Bally's Intralot S.A. (BYLOT) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I'm Murdo, your Chorus Call operator. Welcome. And thank you for joining the INTRALOT conference call to present and discuss the full year 2019 financial results. [Operator Instructions] And the conference is being recorded. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Sokratis Kokkalis, Chairman of INTRALOT. Mr. Kokkalis, you may now proceed.

Thank you. Good afternoon, good morning. Gentlemen, ladies, I would like to welcome you all to this conference call for discussing the INTRALOT results for the financial year of 2019 and the latest developments at the company. Although the 2019 results are not satisfactory, I would like to start by saying that INTRALOT is a company with a strong potential. Due to special and unforeseen circumstances, in February '19, we have abandoned our retail betting operation in Turkey, while the online betting operation is continuing. And earlier this year, we have faced an adverse situation in Bulgaria. Since March '19, I have set a strategy for INTRALOT to unlock its value and optimize its cost. In 2019, we have won new businesses we focus in North America and Western Europe, and we have also launched new products. We also restructured our project portfolio through divestments of noncore assets. With the appointment of Mr. Christos Dimitriadis as group CEO in 2020, INTRALOT is enabled towards technology-driven evolution, leveraging its long experience and global expertise to achieve growth and value creation. As you know, one of the markets we are currently handling is the optimization of our capital structure. We have had Evercore and Allen & Overy in order to advise us from the way forward. I have clearly asked our advisers to come up with an agreement that we serve the interest of all of our stakeholders. At this point, thank you very much for listening to me. And I will ask INTRALOT CEO to proceed with the agenda of this call. Thank you.

Thank you. Thank you, Mr. Chairman. The agenda for this call consists of 3 parts. First of all, we will start with a review of the achievements and financial results of 2019, to be followed by the guidance as regards to the basic areas of focus and main targets of 2020. And after that, INTRALOT's executive team will be at your disposal for the Q&A session. So starting with the historical performance, 2019 has been a year in which we made good progress in the areas of focus we have said at the beginning of it. However, it was also marked by a number of unfortunate events, most of them beyond our control that affected our numbers, but also our ability to deliver better cash flows for this year. More specifically, 3 were the major targets for 2019. First of all, to renew existing contracts and to win new business with a focus on developed markets, while launching our new products towards achieving higher value and potential to create longer-term sustainable profits for our customers, shareholders and creditors. Secondly, the divestments from non-core markets for INTRALOT and in case conditions were favorable. And finally, to contain costs through optimization and efficiencies. 1 year after, we can say that we have succeeded to deliver good results on all of those 3 areas being quantified as follows: as far as our first target is concerned, we have seen progress in North America, where INTRALOT has expanded its presence and have also managed to secure contracts, both in the lottery and sports betting industries. In the U.S., we have launched our lottery system together with our partner, Camelot Illinois, the new private manager of the Illinois state Lottery. INTRALOT has also signed a new contract with Washington D.C. government in order to offer Orion for sports betting and extended lottery offerings in the District of Columbia. We have also signed the launching of Orion in Montana and New Hampshire planned for this year in order to realize our plans for penetrating the sports betting market in the United States following the recent regulatory changes. In Canada, INTRALOT has secured new contracts with the British Columbia Lottery Corporation in order to provide the full Lotos X implementation and assist the lottery in achieving results. In Europe, we have managed to both deploy new products and secure new contracts. We are proud to have achieved the launch of our full Lotos X implementation at the Greek operator, OPAP. INTRALOT has also implemented the EuroJackpot game under Lotos X at the Dutch National Lottery and has also signed the provision of lottery terminals at LOTTO Hamburg. As far as the second target is concerned, we have completed our divestment program through the sale of our stakes at Hellenic Lotteries in Greece, Totolotek in Poland and Gamenet in Italy, yielding a total cash benefit of more than EUR 100 million. As far as the third target is concerned, we have achieved cost savings of EUR 11 million at the HQ perimeter and as a result of the first wave of cost containment program. On the other hand, there were a number of events that affected our performance negatively compared to a year ago. The most important ones were the effect from the revised terms of the new OPAP contract for 7 months in 2019, preceding the launch of the Lotos X. The impact of the lost contract in Turkey with Inteltek for 5 months in 2019, and the turbulence in Morocco due to the loss of the 1 contract with SGLN and the final arrangements in the previous 10-year contract with La Marocaine des Jeux before starting the new contract at the beginning of 2020. Cost overruns in the U.S., mainly as an effect of the beginning of our landmark project in Illinois as well as the nonmaterialization of a machine sales expected in Ohio have also affected our performance together with the turbulence in the Turkish market through Bilyoner after the introduction of the new Sports Betting era and the worst performance in Morocco due to the nonperformance of the market. One more important unexpected development has been the loss of our Bulgarian business due to a change in local regulation at the beginning of 2020, which had no substantial effect on the EBITDA metrics of 2019 but had a substantial impact on NIATMI due to the impairments of EUR 20 million that we had to recognize in our books. Now at this point, I would like to ask INTRALOT's Group CFO to provide more details on our 2019 financials.

