Ladies and gentlemen, welcome to the Get King Group H 12020. Resits Conference Call. I now hand it over to Mr. Jacques Egunoz, Chairman. Sir, please go ahead.
Thank you. Good morning, ladies and gentlemen. It's always a pleasure to share with you our understanding and views about our results and and full year forecast. The team around me is, as usual, with you risk financial manager with Mike Schuller and Jean Baptiste, and of course, with Ian Morrish, our new CEO, Jan, you joined the company on 1st July, 3 weeks ago. So what are your first feeling regarding this first contact with the group?
My first feeling are very, very positive. So as you can imagine, I spend most of my time on the field. To learn the company and have seen, 1st, an impressive infrastructure, but also, and And that's the most important, teams that are very engaged, motivated, and who care for the future of this company. So based on that, everything is possible and, I'm very, excited about the the opportunities that are in front of us at the link.
Well, so now I suggest that we go to the presentation with the key messages on Slide 5. We have identified, of course, 5 significant elements. First of all, of course, irritable. I would say that the key highlights are the 3 priorities to safety of which is absolutely key quality of service and well-being of staffing customers. So what does it mean?
Quality of service means that we had no interruption in our offer. We continue to work all around the clock, and this has been definitively, very important to attract new customers and to keep a good relationship with existing customers. We did, that way, with a high priority to safety for staff and customers And we have spent, as you have seen, perhaps in the press release, we have spent 1,000,000 in order to protect our teams at our customers, mainly the truck drivers. And we offer what is called a well-being which means that we offer a lot of services to the truck drivers, you know, that at the lockdown time, of course, they had some huge difficulties for instance to get mass because they were made back to their own, office. They were rejected from the service area in the highways.
We offer food and different things we will see later on, but I think it has been absolutely key to keep a very strong level of traffic. Your report has been slightly impacted early January by the SNCF strike as usual, as we can say, as we have no, passenger trends during the lockdown. Of course, it has been easier for your report to deliver its own trend. The only negative impact we see that later on is related to the closing of some, plants where we are acting Having said that, your report, even with such context, is able to deliver a positive EBITDA, the 8 semester of performance and that way. The key main indicator on this challenging times, of course, remained cash level.
And so we are very proud to mention that thanks, of course, to the cancellation of the dividend. We have been able to maintain roughly the same level of liquidities and at the end of December without any extra loans or seeing the asset nature And without cutting the CapEx, I will comment this later, but it's absolutely key. So like to like regarding the offer of the company, and a strong level of cash. We have no difficulty to pay the debt service in June and no difficulty to no risk of breach for the carve outs. 4th point, dividends, we believe that if there is no specific crisis in second half, we will resume a dividend service.
And last but not least, because, environment is now, very well recognized as a key priority. We have a strong, CSA policy. I will comment this later. Slide 6, I think that one of the key points has been the fact that we had an immediate reaction regarding the COVID crisis. And we took the first measures end of February, early March, at the time where in some countries, including France and Great Britain, there were still strong question marks regarding the situation.
So as I said, we implemented a very secure chain for staff, customers, subcontractors, as I said, which is absolutely key, all around the clock service, no disruption of traffic. And of course, a very high flexibility to adjust the offer to the traffic and, of course, to make some savings. On Slide 7, You have the figures regarding the number of missions. It's not related to the traffic, the number of missions that means the number of offers we add. Which has been reduced only in the magnitude of 20% when it has been dramatically impacted for Siri, which were only 68% of their previous services.
Unfortunately, OStar has been impacted at the same level than airlines because you know that Eurostar is competing with airlines. We are very committed staff, what Jan said, when he has the first contacts with both staff and unions, And of course, as you know, we have a strong commercial flexibility, which has been quite positive, and I make some comments later on the year. Slide 8, a reminder of the safety and well-being measures we offer And in the amount of investments, safety investment we made, the EUR 2,300,000 a significant part is some plexiglass panels in the truck cars in order to give some specific isolated seat, to the truck drivers. This has been really appreciated, like the service Center we offer with, you have a nice photo with a food truck, laundry facilities and those are very successful, very successful. On Slide 9, we had an OpEx reduction, which is more or less EUR 17,000,000.
I the 2,000,000, it's a EUR 16,000,000 on this picture, but that's important, because we adjust the offer of the services to the traffic. And of course, we made savings 1,000,000 through the falloff, French and British system. What is absolutely key is the fact, and we will see this in the next slides, we didn't cut the CapEx. I would like to insist on that because we, you know, that the concession runs until 2086 that we have the Brexit to deliver. And so we have decided to maintain every investment related to maintenance, safety and, Brexit and other investments.
No savings, no CapEx cuts, which would jeopardize the future of the company. On Slide 10, you have the traffics, and so this has been already published. And so I think there is no specific coming to make, except that when the ground time, the British ground time is over since 10th July. We had an incredible record booking And we do believe, I will comment this on the financial that the summer seems well organized for us. On Slide 11, you have the, as usual, you had the yield increase on the first semester, slightly higher than the previous years for 2 main reasons.
