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Edited Transcript of AENA.MC earnings conference call or presentation 29-Apr-20 11:00am GMT

Q1 2020 Aena SME SA Earnings Call

Madrid May 15, 2020 (Thomson StreetEvents) -- Edited Transcript of Aena SME SA earnings conference call or presentation Wednesday, April 29, 2020 at 11:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Emilio Rotondo

Aena S.M.E., S.A. - Deputy CFO

* Jose Leo Vizcaino

Aena S.M.E., S.A. - Economic & Financial Director

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Conference Call Participants

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* Arthur David Truslove

Crédit Suisse AG, Research Division - Research Analyst

* Cristian Nedelcu

UBS Investment Bank, Research Division - Associate Director and Aerospace & Defense Analyst

* Elodie Rall

JP Morgan Chase & Co, Research Division - Research Analyst

* James Edward Brazier Hollins

Exane BNP Paribas, Research Division - Senior Transport Analyst

* Jenny Ping

Citigroup Inc, Research Division - Director and Analyst

* José Manuel Arroyas

Grupo Santander, Research Division - Equity Analyst

* Nicolò Pessina

Mediobanca - Banca di credito finanziario S.p.A., Research Division - Analyst

* Stephanie Fabienne D'Ath

RBC Capital Markets, Research Division - Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, thank you for standing by, and welcome to the Aena Q1 Results Presentation. (Operator Instructions) For your information, this conference is being recorded today.

Now I would like to hand the conference over to your speaker today, Emilio Rotondo. Please go ahead, sir.

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Emilio Rotondo, Aena S.M.E., S.A. - Deputy CFO [2]

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Yes. Hi. Good morning to everyone, and welcome to our First Quarter 2020 Results Conference Call. As in past occasions, we are José Leo, CFO of Aena; and myself, Emilio Rotondo, that we will be presenting the -- this conference call.

Now I hand over the floor to Mr. José Leo.

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [3]

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Thank you, Emilio. Welcome, everyone, to the call. First of all, I would like to make a point, which is I wish and I hope you are all well and safe as well as your families. This is a terrible time to start with from the health point of view, and that's for me the top priority.

Having said that, I will start focusing on the key highlights section of the presentation. So I will ask you to go to Slide #4. As obviously, it is -- this quarter is a very particular one with -- which is dominated by the impact of the COVID-19 epidemic on our airports as well as the impact of the actions or measures taken by governments in different countries to mitigate and to fight the pandemic. So in terms of the impact of the COVID-19, I will start by describing the main consequences for the airport network in Spain. First of all is the dramatic, I would say, reduction in air traffic that gave rise to a fall in passenger traffic in March of 59.3%. That is proven to be even more pronounced in April. As you all know already, we are experiencing declines in traffic of over 95%, in some cases, up to 99% reductions in traffic vis-à-vis the previous year.

It's clear that at this moment in time, there is nothing clear. It's difficult or impossible to predict when the traffic recovery will happen and with what degree of intensity of that recovery will be. In response to that, as many other airport operators across the world, we have adjusted our capacity, tackled the problem by, in some cases, closing spaces and terminals. For instance, we have closed Adolfo Suárez Madrid-Barajas Airport terminals, most of them, and concentrated the remaining operation in T4 -- in the main building of T4. In Barcelona, similarly, we have concentrated all the remaining flights in Terminal 1. Most of our small airports, more than 25, 26 airports, are now literally closed and operating only on demand.

Part of that as well is the cost saving plan. It's both a consequence of the adjustment in capacity and the need of preserving cash. So we address that by implementing a cost-cutting plan that is going to render in the region of EUR 43 million saving per month on average as long as the traffic is close to 0. The same way, likewise, we stopped the investment plan. Substantially all the investments are now halted, and that will deliver a reduction in the cash outflows of approximately EUR 52 million per month as long as the traffic, as I said before, is literally close to 0.

Also, in order to build up our cash and our liquidity, let's say, holdings, we signed back on the 1st of April more than EUR 1 billion in loans with different maturities between 1 and 4 years. And as we indicated in the information released on the day, we carry on working on implementing signing additional financing contracts, that will be announced in the coming weeks, potentially days in a substantial amount as well. That, obviously, I cannot share with you at this moment.

Also, please go on to the next slide, Slide #5. We can say that even before signing the additional financing facilities over the coming weeks, we are already in a healthy position from the liquidity availability standpoint. We have now close to EUR 2.5 billion both in cash and facilities available. On top of that, we have the Commercial Paper Program that will allow us to issue up to EUR 900 million. For the time being, we have already used that facility to the tune of EUR 495 million. And the reason why we are distinguishing the ECP program from the rest of the liquidity holdings and facilities is because this is a market that may or may not be open at times depending on the severity of the crisis. But we are confident that with the support of the European Central Bank, that Commercial Paper Program will also provide extra liquidity. So in total, we can speak now of around EUR 3 billion of cash available.

It's also important for us to highlight that both Moody's and Fitch, the 2 operators that are rating our credit, confirmed the long-term issuer default rating at the very healthy investment-grade level that we used to be. And the only, let's say, point is that Moody's revised the outlook from stable to negative, which in a way is understandable, considering the circumstances. I think it's important to, once again, reiterate or stress that we would be really keen to be able to share with you our view about the 2020 figures. But frankly, at this moment in time, it's not possible. It would be just an exercise of, let's say, willingness, but no more than that because it's entirely unpredictable when the traffic will recover. And as a result of that, there is no way we can share with you any meaningful outlook for 2020, neither in terms of passengers, nor in terms of the results estimate.

Let's move on to the next slide, Slide #6, where we are sharing with you a similar exercise for the second most important asset at the moment in the Aena's group, which is the London Luton Airport. The situation there is similar to what I described for Aena. The traffic in March went down by 56% compared to March 2019. But in April, the deterioration obviously deepened. At this time, we can say that the airport is practically closed with no operations whatsoever, other than, let's say, a number of them, which are due to, let's say, private aviation or things like that. Luton also took very, very, let's say, relevant actions to address the issue by, well, keeping the terminal basically closed and undertaking a gross cost saving plan, involving reduction in the workforce and also reduction in the salary package. They are supporting that measures with the U.K. government benefit or aid scheme based on furloughs, which allow the airport to obviously reduce the bill, the staff cost bill, transferring that to the U.K. government, to the public funds.

