Global Dominion Access SA

MAD:DOM

Earnings Call Transcript 2020-Q1

[Unknown Executive]

Hello, and good afternoon, everybody. Thank you. Firstly, thank you for participating in our earnings release, and we hope that both you and your people are all well and that we are all adapting as best as possible to this new situation we're living because without a doubt, it's an extraordinary situation. Yesterday, we held our AGM and we reviewed the very good results we obtained in the year 2019. And this same path of growth that we had in 2019 is what we expected for this year for 2020 and what we already saw in the first weeks of the year. However, as from the beginning of March, we felt the effect of COVID-19. And therefore, the results of the first quarter that we're presenting here today are influenced by this fact subsequent to the measures implemented in most countries of the world. And in the case of Dominion, we are a tremendously diversified company. And therefore, not all impacts have taken place to the same extent nor at the same point in time in all of our activities and our countries. But as regards Q1, we can say that the biggest impacts have focused on 18 days in the month of March. And therefore, I will review these impacts and the measures we've taken. But firstly, let's look into the global figures. We have a quarter in which we've grown by 6.3% in terms of revenues at constant currency with a ForEx effect of 0.7% negative. And this means that in spite of the effect produced by COVID, we've had an organic growth of approximately 4% compared to the same quarter of the previous year. And growth has been driven above all by the B2C business because now it has doubled the number of active services compared to 1 year ago, whilst the B2B services have dropped slightly and solutions are maintained more or less flat. And then we have the reduction of margins that we've observed in relation to the first quarter of 2019. And this is the consequence of the situations originated by COVID-19, and the rapid reaction that we implemented from the very beginning has limited this slump to about EUR 2 million as regards the contribution margin and about EUR 3 million as regards EBITDA and net income. As regards the contribution margin, we had a subsequent -- we had a temporary offset because of the slump in sales for these 18 days that I mentioned previously and the cost optimization measures that we've adopted. And you can also see that some restructuring had to take place, and this had a downstream effect for the rest of the margin levels and we have some positive effects like a lower burden of amortizations and taxes and -- well, these have to do with a number of differences connected to foreign currency. But to understand the snapshot, I would like to point out the details for each of the business segments because the impacts have been of a different magnitude in each one of them and so have the measures we've adopted. But I would like to first -- well before moving on to the facts of the COVID, I would like to define the segments we're going to be talking about because we already gave you some data in the earnings release of the closing of 2019. And we said that in 2020, we're going to provide a greater breakdown of information divided by sector to reflect the strategy that we're implementing and to facilitate the interpretation of the strategy. And this has been a demand from you, from the market in recent months. And we hope that this greater breakdown would allow us to understand the different dynamics followed by each one of the businesses. Until now, we were talking about 2 segments, services and solutions. As from now, we're going to be talking about 3 segments: B2B Services, B2B projects 360 or solutions, and B to customer. And in Dominion, we have 2 major domains. Firstly, we have the B to customer world, where we cover all those activities that are aimed at the end consumer, such as the commercialization of the supplies of gas and electricity, telecommunications, insurances, any vertical elements that we incorporate together with our omnichannel network of Phone House shops, call centers and sales forces. And we want to become the multiservice supplier that uses only one omnichannel platform for all of the personal and household services. We want to have a recurrent income. And instead of being a retailer and third-party services, we want to be a supplier with its own customers. So therefore, the relevant thing or the key issue has to do with the number of customers or services, if you want, and their lifetime value, which are the key elements. On the other hand, we have the classical Dominion world, which is business-to-business, where our proposal is to become a Tier 1 supplier with digital and technological expertise that can execute an end-to-end project. And B2B can be divided into 2 segments. We're talking, on the one hand, about B2B Services where we refer to the framework contracts, so all of the outsourcing of operation and maintenance contracts and for the projects aimed at improving processes. And these are recurrent contracts with tight margins that have to reach 10% of the contribution margin. And we're talking about B2B solutions or projects 360. When we refer to those projects in which we create a new production process, we design it, execute it and carry out operations and maintenance. These are global projects, normally multi-annual projects and with long maturity processes. And