First of all, of course, we have an increase of the truck pricing, which has been really accepted by the U. S. And more importantly, for the passengers, even with the reduced number of passengers, the duty of the yield management model we have implemented is the fact that If you have more long stay, and if you are booking very late, the value of the ticket is much more important that if you have anti automated booking or if you have, what we call the day trips, which is very cheap. So it means that without changing any leaders in the yield management policy who has the possibility to be very pleased with the past roughly plus 6% yield in the 1st semester. And I must confess that, if things are running like they are, it will be in the same magnitude for second half.
In Slide 12, Just a reminder regarding Eurostar, we are not managing Eurostars. We will try to help them. They suffered less than airline, but course, they suffered, you know, the figures. The very good news is the fact that the border treaty, in order to delete the border controls in Brussels when you are back from Amsterdam to London has been signed end of June. So it means that when your star will intensify its services to Amsterdam, we can catch a significant increase of the number of passengers.
WIfi trains, Wafee has suffered of the closing of a lot of plants and a recession and deliveries bulk deliveries by right maintenance or point at all. On Slide 13, you report same comments, which means that The reason why we had an active revenue is related to the closing of the plants and the fact that some deliveries has been a concern or postponed. Having said that, with a very tight management of this business, website business. We have, for the 8, as I said, the 8 semester in a row, we are still positive EBITDA. Slide 14, let's say the funny story of teleklin, I do prefer to speak a funny story because frankly speaking, it out of my sense, converter stations are completed.
We are fully ready for pulling the cable in the tunnel for least we've been ready for at least 18 months, something like that. We have a very good news, which is a positive report from the French, railway regulator, EPSF, we said that the answer all the question, which have been raised the safety committee in a positive way and that there is no specific impact to the safety of the tunnel related to the interconnection. Electric interconnection. Having said that, and frankly speaking, I would be very happy to be at the end of the ICG because it would mean that I, my last meeting was on the, 24th February. And I am on holiday since that date, because they don't intend and we have a letter from them explaining that due to the crisis kind of cross measure, they don't intend to meet before September.
So there is a blank vacuum of the ICG between end of February, early September. Unfortunately, we have no mean at all, no legal mean, to push their decision to ask for, to call a meeting and things like that. So the only thing is to wait very passionately when they decide to resume after the summer. It means that with, let's say, quite immediate impact. The full commercial service is now expected to start early 2023.
We have a 25 years exemption. So it's not so important if we look at the DCF, but frankly speaking, it's let's say, it's a boring to wait such decision, but let's say it's a it's lies. On the last slide, 15, something which, you know, is very important for significant investors and stakeholders. We are working hard with a new team new environment of directors, new CSR director, on the stake of their mapping, And I will not comment this in detail, but just to explain that we will continue to be at the edge of the green support of every businesses. More importantly, Slide 17, of course, some comments on the financial figures.
So you have the revenue, which obviously has decreased by 32%. You have to speak between shuttle services and the railway network. Just regarding revenue to remind that, part of the, the term is a fixed fee, which means Even if Eurostar is suffering, we received, let's say, roughly 1 third of the anticipated turn. And operating cost, as I mentioned, has been reduced, mainly due to the fact that we offer less missions of shutdowns. We have the figures, and we have no interim in order to deal with additional traffic.
And we will continue to have this kind of savings for the second half. For the 1, around this table, you are used to that we are not working in OpEx enough, you can say that when we decide to do, we can do. On Slide 18, your report, nothing major things to comment, except the fact that, once again, we reduced the apartment costs mainly through related solar for the plants which are closed. At the end of the day, Slide 19, EBITDA is, let's say, to our disappointing minus 52%, but I would say, what does EBITDA of EUR 123,000,000,000, because I do think that a lot of transport companies would be very pleased with the challenging time to keep this kind of level of EBITDA. The debt service has been paid on June.
And net finance cost is 116 and no specific comment on that as it is. And we are ready to answer to your question. On Slide 20, once again, which is absolutely key focus on cash, you have the level of operating cash flow. Which is less deteriorated than revenue. A level of CapEx, which, as I mentioned, is the same magnitude of the previous year, no cut cuttings, no no messaging in that point.
That service of 23. And so positive free cash flow, small, of course, but positive, which is a key message of 1,000,000. And so Slide 21, which is a conclusion before the Q And A session. Based on the present official forecast from both England and European banks. And, of course, with the key assumption, key assumption that there is no second peak in second half of the crisis, as we consider that we have a very resilient, truck traffic and very strong passenger traffics I can say, for instance, that we target.