They are also stopping the investment plan. Although, clearly, the plan there is relatively small because the bulk of the large investments are already behind us. Finally is making use of all the facilities available and making sure that they have a war chest available for the -- to address in the crisis. Importantly, I'm sure you have an interest on that. They are in discussions with the lenders to ask for a waiver regarding a particular covenant in the financing contracts, which is the leverage. They clearly are going to breach that level pretty soon. And they are already in discussions, which is something -- my understanding is that this is something which is happening around a number of different airports in the U.K. at the moment. And the lenders are conscious of that, showing a pretty, let's say, open-minded approach and a very pragmatic approach to that. So we will -- we expect that will be available in the coming days or weeks.

Moving on to the next slide, Slide #7, the same exercise for the Brazilian airports. The wave of the epidemic hit Brazil a little bit later, but the pattern is exactly the same. Significant reduction in traffic, practical or practical, let's say, stoppage of operations at the moment. So in April, we see similar levels of reduction in the number of passengers, well above close to 95%, 96%, 97%. And the actions taken there are not surprisingly similar to those taken by Aena and Luton, coming -- or bringing the operations to a halt, keeping the terminals practically closed, reducing expenses, reducing costs, stopping any nonessential costs.

In terms of investments, they were not already engaged in an investment plan, but they have a number of obligations under the concession agreement to start presenting or submitting to the regulator or to the concession authority projects, and then those projects crystallizing investments in CapEx over the coming months. They are in discussions with the ANAC to obtain permission to delay the execution of those projects and the submissions of those projects, which is something that is also happening across the board in Brazil. There are a number of other important international operators that enjoy concessions there. They are in similar discussions with ANAC. So we expect ANAC to take a view that will be applied to everyone rather than just to single out any particular concessioner.

In the case of ANB, they have no debt at all. They are pretty strongly capitalized. And they hold more than EUR 20 million in cash at the moment. So we expect they will be able to deal with the needs -- with their needs, let's say, I wouldn't say comfortably, but I would say fine -- they will be fine in that regard. The critical point here is to make sure that the project development and the investment execution commitments are waived temporarily.

Then moving on to Slide #8. This is the usual slide that you see at the front page of the presentation, which is the key highlights. This quarter, clearly, everything is going south. Passenger numbers down close to 20%. Clearly, the -- that is benefited by the -- is benefiting from the January and February figures that were pretty good. Revenues down 13.4%, less than the passenger number reduction for a number of reasons that I'm sure you are fully aware of. Like not all the charges are based on passengers. A significant part of them are based on the number of operations. Also the commercial activities are underpinned by minimum guarantees to a certain extent, and I will come back to that in a minute, so on and so forth. So as a result, the total revenue line declines by only "13.4%."

EBITDA is down 36.1% because in the quarter we haven't yet started to work on the cost adjustment plan. Clearly, the first quarter cost to bill is business as usual. So the savings will start kicking in April, May and beyond. The net profit is down 83.1%. In that particular line, there is also an element of accounting of deferred taxes that has no impact on cash, but probably many of you have noticed that the corporate tax line goes beyond -- goes above 40% of the pretax profit. And this is all driven by deferred tax accounting in Luton, in particular. And we can comment on that if you want. And finally, the operating cash flows are down 16.5%. Clearly, the EBITDA is translating into a declining operating cash flow. But on the other hand, the investments are below the previous year.

A couple of highlights that you are well aware of. First of all is that the new charges -- the new airport charges for 2020 came into force in -- on the 1st of March. From that moment on, there is a reduction of 1.44% in charges in the IMAAJ, to be more precise, vis-à-vis 2019. On the 24th of March, the Board of Directors of Aena canceled the shareholders' meeting that was scheduled for the 31st of March. And the -- legally, the Board will have to call a new shareholders' meeting no later than 1 month after the state of alarm declared by the Spanish government is lifted. And if canceled, from that moment, the Board will have 1 month to call the meeting again. And the meeting will have to take place no later than the end of October. This is a longer than usual period of time. And that's also driven by the exceptional circumstances driven by or special circumstances created by the COVID-19 situation.

There is only one more thing I want to share with you before I hand you over to Emilio, which is you are well aware that yesterday, we also released a piece of, let's say, insider information, which is that our Board of Directors approved or authorized the management to enter into discussions with various commercial operators in Aena's airport in order to assess the consequences and the stretches and the stress that the COVID-19 situation can be creating on their businesses, short term. And then potentially we will be entitled -- we will be, let's say, authorized to agree on a case-by-case basis on potential amendments of those contracts. Obviously, we thought that was an important piece of information to be shared with the markets openly.

But that's not preempting any particular outcome. It's just to make clear that Aena is cautious of the situation that, first and foremost, we feel that the contracts should be honored. But at the same time, we cannot be silly. We have to be aware of the situation. We have to be capable of in cases where we can adapt in dramatic situations, in cases in which we can end up not having any counterparty when the business comes back, we have to be rationale and smart enough to help -- is helping them to help us. So first of all, this is not preempting any outcome, to be absolutely clear, but this is just showing that our willingness to examine the situations and to be rationale and to be business-oriented rather than just, let's say, going ahead with a one-size-fits-all solution regardless. That wouldn't be very smart from our side.

And finally, with regard to the accounting of the minimum guarantee rents in quarter 1, you can see that we haven't accounted for the second quarter -- for the second fortnight of March figures. So from the date of declaration of the state of alarm by the Spanish government, we think that it makes all the sense to waive the minimum guarantee rents. And although we are not obliged, we can still discriminate on a case-by-case basis. As a matter of prudency, we think that the base case and the case that should be accounted for is to -- not to consider those revenues.

So in the second quarter of -- sorry, in the second quarter -- I mean, in the second fortnight of March, we are only accounting in terms of commercial revenues for those revenues driven and originated by the sales -- by the actual sales, the royalties driven by sales. We are not accounting for the -- something close to EUR 30 million, EUR 29.8 million in -- of minimum guarantee rents that, otherwise, would have been accounted for. Obviously, that figure is larger than usual because the second quarter is -- I'm sorry, I am really, really, this is driving me nuts. On the second fortnight of March, the sale element was clearly lower than expected as a result of the decline in passenger numbers.

Without further ado, I will hand you over to Emilio that will talk you through the business trends section. Thank you very much. We will surely speak again through the Q&A session later on. Thank you very much.

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Emilio Rotondo, Aena S.M.E., S.A. - Deputy CFO [4]

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Thank you, José. Now we move to Slide #10. In this slide, as in past quarters, we want to highlight and to give detail on the traffic data. As previously mentioned and as a consequence of the spread of the COVID-19 and the state of alarm, there has been a decrease in the passenger traffic in the Spanish network of slightly above 20% in the quarter, which began with a slowdown in growth in the last week of February and materialized throughout March, in the month of March ended with a minus 59% decrease. This slowdown continued during April with the state of alarm being maintained. And this general decline in our airports and in all types of traffic, domestic traffic being down by almost 20% and international traffic by 21%.

