Gruppo MutuiOnline SpA
MIL:MOL
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Good afternoon. This is the Chorus Call conference operator. Welcome. And thank you for joining the presentation of Gruppo MutuiOnline Fourth Quarter 2019 Results Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Marco Pescarmona, Chairman; Mr. Alessandro Fracassi, CEO; and Mr. Francesco Masciandaro, CFO of Gruppo MutuiOnline. Go ahead, gentlemen.
Thank you. And welcome, everybody, to our full year 2019 conference call. We will rely on the presentation present on our website and start from page, let me see, 15 with the full year highlights. And as you can see from the overall figures, 2019 was a very good year. We posted revenues of EUR million 2,019.9 (sic) [ EUR 219.9 million ], up 18.8% compared to the previous year. Also, the operating income was -- it was up -- it was EUR 50.8 million, and that was up 10.1% compared to the previous year. And here, we have to say that the EBITDA was also impacted by some amortization of intangibles. There is around EUR 2 million of new amortization of intangibles coming from the acquisition of an Eagle & Wise. So that created a software asset and part of it, EUR 2 million during the year was amortized. So the P&L and that goes through EBIT. And that's why part of -- why the EBIT grew less than the revenues.
The EBIT margin is 23.1% in 2019. That compares to 24.9% in 2018. In terms of net income, we did EUR 40.6 million of net income, which is up 18.3% compared to the previous year, and the net income margin is stable at around 18.5%.
Going to the next chart, we see the performance by division. And you see that we had growth of -- in terms of revenues of both divisions. The BPO division reached EUR 133.1 million of revenues. And that -- and that is up 25.6% year-on-year. That, of course, includes the acquisition of Eagle & Wise, which helped the growth, but even without that, we would have achieved significant growth anyways, even with an organic perimeter. The Broking division did EUR 86.8 million of revenues, which is up 9.7% compared to the previous year, and this was all organic. In terms of EBIT, the BPO division achieved an EBIT of EUR 24.2 million. This is affected by the way by the EUR 2 million of amortization of intangibles that we took all the way in the fourth quarter. So this had an EBIT of EUR 24.2 million, which is up 7.1% compared to the previous year, while the Broking division had an EBIT of EUR 26.6 million, which is up 13% compared to the previous year.
In terms of EBIT margin, the Broking division is improving and getting to 30.6% compared to 29.7% of the previous year. And the BPO division is at 18.2%, which compares to the 21.3% of the previous year. But if you normalize for the impact of amortization of intangibles, it's basically stable. So this is, in our mind, in general, a very good performance, and we will see some of the details. But overall, it was a good performance. And this was helped, by the way, going to the next page, by a good and somehow surprisingly good evolution of the mortgage market in Q4. You remember, at the end of Q3, we had said -- we said we expect a decline or -- around the summer, we said we expected a decline of the mortgage market in the second half of the year, and instead, in the last very few -- starting from November of 2019, in fact, there was a reversal. When we realized that, we communicated it. So from November, instead of declining as anticipated, the mortgage market started growing again. So we had -- the market had a positive November, December, discontinued also in January and February. So basically, because of very low interest rates, both remortgages, but also purchase mortgages picked up in most of Q4, and that also again continued in -- at the beginning of 2020. And this leads us to the present situation, and this leads us also to the, call it, epidemic. Basically, we -- and we comment about this in different places. But basically, Italy was the first country in Europe where the COVID epidemic started to accelerate. And by mid-February, we realized that there was a potential problem. Most of the market didn't realize that and the politicians didn't either. And so February was a normal month. And then in March, it became clear that this would be a very serious problem for the Italian Health System and so on. And on March 8, basically, the entire country was put under a lockdown, which means all the commercial activities that means like the shops in the street, doesn't mean the companies, were shut down. So companies continue to operate with a lot of caution and with a lot of smart working, but all -- all the services to the public, except the essential services have been shut down. And this is likely in the short-term to cause disruption to both the mortgage market and the real estate market because it is now difficult if you want to buy a property, to visit a property, if you want to get a mortgage, doing the appraisal is also difficult. It's feasible, but there are more and more obstacles because people are not -- especially, the experts had problems going around the country and so on. And also, the closings are difficult because the notaries are concerned with safety or the buyers and the sellers are concerned with safety. So there are a lot of -- mostly there are some public offices that are not functioning as before. So basically, this is likely to create an operational slowdown of the market. And this is something we clearly -- the entire market clearly faces, and this is the first impact on the mortgage market of the epidemic.