So this EBITDA of EUR 350,000,000 for the full year. And if we look at the 1st weeks of July, even if you have perhaps slightly less traffic, but even some good traffic, I can say that the level of revenue in July for the 3 weeks we have is at the same level than the 19.1 So just to explain that the Zillie increase is performing well, that the traffic is performing well. And so it's the reason why we are reasonably confident to deliver the EUR 350,000,000 we are announcing. Of course, due to the ICG pause, no possibility to give guidance on 22, which is related to Eleklin, of course, And last but not least, we believe that due to the cash position I explained without any artificial means like specific loans or once again, a wrong saving and things like that. As we have a significant amount of cash in France, we are at is, and we believe that if there is no second pick, we can deliver a dividend next year.
So these are the key figures. And I am now with the team ready to answer your questions. Thank you for all your attention.
We have a first question from Stephen Detz from RBC. Madam, please go ahead. Good
morning. Starting with the dividend. When you say your intention reduced dividend in 2021. Do you mean with the 2020 earnings pay a dividend out in 2021, or do you mean with the 2021 earnings per dividend out in 2022? That's the first question.
Yeah. Is it to answer? We believe that it could be an amount in 2020, December.
Okay. And then my second question is on CapEx. Could you maybe let us know what your intentions are for this year and next for the shuttle, excluding Eric Link?
So without electric link, we can say that the CapEx level share will be in the same magnitude in 2019. And, we can resume, let's say, the long lasting programs like for instance, and the renovation of the passenger shuttles. We are already working on that, but of course, we will have higher amount of CapEx in 21 years later. But more or less, I would say, it will be less than, anticipated because As a consequence of reduced traffic, of course, we are at ease without taking any risk regarding obsolescence and other issues. Let's say, to slightly postpone part of the investment.
So we will have a very, let's say, seeing management of such investment, not jeopardizing the future, but not anticipating, too early investments, which are not definitely needed. Having said that, the key expenses to come in the months We have in front of us, of course, related to borders, Freed Tea, Brexit implementation, well-being of drivers because we believe that as it has been really successful, we have an incredible way to attract new customers So it will be really focused on the immediate support of, resuming, revenues, yield and quality of service.
And maybe to finish with the 3rd question on volume and yield. Could you please let us know your volume assumptions through the second half given the €350,000,000, euro's EBITDA guidance. And on the yield side, you had a very strong 6%. Would you expect this to be sustainable in the second half. And how are you doing in terms of market share versus this very, different the financial crisis?
You know that we are always reluctant to give our own assumptions because we do prefer that each analyst does it's, is our own work. What we can say is the fact that, regarding market share, We had a significant increase of market share for passengers in the shuttle, 69%. And you know that it time, we have a new customer, which has been the situation in, mainly in, in June. We have a very high level of loyalty, which means that we believe that we can keep a significant market share on traffic and not resuming and for the full year, of course, what has been the exceptional traffic in 2019. That's really, in second half, to be able, of course, to to fulfill the gap we suffered at the 1st half.
For, for trucks, you know, that the truck traffic is more or less related to GDP. We believe that the recovery is quite consider. We will happen before the Brexit as it happened 2 times in 2019, in March, in October. So we are pretty confident There will be, of course, a decline of truck traffic, compared to 2019, but something slightly over double digit, but not so significant. And for market share, we are still on the basis of the 39%, forty percent market share in a market, which, our best assumption in the truck market is minus 7% 9%, something like that.
So it's the reason why we are confident for this 350.
Thank you. Next question comes from Navil Ahmed from Barclays.
Yes, good morning. Thanks for taking my questions. I had 3 actually. The first one on pricing and yields for passenger shuttle. I'm calculating a very steep increase in the second quarter, something like 25%, 30%.
So I heard what you said about late booking, much more than usual, but as you as well, push pricing up, in the current situation. We're also looking at the market share increase that you enjoyed in the second quarter. And how do you think we should think about pricing going forward in the 3rd and 4th quarter for passenger vessel specifically.
Okay, Jean Baptiste?
Yes, no, Nabil. Not at all. We haven't increased our prices. We will decide that if people believe that we the opportunity in order to make a profit on the situation. Clearly not, the price increase, it's an effect of the mix.
We, the frequent travelers who normally pay very cheap prices, obviously, during Q2, we are not there, people who have a house in France, and go to France every weekend. Obviously, it didn't travel during this period. So this has a negative impact on that price, normally, which wasn't the case in Q2, we didn't offer, also the day trip ticket, which is a which are very, very cheap, because there were no interest for this type of tickets. It's really a question of mix, which explains the price increase in Q2. In Q3, as Jack said, we anticipate the same kind of price increase that we had in H1 overall, for the same reason.
We benefit from late bookings and the different mix than we have normally. So we anticipate the same kind of price increase.
And I would like a very good news because, the Dover port has increased its fees by 6% per €6 per crossing, which of course will be channeled to the trucks and cars. So, we are at ease, of course, for our yield management to attract the best value as robotics explained.
Okay. But sorry, when you compare H1 with H2 and we talk about the overall shuttle pricing, the 6%. The mix is likely to be different in the Southern House. In each one, I'm assuming that a lot of the 6% is also coming from the fact that passenger shuttle were down much more than trucks. That's probably going to be the same thing in H2 as well, but probably less.