If we move into Slide #11, the performance by business lines, just highlight the analysis of the results by business lines in terms of aeronautical activity. The data for the growth in traffic in the Spanish network commented previously has translated into falling the ordinary revenue of almost 15%, reflecting the reduction of the charges mentioned in the first slide of minus 1.44% from the 1st of March of this year. And just remind you that since the 1st of March of 2019, there was no change in the tariff -- in the charges. Also, the effect of the traffic incentives that led to revenues of EUR 4.1 million in the period. And of course, also the rebate for connecting passengers. But all in all, plus the traffic decrease is what pressured the revenues down by 14%.

In terms of commercial activity, total revenues amounted to EUR 211.5 million, 27% of the total revenues and representing a fall of almost 16%. As José has mentioned, commercial activity during the first quarter was affected by the traffic and also by the lesser amount of minimum annual rents recognized during the month of March. Just highlighting just real estate services, EUR 18 million of revenues, an increase by 7%; and international, EUR 57 million of revenues. Highlight that we have included the impact of Brazil that started the operations through -- during the first quarter of 2020, even though the larger airport starting, which is started the 3rd of March. So the consolidation has been very small of just -- I think it was like EUR 5 million. In terms of EBITDA, a decrease of 36%, highlighting aeronautical decreasing by almost 50% and commercial by 21%. The combination of these falls move the EBITDA margin of the aeronautical activity to 19.8% and of the commercial activity to 64.3%.

If we move to the next slide, which we -- is Slide #12, which we detail the commercial revenues by business lines. As you see, we have a decrease in all the lines of activity to a total amount of minus 16% decrease. This commercial revenues include the minimum annual guarantee accrued by contract in the business lines, mainly duty free, food and beverage, specialty shops, advertising and commercial operations. The figures of this first quarter of 2020, as has been mentioned by José, include the minimum annual guarantee from the 1st of January to the 14th of March only, since from the 15th of March, the state of alarm was declared by the Spanish government, and Aena has not recognized these rents since the change in amounts are under review.

Taking this into account in the first quarter of 2020, the amount recorded in revenues from minimum annual guaranteed rents represented 20.7% of the revenues of the business lines that have contracts under these clauses. The reduction in revenues driven by this minimum annual guaranteed review amounts to EUR 29.8 million for the period of this 15th to 31st of March, and other EUR 3.5 million reviewed of fixed rents related to car rental and ATMs.

If we finally move to Slide 13, this is the one that we are going to close our intervention today just to go to the most interesting part of the call, that is the Q&A session, we believe. In this Slide #13, we focus on the international shareholdings. Regarding Luton, passenger traffic fell by 20.5%, with a reduction in revenues in sterling terms of almost 11%, so almost GBP 5 million. Aeronautical revenues were down by 10% and commercial revenue by almost 11%. In commercial revenues, we had a decrease in parking by almost 16% and retail revenues for almost 14%, which mark the trend. EBITDA reported also in sterling fell by GBP 5 million, minus 34% compared with the same period of last year, and EBITDA margin decreased to roughly 24% versus 32% of last year.

Regarding Brazil, during the first quarter of 2020, operations have been progressively started in the 6 airports, I have already mentioned. And the volume of passengers handled was 3.4 million in the whole of the first quarter 2020, which represents a decrease of 11%. This traffic is taking all the periods, not just the period of time that the airports have been operated by Aena. This would be a like-for-like comparison with last quarter.

Revenues in Brazil in reals amounted BRL 25.1 million, and a negative EBITDA was recorded of BRL 3.6 million. Regarding other operation shareholdings, passengers traffic in GAP in Mexico were down 11.7 million, minus 1.4%. And in relation to the 2 airports in Colombia, traffic fell both in Cali by 3.6% to 1.3 million passengers and in Cartagena de Indias by 11%. All of them have been impacted by the spread of the COVID-19, although the impact has been lower as the impact has come later than in Europe.

With this slide, I think we can jump into the Q&A session. So please, operator, if you can open the line. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) We have our first question coming from the line of Jenny Ping.

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Jenny Ping, Citigroup Inc, Research Division - Director and Analyst [2]

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A couple of questions from me, please. Firstly, you talked about the cost-saving plan of EUR 43 million and also the CapEx saving of EUR 52 million, assuming there is no traffic as we stand today. But how should we think about in the second half as traffic starts to come back, although not to the full amount that we have seen in the past, how does these numbers progress? Is it a 50% reduction in traffic equals to roughly 50% reduction in these numbers? Or is there more of operating leverage associated with that?

And then, secondly, on MAGs, can you just talk to us through your thinking in terms of the negotiation process? Is it the entire contract that's up for renegotiations? Or is it purely the MAG numbers themselves? And I presume Q1, what you have booked in Q1 is not on the table to be renegotiated and it's really sort of forward looking from here.

And then, lastly, just in terms of dividends, you outlined the dates on the AGM. But what are the critical factors that still -- that you're waiting for to decide whether dividends for '19 should be paid or not?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [3]

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Thank you, Jenny. Well, with regard to the cost-saving plan, clearly, if there is a traffic recovery, we will be modulating that through the process as we move on, and the savings will be reducing. That's clearly a need because we need to adjust the resources to the reality of the traffic. There is more flexibility, so to speak, on investments, on CapEx that will be entirely in our hands, although we shouldn't forget that investment, CapEx is the main medium- and long-term driver to value creation in our regulated business. So -- but with regard to the cost-saving plan, clearly, as part of the discussions and negotiations we are having with the main suppliers, we are precisely trying to define what needs will make sense or will be relevant to particular levels of traffic. This is a discussion that's still ongoing. It's difficult to say, but whether that will be linear or otherwise. But rest assured that in every circumstance, in every scenario, we will make sure that we generate sufficient savings to ensure the robustness and the strength of Aena's financial position. So it's difficult to tell you, it's difficult to envisage particular, let's say, mathematic relation between passenger number recovery -- tranches in passenger number recovery and tranches in cost increases. But always, always, we will keep a focus on making sure that the savings are proportionate and are meaningful to ensure the business is robust and will come out the other side of the tunnel in a strong position. We will -- for sure, we won't come back to the level of expenses we have until we approach significantly high, significantly, let's say, relevant passenger numbers. Of course, is -- that will never happen in terms of recovering in full the 2019 traffic. I think the 2019 traffic is going to take a good while to come back. But -- so that's it. We will make sure that the savings are still sizable, meaningful and good to support our recovery plan and to ensure at the same time that we are keeping the business in good shape and in strong shape.