Second, and this is more difficult to gauge and estimate as an effect, is the fact that this epidemic is likely to -- especially now that it's becoming a worldwide epidemic, this is likely to cause a global recession. And potentially, depending on how the fiscal and monetary authorities react to this, this could also cause a financial crisis. So depending on this, there could be more prolonged effect. And so people -- companies closing, people losing jobs and so on, and this could mean that if this happens, there could be a more severe and especially more, let's say, structural, at least for a while, decline in demand. For now, it's very hard to say exactly how this will play out. It's clear that the impact on the financial market is very visible. How this will translate into the real economy and so on, we will see. So we think that the conditions of the market will certainly worsen in the first few -- in the next few months, and then they will either improve again or remain distressed depending on whether we have a financial crisis or not. The only thing that we are not seeing now and personally, I wouldn't expect, is tension from the lenders. So because we think that the Central Bank will channel a lot of liquidity through banks, and for now, we don't see problems with bank's appetite. I mean the risks we see them coming more from demand rather than from the supplying of mortgages. So this is our view, which is evolving as we see what has happened.
In terms of business outlook, we did very well until recently. So I'm not in 100% of the business lines, et cetera, but overall, we did pretty well. But it's very difficult to provide an outlook. Clearly, the outlook is less favorable than what it was before. But we also did some right things. In particular, we realized probably much earlier than many what would happen. And so we started preparing from an operational point of view for a lockdown. So we bought a ton of laptops for the people that didn't have them, communication equipment where we needed it, and we basically allowed everybody in the company to operate from home. Now, sometimes this is not fully productive, but at least we are able to guarantee operational continuity even in the worst scenarios. And especially, now that all the companies in the entire world will move to smart work and so on, having been able to source all the equipment and so on, I think will make a difference.
And also, we -- so operationally, we have made -- we have taken all the measures needed with a lot of responsiveness to be able to continue operating remotely. Also, the other thing we decided to do as soon as we realized what was coming was to do a few things to improve our liquidity position, and -- which was already sound, but we think in severe -- in difficult situations, having liquidity means both -- it's both a defensive move, but also allows one to exploit opportunities, which when there are dislocations, there are also more opportunities. So we will not be able to comment in detail on all the things we have done. But certainly, we have moved to have more cash in the bank accounts.
And by the way, part of that is the decision to recommend a much smaller dividend than what we could normally afford because we think that this money will be quite useful, and we'll be able to deploy it very effectively during this situation. So that's why we significantly reduced the dividend proposal.
And so, also, I think we did the right steps, and you'll see the impact of these steps when we publish the Q1 report. One thing that we also did, we sold some Cerved shares. We passed the 3% threshold on the way down a few days before the markets tanked, so we were able to sell some shares, not all of them at, a good price and we did that also in this idea of having more flexibility in terms of liquidity. So we think, overall, we are in good shape while it's not the best solution -- situation to be in, but we are prepared to face this situation.
And also, our businesses, we think has significant competitive advantages and these remain, and in some cases, maybe they could be reinforced by the current situation. So it will be painful. We have been through 3 financial crises from when we started the Internet bubble, the subprime crisis and the Southern European sovereign crisis. So we are like veterans of difficult situations. And not only we are not too scared, but also we have been through difficult times. And we know it's more painful, but we also know that these are the situations where one could find opportunities.
So again, we would have preferred to avoid this, but we are prepared for it. And going into more detail about the different divisions. If we look at the Broking division, Broking division, the better-than-expected in mortgages. The market was down year-on-year, and we were able to grow revenues. And especially in the second half, we were at when we expected to be down. We continue to grow in insurance broking. We do pretty well in e-commerce price comparison, also because we spent significant money on marketing there. But we did well overall. But the only area where we didn't do very well was consumer loan broking, which is a small business, and we are still putting a lot of attention in it. But there is still an issue with -- there are no news -- there is still the issue of supply mainly.