So do you need higher pricing for passenger shuttle to get to the 6%? I'm not sure. My question is clear.
No, it's quite clear. So just to clarify, of course, as you know, for trucks, it's, let's say, price, which is negotiated for the full year and we didn't change it. The only point is the fact that the increase of price in dollar port is good because it will, give a shift, from a series to to the shuttle and, so a better, traffic for trucks. Regarding regarding passengers, I would say the major impact is related to the late booking, because we have less I must recognize that we have less visibility on the traffic for the summer, even if it is quite good, but the beauty is the fact that late booking gives a very, very higher price, which can afford the level of yield.
On your calculation, I believe you are wrong, you are on the other way around, the weight CASK will be higher in Q3 than it was in Q2. So we need a lower price increase, to get to the 6% lower price increase forecast, get to the 6% because the weight is higher.
Yes, good, sir. My second question, if I may, was Europe. Can you shed some light on what's the situation right now in terms of capacity? How many trains do you have on that is London, Russell London, Amsterdam London. And if you can share what would they tell you about how much capacity they intend to put back online of the coming months?
I must recognize that it still unclear, we have a meeting in the coming days with your staff to understand what they intend to do. Clearly, of course, they have announced that, they will reduce, number of missions. I don't know if, it is because really traffic is lacking or if they want to, which in my view perhaps is a right explanation that you want to explain to their own staff that they will organize kind of reorganization. I do think that they want, of course, to increase their profitability at the time they are negotiating the merger with, with studies, you know, the green speed project, which is quite good for us. So You know that when a Chief Operating Officer needs to explain that the team will suffer, he will try to explain that the situation is worse than anticipated.
So I'm afraid that presently Eurostar is in that mood just to explain that times are very challenging and they will request a significant effort from their staff. So I have not a clear view, a clear view about what they intend to do. What I can say is the fact that I don't know why they would not to, to resume their traffic. The good news is the fact that they have a private investor in their equity, and I guess that such investor will push in order to have more traffic and things like that. What is the key, I think, is the fact that when they decide to open a lot of services and the new route London to Amsterdam and more importantly Amsterdam to London.
It will be a significant boost for the tons. Having said that, you know, that, through various mechanisms, We have 1 third of the Eurostar revenue, which is more or less a fixed cost. And I must say that whatever their own difficulties and the fact that they have been obliged to have an interim loan, they pay without any delay, what they have to pass through this, mechanism, fixed mechanism. So I do think that what they are announcing, but it's my own feeling, is more or less related like P and O or the FPS to the way they want to, cut salaries and staff more than to cut traffic.
Right. And maybe just a follow-up on their commercial police Have you been seeing them getting prices to attract customers on that much considering what you just said about their agenda on restructuring. In other words, are you seeing our airlines more aggressive than Eurostar or the other way around?
All airlines are out of the market. They have definitively no chance to compete presently. And for Eurostar for my best knowledge, it didn't change their fair. My daughter, you know, is living in London and premium instruments in Paris. And for the next travel, which is on Friday, it is the same price even slightly higher than it was previously, but not significantly.
So no, I think they didn't change. They don't change their tariffs. They are not I think not really nervous regarding airline competitions, which is a much more troubled times. So I think everything will continue. The key point is when they have a final agreement with their union regarding the restructuring of the a real star company, I think traffic will resume.
Okay. Final question, if I may, on covenants. Thing in the management report, you mentioned that with the new forecast, you have, you feel confident that you're not going to breach the covenants relating to the term loan, but equally, that you may not be able to comply with the other incurrence covenant ratio for the secure, the single secure notes. Can you remind us what the covenants are? And, if you bridge the second one, what what are the restriction that get linked, would suffer, in that scenario?
And, and more broadly speaking, do you intend to get a waiver? Is the management working on that right now? Or do you think that you'll see when this happens and you'll be in a better negotiating position if and when this happens.
Yeah, I like this scenario, but you are well, you are right to raise the point and, Mike, will answer.
Yeah. Hi, Nabil. I think the key point on this when we're looking at covenants is the cash position. You can see we had no basically no cash outflow in the first half of the year. We've got cash to service our debt to the end of 2021.
So I think that we can take a fairly relaxed position because it's no debt service is not an issue. And the the GatLink, covenants and incurrence covenants, no, they're only, you don't actually breach those covenants. It's only when you, it's only in current when you actually look to do something. So, no one is in terms of leverage, if we want to raise more debt, We have sufficient cash, so we don't need to raise more debt. We have carve outs to raise over 1,000,000 before that test comes into play.
So it's not an issue. No, the other one, the debt service sort of comes into play, if you want to pay a dividend, that, no, at this stage, it's not expected to be an issue at the end of December. But no, if it is an issue, no, the the factors, it won't be an issue in June next year because Q1 of this year drops out of the covenant calculation. So we're in constant, dialogue with our, with our creditors. They're comfortable no, we're in a lot different position to airports and airlines.