With regard to MAGs, well, the -- what we had just today just agreed in part by our Board to engage because, obviously, you cannot engage in this kind of discussions without being supported by your Board. And we wanted to share that publicly. But that is part from telling us or telling you what the outcome is going to be. That will be a case-by-case basis. It may, in some cases, involve minimum guarantee rents, I don't know. Deferred payments, it may involve some waviness of some particular amounts. It may not. So they always think that I would say, and I agree with you, you are right, is almost -- is more likely than not, is that through the state of alarm period, minimum guarantees would be forgiven or at least potentially defer. Remember, that this is now no more, no less than an accounting exercise because the minimum guaranteed rents are only collected and -- are only built and collected in the first quarter of 2021. So there is no need to make decisions about payments now. And in the absence of that, we are being prudent because we believe, honestly, and I have to be very open on that, that in the current circumstances, where the shops and the outlets are shutdown because of, let's say, an imposition by the Spanish government. So there is no choice for the retailers. They cannot make any decision. They have to shut down their outlets. We believe that there is a pretty strong case from their part to argue. So we want to be extremely prudent and not to count on those minimum guaranteed rents in accounting terms until we have more clarity. So yes, it's more likely than not done through the state of alarm period. The minimum guaranteed rents are, let's say, on hold.

Finally, with regard to dividend. Frankly, I cannot tell you because I don't know. The Board of Directors decision to postpone the shareholders' meeting is giving them time to make a decision, and they don't need to rush. There is no reason to rush. If and when they are in a position to call the meeting again, I suppose they will assess all the circumstances and the situation at that time. They will take a look at how the traffic recovery is looking like at that time. And they would take into account also the liquidity position of the business and a number of different circumstances. So there is no need to make a decision today. It's a decision that will be made with as much information and as much knowledge of what the future is going to look like rather than just rushing today. So that's my answer. Frankly, I cannot tell you because I don't know. We haven't made any decision. And ultimately, it is the privilege, so to speak, of the Board of Directors to make that decision.

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Operator [4]

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Our next question comes from the line of Arthur Truslove.

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Arthur David Truslove, Crédit Suisse AG, Research Division - Research Analyst [5]

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Arthur Truslove from Crédit Suisse. Just a few from me. Question one, I understand that you haven't taken any measure to transfer any of the wages of your own employees on to the Spanish government. I just wondered, firstly, whether that was possible? And secondly, if indeed it is, why you have chosen not to do it?

The second question that I had was just in respect of the minimum annual guarantees once more. Is it right to assume that any negotiations that you are having just relates to what will happen through the state of alarm? Or is it possible there will be contractual changes to periods beyond the state of alarm? If you could just confirm that then that would be extremely helpful.

And then the third question, I just wondered what's -- clearly, your objective must be to get traffic back up and running again. So I just wondered whether you could clarify what approach you are taking to the measures that will ultimately be required to make people safe to travel and indeed to feel safe to travel? And if you have heard anything from either governments or regulators as to what is likely to be acceptable, it would be extremely helpful if you could share that.

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [6]

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Well, first of all, you are right. We made the decision not to include in our cost adjustment plan our own workforce. The reason for that is we believe that at this stage, frankly, we don't need it. This is a very well thought through decision made by the Board and by the management. Aena is a business, which is -- has substantially outsourced -- has outsourced a substantial part of the services and the -- well, the works provided -- required by the business. We have a level of outsourcing costs -- outsourced costs, which is well above the average of our peers. We also have, in the past, less than satisfactory, so to speak, level of in-house resources for obvious reasons that you know well, being 51% owned by the Spanish government, that is preventing us from hiring people that we may need. So for both reasons, we thought that any action on our own workforce would be potentially rendering relatively not minor but less sizable savings. And secondly, we could be -- in thinking in terms of the recovery, we could be harming our own, let's say, strength, professional, let's say, in-house resourcing strength. And that's the reason. There is -- if -- obviously, you have to monitor that. You have to keep a very close eye on that. Nobody knows at this stage how and when the traffic will come back. And as a result of that, you can never say never. You have to have in mind -- well, you have to keep an eye on the news, on the information and making decisions accordingly. But we believe that with the plan we have implemented, we will be able to weather the storm, and that's the decision made.

With regard to the minimum guaranteed rents negotiations, clearly, the focus is on the state of alarm on the 2020 -- on 2020 because, once again, we don't know how, let's say, severe the impact on 2020 is going to be, but can be pretty severe, can be pretty dramatic in some scenarios. So that's the main focus. I'm not really -- obviously, we don't know what the long-term situation -- medium-term situation is going to be. Whether some of the operators might be at risks of disappearing. We don't know. And also, in those cases where some operators, some retailers are at risks of disappearing, you can find 2 different -- 2 completely different situations, situations where that risk is entirely driven by Aena's operations. And then you have to have a mindset for that. Cases where the reason for those operators being in trouble are far reaching. And maybe you can -- if you fix the problem in Spain, you may not be fixing the problem globally at all. So it is a case-by-case situation. And we cannot be the saviors of everyone, for sure, but we have to make sure that when our business is at risk, we are conscious of that. But the main focus is 2020 -- what to do about 2020. But once again, please don't preempt the outcome. This is just a license to negotiate, which, for us, is important, because if we don't have that license to negotiate we can be sitting down, waiting and just witnessing how some people -- some businesses are crumbling -- simply crumbling and disappearing, which will make no good to Aena because you can imagine this is not the right time to launch a tender for anything.

Finally, with regard to the recovery, that's a very good question. And frankly, this is one which is now subject to a lot of focus by everyone in the industry. We have created a group of people from every angle of the business that we call Grupo de Recuperación Operativa, operating recovery group. That team is working on trying to see what the standards would be, what the processes would be, what the protocols would be. First of all, to make sure that the operation -- if the traffic is recovering, we are able to deliver a safe and effective operation. But also, we are able to -- we are capable of enhancing the passenger trust, the passenger confidence about traveling. But this group is working in coordination with other European peers through the ACI, the Airports Council International section -- European section. Over the coming days and weeks, those groups will be necessarily engaging with airlines, with handlers, with everyone in the industry and extremely importantly with authorities, regulators, governments.

Why is that? Because if you don't coordinate and you don't give a common response and you don't develop common protocols, you will reach no -- nothing. You will get nothing. If someone is traveling from, let's say, Munich to Tenerife and that individual faces different protocols, different, let's say, processes in Germany and in Spain, there will be a lot of trouble. First of all, passengers will lose their confidence. And secondly, they will be confused. And then the whole thing will not be workable. So parts of that are necessarily driven by authorities. You need to make sure -- we all in the industry need to make sure that European authorities and then every single individual country authorities, in Europe, at least, I'm not talking about the U.S., I'm not talking about -- probably that's more far reaching and more difficult to implement short term. But at least any domestic and any European traffic should abide by the same rules. And ideally, those rules will be set by the authorities. They will say, this is what you need to do. Those are the protocols you have to follow. Those are the, sort of, social distancing measures you have to take, so on and so forth. And that dialogue will be also -- should be informed by the views of the airports and the views of the airlines.

