Solocal Group S.A. (LOCAL) Earnings Call Transcript & Summary

Hello, and welcome to the Solocal Q1 2021 Revenues Webcast. My name is Rosy, and I'll be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] I will now hand you over to your host, Pierre Danon, Chairman of the Board, to begin today's conference. Thank you.

Thank you very much, and good morning. Welcome to everybody. It's a pleasure for us to share with you our quarter 1 commercial results. But before I do so, I would like to introduce our new CEO, just next -- just recently appointed, Hervé Milcent. So Hervé, welcome on board again, and tell us your first thoughts, please.

Thank you, Pierre. Thank you very much. Hello all of you. Indeed, I joined finally Solocal 2 weeks ago. That means that I'm fully, fully dedicated and committed in my inductions so far. I am very exciting. Solocal is a very nice company, very well positioned on the French market. So everything is gathered to develop the success of this company. So I'm very, very happy to be here.

Thank you, Hervé. I'm going to take you to the first slides, through the first part of the presentation. And then Olivier Regnard will follow, and I will wrap up the call and open for your questions. So highlights. For us, one of the most important fight, and you remember that, was to stabilize and then grow the customer base. Well, I will come back to that. But we -- you remember, in quarter 4, it was stable with a very, very slight increase. Here, it is still stable with a very, very slight decrease. So we are where we wanted to be, and we absolutely confirm our ambitions for moderate growth of the customer base this year. What is also very important, and Olivier will come back to that, is that we need to assess the quality of the quarter 1 activity. We -- it's complex because the order taking is not the right reflect as such as of the activity because of many phenomenon. We have already covered that with you. So now what we measure is the contribution of the order taking of the first quarter to the revenue of the 12 months following rolling, which is, for this quarter, it's more or less the revenue of this year, more or less. And that's very important. So we have taken a lot of orders. Those orders, Olivier takes them. And look how much revenue they are going to generate for this year, 12 months rolling. And then we compare that to what we did last year, same period. And because of the cutoff of the revenue and the order taking, it is March 15. So we can safely say that compared to last year, there was no COVID impact last year at the same period. So the 2 periods are comparable, and the growth of that contribution is plus 2.6%. It's not a massive growth. We hope to do -- continue to ramp it up, but we are very pleased with that. It shows that following years of decreasing activity, when you measure it properly, it is starting to get on a path of growth. A lot remain to be done. And I have to tell you that what has happened in April about the COVID restriction in France is a worry to us. I have never worried about COVID since I took the helm in August of last year. But now I have always told you, if they close the schools, it will be a problem for us because our people cannot work, some of our people, roughly 30% of our people cannot work because they have to take care of the kids. And also, our customers cannot work properly, exactly the same. So we have difficulty to reach them, same kind of proportion. So we have been hit in April. It is absolutely under control. The good news is that we know for -- almost for sure that on 26th of April, the schools are going to reopen. That's very important for us. We even hear that is not for sure that the government is thinking about reopening progressively a lot of the economy that has been shut down. That should create a rebound in May, June. We are ready for that. So we think that the impact of the COVID in April, which is significantly material, but not devastating, this impact will not last in May and June, and we could even beneficiate from a rebound. So we will keep you posted at the end of quarter 2 of where this has taken us. But let's say, on our first quarter, we are quite pleased with the change, the inflection to growth that we have seen in our order taking, the contribution of order taking to revenue. The revenue itself, it decreased by 10%, which is more or less what we were expecting. You know that when we take an order, it takes, in average, 18 months to get fulfilled into revenue. Remember that last year, in March, April, May, we have been hit very seriously by the lockdown, the complete lockdown. So the order taking of last year is -- was very bad to us, and it's not a surprise that the revenue has decreased by 10%. It is in line with our own expectations. Finally, in terms of the highlights, in terms of customer service, you know I have always told you, this is really customer service and care. This is really the fight, the first step of the recovery of the company, and I will comment on that. It is ongoing. And it is -- the progress is in line with our expectations. Remember that I told you, I committed that during summer, we would get to a customer service which will be acceptable. I'm not saying good, but remember that we come from catastrophic a year ago. So getting from catastrophic to acceptable is a first step. And of course, we will not stop working because we think that it's even our positioning to be good in customer service. Now on the next. That's what I said about the customer base. You see we were at 315,000 when we started the year. We finished at 314,000. Just to step back, look last year, we started at 349,000 and we finished at 338,000. So you see that last year, we were continuing quarter-after-quarter to lose more than 10,000 customers. And this year, it's almost stable. And that's very, very important to us. We have worked very hard, and you can see that it is mostly coming from the churn reduction. We lost last year, during the same period, 23,000 customers. This year, we have lost only, if I may say so, I don't like to say that, 14,000 customers. So a massive churn reduction, which you will see in terms of churn rate, it shows very