Earnings Call: H2 2019

Mar 26, 2020

Annual report

Good afternoon. This is a call for a conference operator. Welcome. I'm Conference Call. Anyone who assist us during the conference call, they will take out an operator by pressing star and 0 on the telephone. A design and message on the conference over to Hello. Good afternoon to everyone, and welcome to our conference call. And I will try to to do the, full year results, especially some figures that some details have not been just close the play previously. Then, later on, if you're open to you for the for the question, both when we put the results and the and maybe even more interesting on the current trading conditions. So So, if we could be at 2000 and, 19, I think we could be quite happy with the the outcome is it for you to to compare maybe with, ear slide before the the the demand side is, where the scope and the I'm happy to speak with a little, the difference, including the proportional consolidation of Mexico, but for sure, you have a few, results. That are, one of the best, let's say, ever achieved by the by the company. And it was it was a combination as as we tried to to explain in the in the first of, a very good trading condition. So I think we are needing, volume increasing, from the pricing, sometimes also increasing pricing, level and, favorable foreign exchange rates. Concentration, not particularly mild, but, anyway, somehow, to be upset by the by the government trying to so, my friend was already was already discovered at the beginning of February. And we have a positive, 4% in terms of cement, cement sales, with, with a typical experience, almost everywhere, except for some minor declines in countries. That are, really working the type of capacity like tech and Poland, and, and the price to trend in in Luxembourg, sir. The the volumes, trended upward, particularly well in US, it's a very strong second semester. And good friend in Italy, partly, helped, let's say, by the by the Chinese copper consolidation. And, beside the, let's say, check and phone numbers, it said, flatbed e flatbed, stronger down the Ukraine and also the performance in in Russia. If you look outside the the, the questions in there, So the joint venture has stayed the important one, in Mexico was actually the probably on the country showing some, some, let's call it weak, threatening condition with, So I've seen in terms of volume that's going to be better. It's also an easy to predict when they give you the package. And then, 18 1 month of shipment was practically unavailable due to the transportation strikes. If you look at the records, volumes, sir, a similar trend even though it's always more difficult or or, okay, more more time that the terms of admin, because if you can refer, like, if if some, agent jobs said that and then, you're just applying or maybe, can't do to help you or not, or not, you mean, if you could say it by other, the job of all the same size. So we've invested the performance in US, which is, which is, focus, terminated from the Texas. That's the area. We are not already mixed with the user. So, I mean, our privacy of invoicing in the US is basically in Texas. For more than the 15% after interest, flat or slightly negative It's in Czech Republic and in the Netherlands. We had, we had, maybe a little bit of size up coming to to an end or to close it to to some fishing. The Yes. Again, all countries, performed with the positive sign, talking in local currency, We had, verification improvement, in, Poland and Technology capacity, also with the project development in Czech. Yep. Would would be practically, basically, and and also in in your claim, the the tickets, of course, you know, the guarantee was somehow somehow I think it went by by the local inflation rate, which is still fairly high. Russia was a private element about 4.5% after. From pricing in US or no, no major changes there in terms of net, net of plans, let's say, like, a 1% after. With, again, some, some, differences among other regional areas. So we have the regions into it to our talking to if it were really, and available or there was no facility to to to approve them. And other, like, like, just just for some Central Texas where the class is, trended up. And, again, this was quite like, your life credit, Crystal, Prasawa's group of loan facilitation following also some some increase that we had to pay, sir, in here, like the US, mainly labor and services, which is, which is, very the guys that they are successfully there with the stronger due to their performance and, to New Orleans. And meanwhile, in Europe, the the country and to to bear additional cost related to to see to see to like that. I don't know. I mean, this was mostly true for possibly for Germany and and and in in countries that the more salary Ukraine and Russia, strong increase in in the in the fuel and handling power cost. In general, if you look at the energy cost, fuel, as in as a whole, like, within the group, was not, was not higher, right, with the amount spent before it would cost a lot greater than last year. It said it was was greater for, electrical electrical power. But, when we compare that the the the weight of the energy deal on our revenues did not change or or was trending somewhat lower. Due to the stronger, let's say, the mobile. In, FX changes that I said at the beginning of favorable, basically everywhere, dollar, 5% after, the Google 2%. They premium. The currency also almost 2% stronger on Sierra on on Elevator. Flat for developments for the exchange rate in in check-in call, and there'll be changes there. Any and from the also Mexican Pedro, which was, I think, somehow the the transmission of their their results, which one, unfortunately declining. And it said that a loss of 2.5% for the because we've been, re hours. The late terminal, but then let's say the speaker was disclosed already, the beginning of February. So no changes there. We are up about 4% in the reported figures with the ForEx favorable change of 81,000,000 and also favorable scope change of 20,000,000, which is comes from the talent business, sir, and the the talent business, sir, and the talent business came from the application Let's say, effective July of the three plants, let's say, it's a cycle to 1 to 2.10 plants from Oliver Cement in, Central And North Pacific City. And we have also made a payment in scope changes in, in Germany, and from the previous year, because the decided to enter an acquisition was consolidated effective on May 1 2018. The next attempt to lower decline by, about 5% in Europe, but it was actually almost 10% decline in looking currency. We just need to know where, improve the 1% platinum in Europe. And it and it said it was 4% after in, in local currency. But, again, this figure is already available. I'm going to the operating cash flow and the DPA. I can't say this is I was excluded through yesterday. And we noticed, also also in this feature, a favorable change in any country will operate it on this section. No exception of the Luxembourg and the Netherlands, which were collected against, against this year. In absolute terms, mainly improvement, but coming, first of all, from the US, very strongly early check performance, here. With about 60,000,000 apps and the reported figures. Of course, here, the reported figure for 2019, include the impact of I press, 16 leaving, which is, which is, favorable, let's say, in in the time of sorts. So the differential state differences