And so overall, again, it was a good performance. But the point is what comes next, and the main challenge is what will happen to demand. And the good things we have, I mean overall, again, the outlook is clearly not so favorable, especially compared to what it was before. But we have 2 things that could help us. One is that monetary policy will keep interest rates at very low levels and possibly will even force banks to expand lending. So this will potentially help. And also, our business is all online. So now that people are stuck in their houses, as long as they buy houses or remortgage or buy insurance, it's easier to do it on the Internet. So there should be a benefit in terms of channel shift. Probably, this will not compensate for the overall effect. But certainly, people will be forced to use the Internet more than they did before. So this improves a little bit the outlook of our Broking division.
Regarding the BPO division, I hand it over to Alessandro.
Yes. Hello, everyone. And, well, most of what Marco has said applies also to the BPO division. A lot of our BPO revenues are anyway somehow connected to mortgages and the real estate market. So I would just add a little flavor on the different business lines of the BPO division. And then just let me stress before I get into that, the fact that obviously assuring business continuity in this difficult situation was especially key for the BPO division, where we have most of the people that work for us. And I think we, as Marco said, have been very good at foreseeing what was coming and getting basically everybody ready to work from home. A lot of people are now in a smart working situation and everybody has tested smart working solutions so that the business continuity is ensured. Again, obviously, we have to strike a balance between what is productive and the smart working. So we are now every day adjusting the situation, but we are ready if that is what is necessary to do to go in 100% or close to 100% smart working position. And that obviously enables us to continue offering services to our clients, banks, financial institutions and insurance companies.
So looking at 2019, as you see also the mortgage BPO business line, and the advantage of the last quarter when demand picked up again, and so I think we already commented on this when we were looking at the 9 months results. We were not so positive in the summer, but then we became more positive. And in the end, even the second half of '19 -- or 2019 was over the same period of 2019.
Real estate BPO services, which is basically appraising properties for financial institutions, real estate properties for financial institution, is up to, obviously, the big percentages are due to the acquisition of Eagle & Wise, but even if it wasn't there, we would have grown double digit. So this is a market -- this is an area where we're doing very well. As I think I already commented, we have a new large customer, which was finally operational, and so we were also doing very good numbers in the first 2 months of the year. Obviously, now we are in the situation that we are in, and for example, this is one of the areas that Marco commented, where we are seeing some short-term, I believe, operational challenges in being able to enter the houses or do the appraisals. But what is good here is that we are seeing a lot of collaboration from the lenders. It's very clear at this point that the lenders still want to be able to keep lending, and therefore, business was kind of going over compliance at this point. And so, for example, we're seeing bank looking at the possibility to do appraisals through video conferences using mobile devices, all things that are -- those are instances of opportunities that as a technology-enabled company we are able to provide to our customers. So, again, as Marco commented, this is obviously something we would not have liked to happen, but as in every complex situation there are also opportunities. And as of this point, we see a lot of our clients being very interested in digital solution that were looked upon as even too futuristic, but now they are sometimes the only way you can let the market go on. Then obviously, it's not just the lenders, it's also the institutions. And for example, the notaries, we need to keep up with this push towards digitalization. Let's see what happens.
And then if we look at CQ loans here, as you know, we saw a statically stable situation. And this is an area that might be also impacted in terms of lending if -- as soon as companies start using basically solutions like Cassa Integrazione, which is basically a measure to let -- have people at home and that the state partially pay for their payslip because when there is this solution, when people are in this situation, you cannot use the form of CQ lending so we expect an increase, obviously, of this form of social measure, and therefore, there will be probably a decline also in this area of lending.
In terms of insurance, as you know, a little bit of Cinderella of our business lines here, and it was weak, basically throughout the year, and so we closed low here. As you know, we are looking also at potential opportunities for bolt-on acquisitions. We'll see what happens now in the situation of the market. Anyway, we expected that where we -- for example, this is an area where we do not expect a significant or too significant impact of the COVID epidemic.
In terms of investment services, we grew. Part of the growth is also thanks to a small acquisition of a software company that we did. The outlook here, it's -- this is one of the areas where, for example, we're actually seeing -- obviously, it's a short-term effect, but in this case, it's a positive short-term effect. We are in -- our revenues depend on transactions. And obviously, there have been a lot of transactions in the last 2 weeks. So while we were getting ready to have people working from home, we also had a lot of work to do and a lot of transactions to handle.