clearly. On the opposite, you can see that in terms of acquisition plus winback, here, we have done 13,000, 9,000 plus 4,000. Last year, we did 12,000. So one cannot say that the acquisitions are really on the up. It is reasonably stable, and that's very important to understand. Quarter 1 was the last quarter where we had some migration to do. And now Olivier will comment on the proportion of the customer base, which is in subscription mode. But we can say now, at the end of quarter 1, that we have finished the migration. And therefore, we can, and you remember that it is our strategy and I will come back to that, we can refocus completely our efforts -- not completely, never completely, but massively to acquisition. So that's why from a stable base of the customer base in quarter 1, we absolutely think that we will continue to have the same kind of good churn results, probably slightly better. And at the opposite, we will ramp up acquisition as from quarter 2. And that's why we are very comfortable to say moderate growth for the customer base. What is also quite important that we don't want in Solocal, to grow the customer base at the expense of the ARPA because I can -- If I take customers at EUR 200 per year, maybe I can increase and I will have a lot of customers, but that's not what you, as shareholders, want. So you can see that the average ARPA is stable, which is really our goal. We have always said to -- with Olivier that we wanted stability. I'm not excluding that we could potentially try to increase it because the market potential is there. But let's say, we remain very cautious about that, and stability is what we guide to. So if I get to the next chart, you can see the churn rate, the net churn rate, which is the churn rate net of winback. Winback, I remind you the definition, winback is a customer who has churned, so we have lost the customer, and within 3 months, we authorize ourselves to get back to the customers and try to win them back. And that's why the notion of net churn is a notion that is quite interesting. Last year, it was 19.7%. This year, it's 16.7%. So it's good. What is even more encouraging is that we continued, for the customers who are in subscription mode, when we do a cohort analysis and we look those customers, they churn at 9%, and it is stable since October. So it's a good number, which explains why we continue to think that our overall churn rate is going to slowly decrease because it has to converge a little bit towards 9%. Now be careful, not all the customers are in subscription. So it will never be 9%. It will be substantially higher, but it will go from 16.7% further down throughout the year. In terms of retention rate, we are stable. I always told you, we have now 61 people who are doing retention day in, day out. And they retain the customer at 52%. This is very stable since now, I would say, 3 or 4 months. So I told you I'm not going to hide stuff. Yes, we are happy about the churn evolution, very happy, but it's not the end of the fight. Because now the question is not to keep customer at any cost, the question is to keep customer and maintain the value as much as possible. And when you think about that, the real question is that we have usually 2, as you know, we have 3 range of product, Websites, Digital publicity, the Booster range and the marketplace Connect. It is quite easy for a retention guy to say, okay, the customer is coming with a website and it's coming also with Connect. The website is EUR 150 per month, Connect is EUR 39 per month. I'm going to retain the customer with Connect and drop the website. Everybody seems to be happy because it is less churn. Olivier Regnard and myself are not happy because that is destroying value. So the next phase of our efforts, and it has started, is to really focus on what I would call product churn and slow down not only customer churn, but product churn and especially the website churn. So you will see the results probably in quarter 2, maybe in quarter 3, but we have really substantially focused the company on that. It will help us maintain the value. And we have also a last -- the third point, which is we were a little bit soft on what I would call early cancellations. It's the guy, we have sold him maybe a website or a Booster through telesales and, yes, for a month or 2 weeks, is not sure that he really wants the product. And we were letting that without a lot of focus. We are now focused because we realize that if there is a sign that the customer is not totally committed and will cancel, we can do a very good job at firming up the offer. All those, you see, it's after the first big battle, which was reduce the customer churn, now we are in second degree battle, but very important in terms of production and cancellation. In terms of customer service, as I said, I think we are on track. If you look at opening hours, we are now more and more spreading the hours to move away from too much administrative approach. VSEs, SMEs, they want us to be open after 6:00. They want us to be open potentially during the weekend, certainly the Saturday. So we are continuing to open access from the customers to us outside of, I would say, standard hours. Quality of service, which is when our people pick up the phone. When somebody calls us, do they pick up the phone? We are at 91%. It is stable. We are where we want to be. In terms of efficiency, that's very important, it's what we call the once and done. So in other terms, when somebody calls us, he has a problem, something to do, how many times do we resolve the issue immediately once and for all? Once and done. Today, we are at -- we want to be above 80%. We are there. Now I would be a little bit cautious about that measure because there are potentially tricks around the way we measure it. I think it's reasonably honest, but we are going to firm it up to be sure that we don't bulls*** ourselves. And then the big problem of the company is the call rate. The call rate versus the customer base is too high. It's -- we are at the level of 1.06. We wanted 1.9 -- we start from 1.19. We are at 1.06. We want to get below 1. And it is a double whammy. So I don't know, in terms -- very often, for example, customers