is a little biased, let's say, Upwork, but, anyway, in the US, the former server was very strong. In absolute thermostat, also, we put it by phone very well because we moved from basically flat to minus 2,000,000,000 BBA in 200843, positive in 2000 and, well, 19. And the 453 policy that we decided to work to to to mention it. To recall that includes some CO2 write sales, in the company. So I'll call this for the, 3, almost 24, are coming from tier 2 did the company sales to Germany, Luxembourg, Netherlands, to take, solar and the trip, etcetera. But, anyway, Italian, for Italian business, sir. Also just from everywhere, almost 20,000,000 in absolute in absolute terms. And we had a strong rebound in, in Ukraine. So you remember that 2018 was, particularly weak. And then on the air with a 14,000,000 improvement also with the help of all the all the stronger counties as we've said before. Russia, performing well too. With 7,000,000 after from 50 to, 57. In total, we are 728. Again, I reported the figure. It's a standard and and for the the the the the cabin. And the main, the main, let's say, no recurring item is the adoption of IFRS 15 for 20, approximately $28,000,000. Then that we have some other minor items of the a negative of, 4,000,000 in, in, in, in, He was mainly in in Boston, Germany, 16 in, in Italy, and 4 in, in Germany. Looking at the joint venture. Mexico was down about, 56, 57,000,000 But, I mean, unfortunately, more in, in local currency due to the stronger pages as we mentioned before. Brazil is we had a negative variance in the reported figure of about 8, 8,000,000, but last year. The policy is not recurring here items of 11. So, actually, the policy is even if it's not appearance to now, up to now, particularly in still in the visible, the same market environment, the the recurring figure is better than the than the this year. In terms of contribution to our to our, let's say, a little, consolidated figures. You see that, the the weight of of relapse is continuing to be very significant around the 56%, 55% to 55% to 55% last year was slightly greater. Also, because in the meantime, we had the Italy, fortunately moving from an equity to a policy, the distribution, to get that all, operating operating cash flow. Eastern Europe also improved No. We made it in the 52, contribution and and ceremony and sometimes you are, let's say, slightly down, the representative is here, 50% of the GDA versus 19 in the 2019. The degree of the due to GA from, reported seizures again from, 5 sir. It's 27 to 728. Tell us that the the volume and and and price impact that was about, 200 and, almost 100 and 50,000,000 positive, of which volumes 100 and 2103. Then variable cost. Failure, okay, considering the the the stronger level of activity because, yeah, 110,000,000 with, significant increases in, raw material and, the digital classification, but moderate increases or, for example, in the case of few, as I mentioned before, no increases, so for few, moderate increase for power, fixed cost, concealing also the the, let's say, of it all, get the level of of of acuity, I think pretty much under control. That labor cost, as I mentioned before, we've also sent in the increase. It's, in labor cost and most probably all the chances of the market, we've been about the, you know, you can, variance for speech questions. Sorry. And and did I say? No. You may just may just change the effects of the effects on the EDA amount to 24,000,000. And, again, I think Jonathan Gitmeid is 16 adoption. If we if you look at the at the, let's say, lower portion of the what we have statement here, So the property profit is not gonna be affected by IFRS 16. The the document is almost neutral at the operating profit level. So, we have improved in the error of the 116,000,000 from 1052 at 68. And, also, as a as a, let's say, We're moving up more than 2 100 basis points from 12.2to14.5 the lower part of the payment is a little, full year, which is not clear because we have less, a contribution from, earnings, equity earnings of the associates, in particular, as I said, the Mexican merger, which has been She's not as strong as as usual, even though it's results continue to be the the quality, let's say. And we have higher finance in the finance cost, sir, of 58,000,000. Last year, it was a 24,000,000 from a 25,000,000. It's, is due to the, so called, non cash, non monetary items that fault within this this category of security, unrealized, let's say, for for extra gains or losses, there is a evaluation if you have an increase in decrease in the year, related to the APT, APT, a paid convertible, cash set, sorry, cash set, an adoption associated with the convertible bond. Which, had a had a certain deadline at the beginning of the year, and then that it was a good size during the during the year. And so it's also being negative. If you look actually at the 2 earned net interest expense on interest bearing loans, We had an improvement, of about 18, 18,000,000, including also interest income. So the the difference between 9. That's a 713. And the higher in length was lower, than 2018 by, 16, a million, approximately. Our cost order was better, let's say, Miranda. So I'm just saying that sort of financial independence is, less than 2%. Currently, it was a lot less than 50% at the end of 2019. Looking at the, cash flow statements or the consolidated cash flow statement, We had a very strong, great guessing, right, from operation versus last year, and due to, also, certain, control and improvement in, in working capital. So we moved it from 422 to 691. And also and also after the play with the following The following intermediate result and net cash generating activities, improved significantly, following a lower, interest payment, as I mentioned before, but if it's cash before, it was approved in this payment, but also the cash the cash let's say, out your interest went down from, 45 in Las Vegas to 32 in 2018. Even tax payments were partially higher due to the, rate of taxable income coming and mainly from the U. S, Italy and Germany countries where also the average tax rate is greater than, than, for example, you say when you're open. And so so, our next presented into 7 19 about 80% of sales, versus less than 12 on the in the previous year. Also, the ROCB, very strong with the pace of generation. Capital expenditure, somewhat lower than last year, including also equity of the investment for the first I can invest things up here, so that, we have the the outflow associated with the the signal everything, investment, the the insurance in the individual market. This year, we did have some special project, not heading for a fact, sir. So we include here 82,000,000 investment associated with the purchase of the Finjan Type 23. Which I mentioned, which I mentioned before. When this is set up in the net financial position at the beginning of the year with with the address, it's the option. It's about 94,000,000. Then the the repayment of the convertible bond, since we had been purchased shares already in 2018, was, represented actually a partial, the partial economic standpoint, the improvement of the international position. Dividend paid. So we're already seeing that to the previous year. We received the similar also in, shipping from so quick in terms of dividend, there was a less total of the start earning investments, the 45 Nissan in 2019, 12,000,000. Let's see. And we ended up with Steve who was very similar. So at the end at the end, the change in net debt, including, the step up coming from, from, IFRS 16 adoption was a favorable 320, you know, which is a very significant amount for for 1 year of, or or insurance like like that. Came down from, 890 to, 568, let's say. Thank you for being an additional, which was not included in the at the beginning of the year. It's never important to point, particularly today than in the in the coming 15 months is the, you know, that's an attempt to aspire. Which is, which is showing with the, I'm sorry, the, if it's favorable, if you didn't have some some great air, confidence on the on the on the on the financial condition because We, in 2020, we have, principal repayment of $26,000,000, let's say, only So it's not a credit payment due with the 521, and that will be the 150,000,000 of principal repayment in 2022. Then the cheaper for the biggest chunk of our let's say, that maturity, sir, will be coming due 23. 