IVS Group SA
MIL:IVS
IVS Group SA
MIL:IVS
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Earnings Call Transcript
Transcript
Other Earnings Calls
Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the IVS Group First Quarter 2020 Results Conference Call. [Operator Instructions]
At this time, I would like to turn the conference over to Mr. Antonio Tartaro, Chief Executive Officer of IVS. Please go ahead, sir.
Thank you. Dear, ladies and gentlemen, good afternoon. I am Antonio Tartaro, IVS Group CEO. With me are present, the CFO, Mr. Alessandro Moro; and Mr. Marco Gallarati, responsible for Investor Relations and Head of our Coin Service business.
In this conference call, we have already done in the last month at the end of March. I will give you an overall picture on what is the current market context for the vending sector. And what IVS is doing in order to face this exceptional situation. Then Alessandro, our CFO, will give you some details on the liquidity and financial situation within IVS Group in order to anticipate what would be probably a common question from many of you. Finally, we will be available also to give you an answer and expectation of the results of the first quarter and other possible questions. Well, considering the unstable situation that started at the end of the last February, my first comment is that IVS Group is proving to be quite strong and resilient.
You know that the pandemic effect have just started to hit our business in this quarter. What we continue -- that will continue to face other and more difficult months just after the end of the quarter. We are aware that the final result will be much lower than the past year. And it is also hard to say how much less difficult the future months will be, especially estimate the new economic activity level in the next autumn and the next winter.
In the March, the crisis was [ increasingly hard ]; and between the end of March and the beginning of April, we think we touched the bottom. Since the second half of April, this was recovering, but it is still a very weak recovery and overall volumes sold are still very low, currently in the range of 60% compared to the past year. There are also some difference amongst regions, for example, in Italy, Eastern Central and above all, South of Italy performed better than North and the Northwest regions. Same situation in France, where the southern region is currently doing much better than peripheral. In general, the big cities are more in trouble than the peripheral areas.
Private corporate sector and factories are clearly performing better than public and transport locations, which are still almost empty and certainly where we have clients like universities and schools that are still closed. Given that we have a few possibility to decide the timing of reopening and the size of the recovery, our priority is to reorganize internally our operation in order to maintain a decent level of operating margins despite the huge dropped of volumes. The ultimate scope is to transform all of our costs or as much we can into variable cost. So it is clear that the cost of goods sold is by definition a variable cost, and it represents around 24%, 25% of our sales. Possible reduction and discounts on this level [indiscernible].
The second big area is the personnel cost that represent a little bit less than 30% in our normal profit and loss. But approximately since the outbreak in March, we have been using, and we are still using the services of temporary employment provided by the government in a different nation where we work. Unfortunately, [ due to limited public ] spending capability, we are observing a slow migration of a part of this cost from the subsidy -- from government towards our profit and loss. However, with these instruments, we have been able to reduce temporary up to 60% of the change -- the shares of the total workforce.
First of all, it will be impossible to turn into variable at 100% of the labor costs, but certainly, a high percentage of reduction helps a lot. In the meantime, we have also been working on the internal organization of the logistics with branches in order to use in a more efficient way, the people that are still at work and [ adopt temporary reduction. Small service backed vending is a business ] where performance come from many macro actions that make the business. The third minor cost category is represented by what we can generally define positioning fee, even if in the contract they can be called also the last royalty and rent. With respect of this positioning fee, we are doing many different things. [ In some evident case as for schools in U.S. have closer fees and be alone ]. In some other public locations in the travel sector, railway stations, they have been suspended, and we have started renegotiation with transport authorities and public landlords. Apart from the suspension of payment from a financial point of view, it will take some time to renew thousands of contracts, especially in the public sector. But we are pretty sure that we will finally reach the good results of saving in this market contract.
Other service costs, like transport utilities totaling approximately another 5%, 10% are also variable by definition and maybe also the lower fuel cost to generate some additional sales. Before this cost go to labor positioning and other service, some almost 75% with just a part of the labor cost that cannot be transferred into variable. It means that we can have a large part of the cost linked to sales. Below that, we have adjusted depreciation and amortization, which are not cash, financial costs with a pretty lower rate on bonds experience on September 2026, [ and other as well and very few things to be ].