Thank you, Mr. Dimitriadis. Good afternoon, ladies and gentlemen. We will start with a short briefing with the financials guidance and achievements. We have succeeded in 2019 compared to the guidance we have given throughout the year. The first target was the CapEx to be in the area of EUR 55 million, which actually was the result of the year on track with what we have announced at the beginning of the year. The second target had to do with the efficiencies, the cost efficiencies at headquarters perimeter, which finally ended up at EUR 11 million, as also Mr. Dimitriadis said at the beginning, managing to overcome the annualized target of EUR 10 million we have set at the beginning of the year. The third target related to the proportion of EBITDA which finally ended at EUR 59.2 million, EUR 5.8 million less than our latest guidance in our previous call, mainly stemming from an underperformance in Morocco as well as the deconsolidation of Eurofootball in December. And the fourth target was to maintain a cash position for the shareholders of the parent, equal to the one we had at 2018 closing, which was EUR 85 million. So this number at the end of the year was EUR 153 million, largely supported by the noncore asset disposals that Mr. Dimitriadis already mentioned. Moving on to the details of our full year '19 financials and Pages number 6 to 8. The result in the revenue line was EUR 721 million, a decline of EUR 64 million versus a year ago, coming primarily from the markets of Bulgaria, Argentina, Turkey, Morocco and Greece, which performed negatively by EUR 87 million, counterbalanced partly by better performance in the U.S. by EUR 21 million and to a lesser extent, in the Netherlands and Chile by EUR 3 million. In Bulgaria, the negative variance of EUR 42.4 million is attributed to a high extent in the change of the consolidation method since December 2019 from full to equity method following the changes in the shareholders' agreement as a result of business developments in the market, but before the crisis outbreak in this market in early 2020. The reasons for Greece, Turkey and Morocco have already been covered by our CEO, while Argentina was negatively affected by the macro environment and strong FX headwinds. On the positive side, U.S.A. was positively affected by the newly introduced project of Illinois and the Netherlands, which presented an outstanding performance in the Sports Betting. As a result of the above-revenue performance, gross gaming revenue was also negative versus a year ago by EUR 26 million, landing at EUR 409 million, which is a deficit of 6% versus previous year, positively affected, though, by a lower year-to-date average payout by 0.8 percentage points, as you can see on Page #9 of the presentation. On the same page, you can see the EBITDA result, which for the year stood at EUR 87.8 million, lower by EUR 30 million versus a year ago, since the better performance of the United States due to the Illinois contract start in mid-February 2019 as well as the better performance of the Netherlands and Oceania. Altogether contributing EUR 10 million, did not manage to counterbalance the deficit of the EBITDA loss in the markets of Turkey, Morocco and Greece amounting at EUR 36 million -- minus EUR 36 million, but also from Bulgaria by minus EUR 4 million mainly due to the change in the consolidation method in December, but also a slight underperformance [ until then ]. In terms of EBITDA margin of sales, it was lower by 2.8 percentage points, with the main contributors for this deficit being the focus of headquarter resources previously allocated to the OPAP contract towards the successful and efficient delivery of our product and projects pipeline; secondly, the increased marketing spending in Turkey Bilyoner as part of the strategy to regain the lost market share after the introduction of a new Sports Betting era; thirdly, a nonrecurring provision in 2019 for personnel redundancies in our -- in Turkey Inteltek following the contract expiration in August 2019; and fourth, the high penalty provision in Morocco attributed to the final settlements of the previous 10-year contract. Moving on to the EBT line. The result for the year was minus EUR 70.6 million, lower by EUR 56 million versus a year ago. Apart from the EBITDA negative contribution of minus EUR 30 million, EBT was also affected by increased depreciation and amortization of EUR 18 million compared to previous year due to the large investments over the last 2 years; secondly, higher impairments by EUR 11.4 million, being the net effect of Eurobet impairments due to its license discontinuation, in part offset by the lower recorded impairments in Inteltek; and thirdly, the worst net interest result by minus EUR 6.2 million and gross FX by minus EUR 5.3 million, counterbalanced impact positively by EUR 14.4 million benefit due to the bond buybacks and the Hellenic Lotteries investment disposal. Moving on to Page #10. On the bottom left, we can see that the net CapEx for the year landed at EUR 55 million, lower by EUR 48 million versus a year ago, as a result of the absence of major contract implementations compared to previous year mainly in the U.S., but also due to the maturity of our products reflected largely on the lower maintenance CapEx, which was EUR 10.5 million lower compared to previous year and also -- in line also with our commitment for cost efficiencies at headquarters perimeter. Operating cash flow finally decreased by EUR 27 million and stood at EUR 61 million. While on a continuing basis, so after excluding the contribution of our discontinued operations, the operating cash flow was lower by minus EUR 14 million, affected negatively by the lower EBITDA, minus EUR 30 million, in part offset by a favorable working capital movement of EUR 19.5 million. The reflection of the financial metrics is presented in Slide #11. So we see that the net debt of the group improved by EUR 21 million -- around EUR 21 million, supported heavily by the non-core asset disposals, but also from the bond buyback program, while main negative variance were the costs related to the discontinuation of the Inteltek contract minus EUR 23 million. The growth CapEx in the U.S., to a large extent, attributed to leftovers in the major contracts in Illinois and Ohio, minus EUR 22 million, but also to CapEx and inventories for new or renewed project such as Croatia, Morocco, but also Turkey Bilyoner to cope with the enhanced competition in the market, which was minus EUR 14 million. Lastly, IFRS 16 first-time application at the beginning of the year also affected net debt negatively by minus EUR 15 million. And at this point, I would like to pass to Mr. Christos Dimitriadis, our Group CEO, to provide a short guidance for 2020.