3 security of your payment, the Eurobond of 500,000,000, but we do have, 3 years of the low or reduced it, basically, it's for repayment. I think think we can move to to your, to a late session. I I hope not to not to have missed or left behind the anything anything significant. But, again, you can you can address clear your question, both on the on the, let's say, last year. And the MDG current training. So I would kindly ask the operator to open the Q and A question. Good evening. This is a call for a conference operator. We are now within a question and answer session. Anyone please press star and The first question is from. Please go ahead. Hi. Good afternoon, and thanks for taking my questions. So I have, I've set on cash, if I may, and and you'll get to the rotation thinking about the the one here, you you have low, amount of debt, that's right here. And have gone and confirmed the 2019 dividend. So how comfortable are you on this 1 and and 7 and as well. And on the other hand, we'll we'll continue, that you have renewed your payback program or might actually start that as soon as now. Is it is it in your contemplating mortgage today that's now given the lower shelf price or how do you think about that once you think that at this point of time, it would be made a safer to protect the the balance sheet, and the cash. So that's my first question. Yeah. And on the second question, if you could talk a bit more about the willing times that you've seen, account here over the last 2 weeks and how this has progressed, which is, what is the percentage of the decline and maybe per agent, which has a little bit of of color there. If you could give us a little bit of, of more color and and if we see, a little differences between So send me out a send me out the US, and if you have additional details. Alright. Thank you. Sure. Well, yes, of course, the the the further renovation of of a cashier is even if our position is, stronger, it's it's a it's a it's a main, it's it's an angle. So we have to we have to to to to make sure that, of course, we can we can we can we can face any any kind of potential, let's say, disruption without, it would be going into any trouble. On the other hand, through that, today, both if you look at the results of 2019 and also, you've seen in a in a very controlled situation, which I think that we will save you everything in 2020. We think that overall, what has been decided by the by the board today, both in terms of giving them the and the, opening of you already approved the sure, share buyback program is, is that kind of a a statement. And, a lot of us to to go We think, private, sir, in a in a safer way. In terms of, buyback program, we don't have to to to Russia. In in a sense, the the idea is is to somehow give a give a sign, I think, to to the market. That, that, let's say, about this financial position and and see the possibility to, to invest some money in itself for for 2.32 future use is because at the end, if you have some, some of your shares, in in your portfolio, this can be very useful tomorrow for other for other reason for other strategic reasons. Yeah, as you have mentioned before, but I think that the value you are not usually aware, the, that also we, could be, I mean, reading directly, but the the support of utmost COVID was completed due to the close-up to the year end, in particularly at the beginning of, March, this year to be sure I successfully read about it. And, there was already significant distribution of cash, additional to what we had in place at the end of last year. It's about 3 hours, again, before before the end of before the end of March. And if it's available, what can be considered available for, for, let's say, the buyback, the buyback program. We need to focus, you know, strongly in this year. On the on the on how the on how the situation develops because if it is really changing, changing, that will give you some some some follow-up. It's changing quickly and, the worst. It's not changing to a different debt. So this is This is this is clear. But there are there are still some, significant additional differences, and we don't know. It's very difficult to tell. And nobody knows whether whether, countries like the US will come to complete production stop like we have right now, Italy or not. So, and for how long also the climate such a stop is going to So, in terms of, again, it doesn't decline. It depends very much from, from region market to to market. Up to the last, the environmental decision. Usually, we are not allowed to produce anymore. For the moment, the deadline is set at, at the end of the third, potentially in your opening. But, I'm, I don't know, really. It's been last longer or or I've been my patient by by 8 the the the the the 3rd. So when you are when you we get we are not allowed to to produce. I'm not even allowed to sell. So our our our clients are currently closed with the one exception, which is the client in the north what's the beginning at this time to, it somehow links to the to the support supply and, production chain of the of the waste. Because, you know, in particular, this plant is burning. If you will from, household waste. So it would create a problem for the for the, let's say, weight treatment you have to be able to to dispose of letters through the through the, let's say, the same appliances. So it's it's open. It's it's remember at the same time, the market does not exist here, sir, until the, the employee will be full of it at a certain point, ignore your thing. Let's see if the economy, this plan, we'd like to shut down. So this is the inflation is, the worst that I could see is not to make it. I don't know. Again, it depends on how how long it's supposed to last. In the meantime, from when we stopped, until I'm seeing the reopening indicator you can set. I don't know. 10 or 50% maximum or what used to be the normal you know, mobile shipment television and, even less. We have not seen that it's a yet, again, anything similar. In the other in the other countries. The well, no. Not exactly. I'm the only one in the civil situation, which is which is, basically, in the phase of shutting the car and doing it in Luxembourg. The the the the the Jacksonville claim is also shipping the same product, in, to work with, say, France and the and the other very large companies. So that's the one where the account is, is a chitchat. In Germany, you look for the moment that no, similar again situation, but but clearly, the effect of any way, it is somehow let's call it trained