As I have already said, the CFO will let us summarize the group liquidity position. However, we were able to not absorb cash during this difficult month, and we did it without a cash base of our suppliers and partners. Vice versa, in many cases, we choose to support them from the other side, I am to say -- happy to say that this -- our behavior was recognized also from our partner. For example, almost all landlords accept to suspend and -- or avoid the cost for provision of the COVID-19 month. The biggest of them up to 100%. And of the IFRS 16 principle, the effect of these negatives will be visible only in the net financial position and in the next quarters. What I can say now with reference to CapEx in that the first 2 months of the year, so before the start of the pandemic. We're investing around EUR 5 million per month, plus another EUR 8 million, EUR 9 million of exceptional CapEx related to the installment of vending machines in Metro Paris. After that, almost the CapEx were stopped apart from what is strictly necessity and already committed. So the remaining part of the year, unless we see a positive change in the market, CapEx should be very low and limited to the new clients. Machine ramping will be the mainstream for reconfiguring the vending machine network to deploy in [indiscernible]. For sure, in the next 18 months, we will be reconfiguring [ network in months ], and we already did in the past when after the Lehman Brothers crisis. We redeployed a large part of our vending machine network on the field to adapt it to the new client consumption level.
We are ready, and I think that it will be an opportunity for our company for many points of view. On the taxes, I would already expect to be boosted by the Italian Tax Authority and government at the last part of almost EUR 30 million of VAT credit and antitrust fine. That should be to return to a decent value. 5, 6 years ago, we had the market share in Italy around 10%, now is [ 40%, but up 15% ]. Our goal was to remind -- to reach 20% market share or a little bit more. We are aware that IVS value, considering also the scenario in the coffee roasting sector [ see to the age in the IPO ] would be increasingly significantly in line with the market share, even more than proportional to economic result. And the market share in all their countries should grow as well even if we start from a lower base.
Now it is pretty obvious that the total size of when the market after the pandemic will be reduced by nobody really knows how much, let's say, about 1/4 to 1/5. But it is also clear that a similar portion of the competitors or even will not survive the crisis. So market share will move much faster than in the past. I am sure that IVS Group has the operations skills and financial resources to grant that our service quality will not reduce. Consequently, we will not lose clients and on the market, there will be main opportunity to have new important contracts.
Now I leave the CFO to give an updating numbers and details also on liquidity and cash.
Dear, ladies and gentlemen, good afternoon, Alessandro Moro speaking. I will not repeat the data on the quarterly results that you can find in the interim report or in the summary of the press release that has already been made public and posted on our website. And we will rather give you some details on our liquidity and financial situation that in moments like this are considered very important.
First of all, to date, the cash available in IVS Group is around EUR 60 million, and the credit line available are EUR 73.7 million. We had EUR 52 million and EUR 60 million of cash and credit line, respectively, at the time of latest presentation. So credit line available increased by EUR 13.7 million that were especially granted to some controlled company within the group. So IVS France was granted EUR 4.2 million, I guess Spain EUR 3 million and Coin Service EUR 2.5 million. Although the decrease of credit line available during the period from the latest presentation, there was no additional drawdown. So we just increased the margin available and have an overall liquidity position of over EUR 130 million. We have also been offered additional loans by banks and by CDP, Cassa Depositi e Prestiti, under the guarantee schemes provided by the Italian government to face the COVID crisis. But now we don't need and do not like this kind of public financing because it will be imposed to the borrower cost and operational constraints, for example, on the possibility to reduce the workforce. And this factor that would reduce our flexibility and unfortunately now, we don't need to stay under this condition. We would rather be pleased if the Italian government and tax authority will re-boost us our own money. In fact, is not included in the calculation of net financial position. At the end of March, we had more than EUR 32 million of financial credit of which EUR 24 million for VAT credit and EUR 8 million of the [ whole of the antitrust fines ] that we paid in the past year and the central administrative court consider the status paid that must be re-boosted to IVS Italia. Apart from VAT credit around EUR 6.1 million was actually re-boost in April. So the outstanding credit VAT plus antitrust is now around EUR 26 million. In any case, a good sum that we would prefer to have on our accounts, obviously.