So there is no need for a waiver. But, you know, if if anything's required, you know, now we're we're, you know, we're pretty comfortable that we will get what is what is needed. But there's difference between a financial covenant and an current covenant.
All right. Thanks a lot for all your answers.
Thanks, Navin. Next question please.
Thank you. Next question comes from Christian Nadelle Tru from UBS. Sir, please go ahead.
Thank you very much. 3 questions, if I may. Firstly, in terms of your OpEx in the second half of the year. I mean, you have the furlough that's, that goes away. You're increasing the frequency of your service Should we assume a flattish OpEx in the second half year over year or any move there?
Should I go ahead with the other one?
So we prefer to We can answer that one quickly. Yes, yes, I mean, OpEx in the second half of the year, we project will be be fairly flat, slightly below last year. Don't forget that last year, we had significant savings in in the second half of the year as well. So, but we'll come in below that, just slightly below.
Understood. Thank you. The second one, I guess, if I look at your EBITDA guidance for this year, this implies that in the second half, your EBITDA should be EUR 80,000,000 lower year over year. Now if the OpEx is more or less flat, that implies that your revenues in the second half should be around 15% lower year over year. Can you give us a bit more granularity in terms of your thinking in the shuttle versus several star revenues in the second half.
Just trying to evaluate a bit better the buffer that you have in your guidance.
Certainly, the assumptions we've taken for the second half of the year for traffic is that there will be a recovery, there'll be a recovery in in passenger, in passenger, passenger shuttle traffic as, as Jacqueline said, we probably won't get back to to the levels of, of last year. Truck shuttle will probably remain below last year. But still at a reasonable level, but that's impacted by the economic EuraStar is probably where the recovery is going to be slower than on the passenger shuttle for the reasons the reasons that were evoked in the previous question. So it's so in terms of revenue, it's it's a slower, slower, slower recovery from Eurostar, shuttle traffic and shuttle revenue coming back to to levels slightly below where we were last year.
Understood. Thank you. And maybe the last one, I mean, coming back to an earlier question, I mean, if your car shuttle yield is around 25%, 30% as it was in Q2. I mean, why shouldn't the yields in Q3 and Q4 be double digits? The weight of the car shutter revenue is increasing meaningfully.
Are there any other moving parts that we keep in mind, or is that the booking curve, are people starting to book the booking curve returns a big to normal now in July August or people are still booking late?
Yes, we think for summer, you've got the, you've got the late bookings, but I think going forward now, I think the 2 things now, during Q2, we maintained our services. So customers are comfortable, with our position that during lockdown, we maintain services And also, you stay with your car, people are realizing where the safest way to travel. So people know what we start seeing now is beyond summer, Now our bookings are picking up. So, maybe we don't quite get the same, in fact, of the late bookings because people are are getting comfortable of, booking ahead now. Now, we're, we're, we're that the best way to travel.
No, there isn't really an alternative.
Understood. Thank you very much.
Thank you.
Thank you. Next question comes from David DeSernoff from Kepler Cheuvreux. Sir, please go ahead.
Yes, good morning gentlemen. I
have two questions. The first one is related to everything. When you said that you you were saying to operate the commercial operation to start in, from early to start in early at you are
Okay,
but may
I send
Okay, thank you. Thank you. Next question please.
Thank you. Next question comes from Martin Vostal. Please go ahead.
Good morning. Just a clarification on your dividends policy. You used to have a policy of increasing your dividends by 5 $5 per annum. Is that still in place or considering that you abandoned your earnings target for 2022, that dividend policy also will have to be modified. Thank you.
Good question. We are very cautious. Of course, we want at the same time, of course, to sell dividends, but to keep a strong level of cash in order face any crisis, assuming nothing like that. So I have no idea what would be the board decision, regarding the level of dividends could be paid in the 1st term in, in December. And of course, the remaining part in June, 2021, as usual, So I don't know what could be delivered.
What I can say is the fact that the board is definitively committed to resume a dividend payment. I think, said that it's quite clear that the dividend paid in 2021 based on the 20 results will, of course, be, let's say, related to the level of EBITDA in cash we can generate. So lower than, it was in a normal year. The second commitment of the board is to resume the dividend policy at the level of 2019 as soon as possible and to restart the $0.05 increase as soon as possible. So it's something which is, that's a very cautious approach but a very strong willingness to resume what was the dividend policy, which has been very successful because we believe that we are working in order to deliver such dividend to our shareholders.
Thank you. Next question comes from Eugenier Rousseau. Madam, please go ahead.
Yeah, hi. I have two questions. First one on OpEx reduction. I'd like to understand whether the 1,000,000 or 1,000,000 you regarding in H1 is only temporary or part of it will be structural. And my second question is, is Trian Could you explain a bit the reasons why you decided to take the helm of the Get Link?