or with with a lot of restriction to, people movement, this movement, this is We will we will immediately translate into a lower and to a lower demand. Again, by March, they they need to talk to to us tonight. US, you can see the original difference is kind of a similar look down, but but not again for production activity, like cement thing, right, and Pennsylvania. The Texas map, which is important for us, not not clearly yet, affected by any kind of significant, let's say, a rotation beside the commendation to the people, to follow, let's say, it takes a lot of precautions So I don't think we will see at the end of March, any significant worsening for that are that are, other than than than the Italy. In the coming months, it really depends on the on the virus, spreading. I'm actually, I'm I'm manufacturing. And the reaction of the different settlement, which I believe that this is my opinion. It's not likely to be sure. Excuse me. Like, if I've been, like, it is right now in Italy, but I might be I might be wrong. Okay. Thanks very much. The next question Oh, yeah. Thanks for that. It's just that you just get into the volumes by market. So, we reversed the report in the last 2 weeks of I've noticed some problems in terms of, like, having to reach you more. So I don't know if you could just ask any color there in terms of of how those markets are traded. And, likewise because communication may be in terms of Mexico, Missouri, and your your small business in Australia. I'm trying to reach, tokens with the new practice, if at all, at this point. I'm sorry. In terms of GS, I know you mentioned there that your operation are you able to ship for me to move product around or you're restricted anyway in in in that regard? Thank you. No. In this, for the moment, we can, we we we can see. We have more problems, in the in the what's called main office, which is which is located in Pennsylvania where, people have been using this bring this communication to to work from, from home, which is not impossible to to to to some extent, seat and not, you know, move around rather than on the production and, and she's suffering from the Pennsylvania plan, sir. It is unable to receive certain raw materials, sir, which will be referred to outside. It's also one of our people's points. It could be one of our people from from the US. So it'll be let's call it, I don't know if people are not coming from your own quarry. And so you need to keep it outside using a certain kind of rigid ticket. This could could translate into into some kind of issues, generally, but, much higher cost than maybe and I'm I'm not able to be on the same, well, not the area because, you know, the time has been or the the traditional plan has been transitioned down. The the the 24, the 1st 2 months has been if you do, it didn't seem actually better than last year because, whatever was, was almost everywhere I knew about in US, let's say, a little bit mild. So, we haven't even, I would say, nothing nothing really showing none of video signs of of, of, let's say, I think it would be very difficult to see to see get any client in the in the end. I mean, it will be the it will be more relevant, from from the 1st branch, let's say, in Italy. And, and then we'll see gradually. I hope processing that trend, but for sure as you can and I dropped in the in any sense that you were calling in going forward. So you asked me if there's a little more of a question, but I can also be able to speak recent developments. So so it's such a high infection rate, in some region that, like, Texas may continue to to, let's say, business as usual or almost as usual. So I don't know. This is what I can tell right now. Is that I'm I'm sorry. So is there is actually a good place where I went some, some, COVID, let's say, 19, She's also there some some song, again, recommendation for the moment to So it's on the social business. It's a event that has been canceled. We don't have, we don't have an impact on the plan here right now. The shipments are not particularly strong, but it is coming from from, let's say, the the current, let's see condition of the economy, which was already was already seeing a lot here. So, yes, sir, he did not see any in our in our shipment. You know, basically it's light versus last year. I think it's what we actually expected already. We really did not see the potential for the for the, let's say, economy to to around the vehicle. So, in Mexico, we have a And it's true also for times. It's like, like, Brazil and and and Russia, that's more important than Brazil. In fact, they consolidated. We had a significant worsening of the of the, of the currency. So any any transformation is that, coming for Mexico, Russia, and Brazil is likely to be is likely to be negative. It looks like negative. It's changing through the year. But, in Russia from one day, you know, it's okay when the Uber went from 70 to 80 to 83. And, of course, it's a very, very tough thing to see on our businesses. I mean, the situation is, again, nothing new. Really, we have nothing so much related to the to the infection to to the virus. You know, it's suffering from, difficult situation. Yeah, for special election when you're done with the new president, but still probably, not fully empowering in effect because the power remain wherever it used to be. And a strong a strong impact, negative impact coming from the oil price. It's a 300, you know, there's such a low level in oil price. So it's going to affect the country, but, what you need to consider, you can see there. But we did not forecast, even, a year for Algeria. Alrighty. Okay. Thank you. And, our conditions aren't present in your country. You you made the question or or, what did you say? I don't know. I'm just saying I I I I hope that you No. Yes. Yes. Thank you for everybody else. So, I think we will, because because they're teaching us so significantly, they will do, they will obtain some kind of success. But again, the problem is, you know, make the the the sound mistake and this is the what's the, or or or or better than, then the, what do you call it? That that would be the lucky soul. This is a heck of a question mark. Next question is from Yatin Juari with Johnson Investment Research. Please go ahead. Yes, sir. Good morning. Just a question for me. So you have enough to give us some color on what has been happening in the past few weeks. Do you think you could give us, some that you have seen. I see that certain amount of high deducting and the amount of a 60% in your nationality. Uh-uh, could you just send us to go by region division? If you've seen anything in Germany, Rochelle, do do that include this food from just to get a sense of what is the extent of the decline? I think it's too early. Yeah. Well, for Italy, not not just in this statement, but I believe that it was made before the the actual, uh-uh, closing down before the because we We are we are forced to to shut down the deduction only 2 days ago. So, basically, so I don't remember exactly when they came out, but I think it was early. When we were seated, anyway, selling some. So, yes, I think it was 50%. Let's see. Currently, currently, there's the it is 0 because it is not with your cell. I mean, the data, the rates are closed. That could be maybe some small demand, but, I think, possibility to to to to to to service. So, again, I think we will have 15 days basically, you know, later on, we will see. If you look at the group as a as a whole, I