Going back to the credit lines and particularly with reference to the pool needed by BNP Paribas to extend the availability period, and we can use the undrawn part around EUR 60 million, up to the end of 2021. The maturity of this loan is [ moved at a later date by October 2022 ]. Moreover, with reference to this loan, in April, we issued a press release in which we said that we had already agreed with the banks [ about superior ] for the next calculation of financial covenant. No waiver in fee were applied by banks for this request. No news with reference to the bond, which expired on October 2026. We are now available for your question, but for details on the results and for the first quarter of additional information on the present situation. Thank you.
[Operator Instructions] The first question is from Matteo Bonizzoni with Kepler.
I have some questions. The first one is on the personnel cost. I was reading that in the first quarter, the decline of the personnel cost was EUR 1.4 million, which EUR 1.4 million was Cassa Integrazione. I understand, and I guess that Q2 that there could be an acceleration in the reduction of the personnel cost because it started basically in March. Can you provide an indication or rough indication of how much the personnel cost should decline in the full year compared to 2019. The same question is for redevances. They decline, I was reading EUR 3.4 million in Q1 now. What is your target to reduce the redevances cost for the full year? CapEx was EUR 20 million now, which basically has coming from Metro Paris. I said clearly that the run rate of the CapEx will decline what is range for the full year? I remember that we were discussing maybe in the last conference call, some that you already spent in Q1. So I guess that over Q2, Q4, the remaining CapEx should be quite minimal. Then a general question about the competitive environment, particularly in Italy, you have already commented that you expect an acceleration of the consolidation, can you elaborate a little bit if you believe if some of your smaller competitors are really in crisis and when for you, these M&A opportunities could materialize, maybe more next year than 2020, so general question about the situation on the competitive environment. And then the last question, a reasoning on the smart working. So everybody is reading and is aware of the fact that this crisis has accelerated the utilization of the smart working compared to before. Then we will see what happens when the crisis will be over, but there are some, let's say, ideas or [ thoughts that this should remain partly gradual ] that could be, I think, a threat for the machine that are placed across corporates that for you are not far from 80%. What is your reasoning about this risk over the mid-term?
So I begin from CapEx, or do you see it's 2 months of CapEx. And of course, the machines we installed during the month -- the first part of March, where we were able to install because that will be committed with the clients and or the CapEx for Metro Paris. CapEx for Metro Paris is almost [ even ]. So you do not expect a big amounts during the next months. And the other part of CapEx is [ all ] what we need. It is that -- also our warehouses were closer since the beginning of Cassa Integrazione in Italy. So no production of rapid machines will be -- was during the last 8 months, except for 1 week. I plan reopening of the warehouses for 3 weeks in Q3. And that's all -- the only [ all ] the CapEx I have to plan to do is to change the one where it will be necessary relating to the being the [indiscernible]. The point is that also the reduction of activity related to the consumption of vehicles. So I do not expect to have a big CapEx for the next months, if the level of activity remain this one. I think that the high amount is EUR 5 million, more or less, at the end of the year. Not more. The other question is the effects of cost reduction. Well, our target is to remove the faster than we can do during the month of March. Of course, the cash on hand, causing also from the delay of the [ issuing of decrees and laws ] in all our countries where we are present. The first move was to you to face the reduction of volume was to use holidays, permissions and other figures that we are [ creating the home management ]. When the various governments issue measures, special measures like Cassa Integrazione, first of all, Italy, then France and Spain. We use these instruments as best as possible. Of course, as you can see in the first quarter, firstly, move up in terms of percentage, the incidence of labor cost. So our target in the second quarter is to, again, collected back these cost -- extra cost for the Q4, for the Q1. And we -- at this moment, until today, we were able to reach and to make the same difference in percentage compared to the reductions of volumes and revenues. So it means that we should have in Q2 a small savings in terms of per incidence percentages of labor cost compared to the decrease of the revenues. It means that we run in terms of reduction more than the reduction of revenues. The amount that you see in the figures for the Cassa Integrazione in Italy is in Q1 is EUR 1.4 million. And we were able to reach 60% of reduction. Although cost -- labor cost compared to the normal cost of a -- in a normal quarter. Other question or aspects?
