Global Dominion Access Sa

Good afternoon and welcome to the Disclosures of Dominion. Before starting, I would like to remind you that once the presentation has finished, and as usual, we will open the Q&A session. And on this particular occasion, you can either send your question in writing, you can send it to the question section, or you can call us on the telephone. All you have to do is raise your hand. So now we have Roberto Tobias, who's the Director General of Dominion, and Patricia Rejon, who's the Director of Business Development, who are now going to speak. Good afternoon, everybody. Many thanks for connecting to our disclosure of Q1 of 2021. At this time, we're using somewhat different tools, which for us are more efficient, and we hope that you will find that they are equally comfortable as on previous occasions. Well, we... have heard people talk about going back to the pre-pandemic levels of doing things like we did in 2019 however we don't talk in that tone we're talking about growing vis-a-vis 2019 which is when we've grown significantly what we're saying is that in q1 we have recovered the pre-pandemic levels and we have grown at a higher rate compared to our historic figures and we've done so in all lines from sales to net results and in all the business segments too. So all of these segments have contributed towards this global growth. We have grown in terms of sales at rates of about 26%, which means 9% organic. And in this first quarter of 2021, we've grown 19% organic at a constant currency. And this is explained because the commercial work and the arrival of new contracts and customers that was carried out in 2019, 2020 is producing results, the results that we couldn't obtain last year. And although in spite of the difficulties that the B2C segment is going through, we have a healthy portfolio with more than 250,000 active services. And on the other hand, as regards to net results, we've grown 25% on average in the last few years. This quarter, we've improved by 33% in the results obtained in Q1 of 2019. So therefore we reached 9 million euros in net profits in this first quarter, when in the year 2020, we produced 12.5 million euros. But if we now move on to the details, we can see how compared to 2020, In terms of business figure, we've grown globally by 13%, although there was an active contribution of forex, minus 2% approximately, and a negative contribution of inorganic, minus 1% approximately, which is related to the B2B service sector and the sale of telco services in Spain. Obviously, these growth percentages are very good if we compare them with 2020. But I think that what has to be underscored is not that, because that quarter already had some COVID impact, but rather growth in relation to moments of normality in relation to 2019. So we can confirm what we already presented in the results of the closure of 2020. In other words, that we saw a recovery. So it's important to underscore that all segments are growing. with a significant recovery of the B2B service sector, which was one of those that was most affected during the central months of the pandemic. And we also have a recovery of our operational leverage in Dominion. We have efficiency improvements in terms of structural costs, and they are below 3%. In other words, the structural costs are below 3% relative to sales. And as regards the rest of our account levels until we reached an EBITDA of nearly 15 million euros, which grows 64% compared to 2020 from 26% relative to 2019. And the net result already mentioned of 9 billion euros is a net result that has smashed all previous records and it's going to smash all quarterly records in our history. So let's move on now to an analysis by segments. We have B2B services that significantly recover their activity levels as well as their margins. And we have to bear in mind that the first quarter usually has lower margins compared to the rest of the quarters. And therefore, this figure of 10.1% of the contribution margin that grows 22% relative to the figure recorded in Q1 of 2020. has room to improve, and it can improve this year. But the objective is to achieve in the midterm levels of about 12.5%. So this segment is also obtaining the results of a strategic approach of recent years. We have the sectoral and geographic diversification that we've been talking about for months. And as an example of this diversification, we have countries like Peru, for instance, where we are working for three utilities and for three telecommunications company, or as regards the energy field, which in 2019 didn't even reach 10% of B2B, now represents 20%. And on the other hand, we have the position as a tier one partner of our customers that is reinforcing us and providing us with significant allocations, like, for instance, the Department of Health in Catalonia, the Post Office, Telefónica Chile or Repsol. As regards the 360 projects, they are maintained at very high levels of acceptance because we are using the industrial deployment and the new opportunities arising from Biden's administration in the United States. And we've recovered trends of efficiency and sustainability that appeared with Obama's administration. And we're still working on the biddings in the Chilean hospitals. So in this field of 360 and B2B projects, we are at a point in time in which this vision, 360, allows us to have margins above our objectives. And in this quarter, we have a contribution margin of 16.4%. And we could even talk about a quasi-recurrence in this segment. because we have a very good balance of execution and this ratio is very stable. And finally, let's move on to the B2C segment. And what I would say is that in this segment, we are in a moment of transition. There are several positive factors and negative factors that are contributing towards this segment in this semester. We've had to adapt to behavioral changes of consumers. because of the closures and restrictions that were tightened in the month of February in relation to what we'd seen in the second part of 2020. And