mean, I mean, I do not say that any gaps are is is is valid because I think there's a there's there's a range, and, it's very it's a wide So, I I I would prefer not not to be there, not to give a number. Today because it's, very well, that's the access. So we'll see a very significant decline in the in the particular region this year. I'm I'm thinking because it's a massive rate. We need to send to you can charge me the, In in in in 2 to 3 months time, I think you can have a different idea. Okay. But every every every original, let's say, guidance or original forecast, has to be in my opinion, discounted, the signatures. Weeks. What have you seen in your in Pennsylvania, Germany, and, and Russia? We did not see yet, any significant reduction in volume. I think not sure for these for these countries, sir. And then we we we need exceptional central euro production will be fine. So quality check has been fairly okay. Russia, right now, after after that I'm not concerned with you coming up after the the the recent, let's say, message that to engage to the to the nations, the nation, they're talking about introducing needed in restrictions with economic activity there. Hopefully, Samantha is the out, but I'm not sure. So, Let me check at the Germany, which is a country which is not as effective as it is. Which part of the construction activity is still going on? Is this still the cost of your activity? Is it residential, normal residential? Is everything still working at a scale or pace? So, obviously, say, any kind of of job, we'll gradually reduce the pace. There's no I don't think at the moment, there's no, I cannot tell if the status is going down, as you can see, you're just keeping it at the same day. So I I think that what we will see, seeing as to what I could really call is, it is a gradual, reduction in the pace of activity. Okay. The last question is the situation where many digitals and and and if if it leads to the conversation, in, in the second half of the year on in in 2021, what what what are your option to, to reduce the cost? And, and and what's the and what can you do as well? What is the minimum and what level of check that you need to invest, you know, in that? Yeah. Yeah. Sure. Now this is important, sir. Now we will we will, the GI is to consider at least at the moment, and I think for the next 6 months, at least this kind of situation, it's something that will will in the last forever. And so, there are some countries like maybe different things where we may compete to trade in the advance of some decisions to to close capacity as well already, let's say, or to optimize it so far, but the the the the production visibility, which has already been in mind, before. So this school isn't to, advantage of sending the fee. And in other countries, sir, we're also to capacity utilization. Uh-uh, it's been, you know, because it's very high. We don't see a reason to to the structure in in a sense. So let's say, building down capacity, what what we can do easily to to, let's call, it is as much as possible. It's industry that has discounted incidents, the, the social, let's call it, support that for workers. There's a there's a a thing, it's more about things that most of you, the account is at least somehow introducing, this kind of programs, and, this should should, reduce, sir, let's say that the direct labor cost it in a significant way, it it will be, at least, from the future's side. Labor costs, labor costs, labor costs, but we will, we will, of course, reduce all the expenses at the level that you the credit support paying business level, both the main main problems. At this place, we do have plenty of flexibility. Our our CapEx program has always been quite, genuinely because, because we thought it was a good idea to introduce, sound improvement and, let's say efficiency and, the business real generation. But when when the case real generations start to to trend down, like, as you do now, to get a good subsidy from the fitness program. I think we can, easily reduce by I don't know. From minimum 50, it's more than 100,000,000 versus a year with about 250. Next one would be okay. I mean, you could be able to get back to the level of 2011 when it was a $115,000,000 CapEx. Yeah. And, of course, there are some problems that are about that are your commitment, sir, and, purchase all the be an issue. So you cannot do it, let's say, just, like, like, like, this over over time or or the training level. So it could become 100,000,000 Yes. And and you think about the EBITDA, when you're losing the 500,000,000 of sales, is it fair to assume that, sir, because of the your variable cost structure, you would need something like a 50% of that into the EBITDA. And then you can reduce it in 30 think as I've suggested that the flow through could be sorted between 30% 50% or would it be further from 50% for you? She she don't need to if you cannot get first at the military. Just the advice that she need, ma'am, the the what I'm trying to get is that she need I'm gonna give you myself What's the reason to activate the GST or is it further through from 2017? It also depends on your, on your, let's say, level of activity because you remain, say, beyond the September level of activity, which means typically, I don't know, 55, 70% you still enjoy, usually good, let's call it, guys are the denominator for the for your fixed cost. If you go below, like, like, it's a pain or it was already happening in Italy, the the worse. So I I think that I I think that, again, Yeah. The big assumption. To be fair. I mean, it's something that, yes, it has a it's a it's a to capture a lot of business of a lot of our cost. So it would be it would be it would be fair for actually a level of electricity percents. Over your over the name of your the name of your time to be with you. Is it pardon? On average, yeah, I have a yes, sir. Yes. Sir. Okay. So I'll give you well, what I'm gonna give you is the the variable cost that's important. Of course, it's it's great. Okay? But the margins are also are also looking smaller. So it's very easy to gain in ready mix when you do not lose or or your production goes down a week. Did you already get that? Okay. Because those are on the price level. If you keep keep keep up with with the price level, But, you have to turn your your your earnings back. It should be in a in a dump on that. A resident or less. You said they come to If they do zero, it's cool in a, you know, in a safer way normally. And maybe a very last question, which is on the pricing. Have you seen any impact on, this, this, description on on pricing. Is it more difficult to, to, to push price increase or have you seen some of the price increase that will have succeeded, being pushed back right now, or or is it too early to say? Not yet. Of course, the, the main piece of market there is also. It was always mainly on the US market. Yeah. I think this is where I'm mostly scheduled for, let's say, beginning of April. So you can It's it's it's nice to continue to work with irregularly or or maybe not not so differently from what has been so far, possibly needs to be introduced. If not that change, it will be unlocked. Okay. Thank you very much. Yep. The next question is from Andrew Baelton It's Credit Suisse. Please go ahead. Yes. Hi. Policy. Good question. I just wanted to confirm that the 200,000,000, credit facility was undrawn as of the the end of the year, and it's for the 22 minutes to get it off. It's just