What we expect to save in positioning fee?
What we expect to save in positioning fee in the first, as we stated there in the documentation, in the first quarter, we expect to save EUR 3 million and so the next in terms of [ proportional ] amounts in the next quarter. It is a long discussion with the clients. I have no doubt that we can see the positioning fee in the client that are closed, like schools or like university. Mind that in France and in Spain, the government issue rules that void in France totally the positioning fee for the public installments. And in Spain, for the public authority to renegotiate the positioning fee. So that 2 markets -- this was a government decrees that make easier the reduction of the positioning fee. We are working, of course, in Italy with government to suggest to them to adopt [indiscernible]. At the moment, we are in position to negotiate with the client, and we are doing it. More other question? Competitors. You have another question. Better, we speak about management acquisition opportunity. The management acquisition opportunity, I think that as we've seen in the past in the -- when the crisis will be more or less over, I mean, December, November, the effect and the market changes will be harder, stronger from our competitor. So we expect to have a good opportunity during the next year to acquire big portion of the market. If you mind the Lehman Brothers crisis, when the financial prices go down and hurt economy, what happened is that in 2012 and 2013, we did -- we performed the better acquisition. We have done from the IVS life -- beginning of life. So I expect in this crisis that it is harder than Lehman to have a really big opportunity because IVS is liquid. IVS has enough management capability. And so we are ready to take all the opportunity from the market -- that the market will show to us. Concern regarding the smart working effect. At this moment, it is hard to have a prediction. Of course, we -- what we receive from smart working is a positive approach and negative approach at the same time. It depends from the smart working [ the same ]. My personal view is that where you work have need 1 hour to reach his job in the morning and 1 hour to go back to his house, of course, smart working for him, it is a good opportunity. And this means that smart working will affect the big cities in Europe, maybe the phenomenon kind of -- could be affected in the market of Rome or the market of Milan in Italy. Not the other cities that are -- that are really, really smaller. Paris, London, Frankfurt, [ bond ] maybe Barcelona from some cases. However, IVS market is not -- IVS is not focus on the office in the market. IVS is usually focus in the travel and in the airport stations and in the big factories and the small factories. So I think that we will not be so affected by smart working as our largest competitor in France and Spain. For them, these are problems. And smart working, especially in Paris, where you know that the traffic is a nightmare. We have said this phenomenon, smart working, since the beginning of the last year. So I hate to say that the smart working effort in Paris is already in field since the last year. Then we have another reflection that we can do is that, well, smart working could be an opportunity also because I think that works from their home. It is not so smart for it work. It means that the workers to work at home, need to have particular space. What we think it will be the -- longer-period plan, it will be opening of smart working space. It means that in the peripheral over big cities, there will be some spaces that will be equipped with printers, the bar and other -- and a lot of co-working space. And in this co-working spaces, vending industry can do a very, very big service. However, it is in the future.
The next question is from [ Louis Dialized ] with Wells Fargo.
2 questions from me, please. The first, if you could give us a bit more color on what have you seen in May, like improvement versus end of May -- end of March and April probably by geography. And the second question is on -- you talked a little bit about opportunities and the ability for you to look for acquisitions. So I'm wondering if there is any geography you would prefer, where you'd like to expand more? And if you have like a leverage target in mind when you think about some acquisitions?
Well, volumes in April was the bottom of our activity, of course, to close the lockdown that progressively affected all the countries in Europe. First of all, Italy, then few weeks after that France and then Spain. So what we observe is reduction at -- of 60% of volumes. Then the 60% will be up and up. And now the level at this moment, the level of activity is slightly 40% less than the comparable to the 2019. Different situation in Italy, where you have the big cities that have a lot of more trouble than the peripheral area. And wherever we have a percentage of our clients that are still closed in Italy and in north part especially. And of course, university and schools are still closed. And what we see where the clients are reopening, it is that they are working with 60%, 70% of their work force compared to before. In the southern, the activity is growing up well. And now we are at 70%, 75% of the precedent level. Frankfurt also make a big difference from [ pace ] area that is already looked down, where we have 50% of the activity volumes compared to May 2019. And without it, we are more than 50%. In Spain, the Spain have a lack of 4 weeks compared from Italy. So we will think that the same situation that I described in Italy will be reached by Spain within the end over the last week of June. Opportunities through acquisitions. We are focused on the [ special ] market. So we think that our target should be in Italy, Switzerland, France and Spain, different situation of the market, different price, a lot different opportunity. I think that we will have a big opportunity, very big opportunity during the next 12, 18 months to make acquisitions, small, big and medium.