this segment is a business that has a higher margin compared to B2B Services because the margin is in excess of 15% or roughly 15%. But as from now, therefore, and in this earnings release and in future earnings release, we'll be talking about sales and contribution of margins in these 3 segments: 2 in B2B and 1 in B2C. And in the documentation, you can find the 2019 pro forma to compare the data. So let's review to what extent COVID-19 affects each one of these segments. The most affected segment is our B2C business, which is only present in Spain and which had to close down its entire physical channel as from March 14, and we also had to suspend the portability processes in telecommunications. Even so, this segment is the one that has grown more in terms of revenues. And it's important to understand and differentiate between the income resulting from the suppliers that are active, that are recurrent month after month. And this is what explains the fact that the figure goes from EUR 15 million to EUR 35 million because we have doubled the figure of active suppliers compared to 1 year ago. So for instance, the closure of the physical channel has had an influence on the acquisition of new services. And even so, we've entered the quarter with nearly 200,000 active services. So although we have closed down the shops for 2 weeks, we have acquired another 54,000 new suppliers this quarter, which means that the rate of acquisition was very good until that point in time. But as regards the contribution margin, in this case, it drops. And this is the direct consequence of the closing of the shops and of the cost of the first restructuring we've carried out. And the main costs in this segment have to do with staff and with the rental of premises. From the beginning, we've applied the measures that we had at our disposal. We've requested redundancy schemes that affect 90% of the workforce and we've also renegotiated the rentals for the premises, which is -- in effect, we'll see as from the second part of April. And the recovery we could have over the next few months in this business segment could happen in a very fragile manner because this is closely related to the activity of the shops and to the volume of our commercial activities. But if we move on to the B2B Services sector, it's been partially affected only. It's closely associated with the restrictions applied to the different kinds of activity in each one of the countries. And the effects started off with the confinement measures in Spain followed by Peru -- these are the 2 countries that were most affected, and later on by the rest of Europe, Chile and Mexico. And in the case of the Gulf, this has an impact of about 20% in Australia. It's a very small impact. And the impacts of this segment are also connected to the temporary closure of some industrial facilities and to the slump in network activity both in terms of electricity and telecommunications. And here, activities have focused on carrying out basic maintenance. We've stopped deployments, and there has been much less activity in the last mile and with the influence of the non-portability. So that means that activity reductions are ranging between 40% to 70% at the moment when the impact was highest. And the measures that have been implemented are focused on doing away with the subcontractors. We've applied redundancy schemes in Spain and we've terminated contracts in others, and we've carried out restructuring plan to adapt to the new workload. About 40% of the workforce has been included in some kind of measure. And just to give you some data, as from March 31, there were 500 people in redundancy scheme, more than 350 terminations of contracts and about 50 layoffs. And these measures have been extended in the month of April and will continue to be applied. And we are also renegotiating our vehicles policy and machinery policy. And we think that in the future, B2B Services could have a pretty positive recovery once these restrictive measures finish. There could be a V recovery because we're talking about recurrent contracts, as we've always said. And what we are seeing is not a cancellation of these contracts. These contracts are maintained, but we're seeing a reduction in activity related to the closing down of the customer. The customer closes down, there's no maintenance. And finally, as regards the projects 360 segment or B2B solutions, the impact is very limited. It's been the less affected segment, although it's the first one in which we suffered COVID-19 with a project that was stopped for 15 days in Thailand. And then project closures, well, have been very few. As the case, for instance, of projects in India during their lockdown, this had a bigger impact in April compared to the first quarter or projects in the United States. And we also stopped some projects for renewables temporarily. We're not talking about canceling projects of our portfolio. These are just delays or postponements that could represent a later ending of these projects. But our portfolio levels are very similar to the end of last year. We have new contracts being signed in Europe in spite of the situation. And we also have the tendering processes for hospitals in Chile, are continuing, and we'll be delivering the first offer in the month of May. And as a summary, I would like to underscore that our team has responded in an excellent manner and has reacted very quickly and very thoroughly. We have a management team