a confirmation. I recognize that you have to log in I'm I'm the customer, sir, that you have the availability of the facilities and that you're currently on. Thank you. Yeah. I did not get to talk to you. Did you give me the address? Hello. This is speaking. I couldn't get Can you repeat? Yeah. But this is is on it's your 200,000,000 credit safety was currently undoing as of the end of the year. Okay. Well, the credit facility has been, as in too long already in 2019 for another 5 years. This is true for 2 fa €210,000,000, that has been, that are now due in 2000 23, the back half facility. There was we've always had a facility, and there's another facility that is due this year, but it's it's we have already initiated to to call it too long, but, it is it's not yet you. So this this will be now, in the next in the next couple of months. Okay. And it's 200,000,000, please, have been already prolonged. Yes. Deducting for the body, and the deducting is not here at all. We have, 33, the resources. So, okay, So one is that if you can, you have raised, let's say, before on the cost side, first of all, it's on the CN that you're gonna apply and use the same or the layoff in Italy. So just have the confirmation that you are allowed to And that means, if you have anything you'd like to, you know, please don't see the US because I know that some states are also great. This is the first question, and we are allowed to use the called a special scheme, to identify the the reason, let's say, the manager decision. In principle, we will try to, absorb, let's say, for us to be existing, let's say, vacation days and, I mean, these, to find them. I'll ask you also to to avoid, let's say, negative impact on the on the work and stuff that we're allowed to use. Would you like to take As a rule, that is nothing really similar, there might be some states. So for some reason, this season, they will let them deal, let's call it, introduce some some kind of social support. So, if we if necessary, if it's necessary, because we we don't know. If we look at today's word, I don't think it should be necessary. If necessary, it would be our decision because if it's gonna be syncing, again, based on the majority, length of the drive, length of all eventual location down all the checks. A company decision to to look at some call anyway during the work. It's I think we will need them back I also I mean, it should be like, so, I don't forget the 1 month shutdown, but later on, I did this. Did not use the right good idea to to let them know. Mhmm. Mhmm. Okay. Okay. This is a question, again, because either You mentioned that that's the reason, and I also recall that, fuel cost, clearly, considering the collapse in your price, for April. And then it's all just fine. It's it's it's it's it's assuming that it's saying that they're gonna the soft benefit that you you believe on average that you the company can get from the fuel cost side. If you do not produce, you don't get the but it's it's not to to go back to to to to production, I think the I mean, yeah, we've we've seen, back up, or it'll also be used to the CO2 price. It doesn't I mean, it it instantly, the power process in the future significantly. The the decline is between 25.50 sun, so it's quite, it's quite significant. But we need to to produce to be able to somehow take a take advantage of it. Yeah. Okay. Okay. And, you mentioned the past due to, here, the now we have a free let's say, of course, you know, the current situation after the you know, we should see the transition to the ETS face power. Yeah. But if you we're talking about discussion with them. You know, you will, you need to know, for the purpose and the assistance of allowance is Yeah. You know, how the company is preparing the the scenario, what type of measure you you said you are but it is placed, you know, but to to be used, yeah, in the exposure to be used, like, increasing cost. Thanks. Yeah. We have 2 in the two directions that you one is to even though this new environment is, somehow affecting it, and I would add something later. But but, so one one headline was was somehow, balance production will be between planting in order to or we should get the the best set in level of safety or electricity alarm system considering the new way of of a type of population. So you'll be Mhmm. So it's called the, HR, HR, So in in in a in a in a in a normal, let's say, in market environment, we do the, balance production this year. In a way to get the the, maximum that's a problem of of the free analysis. Is that, the the the quality of the vehicle to work as much as possible on the on the electric electric vehicle unit of a cement produced, which is a long process. It's not something that is, is, making changing now. So so quickly, could be also be an idea to do, I think, to mention it in the past, to be somehow some kind of, of sales, we started to pay what used to be, let's say, profitable, because of the, you know, the difference that we have signing to all the, city allocation, but we're not supportive anymore, starting from 51, typically export sales. Or get your service to to reduce somehow, your level of activity, which is, anyway, costing you less than, than than say if I'm not more if you have the ICU, on the And and I think the the game will be, that 2 2 main, late decide the the support doesn't capture. It's been through the our suite of the printer. 1 is the interaction or, increase the usage of alternative fuel. This is through through mostly, mostly immediately. Where we are lacking, let's say, or, you know, whatever, you know, what we would like to do. But there are a lot of, regulation and permits and, let's call it, in between before getting to the to the possible. It's for the target. Mhmm. And, and the other is to continue to work on, on the data software. So, with this, It should be between the company in Samantha possibly using, affirmative, so readily available, but, anyway, we have some some ideas, probably to use more flag. Not sure. Maybe some, some, comments about the usage of support fascinated play, and the certificate of income that you need to the 2 main ways. There is a discussion going on currently in December or, to maybe do not include the the most will be successful or not, but not include the 2019, in the calculation because everybody's back to 2019 today to be very welcome. So for the support that we are at the age which, which was originally, let's say, scheduled in the in the new in the new ETS' teams, but what 2019 would that has been already included, but, there is now, the proposal by by, to to exclude 2019 due to the level of your expectation across Europe. Okay. Okay. I just don't understand that, you, considering all the information with the the definition of, let's say, before, but also the possibility to maybe anticipate much of this camera capacity, which level or let's say they should you could you could see that, you know, the day. So you're going for, you know, the 20 22. 