Thank you, Andreas. So moving on to the second item of the agenda. We will provide a short guidance for next year's targets. In 2020, INTRALOT has reorganized its global structure in order to capitalize on the unrealized value it has recently created. And this -- actually, this reorganization is already complete. Technology will be the key enabler towards business innovation, and this is after all a reality introduced by the 4th industrial revolution that is nowadays blurring the line between the digital and physical worlds. Our technology is not only highly innovative, but it is also easily scalable, interoperable and extensible, welcoming all 4th industrial revolution enablers. Cost optimizations, time to market, market competitiveness and to all other drivers of profitability can be improved by using our technology as an enabler. Having said that, INTRALOT's reorganization established an even stronger technology factory, a customer-centric service provision organization, a strong finance division, and a very robust commercial arm. Our people are highly educated and experienced human capital, gives us confidence for the years to come. We are already running special strategic projects with technology focusing on digital innovation and, in particular, to high lottery and online sports betting. Finance is running the strategic project on the optimization of our capital structure; commercial on improving contract value and thinking new opportunities; and the service organization is focusing on cost efficiencies and improved quality of service. Now looking into the very near term, as in most of the sectors of the economy, 2020 performance will be highly dependent on the pandemic evolution reflected in its duration, governmental policies regarding restrictions implemented and the subsequent economic disruption it will cause. Having said that, we are following up the progress on a daily basis. We have prepared a mitigation plan to balance partly the deficit from measures in the OpEx and CapEx lines either through waiving of costs or through shifting of uncommitted CapEx and OpEx for a later period, to a high extent, however, related to the duration of the pandemic. Utilization of support programs from local governments, where applicable, are already in place or further investigated. We are cautiously optimistic and encouraged about the progress we made in addressing the pandemic, mainly due to the actions undertaken by local government for lifting gradually the restrictions, although we are not yet in a position to reassess the situation in the markets we operate in a satisfactory way as to provide updated feedback. Once we have a better view, we will update our communication to the market. On the operational front and with particular focus that will be given on the successful start of the betting contracts in the U.S., in Washington, D.C. and Montana, where our solutions are already delivered on time, but due to the pandemic that caused the postponement of NBA and other leagues, their performance is not set yet. Focus will also be given on the control of the OpEx after return to the $50 million EBITDA trajectory for U.S. lottery business. Focus will be given on the second wave of cost containment at HQ perimeter, primarily stemming from the maturity of our products to support liquidity from the bottom line. And finally, focus will be given on the preparation for a fertile ground for several identified opportunities in North America and across the globe. Those opportunities we are already working on with a medium 3- to 5-year horizon maturity to support liquidity from the top line. And this, of course, includes focus on digital channels and digital innovation that INTRALOT is ready to introduce to the market. Going forward, our CFO, will provide further guidance on the related numbers.