that has managed to overcome previous crisis. And this experience, together with the decentralization that characterizes our model, has brought about a large response capacity to anticipate things and to adapt to the different situations of each country and each activity. And the corporate management has supported this process through daily Management Committee meetings since February 14. And in addition to the adjustment measures implemented in each one of the businesses, at a corporate level, some contention measures and reduction measures have been adopted that have been very strict and have been applied to structural expenses. So therefore, the management team reduced its salary by 50% in March. And the structure that you already know, which is a very lean structure, will be adjusted and will be reduced even further over the next few months. As regards CapEx, we've invested EUR 2.5 million in the first quarter, which means that it's a CapEx that is lower than amortization. And although this cannot be extrapolated to the rest of the year, we will be closing the year with a CapEx that is much lower than last year's. And last year, it was EUR 27 million. Likewise, we've also implemented a very extensive range of actions in order to maximize our liquidity possibilities. Until now, we are charging our customers normally and we've opened up a credit line, and we've also issued promissory notes and we were receiving a new loan from the European Investments Bank, and that would arise in the second quarter. And that means that we have treasury positions in excess of EUR 300 million. And although we already have high levels of solvency and liquidity, I would like to remind you that we've ended 2019 with a net income of EUR 130 million. We are implementing these measures to feel more comfortable but also because we believe that solvency and liquidity are going to be key tools to deal with the opportunities that will arise and which we think will open up after the situation is over. As regards how cash has evolved in Q1, I can say that we are closing this quarter with a net position in excess of EUR 100 million. But I would also like to emphasize that our management model that is always [ a part ] of the company is the best guarantee to overcome this situation. I would like to start off -- because I mentioned this at the beginning, I would like to start off by mentioning our financial discipline that has allowed us to have a very solid cash position to weather the storm and with low payment commitments in 2020. We have earn-out commitments of EUR 7 million. We've already paid EUR 2.7 million this quarter. So in other words, there would be another EUR 4.4 million to go for the rest of the year and that's due, a very small part. It's only EUR 3.5 million of the previous loan from the European Investments Bank. And we have the commitment of paying our dividend, which was approved yesterday, and that's EUR 11 million. But this -- we are also supported by diversification. Our results did not depend on the decisions of any one country or client or sector. We have our decentralization that, as I said before, has allowed us to adapt to the different local realities. And we already have a lean structure and a flexible cost structure, too. And our digitization means that -- and we've overcome mobility limitations for our employees because we are used to using digital platforms. So that means that reporting systems and operating management, we've closed everything very quickly in spite of the many constraints applied to mobility in this country. But it is true that there are still quite a few uncertainties right now and that we have a limited amount of visibility. So therefore, what we can't do is establish a long-term forecast. But with the visibility we have right now, I would like to send you a reassuring message for 2020. This year, and in spite of the situation, we will carry on creating value. And we expect to grow in terms of sales in 2020. We expect to produce positive results without affecting our cash and therefore, not deteriorating our balance sheet. In other words, we will maintain a positive generation of cash flow, and this means that this is the end result of the operating margin minus CapEx, minus financial results, minus taxes although we are not sure about working capital at the end of the year because there's a lack of visibility. But we believe that we will be reinforced in relation to the competition. The impact is going to be significant, but it's going to be limited, time-wise. And we hope that over the next few quarters, we'll be very influenced by the situation. But if everything continues as we expected to, we think that Q4 will mean that we'll go back to the path of growth that would continue in 2021. Let's be cautious and let's portray a worst scenario. But in this worst scenario, 2020 would only represent a parenthesis in the fulfillment of our plan. It would be delayed 1 year, but it doesn't change our strategy, which is more valid than ever. We've reflected upon this strategy and it's still valid in this particular context. And after 2020, I think that it will all be opportunities for us. This was said yesterday by Antón Pradera, our Chairman, during the AGM. We want to be the driving force behind our returns on normality. So this is the message I wanted to deliver, and I would like to thank you for your attention. And now I will open the floor so that you can ask questions. Thank you.