2020 is not coming to, you know, to information before. Yeah. The petrol is your surprise. It's a world where they call. They go back to, 25 or 30, or they they try to to get. I think, if if you run with, with a difference between 10% 15% of our of our the total of the total requirements. And also, also, basically, there is, well, you again, where this is where we are focused on other. I'm not familiar with it. But not long ago, the the the so called cover more of the tax or whatever, was was was confirmed in the in the so called new, the deal or whatever the the European, the European, asset or what's and let's call it the neutral, couple of neutral, And so this also, should not push at least too much pressure on the on on the prices. So prices, can stay with, I think, incentive. And babysitters. You have to allow us this, maybe the profitability will not be great, but but, if your color is efficient, Okay. Okay. Okay, Mister Mister. So last question is on, Let's speak with you now. Clearly, we have to contact the emergency, your number, but, you know, speaking there. Yesterday, they're also the situation. Now, your security is much much less than than contacting me 3 years ago, and, the company wasn't a secret. Yeah. What's the what's the company? What's the view of this? You know, I can see your time, you know, in in that, let's say, I'm a cash let's say, let's call it car. Yeah. Yeah. Yeah. Yeah. So, actually, we made very confident that I'll be Mexican, you know, if you can, let's call it black. It It's economy that, anyway, can you consider, modern? Of course, they continue to have very strong links with the US. So they'll be important in the automotive industry. I got to go through some some, some pain. I don't think you used ones. We it's the cement market, and also the the, typical reaction to to this kind of of, let's call it, flat or or by any kind of car, process this one. Is there any way to to solve how, you know, push for new public problems with this Mexico meter? Anyway. We have we have now after 2 years of decline, a good level of, let's say, demanding for, for, for increasing volumes because, today, we are running the 80. We will we will more than 80% of the the location. So, there's no real need there. It is in case of her when she needs to sit down. There's no need to to have additional capacity. And markets are are still involved in such situations. It's favorable. Let's say the the highest, of the group, the return on capital investment in Mexico. It's it's just my father, actually, we we had the in the entire group. So It's because of the the deposit of the allowed the time to we we knew that this year was not going to be great, like, last year. Now it's a it's a a disruption. There's a disruption coming from the virus If you would need to revise also, action, in a negative strength, but, give me a number. I'm at the team and conference. No problem. Thank you. Next question is from. Please go ahead. Hi. Yes. Great. I've got a few questions. Can I ask you about, cash costs, perhaps I don't know the best way to track it? It's it's it's it's literally. If you're running, I think you're just coming in behind you. Thank 2, down, 80, 90%. How much cash do you burn for instance in the flu? And if you do, perhaps you've done some scenarios as well, if you're kind of tune at the group level, picks up, you know, the pandemic kind of spread when you had a situation where, you know, your revenues were down. Right. It's actually for a few months. How much cash do you think you can earn? It's gonna be Thank you. Yeah. Please, ma'am. Yeah. So, no, I mean, maybe maybe that I mean, it's not a easy question to answer, for the automated And the last time, the level of of activity there, as I said, What was the scenario? The the entire group, was taken off. It's what what was case, or is there a very negative scenario, could be not not to not to be able, to produce any any cash, basically. So it's best to to, at a zero level. From now to end of the year. So, basically, And it is, of course, because before we do that, then we will need to we will need to see some, market in in in the states, in the state of the administration, which is currently and we'll go back to it. I mean, this is currently shut down, to see, other countries, teamwork, working some, let's see, 40% less than what we what we were able to to to achieve here. So if you're down, 40 to 40% versus, versus, let's say, the previous year, probably you're running through a situation where your your cash flow it's almost here. I mean, you basically, it it come out on a on a on a cash breakeven level. I think this is Is that just to be for the emergency tab that's for 24? No. We still got with a state of state, teaching sometimes. No. I'm not not conceiving in public view. Let's say let's say that Okay. After we do campus, of course, as soon as you can see the fields, I'm not not really 00 level. Yeah. Okay. And it's it's easy for me right now, and then if we call them for 2 months, I'm a see the amount. 20,000,000 for the other month. Let me see. I mean, Let me see. It's negative EBITDA just per month. Yeah. Yeah. I just we have a PO. Right? This cost approximately think you can run negative, maybe maybe something between between, I mean, we need 300 confirmation letter, 0 sales, 50. Between, 6 or 7, maybe 15 months or something like that. So I mean, it's basically 0 or 0 sales. No. No. No. It's it's my example for the other field. And then coming back to the the common situation, You got two questions. When when do the inspection get pulled, what the allowances are for 2021? Or when do you have certainty? What the what the numbers are. The question 1 and question 2 is, are you doing any kind of CapEx Like, I've been trying to put on hold, and maybe you never had a plan to reduce carbon intensity. I guess, mainly in Europe, but also globally. Okay. And are you doing anything that is hard and just so I'm not sure. Well, the extra allowance is, we're still missing some of the some of the, and it's a, I just need for a cancellation warranty that I mentioned before because I came up 2019 assuming it will be considered. And, and also the so called beneficial disclose yet. I mean, we have an idea, but it's not a few forty seven floors. I think we will know about a second half of the year before. Yeah. And and then and then, and then, let's just do the 2019 for the 3 year operation. Topics, And it's it's easy, sir, on the R and D. Let's call it on, we hope it to to receive the reduction. Are mainly are mainly, let's say, focus on your own cabin capture. And we have 2 main ones, that are also some kind of, let's call it, joint research project. Together with, either, let's call it, the reserve centers or other in the PPA. One is uniquely and one is in Germany. It's, it's only one. It's called the clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, and clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, clean, And the same thing would be done in Germany, is, Vita and a strength in a in a plan to protect the so called the oxy fuel process. For the right, sir, I think in our in our, we call it, a tough span, a couple of things that have setting back on this year to, not specifically today. They're not approved or introduced at the for the for the reason to redistribute. But, yes, sir, when you're going to take the decision also on the on the on the certain we we we want to proceed with, and we want to start, sir, to say this year to contribution or or the reduction is due to a contribution. And I think that I want to get paid until now, let's go with the the, absolute level of our CapEx And so it's within that what we have usually as a as a as a, let's call it gross amount for for 1 year. The chief of office, of course, is, is there any problem maybe in the past, we did not you know, receive this, you know, majority or or whatnot approved that are now being approved because they do have a significant issue