Thank you, Mr. Dimitriadis. In terms of guidance on forecast, the first target should be to maintain at least the same operational metrics as in 2019 with a lost EBITDA from our Bulgarian business to be recovered by the U.S. primarily, but also from newly introduced projects in Europe such as Croatia. However, this relates directly with the pandemic evolution, and it will be more prudent to check how it evolves and provide more specific guidance later in the year. As Mr. Dimitriadis already said, in relation to the pandemic, for the time being, we are fairly optimistic given that the latest developments in the markets we operate and the messages we are receiving from them as the restrictions are gradually lifted or loosen as [indiscernible] in the U.S. And for the time being, it seems that the impact shall be closer to the lower level of the range we have provided to the market. Having said that, it is still too early to revisit our estimation and provide an updated quantified feedback for the impact. In relation to the CapEx, again, part of it may be deferred for next year, given the pandemic issue, but the target is to be reduced by 10% to 15% on a normalized basis compared to 2019 levels, which was EUR 55 million as a result of no major implementation projects moving forward, but also due to the maturity of our products and the second wave of cost reductions program. All in all, the target for 2020 is to minimize or partially offset the negative effects of the pandemic, supported by our strong liquidity position while preserving it to the maximum possible extent. And of course, we will be updating the market once we are in position to safely reassess the situation. Especially for the U.S., the primary target is to return on track for the $50 million lottery EBITDA, after the first year of operations of our Illinois contract and the control of the expenses of 2019, to a very high extent attributed to the go-live of this landmark project and the renewal of our contract in Ohio. The second pillar is the successful start of the Sports Betting activity, which in 2020 is expected to be slightly negative in terms of EBITDA, being the first year of our presence in the market, while preparing the ground for a further expansion in the U.S. Sports Betting segment. Reduced CapEx compared to previous years, since there are no renewals on the local front, is our third target which would allow us to generate healthy cash flows even in 2020, while keeping the Bank of America revolving facility at minimum levels, just for working capital needs and for any funding that may be required for any opportunities that could arise. Of course, the performance of the U.S. is also going to be defined to a high level by the fundamentals in the market as a result of the COVID-19 evolution. And at this point, the executive team of INTRALOT has ended with a short presentation, and we are at your disposal for any questions you may have.

[Operator Instructions] The first question comes from the line of Wolfgang Felix with Sarria.

Yes. It's Wolfgang from Sarria. I have two questions. First of all, with respect to your central cost structure in Greece, and I suppose, Cyprus, if you need to now rightsize the business, given you have lost a few contracts around the world, where -- how able are you to do that? And where is perhaps a minimum size of the company overall that would justify the R&D spend, et cetera, that you need to go through every year and that would still support itself?

Thank you for the question. Actually, according to our strategy and the discussions we have with the Board, rightsizing is very important, as you very well said, but our focus remains on growth. And what we will target according to our business strategy is to make sure that our -- the maturity of our products and solutions will be able to add the value to the customers, shareholders and creditors of the company. So within that scope, as you very well know, size or investment also led to growth opportunities. And we believe that we are in a position to achieve that growth, taking into account that Greece is a country with less, let's say, labor cost than other developed countries. So cost efficiencies is certainly in our radar but our main target right now is to achieve economies of scale through the maturation of our products.