[Operator]

The first question is from Ivón Leal from the BBVA.

[Ivón Leal, Chief Analyst]

Patricia, well, I have a few questions to see how your activities are going to get back to normal again. So what I understand is if we talk about B2B, if we talk about services with a slump of 7%, this 7% slump is March. So what I believe is that what we're going to have right now is a quarter -- well, there's going to be a risk from slump. And this slump is going to be April, May and June. Or do you think -- or do you have any indicators that are -- point out otherwise? In other words, do you have a candidate for the opening up of plants in June?

[Patricia Berjon]

Ivón, thank you very much for the question. In April, yes, without a doubt. And in the specific case of Spain, we have the 15 days with the greatest restrictions, which is when industries that were open -- well, during those weeks, they were closed down. And as regards the opening of industrial plants, well, that's pretty unequal. We have to bear in mind where each one of these plants is operating. So even though they do open or did open, they have a low workload because, for instance, maintenance that we're providing at Michelin, for instance, in the automotive business has nothing to do with maintenance that we're providing in the case of a heavy industry. So in our case, we have no such thing as a schedule, establishing anything divided by activities or countries, okay?

[Mikel Felix Barandiarán Landín, CEO & Director]

Ivón, this is Mikel Barandiarán speaking now. I would like to try to answer this question although it's a very difficult issue. But what I can say is that we are now in the phase of stabilization. What does that mean in terms of services? Well, after all of the measures that have been adopted, we are in the current situation in which we have a positive contribution margin, okay? So in other words, we are generating value. But what does have to happen -- or that customers are gradually coming back again. And as this occurs, we'll be increasing our activities, too. So what could happen -- well, that some customers will get back to normal and others won't. For instance, we have the case of Michelin, and we've had a normal situation with them for about a week or 1.5 weeks. But when they delivered all the outstanding orders that had accumulated in March and April, they've detected a slump of 30% in their orders, and they're going to stop the Victoria plant. And that obviously affects us. But in any case, I would like to stress that what affects us is the -- not generating any margin. This does not affect us in terms of generating losses. So what we see in the case of services that in any case, we'll always be generating contribution margins or cash even. And most of these activities, approximately 50% of these service activities are essential services. And this is maintained constant, which is the other part for which we have very little visibility because this really depends on the level of demand from our customers and doesn't depend on our own level of demand.

[Ivón Leal, Chief Analyst]

Well, I think that in B2B Services, what is it? Is it 60% of that in Spain approximately? Or how much would it be?

[Unknown Executive]

No, not really, no. It's very important, but Chile -- for instance, in Chile, they're having exceptional behavior, and that's been the case during this period. And behavior in Peru is a little bit more chaotic and is a little bit more complex. And it doesn't have such a significant weight. I think it's 10% of the case of Mexico, which is also -- I dare say, is behaving in a somewhat chaotic manner, too. So what would the division be like? I think that Spain represents about 40% of the overall picture.

[Ivón Leal, Chief Analyst]

Okay. During the previous crisis, well, now people, when they go back to business again, when they recover the activity, they will have to redo their budgets because I think that it's stormy weather for everybody right now. But do you have lots of pressure as regards pricing?

[Unknown Executive]

No. Not at this point in time. We don't have lots of pressure in terms of pricing because we can see that the situation of our competition is very complex, and we've been called by quite a lot of our customers to analyze the situation. And in some cases, we've had to improve our workloads. So I don't know. So this is why I'm talking about so much uncertainty. It's very difficult to analyze our environment because we -- in a financial position because what we have right now is the demand crisis, of course. But there's also a very big influence in the case of financial side of things, and we've been able to act very quickly. We've carried out immediate restructuring actions. And as Patricia pointed out in detail a few minutes ago, it's not only these redundancy schemes, but we've also carried out some in-depth restructuring actions in March, in the first 5 days of the month and -- well, these are not provisions, but these are real restructuring actions that you can see in the accounts. You can see that there's a very significant impact of one-offs in the accounts for the period.

[Ivón Leal, Chief Analyst]

Thank you very much for giving me the split of the B2C because I think that was very handy.

[Unknown Executive]

Well, that's for you, of course. And now that I'm here with the microphone open, I would like to say happy birthday to Patricia. It will be her birthday tomorrow. And it was 1 year ago when she coincided with the earnings result. And although she's blushing a bit now and she's suffering a bit now that times are so harsh...

[Patricia Berjon]

Yes, I always have to celebrate my birthday with the earnings results and that's very difficult to celebrate because of the problems in this year.