And I mean -- sorry, just a quick follow-up. Would you have a leverage -- margin level target in mind when you think about acquisitions or if this is not something you're thinking about at the moment?
But we are open to all type of project idea. I think that in Europe, there are [ old 2 companies that performing vending business like benchmark ]. One of that is IVS. The other one is not the main operator of the market. So a lot of companies owned by private equity firm or [ privately ]. We have different problem, and they will face big products compared -- related to the new type of market, a new version of the market that we will have in the next year. So a few of them will be able to [ adequate to ] their structures and to collect the opportunity of the new type of market that we will live in during the next years. I think that IVS is in the position to call -- to pick all the opportunity that the market will issue.
IVS can generate positive cash and satisfactory EBITDA also with the 30% market decrease. And we will see we able to say the same in the next months. Now it's too early to speak about M&A, everybody has to look at its own business, reorganize, becoming more efficient and the -- which is not granted for everybody to continue to serve the clients, the clients [ which are providing and which are giving good prices ]. Otherwise, other competitors probably will fail to continue the service to clients. And this is what we expect to see in the next month. So it is not necessary to buy companies. But in the very first moment, just to weigh better the clients, which are not serviced anymore changes their vending providers for the next months. And probably, we are looking at commercial actions rather than M&A in the -- by the year-end. In the next year, [ will be probably more interesting for M&A ].
As I say, what we expect is a reduction of activity in a lot of factory services. It means, let me give you more color and then example. It means that when I have a building that I served with 3 battery of 3 machine each considering the reduction of people that I can serve in these better premises, I will expect to reconfigure my machine network in that building. And in the next future, I will have that building not -- still 9 machine, but only 7 because I will serve the new population with 2 battery of 2 machines and 1 single battery of 3 machines. It means that I will have to withdraw from the market 2 machines on 9. And what I can do with these machines that are still paid -- already paid. And I can -- I have the capability [indiscernible] and where else is to revamp in order to make this machine more modern than the machine [ being produced by improving suppliers ]. So what I will do is revamping the machines and put aside because I will double my capability to -- and my hunters on the field to gain market share by internal development. Of course, if I will be able to perform acquisition, I will have enough machine revamped and so new and better performance that the machines, I will find in the branch acquired. So I will increase the margin that I can extract from the acquired machines. The capability of IVS is typically this. And for us, this is ordinary course of business. It was in the past. It will be in the future. More of both.
[Operator Instructions] The next question is from Alessandro Cecchini with Equita.
The first one is about credits after the cash in that you had in -- after the first quarter, you will have around EUR 50 million on credits from the government. I would like to ask you if you expect to, I mean, cash in the vast majority of these credits by year-end? This is my first question. My second question is about you described it, the trend for all the segment in May. But just to recap, could you give us your trend in volumes like-for-like volumes in May overall for your full company for the group? My third question is about the last call, you were, I mean, good in providing, I mean, sort of the best estimate, not guidance, but the best estimate possible for the year in terms of sales decrease and potential decrease in EBITDA. I would like to ask you if you could update these numbers considering the current worsening scenario. And finally, you spoke about smart working, it could be very interesting for us to better understand what kind of sales you have in Milan or in Paris. So combined in order to understand your exposure to big cities that probably it's -- they are the most affected areas. And finally, my last question. And if you expect, I mean, a positive or at least a small positive EBITDA in the second quarter, considering that you said that you haven't burned cash in the first 2 months of this second quarter?