Okay. Would I be correct in estimating your central sort of R&D cost, et cetera, would that be approximately EUR 30 million or EUR 50 million per annum?

No. EUR 30 million is very low, EUR 50 million seems to be more honest.

You said R&D or total costs?

R&D costs.

No. No, no. I was talking about the total cost base.

Yes. So when I say R&D, I mean you split, I believe, the R&D into what you expensed within the year and what you capitalized through CapEx, if I'm not mistaken. I meant both together.

CapEx is much less. I was referring to the total cost base of...

Yes. Yes.

CapEx is much less. It's much less.

Okay. And second, in terms of free cash flow for this year now, ignoring COVID-19 for a moment the fallout, but perhaps factoring in the loss of the Bulgarian business and once again, ignoring any potential litigation that may come from that, et cetera, what would you estimate on that basis, before any of these one-off effects effectively, would have been your free cash flow for the year or net, if you like?

Actually, we wouldn't like to get into too much detail because due to the pandemic, it's not -- it wouldn't be prudent to, let's say, be specific on that front. We would prefer to see how it goes and provide such feedback as we move on throughout the year.

Okay. And then just a final housekeeping question. I may have missed it. I think many bondholders, obviously, this was from last year's perspective, were looking forward to potentially some plan from you around this time. Do you have any view on timing of any such plan at present? Or I appreciate that, obviously, the time is rather uncertain at the moment. And if you've had a plan, it's probably history at this point, but, yes, anything would be appreciated.

Absolutely. So a couple of weeks ago, we have announced the appointment of Evercore and all our financial and legal advisers, respectively. And we are making good progress in the preparation and assessment of the necessary materials to frame various options available to the group. So in relation to the time line that you have asked, our intention is to proceed with that process as soon as possible. And this is something that we're working on together with our advisers in order to address this issue in a timely manner.

The next question comes from the line of Mr. Kalogeropoulos, Ioannis with Beta Securities.

I have a question regarding your 2 outstanding bond loans maturing in 2021 and 2024. Are there any covenants included in the issue of these 2 bonds regarding your net debt over EBITDA ratios? Any closures, I mean for the bonds?

No. There are no covenants. It's just maintenance covenants regarding these 2 bonds. So occurrence -- sorry, occurrence governance, no maintenance governance.

The next question comes from the line of [ Walther Daniel ] with Morgan Stanley.

I had a follow-up on the U.S. Is it correct that you guided for $50 million EBITDA for the U.S. business? And if you could provide us a bit of a bridge from the current $34 million, that would be really helpful. I think you alluded to Washington D.C. and Montana already. And the other question was in terms of M&A interest, you obviously have very attractive businesses in the U.S. and Australia. Are you seeing sort of a number of people approaching you for these businesses today?

Okay. Let me elaborate on the first question that you raised regarding the U.S.A. We have said publicly many times in the past that our U.S. Lottery business is a $50 million EBITDA business. In fact, this was not succeeded in 2019. And the reasons for this primarily relate to some overruns that were related to the newly introduced contract of Illinois and the Ohio extension that required additional expenses, which were not provisioned. But the important thing here is that these costs are mainly one-off costs, so they're not there in 2020. This was around $7 million. The second fact is that we had a delay at the beginning of the year from the start of the Illinois contract, which started in late February. So this was a deficit from the top line of around $3.5 million. And the last one was some unexpected legal expenses in the U.S. in the region of $2 million, and also some administrative expenses at the headquarters, Atlanta, around $2 million. To a high extent, these were also one-offs. So they're not there in the current year as well. So we still believe, and this is why we mentioned it explicitly at the beginning of this call, that the U.S. lottery business is a $50 million business, which, depending on how the COVID-19 pandemic will proceed, we expect to see it, if not this year, definitely in the future. And let me also highlight here the fact that the first quarter of the U.S., excluding the last part of March, which has started being affected by the pandemic, was very good. So it was according to our expectations. So these things make -- so this makes us confident with the guidance we have given regarding the U.S. Lottery business.

