Patrizia SE

SWB:PAT

Earnings Call Transcript 2018-Q3

[Operator]

Ladies and gentlemen, thank you for standing by. I am Stuart, your Chorus Call operator. Welcome, and thank you for joining PATRIZIA's 9-month 2018 Conference Call. [Operator Instructions] I would now like to turn the conference over to Karim Bohn, please go ahead.

[Karim Bohn, CFO & Member of the Managing Board]

Thank you, Stuart, and good afternoon, everyone to our earnings call on the results of the first 9 months of 2018.I'm referring to the results presentation on our website and you might have noticed the new design of our presentation and the quarterly statement. This is the new design of One PATRIZIA, in other words, a harmonized corporate identity of all 4 companies integrated into one.Starting with Page 2 of the presentation. Our earnings and new guidance shows that the integration of the acquisitions and the rationale behind the acquisitions is working. We have ended the first 9 months of 2018 with very strong earnings, and we increased our earnings guidance for the rest of this year.We have increased our assets under management by 83.5% to EUR 40.2 billion. By geography, the split now amounts to 63% with German assets and 37% or EUR 15 billion outside of Germany. The AUM growth, by the way, is in line with our guidance and our expectations.We have delivered again on organic growth, despite higher disposal activities because next to the acquisitions, we have also won new asset management mandates, which are not included in the acquisition volume and, therefore, not reflected in the transaction volume. We have significantly increased our operating income by 110.5% to EUR 98.1 million, up from EUR 46.6 million in the first 9 months of 2017.For the remainder of the year, we still expect an AUM growth, total AUM growth, of EUR 2 billion to EUR 3 billion and a total AUM growth, including our acquisitions, of EUR 18.9 billion to EUR 19.9 billion. And we have increased our operating income guidance for 2018 to slightly above EUR 140 million in expectation of another strong fourth quarter of 2018. We have, therefore, increased the second guidance update from EUR 100 million to EUR 110 million to slightly above EUR 140 million.As I mentioned in the earnings call on the -- for the second quarter of 2018, we do expect cost efficiencies of EUR 22 million to come into full effect in 2019. Also for 2018, the tax rate will be slightly better than guided, and we do expect a tax rate of 20% to 23% compared to the guidance of 25%.Talking about the operating income in a little more detail on Page 3, and I'm referring to the chart on the right-hand side of the page. We have increased our management fees by 91.5% to EUR 127.7 million. Collection fees are up year-on-year by 1.9% to EUR 32 million. Performance fees have also significantly increased by 62.8% to EUR 50 million, and the net sales revenues and co-investment income is up 98.2%, almost doubled to 38% (sic) [ EUR 38 million ]. Our net operating expenses only increased by 47.7% to EUR 141.5 million, and hence stayed well below the growth rate of the management fees of 91.5%. So if you add all those numbers together, take out D&A, you get to an operating income of EUR 98.1 million, so up 110.5% year-on-year.Total service fees on Page 4. Total service fee income is up 62.8% to EUR 209.7 million. And for the full year, we do expect total service fee income to come out between EUR 310 million and EUR 335 million.Management fees, as mentioned earlier on the previous page, is up significantly, 91.5% to EUR 127.7 million. And for the full year, we do expect management fees to amount roughly EUR 170 million to EUR 175 million, and we have also increased the guidance on management fees. The initial guidance was EUR 162.5 million to EUR 170 million that has now been increased to EUR 170 million to EUR 175 million.Transaction fees contribute EUR 32 million to the total service fee income, and accounted for EUR 17.9 million for acquisitions and EUR 14.1 million for disposals. For the full year, we do expect transaction fees to come in between EUR 50 million to EUR 60 million, so we slightly adjusted the transaction fees downwards from EUR 55 million to EUR 62.5 million to EUR 50 million to EUR 60 million.As mentioned earlier, we already generated strong performance fees in the first 9 months, and they are partly included in revenues, with EUR 37.6 million and partly included in income from participations with EUR 12.4 million. And as I said, due to the strong performance so far and the better-than-expected development of revenues in the fourth quarter, we do have adjusted upwards our guidance for the remainder of the year.Transaction fees, moving to Page 5. Transaction fees are up 15.7% from -- sorry, transaction volume is up 15.7% from EUR 3 billion in the first 9 months of 2017 to EUR 3.5 billion in the first 9 months of 2018, despite lower transaction activity across all sectors in the European market. European market is down 15 -- or 14.2% from roughly EUR 200 billion in the first 9 months of last year to EUR 170 billion in