Well, beginning from the last question. As we told you, we did not burn cash, and we will not burn cash. It means that we expect to have a positive EBITDA because we work -- struggle to reduce the cost in percentage more than the reduction of volumes and revenues. So the point is that we did not burn cash using strange or extraordinary systems like suspended payments and other amenity. It means that at the end, if the virus will be back, we will have available also that leverage that we did not use during the last months. So I am pretty satisfactory to have -- to manage the company without to burn cash even in a reduction of 50%, more or less of revenues experienced during this month, and this was the expectation that I have for the quarter. I think that this is a one question you did. It is hard to say prediction for the total year, Alessandro. I make an example, what will be the school and university in the last quarter or third. I really don't know. If the school will be open at Alfa, I will lose 5% of my revenues in Italy and less in France, more or less the same level in Spain. If the schools will be opened and university will be opened at full, we will have no problem, maybe we will cover more revenues than the last year because we are reconfiguring the machines, and we will equip the machines, and we will keep the machines within Europe with these credits. And so we will have some more revenues. Same situation in the Corporate segment. I guess it's not so exposed to big cities that are exposed to smart working. First of all, Milan as smart working for the public sector, it means that the world public workers will not work at all. Because it is my opinion...
We are also the market leader in Milan.
No, we are not.
We are probably the market leader in Rome, where there are different kinds of public state workers, but in the big service companies, banks and so on, the contract where not profitable enough for us. [ So we have also been client like in PEZA, Unicredito ] and so on in Milan.
In Paris, smart working impact -- already take action taking place in 2019. If you see a study of local vending operator association, you can see that a lot of company -- vending company, operating in Paris, see a reduction of 15%, 16% of the revenue schemes from a big office in Paris. So the effect is already in the numbers. And the other question is credit -- was credit, I'll give Alessandro to answer you.
About VAT credit, yes, unfortunately, we have an information about the timing of payments by fiscal authority and so by Argentina [ Intrate ] because the only thing that we can do every day is call and call again every day. And -- but without obtaining information about the date of payment and the timing of the reimbursement. And unfortunately, the same about the reimbursement of antitrust fine. We have called the MISE, Ministero dello Sviluppo Economico, the Italian Ministry and they call us that...
The are working on...
They are working on. But -- on the other hand, I can confirm you that we have agreed with the bank and a credit line for the -- for anticipation of VAT credit of around EUR 12 million. And so we can use this credit line to sell the credit of VAT in the future months, for example, about the credit of fiscal year 2019 and the first quarter of 2020. And so on this side, we are comfort -- confident.
So basically, if I understood it correctly, you stated that your best guess for sales decreased in second quarter is roughly minus 50%. It's right. I understood well?
Around that 45%, 50%. Around that. [ It depends from the month of June ] at the level of group and it will depend, of course, by the level of activity of June would be better.
Okay. Okay. But roughly speaking, if I have -- we have in mind...
Alessandro, my prediction now is that, EUR 55 million, I don't no. I really -- it is hard to say.
Hard to say. But just to have, roughly speaking, the size. And okay, I have an additional question about payables. So basically, I spoke some days ago with Marco. I would like -- and then he stated to me, okay, we don't want to, I mean, push our suppliers. But I would like to better understand your strategy on this point because actually, your suppliers are I mean in a good shape, Coca-Cola or other companies, food and beverage companies are not in a bad situation, relatively speaking. So I wanted to better understand why you don't, I mean, use some, I mean, way in order to free up cash from payables and so on?
Because I expect them to the end of the year to ask them discount for that. We -- of course, we already speak with them. And we make an agreement that we will not delay the payment until it will be necessary to preserve the company. And so they were able -- this is a partnership relationship with a big supplier and also because they ask us to do not do like our competitors did. So this is a different approach from [ AES ]. It is a leverage that I can use, if I will have of what we need. But as Alessandro said, we increased the cash event. And so it will be implied to increase cash in hand and show to my supplier that I have cash enough to pay them, and I say that I can pay them.
It is a potential sale...
It is a potential sale. And we are public. So we will give to the market life and colors. And they are reading the life in markets and colors. So how can I do that and say, no, I have no money, you have to help me. And then after the 2 months or 3 months that we increased our cash in hand. So it is really hard. I prefer to negotiate with them, a reduction -- or propose partnership. If I will have -- I mean if I need, this is a very distinguished current behaviors compared to competitor and you know what I mean.