are calling us because they want a duplicator of their factor of their invoice. That duplicator exists in Solocal Manager. So they could have it immediately just by opening Solocal Manager. So by training our customers on Solocal Manager, we can avoid calls, unnecessary calls. And we are really working very hard on digitalization, quality of invoicing, pedagogy around the offers and others, and the customers can self-manage as much as possible. Where we are still not where we want to be is on speed of resolution. We still have too much inventory of request. And you can see that we are completely outside where we want to be. We want to be fundamentally at 5 days, we are at 16 days. This is not good. And we are going to continue to press on to get towards 5 days around the summer. We measure -- we were not doing that, but we measure now customer satisfaction at each touch point. It's a very simple measure, 1 to 5. We want to be above 4. We start from something that is probably 2.5. We were not measuring, so it's a good feel. It's not something scientific. What is scientific is what we measure now, and we are at 3.7. It gives you exactly the feel of where we are. It's progressing. It's getting more and more towards the acceptable, but we are not yet there and we have still some work to do. In terms of website, website is really a critical activity for us in Angoulême. Fundamentally, we are now almost 100% in Angoulême, although it's a web factory. It's one of the biggest web factory of Europe. And you can see that since January 2020, we have really, and especially recently, we have ramped up the production capacity. And it's not the -- all the people because you have customer service and plenty of things, but the production capacity is now has moved from, let's say, 60 to 100. That's a major step forward. It's not easy to recruit webmasters and to train them and to have a ramp-up in terms of the production capacity. But we are starting to get where we are. We're where we want. And you see those delays where we are still behind in terms of Website Premium and Privilège, the high end. I think we can reduce that and accelerate production in quarter 2 and quarter 3 as that's very important because acceleration of production means cash, revenue, but also cash. And that's very important for Olivier Regnard and myself. So we really believe that by pushing that -- and our Deputy General Director, Eric Klipfel, is at Angoulême today with a mission to see how we can further accelerate, taking advantage of that production capacity without jeopardizing the satisfaction rate, which, as you can see, are very good. So it's not the question of doing what we have done 2 years ago, which is sacrifice customer satisfaction for productivity. It's to maintain or even improve customer satisfaction, but slowly, steadily step up the rhythm of production. And to finish with, I will -- well, you know that audience for us is very important, direct audience and as well as audience with partners. Well, we are not unhappy with the results. 3.9% decrease of audience is a slowdown of the decrease. Even 7.2% decrease of the SEO and direct is a slowdown of the decrease. I am not happy with that. I cannot tell you that we are, through the transformation of PagesJaunes into a marketplace, it is just the beginning of the journey. I think we'll hit some disappointments, but we know where we are going. Hervé, I was discussing with him, I think -- he thinks with further investigation, he will firm up his view. But his first view is that it's an interesting strategy, and the direction is potentially promising. But let's be very, very careful. It will take time. It is more a 2-year fight than a 2-month fight. Nonetheless, we are continuing to working -- to work. We have a new home page, which is much more dynamic, much more professional-oriented. We are working on the application to make it more local, more appealing, more customized. But again, it's a long journey. In terms of the marketplace, you know that our flagship product is Connect. It's from a paper directory to a digital directory, PagesJaunes [ Paffer ], and now to a marketplace. And the product that is a symbol of the marketplace is Connect because Connect helps a pro to offer more services to the audience. So the audience doesn't come just to find an address or find a phone number, but the audience comes to do business with the professionals. That's the major transformation. That chart gives you a view of all the features. I'm not going to take you through all of that because you know. But I want to insist on 2 things which are new. On March 21, and look at -- it's written, it's more on the down part of the slide, we are offering a new product called Connect Privilège. So you know we go from Access to Essentiel to Premium, which is the heart of the range. And now we have launched Privilège, and it looks like it's a promising start. And what we offer fundamentally is what is on the right side. On the right side, what we offer is the possibility to the pro to do direct marketing. So fundamentally, to have a CRM system, very simple. It's not Salesforce.com. But it's very simple, and it's enough for a baker or for a builder. And from that CRM database, he can do SMS campaigns or e-mail campaigns, very important tools on the day-to-day life of the professional. We have added also on Connect Privilège something that we do for our websites, which is a photo set, a professional photo set. Again, the professionals, they can do that, they do with their iPhone, et cetera. But there, we have spotted that they really like to have something very professional, and we have a very good organization to provide that. So that's Connect Privilège. And the other initiative which we are working on, where we are, we are the -- we are on a next -- we are on a soft launch approach, it is the beauty, the beauty market, hairdressers, beauty institute, massage, salon offer, name it. Whether, by the way, large retail accounts, Jacques Dessange, Sephora, Nocibé and the local independent professionals, we have developed a superb offer. I really mean it. The first level is Essentiel, Connect Beauté Essentiel. It's a EUR 39 basic offer. And