That was the first part of the question. As far as the second part is concerned in the M&A, currently, we -- our strategy is more toward the side of partnerships in parallel with organic growth versus an M&A discussion. So there is no such discussion on the table. And as far as partnerships and the organic growth is concerned, this is a result of the impact that technology had in our industries and the creation of a more complex value chain and also the existence of ecosystems for creating additional value to our customers. So we're definitely looking for partnerships in order to enable our growth.

I see. Great. And maybe one quick follow on, on organic growth. I mean, I think the Greece partnership with OTE, I think that's a great project you are doing as well as maybe the contract extension in Australia is something you're pursuing. Are you getting any good signals there?

Absolutely, and this is a great point. Greek projects is a very big opportunity for us, and this is referring to a set-up of a JV with the Greek telecommunications operator. So we're looking into this very seriously as far as the online sports betting area is concerned. But I would like to add to this -- at this point that we have many opportunities in front of us, including the sports betting market expansion in the United States, specifically with our existing customers, but also as far as new opportunities are concerned. We are following up very closely. There are new developments in the United States. And we are in very close discussions with our clients in order to explore the opportunity should the regulatory framework allows this. On top of that, we have more opportunities in the area of VLTs, which we have enhanced very recently as far as our capability is concerned. And we envisage to move on with careful steps towards grasping more opportunities according to the global projects pipeline from renewals in the next couple of years. Moreover, we're looking very seriously into new opportunities in the digital space and especially in the iLottery space in the United States, but in Europe as well. And of course, as you pointed out, Oceania and Australia are certainly an area of -- strategic area of interest.

The next question comes from the line of Mr. O Sullivan, Brian with NatWest Market.

I have got a few. So just can you give -- can you tell us what your cash position is as of today, and what the estimated monthly cash burn is currently?

Cash position currently is around EUR 145 million.

And the cash burn, roughly, at the moment?

So it was EUR 170 million at the end of the year, so EUR 27 million.

Okay. Sorry. There's 2 questions then. So that EUR 145 million you're saying is the cash position currently. I'm assuming that is the total group, including partnerships, which probably are holding in the order of EUR 15 million to EUR 20 million. Is that fair? And the second part of my question is the monthly cash burn, your estimate of monthly cash burn at the moment.

Okay. First of all, the EUR 145 million, it's -- most of it around EUR 136 million, EUR 137 million at HQ perimeter, because currently the Inteltek, which was a great -- a very big part, also the Bulgarian cash was part of the group. So without these 2 entities, businesses, the group cash, to a very high extent, is also the HQ perimeter cash. Now regarding the monthly cash burn, before the pandemic, we were in a position to be, let's say, cash-neutral, excluding the coupon payments. However, at this point of time, it is difficult to assess because we are having the pandemic issue. And of course, as you can easily understand, it's a situation that needs to be supported. And it will be supported due to the strong liquidity we are currently having available.

Okay. That's fair. I mean look, I assume, though, you have got some handle. Roughly speaking, are we talking EUR 5 million or EUR 10 million per month in terms of a burn at the moment? Because clearly, I appreciate it's an evolving situation, but the vast bulk of companies we're speaking with have some sense in terms of what their burn is based on the current situation. And obviously then we can take our own view in terms of how things will evolve.

So as Andreas said, it's very hard right now to assess. And again, any number that we give will not be represented because it's a very special situation we're going through with the COVID-19 pandemic. Nevertheless, we have taken actions in order to reduce the impact of the pandemic, and we're looking into this very, very closely. And we're also taking advantage of any support we get from the local governments in the areas we operate in, primarily in the United States, in Australia, in Malta, and as far as other regions where governments took the initiative to assist enterprises and sustain their economies. But again, any number that we will give, I believe that it will not be representative right now.

Okay. That's fine. Just as maybe a follow-up to an earlier question then. Regarding a business plan and a proposal as a first gambit into bondholders in terms of what sort of the capital structure you would like to see post this, et cetera, and what the plan is for the future presumably excluding COVID-19, you mentioned as soon as possible. But I'm hoping you could maybe flesh that a little bit more in terms of give us a rough indication. Are we thinking another 3 to 4 months before Evercore and yourselves have agreed in terms of the strategy? Or are we talking a matter of weeks here before we can see the first proposal?