the first 9 months of 2018. Transaction fees are slightly up, almost 2%, from 31.4% -- from EUR 31.4 million to EUR 32 million in the first 9 months of 2018.One note in our conservative valuation of our AUM, and that is reflected in 2 KPIs. Without the GBW reevaluation, the valuation uplift is only 0.8% across our assets under management, as we still produced a positive valuation impact of profit of 20% in the disposals we made for our clients this year. We transacted on EUR 1.8 billion of sales and produced a profit for our clients of EUR 300 million or 20%, and that's a very good indicator for the conservative valuation of our property portfolio across the board.Also, on another note, fundraising. We raised EUR 1.5 billion of new equity so far this year, and around 40% of our equity raised in 2018 comes from international investors outside of Germany, and that really confirms our success of our international fundraising strategy and initiatives.Performance fees on Page 6. We have produced an average IRR across all funds and structures of 12.1% with a median IRR of 6.8%. And these strong IRRs across the board are producing and continue to produce significant performance fees. We increased performance fees by 62.8% year-on-year from EUR 30.7 million in the first 9 months of 2017 to EUR 50 million in the first 9 months of 2018. And as I said, we do expect performance fees to amount to EUR 90 million to EUR 100 million for the remainder of the year.Now one of my most favorite pages is Page 7, on profitability and costs. Our productivity and efficiency measures are reflected, particular in our total expense ratio, which shows that our operating platform is scalable, that scalability works, and it continuously improves our cost ratio. Our cost ratio has significantly improved from 80 bps to 51 bps in 2018, starting from 1.14% or 1.2% in 2012 or 2013, respectively, so there is a significant improvement in our total cost ratio, which we do expect to continue.Also, the year-on-year improvement of our EBITDA (sic) [ EBITDAR ] margin is quite impressive. If you look at the funds -- if you look at the EBITDA (sic) [ EBITDAR ] margin produced only in the fund management business, we started at 8.1% in 2012 and produced 28.8% in 2017, 36.2% in the first 9 months of this year, and for the full year we do expect an EBITDA (sic) [ EBITDAR ] margin only from fund management to amount to 38% to 41%. And the total business is expected to produce an EBITDA (sic) [ EBITDAR ] margin of 42% to 45%.So we have really transformed the business model, not only operationally, but also from a margin perspective. We have transformed the business model from being a European or German resi specialist to being a pan-European fund manager, and have build up a business, have closed the business's expensive investments, have kept the overall margin at a pretty high-level, and have caught up to a very high EBITDA (sic) [ EBITDAR ] margin over time, as I said, from 8% to roughly 40% this year.Moving to Page 8, on our financial position. The financial position remains very strong, both in terms of equity ratios and also in terms of our liquidity position. As of end of the third quarter of 2018, we had a total liquidity position of almost EUR 540 million available liquidity, with an equity ratio of 64% and net equity ratio of 77.2%. And both ratios and the liquidity position gives us a lot of flexibility when it comes to further development of PATRIZIA, both in terms of M&A or inorganic growth, in terms of digitalization and technology investments, which will translate into continued growth and profitability and also AUM or, in other words, organic growth.I'd like to talk about the guidance for 2018 and a little bit about 2019 on Page 9. As I said earlier, we have increased our guidance to slightly above EUR 140 million for the full year of 2018. The management fees are expected in the range of EUR 170 million to EUR 175 million based on increased assets under management. Previous guidance was EUR 162.5 million to EUR 170 million. And that guidance, we have already achieved 74% in the first 9 months of this year.We expect slightly lower transaction fees of EUR 50 million to EUR 60 million, down or slightly down from the guidance -- from the previous guidance of EUR 55 million to EUR 62.5 million. And of that guidance, we have collected already 58%.Performance fees are expected to come in the range of EUR 90 million to EUR 100 million compared to the initial guidance of EUR 50 million to EUR 70 million, and we have collected already 53% of the guidance.The net sales revenues and co-investment income is expected to come in bang in line with the initial guidance, and we have achieved already 97%. The net operating expenses are expected to come in between EUR 210 million, and you probably remember that we have lowered the guidance for the operating expenses with the financial results of the second quarter, down from EUR 210 million to EUR 230 million down to EUR 200 million to EUR 210 million, and that's mainly the result of the reorganization of our business as a result