What you had in mind at that time, I know the time has changed in that, but, and what will be your main priorities in the coming months?
Okay. First question, you
On the OpEx, yes. I mean, the OpEx, a lot of the reduction in the first half of the year was was due obviously due to the impact of the COVID, we talked about the part time activity, the following impact. That's that We've stopped those now from the 1st July. We will have reduced the the number of the number of missions and we we the number of shuttle missions and we we continue to adapt our capacity to demand. So there will be there will be continued savings in that respect, particularly in terms of in terms of temporary staff and contractors.
Others were, again, directly linked savings directly linked to the number of shuttles, reduction of electricity costs and the like, and some were deferral of costs we've deferred a lot of our marketing costs, but we're beginning to market now. Obviously, the launch marketing campaigns now as we get to get in trying to attract attract passengers back. So, yes, so certain of certain of them are sort of more long term, if you like, as we adapt as we adapt our our capacity to demand. Others were probably one off and obviously the activity Bastian and the and the following would be the prime example of that.
So nice, Jan, what's the decision to join the company at the Covey COVID times?
Yes, before answering that, so what I said at the beginning is that I've been there for 3 weeks spending most of my time on the field. I I'm learning the company. I will continue to do so for the next weeks before, of course, I will decide on the strategy. So don't ask me for the moment. Any question about the future road map.
It's too early. I have nothing to say on that today. On top of discovering the company, I'm also very, in-depth into the operations. Jacques, of course, has put in place a strict control of our expenses in Q2, because of COVID. So we continue to do that.
It's the discussion that you had just before. We need to be sure that operationally, we continue to offer the best service possible to our clients at the best cost And, to your question about why agenda company, I could make a long answer, but, the short one is when you look at the market. And you know that I've been working in the infrastructure and transportation industry for many years more than 20 now. And, what is the most attractive asset on the market than, the tunnel. You know, it's fast.
It's growing. So it has it ticks all the bugs. All the boxes for, being the infrastructure of the future, and I want to be part of that future. And I see many opportunities with the team. So, the future will be bright.
Thank you. I wish you a long life.
Before we get a new question, I got the one from that Carden at Kepler. He's asking about the Elek Link and the IGCs. We're concerned with the absence of schedule from the IGC and how long do we need to start the operation when we get the green light for the installation of the cable?
It's, of course, it's a pity not to have such decision. When we know that we have the very positive report from the French regulator, we are waiting for the same level of advise on the British side. Yes, it's very frustrating. But having said that, as it is a 25 years investment, of course, we we consider that we have to wait because we have no legal way to call a meeting from the ICG and If we do that, I think a reaction would be adverse or no need. Having said that, the key point, you're right to raise the point is the fact that, We have still a strong relationship with our subcontractors.
And more or less when we have the green light, We need 10 weeks, which means 2 months and a half in order to resume the works. Having said that, you know that the pulling of the cable was, forecasted and 1, not 2 nights per week, We have always a possibility depending on the traffic in the shuttle, but we are, let's say, this is a positive result of, traffic less important than anticipated. We can add 1 week per ops, which means 3 weeks per 3 nights per week in order to pull the cable. So we have the possibility to, let's say, slightly compensate the delays which are imposed by the lack of decision from the ICG. So one, in a nutshell, of course, now I think that the most reasonable to, as you mentioned, as we mentioned, is to consider that it could be operating in early 2022, disappointing sad news, but, that we can do nothing.
We, I would like to really I like the fact that we answered all the questions which have been raised, which means that there is nothing which is a pending question from ICG And Safety Committee. That's the point.
And a question on Eurostar, worked at home, do you expect Eurostar traffic to be impacted by worked at home development that could reduce the business trips?
Yes. I mean, we
are differently entering into a world which is different from the, the previous one. So, for sure, this might have an impact. But if you look historically, when the telephone came on the market, it was a disruption, which is much higher than the video conferencing system that we know today. And it never stopped people from meeting each other. It's even the contrary that you're interesting.
When you look at the people that use the most, the new technologies to contact, they won't some point to meet. So, if you just look at very short term COVID, etcetera, of course, there there is an impact. There is no historical data to support the fact that on the mid to long term, it will have an impact can, on the contrary, continue to increase contact between people, which is at the core of, of developments economic developments.
Yes. And I don't know if it is a wide benchmark, but if we look at terrorism attacks, 3 months after such attacks. Of course, traffic is resuming. I don't know if we can consider that it could be the same for COVID because it's more, let's say confused the threat, but yes, at the point in time, we believe that this kind of traffic will resume And regarding UK statements, you have seen that Boyd Johnson is asking people to go back to the offices in order to resume a kind of standard life. So I think like Jan, it will resume Next.
Thank you. We have no more questions by phone. Thank you. Next question comes from
Just one question on the EBITDA guidance for 2020. So that's obviously assuming no re lockdowns So could you maybe share your thoughts on that scenario? Because, looking at my case is picking up, it's after summer, is it a possibility that there will be read off downs, in Europe, probably less severe than we've had, but still from assuming you've done some of the calculations, within this scenario. So can you maybe share your thoughts on how prepared you are for a lockdown V2 after summer?