Let me put you an example. Let's pick up a low-cost carrier. If we implement our own measures in Aena, even if those measures are the same in parties in the U.K. and in Germany, and still the airline should be, well, part of that because otherwise they can be flying almost empty flights and that won't work for them. So in this dialogue, the solution should be workable and acceptable to the airlines. And those kind of solutions can only be implemented with the supervision and the drive coming from the authorities. Is social distancing -- our social distancing rules going to be the same for that passenger when entering the airport as they were when traveling in the tube, for instance, because otherwise, well, you can be damaging Ryanair's or Easyjet's interest, and treating that differently from the treatment you are giving to the rest of the transport system, tube or buses or whatever.

So we are all working very hard. We are all already developing those solutions, technical solutions, operational solutions, but all of them should be ready, but provided that they can only operate, provided that the health authorities, the government authorities are setting clear rules. You can see these days, there are already airlines announcing that they are about to operate flights, for instance, Wizz Air literally yesterday and today. But obviously, for us, this is good news. But the question mark is how you can make that work if you don't have all the parties involved in full coordination and you don't have the governments in the different countries involved in those flights, providing the same background. I hope that helps. But it's not a definitive answer because there are no definitive answers yet, but rest assured that everybody is working very hard. That we can say. We have a very [turning pivot].

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Arthur David Truslove, Crédit Suisse AG, Research Division - Research Analyst [7]

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Sure. Just following up on that element. Do you think things like testing for COVID-19 at airport is realistic? Is that something that you think you would be able to roll out, if need be?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [8]

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Sorry, say again. I didn't quite get your question.

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Arthur David Truslove, Crédit Suisse AG, Research Division - Research Analyst [9]

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Do you think that testing for COVID-19 would be feasible at airports? Is that something that you would be able to operate, if need be?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [10]

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Frankly -- well, excuse me for this answer, sorry. I don't want to be irrespective, but you are barking at the wrong tree because I don't really know. I don't know. This is precisely -- it's very difficult to say for me, definitely, but even for Aena, because we are not health experts. What we have to do is to make sure that anything and everything the authorities believe is right and also everything which is good to underpin the customer confidence, we should be ready to implement. We should be ready to implement. And that's what we are working towards. But of course, any decision made by the health authorities, by the government in that regard better off should be previously well informed by the views of the airports and the airlines. But ultimately, once they manage to collect that information, when they manage to get that input, they should be driving those kind of guidelines. We cannot say whether taking the temperature is good or is bad or we cannot say whether, I don't know, testing people is good or it's bad or we cannot say that. Someone else has to say that after listening to us, after listening to the airlines. I think there is a huge amount already of work and coordination and appetite to engage between airports and airlines and all the players in the industry.

Well, I think we are waiting a little bit for the European authorities and in every country for the local or for the national authorities to take a view, which is understandable. They need time. But the sooner they take a common view, the better. But you know the European Union in these kind of things is never the fastest decision-making organization. But if you fix the problem in Spain, but you don't fix it in Germany or the other way around, I think that will not work properly. We have an advantage in Aena, which is we run all the domestic traffic, and that's good. That will give us somehow some degree of advantage, as I said, but still it's not enough because, for us, the European Union traffic is critical. So we have to make sure that there is coordination among those different countries. I think there will be, believe me. I'm not saying that this is not going to happen. But the focus probably now is some other things. Yesterday, the Spanish government issued a program to ease the lockdown restrictions. So this is what you can call the lockdown scaling program. And this is a program that extends over the coming 2 months and is targeting almost everything, but transport and air transport, in particular. Why? Because probably they need more information and they need more discussions with other European governments. They can make decisions on the number of things domestically, but the other thing is much more complicated and need to be coordinated. So -- but I'm sure in the coming weeks, hopefully, they will come up with something.

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Operator [11]

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Next question comes from the line of James Hollins.

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James Edward Brazier Hollins, Exane BNP Paribas, Research Division - Senior Transport Analyst [12]

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Three from me, please. First of all, you've noticed that Argentina has cut all flights as it spans until the 1st of September. I was wondering if there is any news you could give us on what Brazil might be thinking about, obviously, for your operations there?

Secondly, on store and negotiations -- regulatory negotiations, I was wondering if clearly, all this scenario puts a significant new timeframe on negotiations or even when the next door might start, apologies if I missed that detail.

And then the third one is on receivables risk. I was wondering if you could maybe quantify even a round number how much and obviously, you're delaying parking fees, et cetera. Just wondering how much receivables might be at risk of nonpayment if airlines were to disappear, and I'm thinking Norwegian, I don't know the finances have been for Canaria, but any detail you can give on receivables risk quantification would be very helpful?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [13]

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Okay. Thank you. Well, starting with Argentina, frankly, I didn't know. So it's -- that's a clear manifestation of the fact that the different countries are going their way and you need coordination at some point in time. Luckily, for us, the main coordination needs are focused in Europe. And maybe that's not a walk in the park, but by no means, it's as difficult as coordinating countries in other continents. So I don't know what Brazil is going to do. Brazil for the time being is following more or less the pattern that you can see in Europe, which is not taking any view. Just the guidelines are that flights should be restricted. On top of that, you have frankly, people not traveling. It's as simple as that. But they are not indicating what their plans are. I'm not sure -- I have -- I doubt Brazil will follow the Argentina's way because, in my view, Brazilian government is more in the trade-off between economy and -- don't misunderstand me, between economy and health. I think every government pays attention to both. But in that trade-off, probably the Brazilian government is more inclined to make sure that the economy comes back to work as soon as possible. But that's just a pure guess. I don't -- so there is no indication so far.

In any case, I think the long-haul flights, in my view, will be the last to come back to normality or well, normality maybe is not the word, to come back. So that's my view.

Secondly, with regard to the DORA negotiations. Well, nobody has, over the last weeks, raised that point, neither us nor the regulators. We are working internally in trying to identify alternatives, options. And at some point in time, and once again, depending on how the traffic comes back, we will, for sure, discuss with the regulators those options for sure. But for the time being, it's just an internal exercise. All the options that you can think of are being explored. And well, all sorts of thing, including potential extensions of DORA 1, all of that is being assessed internally. But nobody is now really jumping to discuss these things. Everybody is conscious that this is not the right time. And depending on the length of this crisis, well, you can think of completely different DORA 2 scenarios, both in terms of traffic, in terms of CapEx needs, everything. So once again, without preempting anything, we don't know. We don't know. So the best thing -- the best strategy is to wait and see. And if we are running out of time for the discussions to discuss other options. But no external discussions or meaningful discussions. Obviously, we are in touch with the regulator, but nothing meaningful, nothing involving a serious discussion has taken place so far.