what it gives is exposition of the hairdresser to the whole web, of course, Google, PagesJaunes, Instagram, Facebook, very, very important; and the opportunity to book appointments, which is where our estimate competitors, Treatwell, Planity, have entered the market because they have offered exactly like Doctolib did to us 7 years ago or Booking did to us 10 years ago, the possibility to make an appointment. And we don't want to let that happen on the beauty market. We are very clear. This is the line in the sand. We are going to fight. And now we are offering this Connect Essentiel, EUR 39, where you can make your booking appointments and where you can also do SMS and e-mail campaigns to your customer base. The midrange product is the product that I want to push because it's a unique product. It's Connect Beauté Premium. It is EUR 69. And what I find fantastic for EUR 69 is that you have, for the same price, a set web, which in our range costs EUR 69. So we offer a set web. It's a bundled offer, a set web, and Connect Beauté Essentiel. So EUR 39 plus EUR 69 for the price of EUR 69 bundle. We think it's a fantastic offer, and we are going to push it like hell. And then we push to Privilège, EUR 79, where fundamentally what we offer is a click & collect shopping capabilities, which is quite interesting for the beauty salons because we have learned that that's where they can gain additional margin and profit. So we are officially starting May 3. And we have really -- our ambition is that this time, on the vertical market, we will not lose. Will we -- how we will do versus Planity? Time will tell. I'm not arrogant. We'll see. They are a very good competitor. So we'll see how we do. But we are not going to lose that fight without giving it a very, very serious fight. And to continue on, the reason why I'm increasingly confident about acquisition is that you remember, we decided in August, it was my first decision actually, to recruit a hunter sales force. We have maintained our field sales force at 400. But before August, we had 400 guys who were doing migration and acquisition. And we have thought that because we needed less migration time, a smart way, instead of telling everybody you will do less migration and more acquisition, we have people who prefer to do migration from their history with PagesJaunes. So we tell them, okay, you like to do migration or cocooning or farming customers doing cross-sell, please continue to do that. We have reduced the numbers to something like 300, and we have put 100 hunters, people who do only hunting. We have recruited from our sales force people who were very interested to do that, but we have also recruited from the market. It has been, to our satisfaction, very easy to recruit, which tells us that our offer is a good offer because we had no problem to recruit more than 80 guys. And what is really satisfying, that we kept 78% of them. When you recruit very quickly a big sales force, you have people who do not fit or do not like or whatever. So 78% keep -- is a good keep. We are happy about it. And we are even more happy that in average, for their first quarter with us, some of them did not even start in January, for their first quarter with us, those guys delivered, in average, 28 new customers per hunter and per quarter, which means that as a start, just we are at 120 per year. This is just a start. What we want is 140 per year to have a payback in 1 year of the acquisition. As you can see, we are not far. And what is very, very good is that actually the ARPA, the average ARPA of those guys is EUR 1,526. So when I was telling you that I think that we can do better than EUR 1,300, that shows that it is not impossible. And we are slightly behind the full year goal of 140 because we are at 120, but we are above the ARPA goal because we said that the ARPA goal was EUR 1,400. So as you can see, we have very high hopes. It's going very well. It was a very smart decision, very well executed by our HR, by Eric Klipfel and our sales managers, and we are happy. And to finish with, because I know that some of you asked a question about the morale of the company. Sometimes, when we have some discussions with our unions, some of the unions immediately take the initiative to push it to the press. And we have a little bit of press rumor about morale in the company. It is very anecdotical. There is only one union who is doing that. It's very, very anecdotical. And what matters for me is numbers. And we have done, in January, February, an employee satisfaction survey, classical, the right method. Participation rate, 80%. You can see that when we measure the overall positivity, we are at 72%, which is 7 points higher than 2020. When we measure, which is really the key measure, is the commitment to the company, we are at 75%, 5 points. Let's be humble. It is not still what is very good. A very good company gets to 80% commitment. So we are still behind, but we are progressing fine. As you can see, and that's my key point, in terms of work atmosphere, we are at 92%, plus 30 points versus 2020. And at 92%, I think we're where we need to be. Goals are perceived as clear, very important to make the company work, 79%, 11% above 2020. This is also good. Confidence in the firm's future, you can see that it's progressing, plus 17 points, but only 63%. So we need to control that with time and ensuring our people, for example, that the liquidity of the company is okay. And I have told that, and I'm saying that again on record, the liquidity of the company is okay. I'm not saying that we are a rich company. I'm not saying that we have plenty to waste. Olivier, myself and now Hervé, we are like [ hawks ] on cash and ensuring that we protect the cash position because we remember last year, it will always stay in our mind. Nonetheless, it is now starting to be, I would not say comfortable, but it's starting to be sufficient. And you can see also that our people, in terms of customer focus, 11% increase, that's good, but 69% only. People -- our people still expect that we do a better job for our customers, and that's what we are working on. I'm now going to give the floor to Olivier to take us through the numbers of revenue.