The leasing and rental BPO, the growth that you see here, the real underlying growth is more obviously similar to the 1, 2 of H2, the 47% that you see on Page 21, is due to a different period of consolidation. You remember that in 2018, we started consolidating basically from mid-March. So there was growth -- underlying growth. You remember, we commented that there was a very interesting new contract in 2000 -- in the second half of 2019. So that is the impact of the growth.
Now, as we look at this business, and also at the CQ loan business, these businesses have a good portion of the revenues coming from portfolio situations. So we do not expect portfolio situation to be impacted significantly by a short-term shock in demand, but also some of the revenues come from -- and therefore, managing a fleet of cars will not be impacted clearly by -- lease cars will not be impacted by this virus. But obviously, new -- in the situation of new vehicles, which is also part of the business that we do here instead will be impacted. So let's say that the 2 portfolio of businesses that we have, which are in the CQ loan and the BPO revenue loan and a little bit also the investment services one, we believe are more resilient to go through this short-term impact.
One last note, which was also in the recent comments, the leasing and rental BPO revenues, margins will be impacted in 2020, although with this -- what is happening now is very unclear when the timing will be because it was a project that was supposed to start in April but has already been postponed by a month. Basically, there will be a change in the [ commentation that a car ] normally has. It's normally a piece of paper. There are 2 pieces of paper, the title and what we call [Foreign Language], basically what enables you to go around. They have been put into a single one, and it will become a digital certificate. Unfortunately, this passage, so giving back the paper and getting the digital certificate cannot happen at distance and cannot even happen in a centralized way. So this will be an impact that we will need to handle in 2020 if there are no changes in the regulation. And it will impact on the EBIT of the -- of this business line and obviously of the overall division because we will have extra cost to involve people on the territory, and we will not be able to charge all of it back to our clients.
I think this kind of gives the overall idea. Let me also reinforce Marco's words in saying that, especially talking to our long-term shareholders, that one of the advantages of having long-term managers is also that you can remember how hard it can be in this situations, but let me say that we're not scared. We know what to do, and we'll get through this period, and we are prepared to handle it.
Thank you, back to you, Marco.
I think this -- I think we said all we have to say, so we can open the call to questions. Please, operator.
[Operator Instructions] The first question is from Giovanni Razzoli of Equita.
A couple of questions on my side. The first one is about the sensitivity of your [ integration to develop ] just to go down in economic activities. Is it fair to assume that [ your mortgages ] are relatively more sensitive vis-à-vis the remortgaging business in the current context in terms of volumes? And then e-commerce business is the most [ defensive ] within the [ more key ] division. And specifically, to the extent that you have 51% growth in the region EBIT margin in the full year, is it fair to assume that excluding the goods amortization, the e-commerce business is operating at above that level? The other question. Shall I go one by one, Marco and Alessandro? Or you prefer maybe ask one. Hello? Hello?
Yes. No, no, go ahead. I think you can ask all the questions, and then we will answer them directly.
[indiscernible]
Yes. Okay. Very quickly. The first -- the other one is can you give us an idea of the cost flexibility that we have been approaching in the mid term? For example, what kind of viable cost are in the condition to -- so it's rather similar to what between -- faster than what is going to be assumed. And kind the certain commentation that Alessandro just mentioned, can you give you an idea of the amount of it for 2020, so 12 positive? Define what could be the [ immediate ] solution going forward?
Okay. So let's see if I remember. So regarding the mortgage market. Well, I think it's not obvious what will be more sensitive to the slowdown if it's mortgages or remortgages. Because the point is, certainly, if people get really scared, if there is a demand shock, that will affect more purchase mortgages than remortgage. Because with the remortgage, you just save money. Today, you just save money. So it's just a decision to collect the paperwork and go through the process and then you save money. And it's likely to continue because of the low interest rates. So demand will likely stay there. While for purchase mortgages, demand will potentially contract even significantly. But from an operational point of view, and in the short term, we will be more affected by the operational issues. Banks and consumers, but banks certainly, and also regulators, all the operators that affect this market will consider purchases more important than remortgages. So banks are saying maybe they have because there is limited staff in their branches and so on. They prefer to have their finance for people that have to do a purchase mortgage. Because maybe someone has already signed a preliminary contract, there is a deadline and so on. So from an operational point of view, probably the priority will be given to purchase mortgages. So short term, I would say purchase, which is more -- depends on the offers that were made before. We'll probably not contract more than remortgages, then the rebuild contract, of course. Then afterwards, obviously, this depends on the recession, the financial crisis, et cetera, then the impact will be more visible on purchases for sure.