Tier 2 impact. Next question is from Tobias Werner with MainFirst. Please go ahead. Yes. Good afternoon, everybody, and good afternoon, Pietro. Two questions. If I may, number 1, if I may just press you again on on the energy side, and I thought you were gonna be late to the call. What exact it is your energy bill as of 2019. How much of it is, hedged or forward billed? In in in that context. And, just remind us roughly, basically a technical tool. That's the first question. And then the second question can you've, you've closed the insurance, the customer's transaction, has the cash order is distributed to the partners? And is it, is it taxed or will it, will you just get your gross amount? Now it's also now. Yeah. I want you to use it because the transaction closed at the beginning of March 6 or 7 months, but it goes directly. So, yeah, it was, it could be a gross amount for the moment, sir, because my savings and my partnership with the will be paid, let's say, directly by give it to by the department, sir. And on the on the edging, for for fuel energy, in general, we tend to be very, very cautious the the the principle is to okay. If we see that there's some very interesting prices on the energy and fuel oil, we could anticipate some, let's say, purchasing refer to the following year, but, not usually no more than, let say 30% depending on the state of the following year. Otherwise, pet coke, basically, at the end of the day of, 50 months. And, so we have to do that on the on on the spot market. We have the main menu in the spot market. So, if you make a difference in any one direction, in, for a month, month time, usually we should be able to to proceed with kind of, of level all the new If I may just ask for you, ask costs last Yeah. And, I'll speak to you soon after the call. I don't have that screen, but I think you definitely never really did it. But I I mean, I mean, I had to get a different percentage of the sense that if you look at the if you look at the and let's call it difference. You will mix, last year, for example, for the whole desktop was 30 7% and call was 21%. Then you had natural gas 14 to 17% alternative fuel. So with the right fuel of 24% and, my father and I or I guess, should I or you do it, to the value for us, finding the return there with you, and, that's it. 1%. And your other question was Okay. I what I've seen fairly quickly is is the if you look at the cement business, sir, so not not ready, sir, only cement, fuel and power we spent the last year 357,000,000 total. Mhmm. That's very helpful. Yeah. Thanks very much. You're welcome. I'm all the best. Thank you very well. Thank you. Bye bye. Next question is from my Thank you for answering my questions. I have a a question. Is it is it possible? Yes. This question is, when and, to what extent do you expect a positive impact? Councilement manager due to insist in that meeting, infrastructure in the in the second question is, what is your exposure to the old sector in terms of the hidden volumes? In a US for Russia. So the question is, if, do you expect I worked on white line down the sale or receivable, the authority on the document with those factors. And the last question is is, are you also planning to buy to buy service chancellor or only your nearest Jennifer for the buyback. Okay. I hope to recall all of them. That's why I was public public in the branch in the bank. And, you are calling, you know, already call it, baby, this crisis according to the to PCA, maybe they will they will revise the figures. Public Spending was already considered one of the most important in the sense of consumption differential, helping helping the trade consumption. So to move forward in the in the overall U. S. Market. It it it is true. I mean, it's true everywhere. It's, you know, not only in the US that from the from the decision making to the actual opening of the job site or the port currently, etcetera. The office is always, is always fairly long. So once something has been decided to approve the, finance to the, maybe maybe faster in the US than it is initially yeah, I'll take it. You require from minimum 1 year, maybe maybe 2 years. So so it recent recovery in coming from other spending. I think you will take some time. We don't we don't see there is any need to actually pay interest on on on on your paper. The second one I think is about alright, sir. And this can be a little bit of concern for So what's going on is, though, Russia may continue to to to to to produce. If any concern is more on the oil price, sir, and the impact, and the impact on the on the frequency. So if you have seen, after the the the, let's say, discussion between, Arabia and Russia and No. I do need to take that sort of immediate. So, Rasha, may may I continue to produce, sir, but you know, the price is is low. 1st of all, the economy is gonna extend this offer. And second, we we we we would suffer immediately to settle maybe sufficient volumes or good volumes. So I probably would recommend, when when we translate our figures, from the Google into into your new software. I was very nice mentioning that at the beginning, we had one of the major executives here. Together with the expecting decline, let's say, in, in Japan, that you do to coronavirus, in the US, sir, it is a little different because our our, let's say, private, our sales are important, but not important that they are let's say, in, in Russia. And we may see a decline there. We already seen a decline, in, oil extraction activity. Which will, which will, affect our our our So this should not be an issue or not very important in terms of currency, transitory condition. The quick one. And if you start to sum my way down, so let's see the lowest range. Yes. Yes. Oh, this is very this is a big, a big risk. I think, particularly uniquely, we will be facing a very difficult time for the for our, let's say, credit. So the risk of increasing, the debt expense, I think, is very high. So they typically, depends on where our payment terms are particularly long, and we may, yes, We we make the interest on significant difficulties, there, going forward. I mean, let's see when the when the market reopens, but the the liquidity, the sale of the of the customer, yes, is there any concern. A little less, elsewhere. It's because, typically, again, the payment term is not that longer. And, at least so far, we are not seeing, similar, let's say, lockdown situation, sir. So, more or less, there is some activity going on less, okay, gradually at the lowercase, but the market is still, still active. On the Quebec, I I think we are we are we are open to both category. I think it's a good sense. To to move forward with that, what's the difference here. We have the the You know, I mean, that is here, gives you much greater liquidity. So, there will be, I think, much easier, much easier to to to to this, let's say, in, in, in the, in the share due to the liquidity, but we'd not allow the the the deal by some shipping CRC if they are available. For any further questions, please press star anyone. Okay. Very good. Thanks, everyone. And let's say available, our office is, still still opening the not the most of the offices are, obviously, the the events that you have kept with the information, they are decreasing, but, We remain available, from remote on, telephone, any kind of means. So You can, talk to police union folks along. And I'll put a denial number if you need to connect your family. Thank you.