Yeah, you're right to consider this kind of possibilities. What we believe is a fact that, if it is not a general lockdown, And more importantly, there is no current time. We are on the good side of the situation, and, we will do better than half first half, which of course was really quite a serious discovery of this new Having said that, regarding the truck business, we do believe that the traffic, which is going through the tunnel is really simply resuming and will not be really impacted by a new lockdown because I do think that, you know, that we have a significant stream of E Parcels. That means that all those which are placed with Amazon and others. And so If there is a new EBITDA lockdown, it will increase once again this string, which is a very positive one for our own business and great value for good, so good pricing.
So no specific fears regarding such situation. If it is I think the worst situation is a new crown time, which would impact dramatically the passenger business. We made various assumptions. We worked on various scenarios, including, of course, as you mentioned, cost cuttings in order to deal with this kind of situation. What we can say is the guidance we are announcing is, as usual, something that we believe, reasonable guidance, not conservative, but the best assumption we can make presently.
It could be better. We hope it will be better. It could be worse than we are ready because we have already identified what we can do. If the situation is deteriorating, we are much more ready than in February, March, in order to adapt the situation and to keep the best level of cash because at the end of the day, I must confess that, it's a way I manage your company for the first half. I do think that, Ian, is in the same mood.
What we need and I might make comments. EBITDA is important, but what we need is to protect cash and we are really, fully aware of what we need if there is a deterioration of the crisis situation or sanitary situation. To protect our cash, which is absolutely key. So at the end of the day, confidence.
As always. Thank you.
Thank you. Next question comes from Peter Winink.
Yeah. Hi there. Just one question from me. In the results statement, it says that the company is not expecting to breach any dividends, but in some of your stress scenarios, you see that there is a risk that you could breach some covenants. I mean, would the company still resume paying dividends if you still see a risk that covenants could be breached?
Perhaps I will answer differently than that might because I am less expert in the company's action. I would say that, if we are close to bridge the covenants, it will mean that, other competitors would disappear because we are in a very better situation than series and airlines company. So yes, it could be catastrophic movie from Hollywood, but we don't think that we have such significant trees. And as Mike said, We are we have very good relationship with, writing agencies and the creditors and we did not need to ask, waiver for risk of breach of covenants in June. We had some informal discussions with, some creditors and banks in order.
At the time, a lot of companies were raising funds to consider if we need to have this kind of interim loan. And the best advice of our banker has been don't do that. You definitely don't need that. No doubt at all. And once again, you have a very better situation than other companies.
I think it's something which could happen in the second half. It's clear that as I mentioned, the board commitment resume dividends even at the reduced level as soon as possible is something which is quite clear for our own creditors, bunkers and others. And We could, if, unfortunately, we are in a breach, which could prevent us from serving dividends, keeping the level of cash half a billion, which is not too bad. Let's say we believe that we could manage a specific discussion in this unlikely situation that to serve a reduced dividend and to have, at the same time, a waiver in order to do that. We are fully confident, know that about that, it's something which is quite obvious due to the discussions, you, Mike, and I had with the creditors.
Thank you. Next question comes from Nicola Moran. Sir, please go ahead.
Yes. Good morning, gentlemen. Just a few questions from me. First one on the on the market share loss that you had in Truck Shuttle. Can you explain a little bit what's happening in terms of dynamics?
So we understand the the fairies, cut prices, passed on the full, after charge drop. But are you I mean, what are you seeing in in July, which makes you comfortable that you will regain that market share? That free these 3, 4 points of market share that you had in Q2.
The answer, Nicole, I answer is quite easy. It's a decision we made to reduce the number of trucks per shuttle because you know that, the drivers are regrouped in the club car at the head of the shuttle. And we decided very rapidly to implement a social distancing, which means to limit the number of drivers in the club car. It was a 27, I guess, something like that. Again, the 45, 50 drivers, which are, used in this kind of, right, when there is a normal situation.
So we have decided to cut the number of, or to cut the capacity in order to offer the social concession to the driver, which has been fully appreciated by, by the year or years. At the same time, a series where trying, of course, to attract truck drivers. And I must say, and we claim, the official officials that matter at the very intense peak time of the of the crisis. Fair is allowed against the maritime rules drivers to stay in their trucks, which is absolutely forbidden for safety reasons. So it was a kind of unfair competition.
We claim, the British government that this is not acceptable at all. And of course, this has been or seized fortnight after we discovered the point because we took time to discover the point. So it was an unfair attractiveness from the series. We offer the same dispensation, but not keeping the driver in the truck, but offering less, seats, to the driver. So It has been a positive decision.
I assume, I consider that it was the right assumption to make and, at the end of the day, when we see the recovery of the traffic now that we have the plexiglass within the Plobal, I do think that it was the right decision. And this is the only explanation of the reduction of the market share, the one point we lost in 2nd Q.