Good morning, ladies and gentlemen. I am very happy to be there with Pierre and Hervé to present you the Q1 current trading from a financial standpoint. So as already mentioned by Pierre, we -- our revenue for Q1 2020 stands at EUR 106.6 million, so -- which is a decrease by 10% against last year, Q1 2020. I am sure that you perfectly remember that this was expected and that during the financial year presentation, let's say, we told you that H1 revenue will decrease compared to last year. If you remember well, our order intake do convert into revenue in a 12- to 18-months period of time. So the significant impact or drop in order intake of the first lockdown last year, beginning mid-March, did still has -- have an impact in Q1 2021, while it did not at all impacted Q1 2020. Moving forward on our subscription, let's say, model. Now 88% of our order intake is done under this model. And as you remember, we should, more or less, let's say, be capped at this type of amount of, let's say, of proportion since all our products cannot be, let's say, subscribed under this type of model, especially on our large account networks. And we are working hard on it in order to be to, let's say, to spread this model on all our, let's say, customers and product bases. Now in terms of backlog, our backlog at the end of March 2021 is stable compared to December 2020, meaning that the order intake of the first quarter did cover, let's say, the conversion in revenue of the backlog end of December 2020. Now let me drive through this indicator, which is what is the revenue already secured for year-end. You know that we used to give you this type of indication in order to be in a position for you to, let's say, to assess, let's say, what could be our revenue at the end of the year from a financial perspective. So currently, we already had recognized EUR 106 million in terms of revenue. And our backlog end of March 2020, EUR 206 million of this will be converted into revenue during the next 9 months, meaning that we already have secured EUR 310 million of revenue for 2021. When we compare this amount to last year, it is decreasing by EUR 50 million -- a little bit more than EUR 50 million, and it was perfectly expected and in line with what we highlighted you end of December. Clearly, next quarter, this gap should decrease because we will benefit from, let's say, a positive impact of, let's say, of the -- well, the first lockdown impact last year. Now if we are moving to, let's say, the revenue per product category, if you remember well, we have 3 product category. The first one is Connect. It's our former Presence category. That is more or less the same type of product. The second one is Websites. And then Booster, which gather all, let's say, the advertising products that we currently sell. On the Connect perspective, we clearly will refer to the benefits of all the products revamping that we have been doing in 2019. And on top of this, clearly, well, the lockdown, the current context helped us on this product since our customers need more and more visibility on the Internet. Then on the Websites, you see that we registered a decrease by almost 25% compared to last year. But I think we should, let's say, analyze this matter in details. So first point, as already mentioned, we have been suffering from production issues until early 2020, and it took us some time to, let's say, to reassure our sales team that now everything was back on track. Second point, clearly, Websites are a higher investment for our customers because their ARPA or, let's say, the cost of a website is clearly higher than a Presence product or a Connect product. And last but not least, we benefited in 2020, in Q1 2020, from a one-off effect, a favorable effect, meaning that clearly, while the comparison is not perfect, restating Q1 2020 from this one-off effect, we would have registered a stable revenue compared to last year. And the revenue that we registered in Q1 2021 is, let's say, quite consistent with the one that we registered in Q3 and Q4 2020. And clearly, we expect that for the coming quarters, it will remain stable plus. And you have to take into account that, let's say, the time lag between an order intake and the revenue recognition for our website is clearly longer than for other type of products. Now on the Booster side, which is our biggest, let's say, category, which gather all advertising products, clearly, this is the one which has most suffered of the loss of our customers -- the decrease in our customer base, but also because a lot of our customers' shops and so on have been closed for some time. And so they did decrease to -- let's say, they did decided to decrease their advertising budget and especially the large accounts. Now if we take a little bit of time on, let's say, the benefits of our subscription model, you know that -- well, this graph aims to, let's say, highlight what is the part of revenue within the quarter is generated by auto-renewed -- already auto-renewed contracts. And if you are looking at Q1 2020, 12% of our revenue was generated by auto-renewed contract, meaning that 12% of the revenue was generated by contracts which did not need any, let's say, commercial action. In Q1 2021, this portion increased to 24%. Why? Because the first cohort of, let's say, our subscription model roll-out and implemented end H2 2019 did renew end of Q4 2019 and Q1 2020. It's why the portion of revenue increased significantly. And this will be mechanically the same thing over Q2, Q3, Q4, meaning that this portion will increase, increase and increase. It is, in some way, our way to immunize ourselves against any, let's say, problem in our commercial actions. Now before leaving back the floor to Pierre, I just wanted to come back a moment on our KPI which highlights, let's say, the contributions of our order intake over the next 12-months period in terms of revenue. So we do perfectly understand that our change in business model makes it quite complex for you to compare one year for another. So this KPI is clearly aiming to, let's say, help you to monitor what is our sales dynamic currently. And so in Q1 2021, the -- all the order intake that we have, let's say, registered will convert into revenue, will convert into EUR 79.5 million revenue over the next 12 months rolling. And this, comparing it to last year, means an increase by EUR 2 million or plus 2.6%. So this is very important to understand this KPI because it means that we secured, during Q1, EUR 79.5 million for the next 12 months. And this is also important to notice that for Q1 2020, as already mentioned by Pierre, there is no impact of the COVID. So these 2 numbers are quite comparable. Now I will leave the floor to Pierre to conclude this presentation.