of the acquisitions we made.We do expect restructuring costs for the full year of 2018 of EUR 30 million booked as reorganization expenses and hence excluded from operating income. The expectation of our annual cost efficiencies from the integration of the 3 companies or the 4 companies of EUR 22 million, which, all things being equal, should show a full effect from 2019 business year onwards.And we also look optimistically into 2019 and are currently very happy with the analyst consensus for our operating income of EUR 120 million to EUR 130 million, and we also have quite a good visibility on performance fees for 2019. By the way, a detailed guidance update for 2018 is also displayed on Page 16 of our quarterly statement.Now at the end of the call, I'd like to spend a few minutes on our digitalization initiatives, which have become or which has become a key element or core part of our strategy. We strongly believe that digitalization, i.e., technology and innovation, is already becoming a key competitive factor in our industry. And we also strongly believe that technology and innovation will ultimately have a significant structural impact also on our industry, the real estate fund management industry, in terms of services, in terms of products, quality of services and productivity or simply cost efficiencies.And we at PATRIZIA want to become the technology leader in our industry, and we have the scale and the financial means to be at the forefront of technology. And we have already started to build and to work on an ecosystem or, simply call it, a platform that covers and will cover the entire value chain of our business, and it will cater for our clients, it will cater for our tenants, and it will cater for our business partners or suppliers.And digitalization has become a core element of our strategy and will be key to achieve investor-faced operational excellence, efficiency and system-based processes and, ultimately, an exponential acceleration of our economies of scale of cost efficiencies.Since the end of last year, we have established a digitalization team and an innovation lab with experienced professionals from the tech and from the IT industry as well as from our own industry and from within our own company, PATRIZIA. In an agile project management environment, more than 150 colleagues across all functions are currently and successfully working on the migration of EUR 40 billion worth of assets into 1 system. They're working on harmonizing, streamlining and, at the same time, digitalizing all our operational processes. And I'm personally very impressed by the spirits of my colleagues and the outcome. It's ultimately all about the mindset.To talk about the various initiatives in a more tangible way, on Page 11 of the presentation, we strive to become the digital leader in our industry, and we strongly believe that will be -- that this will be key to be part of the new fund management services environment. Now going from left to right, processes or EAM, enterprise architecture management. We are digitalizing and harmonizing all our processes, and we want all of our core processes to be system-based, and that also entails establishing a culture of quality thinking within PATRIZIA to achieve continuous improvement of our processes and also to unlock the potential and the agility for further growth.We are building an ecosystem that covers the entire value chain of our business, and the digitalization strategy is following a well-defined path to become the digital leader of our industry over the next years. The core is building a state-of-the-art fund management system that enables the efficient, scalable and high-quality administration of all our funds and properties of all 4 companies that we have integrated into 1 system, one that is catering for the infrastructure. We are using the integration to build a modern and state-of-the-art and unified IT infrastructure and, ultimately, a project called THE LINK, which establishes a reliable and harmonized and, more importantly, a user-friendly interface for our business partners, in particular for our property managers on a pan-European basis. And all these initiatives are developing digital services and are building an interlinked ecosystem.Our innovation lab is globally sourcing and testing new technologies relevant to us and relevant to our industry, such as PropTech and FinTechs to increase quality and efficiency of our services as well as enhance client and, ultimately, enhance tenants' experience. The acquisition of a stake in EVANA is only one example and the first step of our investment into a AI-based or supported business processes.Now as you know, PATRIZIA went successfully through a few transformations over the past years or even over the past decades. And we are now embracing the next transformation, which is the digital transformation.Over the past decades, we were always on the forefront of changes in our industry, and we again want to be at the forefront of the next transformation of our industry, the digital transformation. And in our business, it's all about people