[Operator]

[Operator Instructions] The next question comes from Carlos Treviño from Santander.

[Carlos Javier Treviño Peinador, Equity Analyst]

I have quite a few questions for you. The first question and perhaps to continue with a question that was asked by Ivón. Could you please give us a more specific reference? You said that services have dropped between 40% to 70% in the worst weeks of April. But in this particular week, how much has been stopped in B2B Services? And then I'll put another 2 questions to you. But talking about the references you've given for the year as regard growing in terms of income and of having a positive net profit, well, I think that by working out the figures, this could give us an EBITDA of EUR 47 million for the year, at least. So do you think that this figure is in line with what you've been discussing? Or do you think that the minimum figure of EBITDA that you have presented -- is it different compared to this one that I just mentioned? And I also want to ask you to give us the figure for provisions that you gave for the quarter, those one-offs that you were talking about so that we can try to work out the net margin. And Patricia, you also pointed out during your presentation that the Smart House incorporations, I think you gave us a figure 54,000 in the quarter. And I think that the figure would be lower if we look at the reference we had on the closing date of 2019, and the figure you've just given now for the first quarter of 2020. I would like to clarify that particular issue, please. And then could you also give us the exact backlog figure, too?

[Unknown Executive]

Carlos, there's one of the questions that we didn't quite catch, the penultimate question. The -- sorry, could you please repeat that question again, please? We couldn't hear you very well. Carlos, are you there? Did you hear me?

[Operator]

Carlos, your line is open. If you're not muted, please go ahead with the question.

[Carlos Javier Treviño Peinador, Equity Analyst]

Hello?

[Unknown Executive]

Yes. We can hear you now. Thank you. Go ahead.

[Carlos Javier Treviño Peinador, Equity Analyst]

I'm sorry. No. Well, the question that I was referring to has to do with the number of Smart House incorporations. I think you said that it was 54,000 in the quarter, but it's 199,000 now. And 171,000, you gave, when you published the annual results. The figure for me would be 28,000. Could you please clarify that issue of newcomers?

[Patricia Berjon]

Okay. Well, let's go through the different questions you've just posed, Carlos. Well, what you're talking here, what you mentioned about these new 54,000 services versus the 171,000 at the end of the year, yes, I think that we have made a mistake there because it's 171,000 at the end of the year, including energy and telecommunications. And we were only subtracting the part that had to do with energy. So thank you very much for that comment because we did make a mistake when we drafted the speech. But I have to confirm that the number of active services right now is 199,000 with the split that we gave you between energy and telecommunications. Okay. And then, yes, there was another question about the portfolio. I'm not sure whether you heard Mikel say that it's EUR 603,000 at the -- on the closing date of March.

[Roberto Tobillas Angulo, MD & Head of the Renewable Energies Division]

I think that -- Carlos, this is Robert speaking. I think that you're talking about EBITDA. And to be at a level of breakeven -- and we've obviously performed analysis of our balance sheet expenses, bearing in mind all the amortizations of the year, the financial effect and the tax effect, I think that the level would have to be a little bit higher. It would be between EUR 55 million and EUR 60 million. And of course, we have to look into the differences in the exchange rate, and we have to see some equity swaps and other similar components, too, but I think that we are at that level roughly. And I think that this level, I'd say that, that would be the worst scenario. I think that for -- with EUR 60 million, we have a net of positive income. And you spoke about positions -- or provisions rather. You know that what we can't do is provide this every quarter. We cannot make an endowment just like that. But rather, well, there have to be something behind that because we've implemented a number of restructuring actions and this constant exercise of maintaining our maximum levels of productivity and resilience. And we have our provisions, of course. And we also have our own cautious interpretation of how projects should be carried out. There are provisions but these are the typical provisions you have in the case of the gross margins one has under normal circumstances. And then I think that there's just one more thing to go here, the first question that you asked, where you spoke about the percentage of activity in B2B Services. As I said previously, at the minimum moment that was in April, we had a reduction of about 70% in our activities, and this changed on a daily basis. But now that we -- that is no longer happening, we'll be talking about activity reductions of about 50 -- well, 40% to 50% basically.