So in terms of going forward, and again, I have to put the caveat of the COVID crisis, I have explained, so far, I think it's under control. As far as the schools are reopening as planned on the 26th, it will have been a once-off for a month. It will have consequences, but certainly not devastating consequences, and we can swallow that. But we have to be a little bit cautious, and that's why I'm putting that word of caution. But fundamentally, what we reiterate is our guidance. Customer base, moderate growth. It's an ambition that we confirm. EBITDA, EUR 120 million. This is a guidance that we think that so far is on track. And we have, with Olivier, made a lot of, I would say, progress in terms of cash management and in terms of cost management. So we are capable to adjust the cost, if needed, to whatever, let's say, under control impact on the order taking would be. And I could not insist more on the fact that the cash position is absolutely as expected on 31st of March. It's actually slightly above our expectations. And therefore, our liquidity, and I'm saying it looking at your eyes, our liquidity is fully secured. Even if there was a crisis, as long as it's not a nuclear war, if there is a crisis, we have enough to resist and to go through the potential big storms that would come. I don't hope for it. I don't think, by the way, it will come. But nonetheless, it's very important for our company. And that is attribute to the restructuring that we have done. It is because we have reduced the debt. It is because we have reduced the interest charge. It is because we have created a buffer of cash, which we had at the beginning of the year, which was worth EUR 61 million, if you remember. It is because of all of that, that we are in a position to go through potential turmoil even if I don't wish for the potential turmoil. That's, in a way, a response to a lot of people who say, why did you restructure? Well, if we did not restructure 1 year ago, we would be in a very serious trouble today. Our priorities are very clear. First and foremost, customer service. We will succeed because we satisfy our customers. This is really our mantra. Operationally, we need to continue our effort on reduction, on churn reduction, with really this focus on product churn, especially on the Websites. And because of the end of the migration, we now need to shift even more attention to acquisitions at the right ARPA level in order to create profitable growth for the company. Thank you very much. Thank you, Hervé. Thank you, Olivier. And now we are fully available for whatever question you may have.