and technology. And what we are simply doing is adopting digital practices, which are already present in our daily -- in our private lives, to our business.Just to walk you through a few examples what we are actually doing in connection with our digital transformation, moving to Page 12, to the first example. As I mentioned earlier, we are migrating the real estate data of EUR 40 billion worth of real estate from 4 different companies and 4 different systems into one unified system and one consistent data source. And the PATRIZIA worldnet is a net that is currently an internal prototype that shows all assets, including all relevant data in 1 place, in 1 world map. And if installed on an iPhone, on a client's iPhone, the client will even get an alert when he drives by one of his assets and the client will be able on the worldnet to see all of the assets and the relevant data of his assets. And this makes site visits or site tours very easy for clients and will certainly enhance the client's user experience and user-friendliness across the board.The second example on Page 13 is another example, where we enhance client experience. Reporting is, also for regulatory reasons, an increasingly important topic for our clients, but it's also about transparency and client experience. The digital frontend, or simply app, is just one example for tech-enhanced client services, and our aim is to build a top-notch frontend for our clients.The main goal, or the main goals, is to produce a unified investor frontend across all investments, including institutional funds as well as closed-ended funds for our private and semi-professional investors. We plan to launch the app for our German institutional clients at the end of the second quarter of 2019, with the aim to have all other vehicles included and implemented by the end of 2019 or beginning of 2020.What are the key functions? All the relevant data will be aggregated in that app. All relevant documents regarding the investor portfolios will be included. You can find things like net asset value, gross asset value, performance, retail performance, picture, produce NOI, everything relevant to an investor -- to inform investor will be displayed on that app and the investor will find all information relevant for his fund, his portfolios down to an asset-by-asset level. The app will be multilingual, first only in English and German and it will be mobile-ready. And all the information will also be available via an API, application program interface, so the client can directly transfer all the information to his or her system in a very seamless way.Moving to the last example, I'd like to talk about on Page 14. We recently bought a stake in a company called EVANA, and EVANA is our first investment into AI-driven document data and process management. The name EVANA stands for evaluation and analytics, and it is a service provider for document data and process management, and it applies sales learning algorithms to extract any value at large volumes of data. So actually a perfect technology, in particular, relevance for our industry, the real estate industry, where large amounts of data need to be processed quickly.We acquired 25% -- 25.1% in EVANA in October 2018. And following a successful pilot, we will adopt EVANA's software to digitalize our own management processes in a tailored -- on the tailored and centralized platform, both on a corporate and on an operational level. And the technology will help us and enable us to provide enhanced services for our clients and will continuously improve our quality and efficiency in our processes. Just to give you a few examples where this becomes relevant and very helpful. It will help us to automatically feed data rooms for sales transaction, and it will also help us in the ultimate extradition of information and data in acquisition processes. It will help us in the evaluation process on transactions and even in payment processes. And if you only look at valuations, we process hundreds of valuation reports and valuations manually every year, and EVANA will help us to process all those valuation reports automatically and will significantly reduce the manual part of the process, which is quite labor-intensive. So we do strongly believe that technology will help us to continue to enhance not only our operational processes and client services, it will also help us to significantly accelerate the economies of scale across the board.Now that concludes my presentation, and before I hand over -- or hand back to Stuart for Q&A, I'd like to let you know that we are roadshowing in the next weeks. We will be in Luxembourg. We will be in the United States, Atlanta and New York and Boston and Chicago and Salt Lake and Denver. We will come to the Berenberg pan-European Conference in London, and we'll be in Dublin, and please register for meetings if you are interested in it, if you are available for the meetings, and Investor Relations is happy to organize and accommodate meeting requests for you.With that, I'd like to hand over -- or hand back to Stuart for Q&A. Thank you.