And finally, with regard to receivables. Well, I have to say we have little or no risks of not collecting the receivables because our procedures involve -- our policies involve that every airport operator -- to start with, every airline should pay the fees either in advance or with the bank guarantee and this is the case across the Board. Any operator, anyone you pick, they are either paying ahead of the game or their debt is fully entirely covered by guarantee. So we have no receivables risks whatsoever. Obviously, that doesn't mean we have significant risk of some of those operators disappearing. If they disappear, our trading will be affected. But the different thing is to be impacted from the point of view of the receivables collections. We are fine in that regard. And likewise, for the commercial activities, every single revenue, every single fee, either based on the sales or minimum guarantees, are fully covered by guarantees, so.

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Operator [14]

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Next question comes from the line of Stephanie D'Ath.

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Stephanie Fabienne D'Ath, RBC Capital Markets, Research Division - Analyst [15]

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The first one is on what the Prime Minister said yesterday during his conference regarding the deescalation measures. If I understood well, it takes up to a minimum 2 weeks and by the end of stage 4, it could be something like back to normal. So is your understanding that at earlier mid-June domestic traffic can resume and maybe late June or end of June until you open.

Second question, please. Regarding your decision to not benefit from the technical unemployment support from the government, would you decide backwards to change that and ask for government to pay like they do for a lot of companies and save the 70% of the salaries of employees that were not able to work as a result of the state of alarm?

And then third question regarding regulation. Could you see that you decide to move back to the, I don't know, EUR 0.5 billion CapEx instead of EUR 1 billion CapEx per annum in DORA 2. And what do you believe will be the time line in terms of the decision?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [16]

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Okay. Thank you. Starting with yesterday's plans. The government announced yesterday, as I said before, what you can call, the plan to ease the lockdown restrictions which extends over a period of time of 6 weeks since the end of the current state of alarm declaration. So that will take us to the end of June. They set 3 different stages of roughly 15 days each. And if you read the document that would tell you that they are basically focusing on internal mobility and the recovery in business activities and everyday life activities. But when -- and this is pretty much focused on in the internal market. What they are not indicating yet is how they look at mobility through flight domestically and let alone internationally. So that's the reason why I mentioned before, it's early days, we don't know yet. Well, I'm sure that through that period of time, there will be a significant amount of extra information that will make the government to take a view on this, I'm sure, pretty sure. As I said before, they are absolutely conscious of that. Furthermore, they said -- one thing they said is that the availability of what is called Air Test, which is the temporary layoffs mechanism will be extended for the transport industry. So that's a very good indication of how conscious they are of the importance of the transport industry and the air transport industry for the Spanish tourism and the Spanish economy. So they are conscious of that. But they are not yet indicating how they see the recovery of the air traffic activity, and we need to wait. Once again, I feel that they are also waiting to have a coordinated view with the rest of the European countries because you can rule pretty easily internally how people can, let's say, go to take a walk or to take the children to a place or whatever or how the restaurants will operate. But it's more difficult to do that with the air transport without coordinating with the rest of the European authorities. So my view is, yes, there will be something in the coming weeks, probably, I don't know, sooner rather than later. But it's not yet in that document. It's not contemplated in that document because of the reasons I mentioned before. But they are conscious of the importance of that to the point that they are mentioning that potentially for our industry, the temporary layoff scheme could be extended.

Second point with regard to workforce, our own workforce. As I said before, we haven't included that in our adjustment -- cost adjustment program. Actually, the contract -- the supplier contract that we have been using in a scale are affecting people in terms of that to the tune of 4 individuals for each Aena individual. If you look at Aena, let's say, network, for every individual, internal Aena person working in that network, there are 4 external outsource individuals working in the same network. So we have one piece of the total workforce supporting our business. And I don't mean activities -- ancillary activities around the airport, I don't mean that. I mean people working for the airport, supporting and providing services to make the airport work and operate. So it's a relatively small part of it, always important. And believe me, we will keep an eye on that. We will not ignore. We will look at every angle if and when we consider that to be appropriate. Once we know whether this crisis is going to last longer than we expected, whether or not the traffic is going to recover in a particular way. But for the time being, we are not making use of that temporary layoffs in -- with our own internal personnel.

And finally, with regard to the CapEx program beyond DORA 1. As I said before, the DORA 2 at this moment is, I would say, is in the freezer. Nobody can really discuss anything meaningfully. However, you can discuss now DORA 2 scenario without credible passenger forecast until you have that forecast, I wouldn't say forecast that you can believe will be certain, but at least something that is underpinned by reasonable assumptions in terms of recovery. There is no way you can discuss that. But if we face a situation where the traffic is going to be substantially less than we expected, of course, the CapEx program would be there for review. And it's not only Aena that would discuss that, it will be the airlines as well. The airlines and Aena should agree that the traffic expectations are going to be -- are going to support any particular CapEx program because ultimately, we need to be in agreement that we need that CapEx. And secondly, the airlines will pay for that. So I think we need -- we have to wait still, probably month to be able to discuss those things in a way that is meaningful, and it's not just a pure academic exercise.

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Operator [17]

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Next question comes from the line of Elodie Rall.

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Elodie Rall, JP Morgan Chase & Co, Research Division - Research Analyst [18]

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I didn't think my questions were going to be taken, I don't know, I had a problem. Maybe one additional question versus what's been discussed about your [trade] on -- I mean, we understand cash is king and you're doing everything to protect the balance sheet. But what if you see an opportunity in the acquisition space that is too good to ignore? Would that be something that the group would contemplate at this time?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [19]

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Okay. Thank you, Elodie. That's a good question because it's taking me out of this COVID thing for a while. So I appreciate it. Now clearly, honestly, I'm going to answer with all the honesty and openness. I don't think this is time to look at these kind of things. I don't mean in 6 months' time, I can be telling you something different. But today, to start with, you can never say what a good price is. The asset prices are now all over the place. Nobody knows what a good price could be because to build a proper business case, to start with, you need to put some numbers in terms of passengers over the coming years, and you have to be very brave to do that. So honestly, I don't think anyone can think of good opportunities at this time unless they are just pure, I would say, present. They are just gifts. But otherwise, any price is now lacking references and lacking support and lacking information on which you can base the assessment. So the base case -- a strong base case scenario is that we won't be buying anything. On top of that, is the point you made, cash is king at this time.

