy and the industry and international markets and are therefore subject to change without prior notice. 24