[Operator]

[Operator Instructions] The first question is from the line of Andre Remke from Baader Bank.

[Andre Remke, Co]

Got a number of questions, starting with the performance fees. This very strong contribution, I think, triggered mainly the guidance increase last week. So where does it come from? Are there any specific vehicles, larger portfolio disposals? And if so, have those investors reinvested the proceeds in any other PATRIZIA vehicles? This is the first question, please.

[Karim Bohn, CFO & Member of the Managing Board]

Andre, thanks for the question. Now the performance fees come from a whole lot of things. First of all, they come from selected asset disposals, mainly out of various core funds. We haven't sold entire portfolios or even closed funds, but we have also produced the performance fees within running core funds, in particular, 1 resi core fund. So performance fee is really allocated across the board, core, core plus, value add, including select asset sales. You might have -- I mean, you have noticed that we sold more assets this year than we have over the previous years because we are encouraging clients to take some profits off the table in this very good market environment.

[Andre Remke, Co]

Yes, and a follow-up question on that, the second part of the question. Have those investors then reinvested in any other vehicles? Or do they take the money and invest somewhere else?

[Karim Bohn, CFO & Member of the Managing Board]

All those investors are looking to redeploy their money into real estate and to redeploy their money into real estate with us. Have they deployed yet? No, but they only sold their assets over the past 3 to 6 months. And as you know, it takes more than 3 months to redeploy the money, but we do expect the majority, if not all the money, to be redeployed in real estate with us.

[Andre Remke, Co]

Okay. Another question on the cost savings, the EUR 22 million you indicated for quite a time for next year. Has this been -- or what level has been reached already this year? And what is then the delta for the next year?

[Karim Bohn, CFO & Member of the Managing Board]

Well, we have -- in August, when we announced Q2 earnings, we said that out of the EUR 22 million, EUR 10 million of savings will be realized this year and the remainder will be realized in 2019. So if you compare -- so what we do expect is EUR 22 million of savings in 2019 compared to the initial guidance for the cost in 2018. So these are the two reference points, I guess, to look at.

[Andre Remke, Co]

Okay, so it's clear. Maybe it's a bit too early today, but what are your thoughts on the potential dividend, given the strong increase in operating income, so cash flows? Could this be linked to the dividends? What are your thoughts here?

[Karim Bohn, CFO & Member of the Managing Board]

Well, I mean, you rightly pointed out. It's a little too early to talk about the dividends. What we -- when we reintroduced the dividend policy, we said we'd like to pay out a stable dividend. And I think you shouldn't expect to pay out a similar percentage of that income compared to last year, but you should expect a very stable dividend. And as we said, when we reintroduced the dividend policy, we got to continue to keep the financial flexibility, especially in more volatile years to come, but we will continue to pay out a stable dividend. And that's really all I can say at this stage.

[Andre Remke, Co]

Stable dividend would mean or imply a flat dividend?

[Karim Bohn, CFO & Member of the Managing Board]

Well, I didn't say this. I think what I can say is that you cannot expect the same percentage applied in net income we applied when we paid for the dividend for 2017.

[Andre Remke, Co]

Yes, okay. Then, on the second part of your presentation, with regard to the digitalization initiatives, thank you for the presentation on that point. Any ideas or, let's say, indication what kind of costs or investments are needed in the first instance, at least, to realize all these things? And is this -- is it realistic to assume that the cost ratio will increase then for the next, let's say, 12 months, 24 months before you could harvest on such investments?