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Operator [20]

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Next question comes from the line of Nicolò Pessina.

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Nicolò Pessina, Mediobanca - Banca di credito finanziario S.p.A., Research Division - Analyst [21]

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Just one additional question. Sorry to go back to COVID-19. Do you think there is the chance of asking for a rebalancing of tariffs following the decline of traffic due to the COVID-19 crisis? Is it something that you have the opportunity to do according to the regulation? Is it something that you have been considering or not?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [22]

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Well, I will be brave enough to tell you that we think the regulation would cover that. If you look at the Article 27 of the current -- the main piece of legislation affecting Aena -- Aena's regulation, which is the Spanish Law 18 from 2014, I think that Article would perfectly well encompasses -- will perfectly well encompass this situation. That's my view. It's a brave view without checking with lawyers or anything like that. Different stories, whether that is the right approach today or in 6 months' time, I don't know, I don't know. Of course, we look at every angle and we don't rule out anything. We check every possibility and every avenue. But I don't know. And I don't know for a number of reasons. Reason number one is that -- and this is a comment that applies not only to Aena, but I would say to every other regulated airport in Europe where you can find similar legal, let's say, rules or clauses that could open the door for a discussion on tariffs. And the main reason -- the main concern, I would say, that applies to every airport is that if you rebalance the tariffs, and let's say, for example, we increase the charges by 15%, to say something, who is going to pay for that? The airlines. So the question mark is how palatable, how feasible in practical terms is to make the airlines across Europe to pay for a 15% charges increase these days. I leave it with you.

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Operator [23]

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Our next question comes from the line of Cristian Nedelcu.

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Cristian Nedelcu, UBS Investment Bank, Research Division - Associate Director and Aerospace & Defense Analyst [24]

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Just a couple left from my side. Firstly, you are mentioning in the management report that you are postponing some of the tenders for food and beverage and specialty shop contract that was supposed to happen these days. Can you tell us what is actually happening when 1 of your current contracts is coming to an end? Is that extended under what terms I'm just trying to understand better?

Secondly, based on the current DORA and the WACC calculation in the current DORA, can you comment on how some of the inputs are calculated, for example, the beta or the equity risk premium? I'm just trying to understand if the COVID-19 would actually help put upwards pressure on the regulated watch considering their formula today?

And maybe the last short one, if I may. I think you've made reference to further financing -- discussing further financing these days. How do you determine how much cash you want to have access to going forward. I guess, there is a number there. There is a calculation, hence, if you can just elaborate a bit on that, please?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [25]

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Okay. Sure. Well, with regard to the first question, we have a mechanism in every contract that will allow us to extend the contract for 6 months. I will -- I don't know if Emilio can elaborate later on a little bit more. Otherwise, please, Emilio tell me you can't and it shouldn't be a problem. But I -- we have a 6-month, let's say, unilateral extension possibility in those contracts. So we can kick the can down the road for 6 months and to wait and see how things evolve in the same terms on the same conditions.

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Cristian Nedelcu, UBS Investment Bank, Research Division - Associate Director and Aerospace & Defense Analyst [26]

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May I add a follow-up. Would your commercial partner, would your retail partner accept the same conditions during the 6 months, the same marks and everything else, are those standing in line?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [27]

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They signed that. They agreed to that. If they don't want the contract, obviously, they can't walk away, and we will execute the guarantees. So that -- no, no. So that's -- this is a 6-month unilateral extension, that was already agreed contractually day 1. And then Emilio can -- may or may not elaborate later, it's up to him or otherwise, we can check all the details.

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Emilio Rotondo, Aena S.M.E., S.A. - Deputy CFO [28]

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Yes. No, I think that just to highlight that one of the reasons why this contract has been delayed, is also because of the state of alarm. According to the state of alarm regulation, our procurement process has to be halted until -- during this period. So there's the reason also why part of these awards have not been executed.

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [29]

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No, but it's true that it would make no sense at all to run a tender process today. It's not probably the best time. But anyway, we can collect some more details for you, if that's okay, to make sure that we provide the right answers. But generally speaking, all those contracts enjoy that 6 months' mandatory extension possibility.

Well, with regard to the WACC. Well, you mentioned that you wanted to know how the current WACC is calculated in DORA 1. Is that part of your question?

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Cristian Nedelcu, UBS Investment Bank, Research Division - Associate Director and Aerospace & Defense Analyst [30]

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In particular, some of the inputs, for example, the beta, is it a 2-year beta, 5-year beta, the equity risk premium? Anything you can -- any detail you can provide?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [31]

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Okay. Well, I don't remember exactly the numbers now. Those are public. So we can share them with you later on. But the betas and the equity risk premiums were calculated. Well, particularly, betas were based on an estimate of the asset beta of the peer group. And then it was levered based on, once again, the gearing or the leverage of the peer group. So -- rather than just focusing on Aena's particular situation. You know that if you look at Aena's particular situation, the gearing would be completely different sometimes because we have a relatively small portion of gearing -- of leverage.

And then in terms of equity risk premium for memory, I remember they used a number of references. Damodaran also a Spanish guy, which is very well-known as referencing EBITDA in the termination of equity risk premiums and -- as well as this other entity -- institution, I don't know, someone -- an institution, which is a subsidiary or something of Crédit Suisse. So they look at different references and they pull together some sort of average approach. But that's not telling you anything about the DORA 2 cost of capital calculation. Other than the methodology, I don't think the methodology is going to change a great deal. To check what methodology they can apply, you can look at the recent utilities regulatory determination where the CNMC is already indicating what sort of methodology they are planning to use, and it's a reasonable one, frankly. And then the DORA 2 specific values for the different parameters will be now surely affected by the reality we are going through, I believe so. So it's very early to say. Probably 2 months ago, I've been discussing with you this in a particular way. Today, I believe that the risks assessment, the risk premiums and a number of things for DORA 2 would be impacted by the epidemic, by this crisis we are going through. That's my view. But other than that, I cannot tell you. Methodologically, please take a look at the former determination. My team will provide you with the details. And you can also take a look at the recent utility regulatory determination for gas and electricity where you can see the sort of methodological approach the CNMC is taking, which is fine for us. It's fine for us.

Then values, specific values, specific picks for the parameters, well, time will tell. And finally, with regard to financing. Well, I wouldn't say we have been targeting all the financing we can get, that wouldn't be true. But we had in line a substantial amount of extra financing to be raised, probably in excess of what we, in normal circumstances, would need. And the only condition for that financing to be agreed and implemented was flexibility. Obviously, cost as well. But everybody knows that these days, you have to pay a little bit more for your debts that you paid 3 months ago. That's natural. Still I think it's reasonable and fair. But for us, the only condition that was, let's say, top priority was flexibility. If we, over time, don't need that financing, we should be able to repay that without any extra cost. That was the aim of everything we have been doing over the last 2 months or 1.5 months in terms of raising financing. And that will be a condition that will be also met by the next package of financing that we will be hopefully announcing soon.