Regarding e-commerce, this is certainly one of the most offensive areas we have. And here, the margins, I say -- I don't have the precise figure, but I would say, if we look at EBITDA margins, they would not be below the average of the division. So I mean EBITDA margins in -- this is very rough, so don't take it as a precise figure. Just it's a very rough indication, but say your 30% EBITDA margin is a ballpark figure that makes sense for this business. So in line with the average of the division. Then -- then I don't remember the other questions apart from there was a one for Alessandro.
Basically, my question is for you, Marco, and you've answered my question.
The next question is from Konstantin Khadjavi from Khadjavi Capital Partners.
Marco, so congratulations on preparing early for all of this and good health for your guys and the whole team. I'm just wondering with regards to cutting the dividend. Are you doing this to also have more capacity for the share buyback? And what kind of capacity do you have for buying back your shares? If you could just comment on that, please?
Okay. Regarding buybacks, certainly, there's one potential way also to be quite meaningful way to allocate capital. Our capacity for buybacks comes from 2 or 3 things. One, the authorization that we have for buybacks that I think I'm not 100% sure that you can set it. I think it's up to 20%. Certainly, 10%, no problem. We are at 6% now. But I think we have an authorization for up to 20%. These -- I suggest you check it or I can get back to you personally. But so once the authorization, which is granted by the AGM every year, and maybe Francesco wants to confirm if it's 10% or 20%. He is trying to check it now.
And second, it depends on the liquidity available, the cash available. So you have seen -- you can look at the financial position at the end of the year. And we have told you, we have done things to strengthen our liquidity position. So we should have more cash than what was available at the end of the year now. And so that's the second factor. And third, it's also a matter of opportunity. So depending on what are the uses we have for the capital, whether we think there are risks, why we should keep a buffer or not. But certainly, it could make a lot of sense under certain circumstances for us to buy our own shares. And obviously, we also know how we are doing and so on. So we are in a good position to make the judgment.
But now we are still in a situation which is not stable. So I think it would also make sense to see how this stabilizes because in Italy we have been under siege for 2, 3 weeks. We have already seen a lot of things that in many other countries we have not seen yet. And in the U.S., they haven't seen yet. So once we have the U.S.A. lockdown, all of Europe in a lockdown and a full-scale pandemic, then we will see exactly what happens to the markets. I mean we really have no doubt that this will happen. So what we are seeing now is the experience, maybe with less casualties and so on, I don't know. That's possible. But in terms of economic impact of everybody locking their houses and so on, I think we'll see it everywhere. And we will be able to assess the real situation only when we are there, and that will guide our actions also.
If I can go back to the questions that were asked before because I actually have not answered a few questions. So there was one about cost flexibility in the BPO division. Obviously, the -- as we have seen in 2008 -- sorry, in 2011, we -- the most significant cost in the BPO division is actually the labor cost. So the labor market is obviously less flexible than other cost. Anyway, we have some retained flexibility through the use of temporary workers. And there, as you know, is in the order of 20% to 25%. Then we also have the ability to use accrued vacation period. And finally, the government has just passed those measures that I was referring to before. And we are obviously willing to use them and have flexibility and keep, obviously, our margin positive as -- if demand goes down. As of today, we are not seeing a decreased request in our services, basically in none of our business lines. But obviously, I cannot say what happens next week in terms of this demand. But as of today, especially for those impacts on remortgages, where people are still crazy about doing remortgages in this moment, we haven't seen a decrease. As Marco has commented, it doesn't mean that we will be able to actually close all the mortgages we would like, especially in the short-term because there are some operational issues that were mentioned. So there might be a slowdown in revenue, even if there is not a slowdown in demand, but all these things are really in the end temporary.
The second question was about the one-off impact. I cannot comment specifically, but let's say there are 200,000 transactions that are impacted by these, and it will be in the order of some, let's say, low digit -- low double digit in terms of euros. What we really don't know is repair transaction. And what we really don't know is how many of these 200,000 transaction are going to be impacted in 2020. It was supposed to be -- to start in -- as I said, in April, and then there would be another part in May and so on until October. But now one month has already been postponed, so we really don't know when this happens. If it doesn't happen, we go on as before. And so the impact is not there, but we will see it in 2021. So how much of this rock, we will need to digest in 2020, I'm not in a position to say now, but I think I kind of gave you the idea of how big the market is.