Thanks.
To date in July, your revenues are up year on year. Mean, that's to us. I mean, just doing a back and blow envelope, computation, it implies that that, basically volume on shuttle is up 15 to 20%. I mean, we we understand you you you wanna push a police tone, but this is particularly aggressive. No?
How do you get that, Nikolas? Why do we need a a traffic up to get the revenue at last year level?
Well, because because, I mean, she's freaked out Eurostar. I mean, Eurostar is running at 25 you, Rafiki.
On your auto shuttles only not on your roster, obviously, there. Okay.
Okay. As I said, it's still working and it's a recovery plan.
Sure. So it's it's revenue at at the shuttle, up, month to date on the back of on the back of pricing and, and volume is still down. Yeah. Correct. Correct.
Okay.
At least for the 3 weeks of July.
Okay. Understood. And very last one, on LAX Link, Could you shed a bit of light where where what do you think the assets kind of revenue run rate would be right now in the current spread environment, which is quite depressed?
End of June, we made, of course, the classic impairment, which is based on the value of the gap between electricity pricing between UK and France, including the fact that the need of electricity, as you know, was significantly down and the price too. So the new calculation we made regarding the profitability of the future business and the conclusion has been that we don't need any impairment as we state due to the fact that electing this still its value and the likely the slightly impact we have seen on the GAAP pricing is not so important that it could jeopardize the profitability of the business. And so when we are able to operate elect Link, we are still in the mood of an EBITDA between 1000000 to 1000000.
30, okay. Okay. But this year would be a, would be markedly below that range. This year, you mean 2020? 2020, if we were separating the spread yet?
If you look at H1, the interesting thing is that Yes, prices of electricity have reduced, but the volatility has increased significantly. So our potential of our revenue for H1, I'm not sure I didn't look in detail at the result because it's virtual, but, the revenue we had, we would have had in April and May, was actually at the high end of the potential.
And it was better than this time. It was better than this time this time last year because of the of the volatility primarily, which we which electing can actually benefit from volatility of prices between the two countries.
Alright. Okay. Thank you.
That's true. Next.
Thank you. We have a new question from Nadil Ahmed, sir. Please go ahead.
Yes, sorry. I've got 2 follow ups actually. The first one is on cost cutting. So it looks like during the time that makes the priority was given to the quality of service and preserving cash, which is perfectly understandable. But even that as well an opportunity for you guys to review your operations and potentially be maybe a bit more aggressive on structural cost cutting.
And if that's the case, an ongoing review, could you share some light on how much costs you expect to to take out of the fixing, please.
What I can say is the fact that It's one of the key priority for Jan. But as you said, but you can comment as he said, he's discovering the businesses, but I know that, and mainly coming from the states, he has a very strong level of commitment on cash management and our OpEx management. And so I'm sure that we will continue to find the way to make savings without deteriorating the offer and the business.
Yes. On this one, I would say that COVID are not COVID, a company is well managed when it's a lean management. So, we are going to do everything that possible to do to operate, to continue first to give the quality of service that is making our assurance that our core promise we do that, leveraging, all the possibilities to be, as lean and as efficient as possible in the way we we, we manage our operations. Okay. And the last one, if I may, the general question, I saw a lot of, initiatives in the citizen convention for climate in France to potentially, both, support rare weather usage at the expense of the transportation means.
I think they are talking of a significant investment plan. Is there anything concrete, in France or with the European green deal that would, that could affect your business in a positive manner. I'd be interested to hear your thoughts on all that. Yes.
So right, Nadil, we are looking very carefully to all the possibilities, which could be raised either at French or European level. And we have some ideas in order to do that. Once again, to look at some innovative solutions, perhaps some new offers for significant traffic. What we can say is the reason why I mentioned the CSR as a key message We do believe that everything which is done in order to support green businesses is quite good for us. And if there are some specific, mechanisms, subsidies, at least French or European or both we will try to attract them.
We have, some projects, ongoing projects we are working on. I must say and sorry, I think it's earlier to explain what our views, but yes, the answer is we look very carefully to attract extract the best value of this new green,
Okay. Thanks a lot.
Thanks.
Okay. So ladies and gentlemen, it has been a pleasure to answer to your question. It was a quite challenging time, we do believe that we did our best in order to protect the company, to protect staff and customers. And it means that we believe and I am back on the cash file we have. We believe that we are all announced in order to, defeat the competition and to continue to be back at the previous levels as rapidly as possible and, again, is fully motivated to take part at this kind of, let's policy and programs back to good, EBITDA level and serving dividends.
Thank you for your comments. Thank you for your questions. We are the team is still fully available to answer to any question, and I wish you to stay safe and to have a nice day. Thank you very much. Bye bye.
Thank you, ladies and gentlemen. This concludes the conference call. Thank you all for your participation. You may now disconnect.