So this -- again, this arrives from our discussions with our advisers. And as soon as possible is our intent. And in terms of the specific guidelines, I think since this process does not depend on us, but it's a discussion that we're having with the advisers of -- or we will be having with the advisers of our bondholders. This is not something that we can estimate very accurately. And as far as the business plan that you said, absolutely, I mean, we have a business plan in place in alignment with our strategic intent. And we're very close to monitoring it in terms of execution.

Okay. That's fair. One very, very quick one for me, if I may, to finish. You mentioned you got prepayments from Canada and one other, I think it was the Netherlands, cash prepayments for new contracts. Can you estimate what those were, and whether you expect to have one from Ohio as well, which I think has been promised a few quarters, but I didn't see it in the annual report?

Okay. Let me take this one. Regarding Canada and NLO, it's EUR 9 million, the prepayment. And regarding Ohio, I don't think that we have ever said that there is a prepayment in Ohio. That's not something that we were expecting.

No. I think this is machine sales. So of course, it's -- was never set in stone, but I believe the state lottery themselves has put into their budget a quantum for machine sales, which you were expecting and hoping to make at some stage over the course of 2019. And I didn't see it in the report. I'm just wondering, perhaps then maybe asked a different way, do you still anticipate to make machine sales in Ohio over 2020?

For Ohio, as Andreas mentioned, the sale in 2019 has not been materialized. That's why also there is a deficit. We are still discussing with the state of Ohio in terms of the sales for the machines for 2020. Nevertheless, it's not including for prudency in the guidance and the numbers that Andreas set for you for 2020.

[Operator Instructions] The next question comes from the line of Kawada, Peter with Imperial Capital.

I just have a follow-up question regarding liquidity. I saw in February and March, you've got a new RCF in the amount of EUR 18 million. So can you tell us how much undrawn RCF capacity you currently have?

Regarding the new facility we have at EFG Luxembourg, for the time being, it's fully drawn. However, the other lines that we have in the U.S. with the Bank of America, this is fully undrawn. So it's $40 million available.

If I heard correctly, you have roughly EUR 136 million in cash, plus $40 million in undrawn RCF.

Right.

[Operator Instructions] The next question comes from the line of Kandalam, Jayanth with Lucror.

Just had two quick questions. One was a follow-up from the previous one. I didn't quite catch it. You said you had a new RCF, which was that the Luxembourg entity and that was fully drawn. Do you have the number for that, please?

It is EUR 18 million, 1-8 million euros.

Okay. And that sounds a part of the EUR 145 million of cash at March end, right?

Yes. It's EUR 145 million March end, correct, plus EUR 18 million as a facility, plus $40 million in the U.S.

Okay. Okay. Perfect. And just another quick one. I think you may have answered it, but I may have missed it, the line is not very great. So what -- did you provide a CapEx figure for the current year, please?

For 2019 or for 2020?

2020, please.

I have said already that depending on the evolution of the pandemic -- it highly depends on the evolution of pandemic because part of the program that we have prepared and we are implementing also refers to a deferral, let's say, of uncommitted CapEx lines for next year, if necessary. However, on a recurring basis, it is our strong target, one of the main targets we are having to reduce the required CapEx. And I said, 10% to 15% compared to 2019 number, which was EUR 55 million. But this highly, again, depends on how the COVID-19 will evolve.

All right. And one last question, if I may. Regarding the U.S. business, you mentioned, if I caught you right, that whatever at this point in time, if you assume that -- so what are the assumptions behind the USD 50 million EBITDA target? So are you assuming that the pandemic stops and everything goes on like as of now? Or in couple of months? I mean -- or is it -- does it -- or it's not related to the pandemic at all, but you're still going to achieve $50 million no matter what?

So we're still monitoring the situation. As you very well know, there is no final conclusion about the pandemic and its final impact. What we are observing is a slight improvement of the situation, but we're not yet in a position to provide a new update to the market.

[Operator Instructions] Ladies and gentlemen, there are no further questions at this time. I will now turn the conference over to management for any closing comments. Thank you.

So I would like to thank you all for participating in this call. I hope that you have found the information that we have shared with you very useful. And we will be updating you and the market regularly with the progress in our financials. So thank you very much.

Ladies and gentlemen, the conference has now concluded. And you may disconnect your telephone. Thank you for calling. Have a pleasant evening.