[Mikel Felix Barandiarán Landín, CEO & Director]

Carlos, this is Mikel speaking again. And just to clarify what Robert has pointed out, it means that we haven't included provisions on the balance sheet. So what I will say pointing out to you is that due to the COVID effects and because of the restructuring actions carried out because of the terminations of contracts, we've invested about 40% of what we were going to do in the year. This obviously will depend on how the situation evolves. But at this point in time, we have invested a -- something like EUR 5 million, which has to do for services, 3-point-something, and phone houses -- Phone House, it's 1-point-something.

[Operator]

The next question is from Miguel González from JB Capital Markets.

[Miguel González, Vice President]

Congratulations, Patricia -- or rather, happy birthday. Well, you've answered all the questions that I wanted to put to you. But in any case, I do have an additional question that has to do with the B2C business and the contribution margin. I think that it was 6% in the quarter roughly. So could we take this margin as a reference for the next quarters?

[Unknown Executive]

Well, Patricia is going to answer this in detail. But as I just pointed out to Carlos, this margin includes the restructuring expenses -- extraordinary expenses of about EUR 1.5 million. And we'll have to see how this evolves over time, and we'll have to wait for the retailers to open up again to see how this margin evolves. But as regards recurrent terms, this margin should be high. And I'll hand you the floor now, Patricia.

[Patricia Berjon]

Yes. True. And what I was going to explain to you now is that we have 2 effects in these figures that we are seeing here in the case of the B2C margin. We have the COVID effects, which is what Mikel has just pointed out. That margin, you can see there, includes restructurings and also includes the effect of having, for 15 days, all of our physical shops closed and with a very limited reaction time. We're talking about the last 15 days of the quarter. But then we also had to bear in mind in the case of B2C -- and this is a comment on future results, that this -- the mix is also very important because we have a number of services where -- well, this is our project, and this is what is going to grow and which is growing a lot, too. And this is our own customer. So this is -- we are including all the invoices, and this goes to sales. So therefore, the margin profile is lower compared to when we are including a third-party service because what we apply to sales is a fee or is the commission. So therefore, the percentage is higher. So depending on how this mix changes, you will be able to see that the percentage of the margin relative to sales will be somewhat higher or somewhat lower. And the trend will be -- is that it will have a greater weight for our own customers. But in particular and as regard to your question, the margin that we can see right now has been lessened by the effect produced by COVID.

[Roberto Tobillas Angulo, MD & Head of the Renewable Energies Division]

Yes. And this is Robert speaking now. And perhaps I'd have to say something else, and that is that we have a differential B2C. And the B2C is omnichannel, and it's based on our own network of shops that is called Phone House. So what's happening here? And this has to do with the accounting issues. You must bear in mind that we are in the same consolidated group. And whatever has to do with acquiring more and more shops even though channels are being diversified and with the best lifetime value, well, this is something that is done -- being done through the natural customer, Phone House. And this is a loyal customer, and it's the customer to deliver the greatest value. And in the long term, they're going to give us a very good recurrent. But what's happening is that although at Phone House, we are applying these costs that are market costs, well, you have to understand that in the case of energy, the energy business, you know that there's commercializing companies that have been launched into the market recently that are activating this catchment cost. And this perhaps can dilute our internal margins to a certain extent. But at a consolidated level, we cannot capitalize on these internal catchment expenses that we have at Phone House for our B2C project. What does this mean? Well, this means basically that from the point of view of the income statement, perhaps our results are more dilutive, that our income statement is going to be somewhat worse than if we were to do a benchmarking exercise with the competition. This, in the short term, will produce a reduction of taxes. And from the cash flow perspective and if we look at it only from this angle, I think that we're going to be better off. But when we interpret these income statements and we can see how other companies are capitalizing on these expenses and are amortizing them, some of them through EBITDA and others even as if they were amortizations, we have to understand that this is a CapEx that is going to have an impact on the cash. We'll have to see their balance sheet, but we have that in mind. So we have this concept, and we believe that it's much better to have the internal catchment mechanism in-house. But as you know, our financial discipline and how we understand our accounting exercise, we cannot capitalize this expense. And if I say this could have a significant dilution of margins if we do a benchmarking exercise with the competition, we'll be talking about this in the future when this is fully implemented but it should be mentioned now so that you don't forget about it and so that we can share things as we disclose more information in the future.