Excuse me, sir, would you like the next question?
Yes.
[Operator Instructions] The next question comes from James Clark of Obair Partners.
Your comments so far, that was very useful. I had a couple of specific questions, and some of these have been relayed from other cross-comparison businesses that are operational around Europe that are interested specifically in your experience since the lockdown. If you could give us some insights into the demand end of the funnel, where the volumes had gone up or down across different product lines on that side. And then specifically coming to the BPO business, it would be useful to understand the usual cycle time in the mortgage business, perhaps from the request for an offer via the website all the way through to the closed-end of the BPO process so that we can have some understanding of the lead indicators in the business.
And then the last question is actually just your general observations on the Italian market situation for businesses because most of the headlines that we see outside Italy focus very much on the lockdown and the impact that has on consumer-facing businesses, which is clearly very challenging for those in the restaurant/hospitality sector. It would be helpful to understand how B2B operations are continuing and how people are going about their business and the impact more broadly on the business landscape from your perspective. So those are the 3.
Okay. Thank you, James. Well, regarding the CTIs, especially the demand of CTIs that you see on the Broking side, we are not able to say much today. And also, we have the feeling that the figures we are seeing are not necessarily representative. So we see wild swings. And sometimes, they are not even into MiFID, so maybe you have the lockdown for a while. You have -- just to give you an example, a reduction in the visits to Trovaprezzi, which is very weird. But then it lasts for a week and then it normalizes. So we -- we are not able to provide specific indications also, again, because we think they could be misleading, and we don't really know exactly how things will evolve in a few weeks.
In terms of -- well, maybe Alessandro wants to comment on the cycle time.
Yes. Let's say that the cycle time from the start on the website is probably 2 months to -- if the transaction is ready, meaning if it's really doable and the properties are. For a remortgage, it can be one month. I'm really giving you averages. So -- but the point is this is exact -- it really can change on what was behind your question, because if you're talking about what is going to happen at the moment, but we -- everything restarts and how long it will take then that's probably okay. But now in terms of what happens now in the next month, really, it is a very complicated moment from an operational standpoint. So there might be a slowdown and an acceleration because they find a solution on how to maybe do a notary deed without the physical presence or things like this, okay? So there might be a transition period where we really see some strange dynamics. And if that was the aim of your question there, I cannot really answer. Instead of when there will be rebound, which, again, if there is no transmission to -- significant transmission through a financial crisis will be probably in the summer, then at that point, we will see it start and then the results will be 2, 3 months later in terms of new mortgages that actually happen.
That's what is the point I was trying to get to on that one. I think your point about the supply chains' acceptance or preparedness to adopt digital solutions in the face of a crisis is a very interesting and useful catalyst. And as you say, actually being able to take digital motorization of documents will be a big step forward. Actually, irrespective of the current crisis for many financial products. And then your comments on, I suppose, the broader perspective on the Italian business landscape and operations beyond your own business that you see that we might be able to learn from.
Marco, you want to take that?
No.
You're 2 weeks ahead of us. So we're keen to learn.
Yes, sure.
Well, I -- it's hard to say. I mean production will be able to continue, and supply chains will be able to adjust. One point that is quite interesting that I haven't seen in the press, in the articles and so on, is the fact that once there is a certain quantity of cases in a region then the workers get a bit scared and you start having unions and workers saying we don't want to go to work because it's no longer safe and so on. And that could also create some friction. But our feeling is that the supply chains and the production after an adjustment should be able to continue. And maybe -- there are businesses that are directly hit. And for them, it will be a disaster because if you are in hospitality or in many areas of retail, you have no chance. I mean, the only thing you can do is shut down and file all the people to the extent that you are allowed to do that. And this will happen everywhere. In other areas, business will be able to continue, provided that there is demand. And that will be the issue. But we think an economy could continue to work even in these conditions, even if they are long-lasting conditions.