in the first weeks of January, if you remember, they were affected by Philomena by the snowstorms in the country. And in this first quarter of 2021, we have practically carried out our internal restructuring and we are now boosting the digital channels, which will produce higher levels of customer traction in the next few months. And we must bear in mind that in this quarter, We also have an extraordinary number of leavers because we are cancelling the contracts of unpaid customers that we couldn't deregister in previous months. Even so, we have added to our customer base 53,000 new net services year on year. And we have 252,000 active services, both in the vertical axis of energy and in telecommunications as regards to the contribution margin of the segment. It reaches levels that are somewhat above the levels we expected for the year as a consequence of some extraordinary income that have to do with commercial agreements and also because of this transition concept, because of the incorporation of new employees and the employment reduction scheme. In regards to balance sheet items, you know that we haven't reported this figure this quarter. but there has been no relevant movement of net cash, neither in positive or negative terms, in this quarter. It is to be expected that the closure of the renewables operation, as well as our involvement in some 360 projects, will produce positive cash in the next few months. With this, I am going to conclude the review of the quarter by summarising some messages. The second quarter of consecutive growth after the pandemic And we have improved our historical data. And we also have some good levels of net profits. It's the best quarter of our history, 33% higher compared to the first quarter of 2019. And it's important to see that all these segments have contributed towards this global growth, but we know that all of them and some of them in particular are going to improve even further. And the reality shows that we have tailwind. In other words, we're very lucky because this crisis has accelerated trends. like for instance, a greater sustainability. And well, this is a consequence of our efficiency, which is the key element of the value proposal of Dominion for our customers. So this is why we have increased or will increase our growth in the future. And this is why we are reviewing our objectives for the year. And we know that they're going to be better compared to what our strategic plan said. In 2021, we're going to be growing in double digit in terms of sales above 5% established by our strategic plan. And our EBITDA will grow And we will also have growth of net profits above 25%. And well, apart from 20%, the 20% figures established by the strategic plan and everything compared to the figures of 2019. In other words, figures that were not affected by COVID-19. And we'll do so, obviously, by meeting our financial requirements and our cash generation requirements, which means that we should transform 25% of our EBITDA into operating cash flow. Thank you very much for your attention. And now we're going to be moving on to your questions. OK, well, let's open the Q&A session. If you are connected through Zoom, you can send your questions in writing through the Q&A session section or just raise your hand by using the button to do so. And if you are following the presentation via telephone, please press asterisk nine to ask your questions and wait for us to allow you to speak. Let's give the floor to the people that have raised their hand and we'll make sure that your microphone is not silenced, please. Firstly, we have Carlos Treviño from Santander. Hello, good afternoon. Can you hear me? Yes, loud and clear, Carlos. Thank you very much, Patricia. Good afternoon, everybody. I have two questions and something that I would like to ask you about. Perhaps could you give us the back book figure you've entered the first quarter with? And as regards the questions, could you please say a little bit more about your gross newcomers in the case of smart house? In other words, could you quantify how many disconnections there have been because of unpaid bills to see what kind of business trends there are? And what has happened to energy and telecommunications too, some trends. And then I wanted to ask you, about the M&A vision you have for the year. Do you have any latent targets or things that you might be able to close little by little? Or don't you really see anything relevant at the short term? Well, thank you very much, Carlos. On the one hand, you were talking about the backlog. Well, the backlog is 616 million euros. It's above 600 million, therefore. And you know that we had some, you know what the hospital issue has been like and renewables, but we also have some industrial projects. And as you can see, it's not only one project, but rather we have some very high and healthy levels involved. But as regards the customer traction element in the case of Smart House, well, as I said, we are in a transition quarter now. because the physical channel was pretty limited in Q1 in January because of the snowstorms, et cetera, et cetera, and February because the restrictions were tightened a lot. However, the digital channel that has been boosted a lot in recent months, for the first time, we have attracted more customers through the physical channel. And I think that the figures will carry on growing in that field. And as I said before, year on year, it's 53,000 net newcomers. And compared to the closure of 2020, it's 10,000 newcomers. What about M&A? Carlos, I will answer about M&A. Well, we feel very comfortable in whatever has to do with B2B projects. You know that we have that portfolio and that we have possibilities of organic growth and we have all these synergies to the company. This is on the right path. I think that the B2C project is now beginning. It's on the right path, too. And that's where we think that there's plenty of room to move. and there's a very positive future. We've done M&A there with our human team, and we think that we have a