[Operator]

[Operator Instructions] We have another question from Carlos Treviño.

[Carlos Javier Treviño Peinador, Equity Analyst]

Well, I'd like to ask another question. And this has to do with the working capital in Q1. So how are things as regards business in Q1? EBITDA, EUR 18 million. You said EUR 2.5 million of CapEx. So that would be EUR 15.5 million. And you're talking about the fact that you finished with a net cash position over EUR 100 million. So could you please explain what's happened there, in particular in the case of working capital? And so what do you think is going to happen with working capital over the next few quarters?

[Mikel Felix Barandiarán Landín, CEO & Director]

Well -- this is Mikel speaking, Carlos. Well, let's see. The closure of the quarter, as Patricia pointed out previously, we've closed over EUR 100 million. And you have to bear in mind that cash expenses this quarter have been something like EUR 2.7 million that Patricia has pointed out that we paid. We've had EUR 2.3 million or EUR 2.4 million of repurchase of shares, and we've also had about EUR 5 million of exchange rate differences that have -- had an impact on our cash. And without these items, we would have ended with a similar cash figure similar to the closure of the year. But why has this happened? Well, I was surprised positively about this because lots of payments that we had to make at the end of the year, some of them were postponed, especially Angola. We received that in the first quarter -- and Honduras. And both of them were significant payments that have had an impact. As regards the working capital, well, the working capital figure, the net figure, we've closed the quarter with -- it's practically the same, the figure we use for the closing of the year. So there have been no flow movement. Although it's true that we've had a significant impact in case of shops or retailers because they were closed down for 18 days and now -- well, they've been closed for much longer than that, but we negotiated all of our payments with the suppliers of terminals. So that's why there was no impact. So this is why it's very difficult to make an estimate. I'm not talking about opening up the shops or the catchment point but to what extent these commercial actions are going to open or grow at these shops because what we're seeing in China and in other places is that the incorporation of activities is relatively slow in China. They started off at 50. In some places, they've reached 70 or 80. Or in more populated cities, they've nearly reached a normal situation. We want to see how this is going to behave here, or we want to see what the return of the retail business is going to be like. And this has a significant impact, too, in the case of the net working capital, as you pointed out. But due to financial discipline and because of our internal policy to the extent that we can, we'll try to transfer that to our suppliers or our manufacturers. We didn't want to include that variation of working capital in our worst case because we find that it's very difficult to estimate what the movements are going to be like or what's going to happen.

[Operator]

The next question is from [ Gabriel Colominas ] from [ Zurich ] Asset Management.

[Unknown Analyst]

I have a question, a very quick question in fact. And what I understand is that the B2C Services, due to their typology, includes those that have to do with third parties and those that have to do with the -- commercialize itself with Dominion, especially because I think that in the case of telephony, you've not fully developed that particular item. And then that's the first question. Then secondly, how many customers do you have for the acquisition of 2019, in June 2019?

[Patricia Berjon]

Well, [ Gabriel ], this is Patricia speaking. Yes, we do have our own telephone -- telephony operator. And we are distributing gas and electricity and also telecommunication services and other convergent services. So this figure that we're reporting in terms of B2C includes all of these services that we're operating ourselves. These are the customers of Dominion as well as new corporations of other customers or other Phone House shop. We also have catchment for customers from Vodafone or MASMOVIL or for people that are using Orange. And this is what we have in the B2C report. And then you were asking about the number of customers and the -- when did the acquisition take place. That was in March 2019. And there were about 70,000 customers, if I'm not mistaken.

[Mikel Felix Barandiarán Landín, CEO & Director]

Thank you very much, yes. This is Mikel speaking. And as regards the telcos and just to clarify what Patricia was pointing out, I think that right now, we have about 35,000 own customers in our telco operator. So we are using a brand, and the company that we acquired is called Boutique Telecom.

[Operator]

We've finished with the questions via the telephone.

[Unknown Executive]

Well, thank you all very much indeed, and have a wonderful afternoon. Thank you. Goodbye. Bye-bye. [Statements in English on this transcript were spoken by an interpreter present on the live call.]