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Operator [32]

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Next question comes from the line of José Arroyas.

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José Manuel Arroyas, Grupo Santander, Research Division - Equity Analyst [33]

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3 questions from me, please. The first question is on what you alluded to in your press release as customer support measures, which include the deferral of payment of aircraft parking fees and this comes to real estate operators and so on. I was wondering if these discounts are included in your OpEx savings. In other words, if the EUR 43 million monthly OpEx savings are net or gross of this loss of income that Aena is effectively announcing?

And the second question is on the dividend on account of full year '19 earnings, which, as you very clearly explained, it's down to the Board to decide eventually. But I was wondering if we should apply the same logic, you have been -- you have always been telling us that Aena would not look to take on debt, to pay a dividend. In other words, if the free cash flow generation in 2020 could be a reference for any potential dividend on account of full year '19 earnings?

And my last question is on free cash flow generation in the coming 3 months. Clearly, the Q1 was a very good quarter for free cash flow generation. But the going gets tougher from here. And I was wondering if you can give us an indication of your monthly cash burn in the next 3 months?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [34]

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Okay. Well, first of all, with regard to the rest of the measures we have taken to support our customers, all of them are being -- sorry, can everybody go on mute because I can hear people talking. Okay. Well, all those measures have been driven by a case-by-case approach and understanding exactly the needs of our customers. And none of them are material. None of them. Clearly, they are not contemplated in the EUR 43 million cost saving per month, but also the EUR 43 million is just an average. There will be months in which we will have larger amount of savings and obviously always calculated on the base of 0 traffic scenario. So none of those measures are really material. They are going from just allowing the airlines to pay the parking fees over 6 months, which is not the end of the world, it's just an alleviation that is not having any material impact or allowing some discounts to some of the handlers and cargo and the airlines themselves in their rents or in their facilities over the period of time of the state of alarm. None of them are material. We are talking about figures, which, obviously, every Europe is important, but we are never speaking of large and significant or even double-digit figures at all. So -- and we believe the trade-off between giving up those monies and helping the people to go through these 2 months of very painful experience, the trade-off was positive to us.

With regard to the dividend and the -- that's a very interesting question. To be honest, I didn't think about it from that standpoint because, of course, we said very clearly, we will never raise debt to pay dividends, specifically to pay dividends. We are not raising debts to pay dividends. We are just raising debt to keep the business healthy and strong. So in this particular case, I wouldn't link that to the debt-raising activities. It's more about -- once again, that's the decision to be made by the Board. And I suppose the Board will contemplate a number of different things. One of them, of course, is how severe the crisis is, how protracted the crisis is and whether or not it's a reasonable decision to pay a dividend and that is if -- whether or not by doing that, you are risking to destroy the value of the business. And as investors, probably investors in Aena would say the same, would think in the same terms. They would do exactly the same. They will contemplate the impact of very attractive and welcome dividend payment vis-à-vis the risk that, that dividend at that point in time may pose on the value of the business. But no, I wouldn't say -- I wouldn't link exactly the current financing raising activities with the decision on dividend, to be perfectly honest.

And then in terms of free cash flow for the 3, I will tell you what you can use as a base case, and it would be very open on Q2. Okay. Q3, I have no idea. Q4, well, this is just a science fiction. Q2, a base case, and hopefully, it won't be the real case, the actual case. But in the base case, would need to say no traffic at all. That is not really a crazy assumption. You can perfectly well contemplate 0 traffic or close to 0, obviously, traffic situation in Q2. That wouldn't be exotic. And then our burn rate is something around EUR 130 million per month cost savings and including operating costs, CapEx, and very little CapEx and financial costs. Altogether, if you take a 0 traffic scenario and you don't take any revenues or any cash inflows over the quarter, you can take the EUR 130 million per month cash burn as a good reference. So you can build your own model yourselves. I hope that helps.

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Operator [35]

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Next question comes from the line of Elodie Rall.

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Elodie Rall, JP Morgan Chase & Co, Research Division - Research Analyst [36]

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Now, my question has been answered. Can I just follow-up on the dividend since I have you on the line. So I understand you're not going to guide on anything. But just on the timing of the Board decision, I understand the AGM is postponed to 1 month after the state of alarm is [retrieved] no longer than the end of October, but is the Board likely to meet before like early May to decide on the dividend, I wasn't quite clear on the date?

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [37]

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Well, I cannot tell you the Board -- now the Board has an obligation, it's mandatory to call the shareholders' meeting, again, no later than 1 month after the state of alarm comes to an end. So you have to answer a number of questions -- or I have to answer a number of questions. First of all, when is that deadline effectively taking place? Well, one month after the end of the state of alarm. When is going -- when the state of alarm is going to end? Nobody knows. Nobody knows. So can this Board of Directors make a decision to call the meeting, the shareholders' meeting before the end of the state of alarm? Yes, they can. Will they? I don't know. They -- obviously, this is being monitored. I suppose that if the state of alarm takes 3 more months, I'm just speculating, there is a possibility of the Board calling the meeting before. Calling the meeting doesn't mean the meeting taking place. But at the time the Board makes a decision to call the shareholders' meeting, they will need to put forward a new proposal on profit distribution and dividend distribution. They will have to make their mind then. So I don't know. Let's assume that the state of alarm ends at the end of May, which I have no idea. Then the Board will have to mandatorily call the shareholders' meeting before the end of June. And then they will have to be clear about their proposal on dividend. And the shareholders' meeting can be called to take place any time before the end of October. So that's the situation. And frankly, I have no idea. Honestly, I don't know. This is a question I cannot answer because this is entirely a decision for the Board of Directors to make. They are meeting every month, as you can imagine. But whether or not 1 particular month they will make a decision to go ahead with calling the shareholders' meeting, I have no idea whatsoever.

Any more questions? Or I think...

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Operator [38]

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No more questions.

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Emilio Rotondo, Aena S.M.E., S.A. - Deputy CFO [39]

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There are no more questions. So yes, thank you very much to everybody, and we meet again next quarter. Thank you.

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Jose Leo Vizcaino, Aena S.M.E., S.A. - Economic & Financial Director [40]

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Cheers, bye. Stay safe. Bye.

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Emilio Rotondo, Aena S.M.E., S.A. - Deputy CFO [41]

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Bye.

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Operator [42]

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This concludes the conference for today. Thank you for participating. You may all disconnect.