Alessandro, if some competitors do not pay at all, which is likely in some cases, these competitors will lose the clients. So clearly, if we have a good relationship in payment and continuity with our suppliers, which are the same, Coca-Cola or Lavazza and so on, and we had to step in, in the market share and the client contracts of our competitor, which is not paying anymore. At that time, we are asking for an extension of the payment terms. Not now. We don't need now to expand the payment terms.
Okay. I missed your indication for the CapEx for the year, you stated that more EUR 5 million from the current level, so EUR 25 million for the year, is correct?
Yes, it is.
[Operator Instructions] There is a follow-up question from Alessandro Cecchini with Equita.
Last question about the credit lines available so that you were a very good -- thank you for explaining us in detail about all your lines. Do you -- do you think that from the time being is enough for this kind of, I mean, liquidity? Or do you expect maybe in the future to draw other lines so on and so. With this current situation, are you okay? So just to understand your view on the cash that you have drawn until now?
In this period, we didn't draw nothing.
No, no. Additional -- asking -- sorry, asking for additional potential lines. Sorry not the...
We have been offered by some banks. We have been offered also by Cassa Depositi e Prestiti. We have good relationship, and they called us asking if we needed lines. As Alessandro said in his speech, first, we don't need -- we have existing cash and we have existing credit lines. We will see it, but we should have a very real necessity to have -- now we have cash and credit line for a total of EUR 120 million, plus a potential reimbursement of VAT and the antitrust fine for another EUR 25 million, 30 million. So we have EUR 150 million cash credit line available. We don't see a necessity to spend all this money. So...
And Alessandro, as I said, in the covenant bond. We cannot do that at the level of -- in France. So the credit line that we have, it is up to the covenant bond. So we cannot draw the maximum amount of debt [ in the only covenant -- the cost of the number that we have ]...
[ Mine is a covenant bond that is current ]. So it means that we cannot close a contract of more than of that of the EBITDA ratio. So we have the line committed from the bank at the level -- maximum level that we can have.
[Operator Instructions] The next question is from Georgio Martorelli with Amber Capital.
Hello, can you hear me?
Yes, we can hear you...
Yes. Yes, we can hear you...
A quick question, your guidance for the cash flow for next quarter, you're saying that you're expecting the next quarter to be cash positive or it's -- I understood. I didn't understand the answer. Meaning with minus 50% of top line. And I don't know exactly if you can give us a guidance of fixed cost, which you cannot reduce further in the coming months. What would be the EBITDA projection for second quarter? Because you have anyway, EUR 5 million of CapEx and EUR 3 million of financial costs to be paid. So only CapEx and interest costs are in total around EUR 6 million, EUR 7 million, or EUR 8 million. So how much you can reduce cost to protect your P&L and your cash flow in an environment with top line declining by 50%?
Well, of course, if the volumes will reduce by 50%, and the target is to reduce for the same percentage cost. What we see is that we are performing well on until today or the personnel cost and also other fixed service costs is reduced [indiscernible]. What the -- the exercise for the month of June it to have enough coverage from the few in 5 weeks compared to the 13 until the end of [indiscernible] that will Italian government give us. What we -- given this, what we see also in Spain and France that as I told you during my speech, that a part of that contribution is -- will be more less intensive. So I think that we have our internal targets to keep the same profitability you see in the first quarter in terms of EBITDA compared to the level of revenues [indiscernible]. So it should be less than [indiscernible] but it could be something that we can achieve. The other question was?
No, no. Simply asking about the cost -- the fixed cost you are -- you have...
Fixed cost are fixed, that's the reason of course. But what we've been trying to do is to enable a large part of that. And the real point is that if you ask for the first 2 months of the second quarter, so April and May, I think that we reduce the labor cost more than the reduction of revenues. I don't know if we will do the same in June closing by the different scheme of Cassa Integrazione in our main market that Italy that give us only 5 weeks to compare to the 13 until the [indiscernible]. But however, we will do something with better that we can do.
[Operator Instructions] Gentlemen, there are no more questions registered at this time.
Thank you to everybody, and thank you also to attend our conference at this time of the last day of the week. Unfortunately, the next week, it is closed by holiday. So the only 2 time we have available was this one. So thank you so much to attending so many at our conference.
Mamma mia, everybody who was working from home. Thank you...
Well, thank you. Have a nice weekend.
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