perfect team to become involved in the next two or three years. So I would say that the world of M&A is focused much more on the world of B2B services, and in this world of B2B services, regardless of the fact that we can contemplate certain bottom-up acquisitions, it's true that it has to be focused efficiency, sustainability, the environment, automations, and things that have to do with the environment. So yes, perhaps we are tending towards what Patricia said before. We feel very comfortable because now the strategic epicenter is now focusing on the world of sustainability, efficiency, and outsourcing too for companies. And we feel comfortable in that world from an organic perspective, and we're looking into things that are inorganic. So we will continue to play an active role and we will look into larger or smaller operations. But perhaps now the vector of what we're looking into is focused on this. And this is what I could anticipate. Thank you very much. And as a follow up to the question on smart house, I understand that these disconnections have been connected to energy or it also affected you in the field of telecoms. Well, yes, in energy and telecoms, but perhaps mainly in energy. Thank you very much. Thank you. Okay, let's continue now with Miguel Othello from JPA Capital. Miguel, you demute the microphone, please. Hello, good afternoon. Can you hear me? Yes, loud and clear. After the presentation, I have three questions. The first one has to do with the bidding in Chile. I've seen nothing on the results, on the outcome of the BOV hospital in Chile. And this was supposed to be released in April. Has the process been postponed? Or do you expect this to happen? And the second question... has to do with the one-off you've had in B2C this quarter, so in regards to unpaid bills. So do you expect any negative effect over the next few quarters? Give us a number for net subscription that you expect for this year, because I think we've spoken about something like 70,000 net connections for the year. But after this one-off, I'm not sure if you would maintain this figure, but it's going to be somewhat lower. And the one final quick question, could you give us the growth of figures of the part that has to do with their B2B services, excluding divestitures and period acquisitions? Thank you very much. Well, I will answer about the hospital side of things. In other words, all of the hospitals in the B2B sector This is going to be submitted tomorrow on May the 14th. And you know that we have the Maoli Hospitals Project. We did not receive any award, at least direct award, in that project. So I think that we can provide support through our know-how in terms of medical equipment. And, well, in the case of Bio Bio, we will be submitting the offer tomorrow together with our partner. And I think that the award will be released in... month that's when the notification will be given yes and then you were asking about the issue of one of the b2c because of the non-payment issues well you have to think what happened throughout 2020 and this has an effect on the operating figures of 2020 so what is terminating those contracts that even though they were not paid in 2020, we could not deregister. There's a somewhat exceptional accumulation of deregisters, but in any case, this has not been contemplated in the figures. And then we have B2B services. Well, I'm not sure if you're referring in particular, I'm not sure if you're referring to organic. I think so. Yes, it's organic. Exactly. Well, I think that it could be something like a minus 1% in services. Well, just hold on a minute. I think that it's 19, 18 or 19%, roughly. Perfect. And I had another question, and this has to do with the 70,000 net connections that you'd given in your guidance at some point. Have you maintained those? Are you going to be somewhat below that figure? Well, this is a complex figure at this point in time. It's still a very complex environment to deliver any forecasts on any net figures for the year. Customer attraction, well, we have the behaviour of consumers is changing. And while some habits have to settle down in one way or another, we are really focusing a lot on the digital channel. And while we open up more physical channels and we can't really give any specifics at this point in time. But in any case, let's say that the expectations are good, especially for the second half of the year. OK, understood. Thank you very much. Thank you. Well, these are the questions we have in the chat. We have Jaime Amorivita from Delantra. Good afternoon. What kind of restructuring costs have been any B2B? Thank you very much. Well, nothing that's mentioning really in this first quarter. Well, there have been some restructuring as a usual thing in our business in any area, in any quarter, but in any case, this is really covered by operations. We have another question from Juan Peña, and he's asking about the updating of the arrival of a partner in the renewables business. And have you had any impact of this negative trend that renewables are suffering from in the stock exchange during the negotiations? Or do you think that the operation will not crystallise as you expected it to? Well, the truth is that this is an operation that we have agreed upon, and it's not something... That was subject to market variance, and we think that the price is reasonable. And the terms that have been agreed to, well, there have been no variations whatsoever in this regard. So we are now in the final part of the process. have to establish some of the final conditions. But in any case, what I hope that in the next few weeks we'll be making a disclosure of where we stand and we'll be also retaining our agreement. So we expect that in the very short term, we expect to be able to share this information with all of you. Well, it seems that there are no more questions in the chat and there are no more questions on the telephone or Zoom. So we're going to close this session. Thank you very much indeed for your attention and for following this conference.