[Operator Instructions] We currently have no questions coming through. [Operator Instructions]

Any e-mail question or -- [ Xavier ]?

Yes. First question. Is there seasonality in churn?

No, I don't think so. I don't think so. I don't see any seasonality in our churn. There is, if you want, the seasonality now of the subscription. So it is true that if we have quarters with biggest subscription volume, 1 year after, we might have a seasonality linked to that. Honestly, Olivier, I don't know if you want to comment, but I don't see much of that.

No. There is no -- there should be no significant seasonality between one quarter to another one. They may be -- they might be in the future some seasonality, but from one year to another one, because we launched our 24 months, let's say, subscription model. Well, 24 months, let's say, length contract, so we will have cohort effects. But Q4 and -- Q4 2020 and Q1 2021 churn are quite comparable. We lost net from the winback probably 10,000 customers in Q4 and 10,000 customers in Q1, meaning that it's, let's say, stable and comparable.

On the phone?

Again, we have no -- apologies, we have no questions on the phone lines.

I'm going to give it 30 seconds in case somebody wakes up. As you know, our very competent Investor Relations team, under the authority of Julie Gualino-Daly and with Colin Verbrugghe and [ Xavier Routelzo ], are fully available. I know that you interact a lot with them over the phone or via solocal.com. Don't hesitate, we are always available. And if there are no further questions coming, I thank you for your attention, and I see you very soon. Goodbye.

And before we do disconnect, we have had a question last minute by the phone lines. Would you still like to take that?

Happy to take it.

So this question comes from the line of Eric Blain from Finance Connect.