Let me comment in manufacturing, what Marco was saying, especially in the north of Italy, this has become an issue. I mean even if you were supplying demands that have not slowed down, so you still had demands that some workers in the area of Brescia, Bergamo are refusing to go to work because they feel they are not completely safe. So the government is also moving in the direction trying to detail together with unions, which are the safety measures that need to be in place, some assembly lines and some of these things are really too hard -- potentially can become too hard to run. But then on the other side -- at the moment, when you see that the peak is behind you, then probably it's not too hard to reopen and restart. The real thing that has a very, very significant impact on people is when there is a high number of deaths in a concentrated space of days. And when even the ability to process all the deaths comes to be overwhelming in obituaries and cemeteries and stuff like this, unfortunately, is happening in some areas of the north. That obviously becomes pretty, pretty scary, independent of what kind of job you do.
Understood. I mean, other than laptops, which one of my other customers had sold a lot of laptops. They're in the laptop selling business in the last months. But leaving aside the laptops, any suggestions or preparedness measures for other -- and this is specifically for digital businesses that are similar to yours that may have a human element as well on the Broking side, but whether the funnel is digital.
Well, by the way, in some countries, they are getting very close to Italy, so...
They are already in Italy now.
Yes, like Switzerland is 1 week behind or more than that, others a bit more. But so what is important is to be able to operate a distributed call center. So because many of these businesses, you have to speak with customers or other parties. And while working with the laptop is relatively easy with the Internet, being able also to around the telephone operations, distributing the calls and so on, is a bit more challenging. And that's one of the areas on which I would focus. Also, in terms of working from home, the problem is you're running a lot of bottlenecks because, first, you have to make sure that all your employees have the right connectivity. And if they don't -- if they don't, you have to provide it to them. So even like the small devices, the mobile modems, they could come -- they could become in short supply. And those are important for the people that maybe don't have broadband -- fixed broadband at home. So we have to make sure that all the employees does and source them for them if they don't. Also, you will see, and this is very difficult to fix, that as soon as the entire country goes to smart work, all the telco lines become clogged. So even if you have done everything correctly, sometimes you'll have trouble just because Vodafone doesn't have enough capacity to handle all the traffic. So to the extent that you have more than one data center, more than one access point, et cetera, it's better because as these problems come and go, you realize things. It's -- I mean, it's not rocket science, but one is to get ready and one is to get ready as soon as possible. I mean we work all the weekends with different people working in the nights. The managers are coordinating this because we knew this had to be done fast. Also, the problem is our scale didn't happen. So -- and now we are relatively safe from this. Our fear was that we would get one day a call from the health authority saying one of your employees at this office is sick with the virus and so we quarantine all of the other people and when they are not ready to work from home. So you have to -- for a while, you have the weakness that if you get hit, you can be badly hurt. And you have to get past that point as soon as possible. So that's the advice I would give and we would give. And then on top of that, there is the personal advice because I mean our view is that all the people listening to this call will be in lockdown more than 2 weeks from now, 3 weeks from now at most. And it's better to get organized personally for that. So you have to decide whether you want to stay in the city, if you have a house in the countryside, you want to be ready for that, move the family there. Maybe you want to buy a laser printer in the delivery office there. So maybe stock out a little bit on supplies, because our feeling is that this will happen everywhere. So it's better to get ready in advance so that you handle it more and more comfortably. And also, it's clear that to the extent possible it makes sense to avoid all human contacts from now on.
Yes, by the way, this was one -- what Marco has just said from the personal side you can also read from the business side. One of the things we did is you know that we have a diverse stage geographically, which is also in health, obviously. And in Italy as and partially in Romania, and so we dispersed our management team in the different areas so that they could look after the business directly, and we could have a person of total trust in each of the areas.
Yes. One final piece of advice is this in case any of you have to deal with these situations. If you move to smart working, what is important is to enable people for smart working. With smart working, people will have potentially lower productivity. If you decide to send everybody home, when there is the epidemic, then it's difficult to bring them back to the office. So the best is to enable people for smart working, to test a smart work to make sure that everybody is able to work from home, but not to -- but to keep a certain percentage of people in the office because that's more productive. And once -- if going back is very difficult because people will get scared and so on.
[Operator Instructions] Mr. Pescarmona, there are no questions registered at this time, sir.
Okay. I'd just say one thing, we got the confirmation from Francesco that we can buy back shares up to a limit of 20% from an authorization point of view.
Okay. Thank you. Then we close the call, and we thank everybody and hope to -- that you are okay, in good health and everything is fine.
Yes. Thank you, everyone. Bye-bye.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.