[Karim Bohn, CFO & Member of the Managing Board]

Well, first of all, for the digitalization process, without applying any new technology, the costs are actually not that significant. We do expect for next year, costs to -- for the upgrade in IT to be between EUR 6 million and EUR 8 million, but those won't go through the P&L because most of those or the majority of those expenses will be capitalized in intangible assets. As I said, the main part of the digitalization process is to upgrade our IT and to digitalize processes, and that requires in-house resources to actually do the work. And we have opted not to work with external consultants. We have implemented internally agile project management structures, where a large number of colleagues work across all functions to migrate the data, to migrate the systems to digitalize and optimize processes, and this is really internal work to be carried out, and this internal work is being done by our colleagues on top of their day jobs. Now when it comes to technology, also those, like the investments in EVANA, is investment which will ultimately be capitalized.

[Andre Remke, Co]

So what -- when it comes to probably also to your M&A strategy, the key processes, there is, obviously, no need for M&A, but as you did with EVANA, in terms of new technologies, there could be also potential M&A activities on that front.

[Karim Bohn, CFO & Member of the Managing Board]

Yes, absolutely, absolutely. I mean, as always with technology, you have to ask your question, are you able to buy technology, build it yourself or simply buy an existing software? And we believe, in particular, in this type of technology. And when it comes to artificial intelligence, we think, as I said, in an ecosystem, you want to build an entire ecosystem, and we will buy bits and pieces of smaller companies to build that ecosystem to cover the entire value chain to ultimately have a proprietary platform run by us, which will give us, and hopefully, a significant competitive advantage over smaller players. And as I said, I think, we do have the scale with EUR 40 billion to apply those technologies, and we have the financial means to invest in those technologies, and we strongly believe and that comes to the -- and that answers kind of your second question, we strongly believe that this will lead in acceleration of an exponential acceleration of potential cost efficiencies. I don't think really you're going to see those in 2019, but on the next years to come. Digitalization process and innovation initiative, they will lead to better services and to lower expenses.

[Operator]

The next question comes from the line of Manuel Martin from ODDO BHF.

[Manuel Martin, Analyst]

Two or three questions, if I may. I'd start with performance fees. Could you give us maybe a flavor or an indication on performance fees in 2019? I know it's difficult, but given that you feel comfortable with an operating income of maybe EUR 120 million to EUR 130 million, would that imply something like performance fees in 2019, 10% to 15% lower than in 2018? Would that be a feasible back-of-the-envelope calculation?

[Karim Bohn, CFO & Member of the Managing Board]

Well, Manuel, at this stage, I like to be little more precise that just the percentage. At this stage, we believe that we will produce, again, performance fees of EUR 50 million to EUR 70 million, so bang in line with the initial guidance we gave out for 2018. So another strong year with performance fees. And it also underlines what we kept saying all along. We do believe that a business with EUR 40 billion of AUM across the board will continuously produce performance fees, if we continue to outperform the market and create value through asset management and repositioning of assets.

[Manuel Martin, Analyst]

Okay. A question on the expansion of PATRIZIA. I mean, two things, two points. Could you give us an indication on how is the integration of TRIUVA and Rockspring growing -- going on? And when do you expect, let's say, changing from defense into offense with these 2 companies?

[Karim Bohn, CFO & Member of the Managing Board]

I think we've already -- well, first of all, the integration is going well. Technically, the integration has been concluded. We're already working on one e-mail system. We're all working on the same servers. We have 1 brand name across the board. We have integrated all the teams. We have changed the business model from a country model to a functional model. And internally, officially, the integration will be concluded end of the week after next. The last workshop where we finalize the open ends in the various processes and interfaces. So integration is going well. We're spending a lot of time with the colleagues across the board. All the teams are now teams that consist of the 4 former companies. And I think we've already started to play offense. The performance -- some of the performance fees come out of the acquisitions we made. We are already in the market with a new product coming out of -- well, actually, it was 2 products coming out of Rockspring. We are already in the market with a product, which we initiated, which is called living cities, already a pan-European-ready product, which is a new product, which is supported by the help of all companies: Rockspring, TRIUVA and PATRIZIA. And we are already seeing on fundraising that the depth of international clients has increased significantly.

[Manuel Martin, Analyst]

Okay. That leads me to my last question, expansion in terms of fundraising. How do you see, let's say, the next year, 2019, in terms of fundraising when it comes from your fundraising stuff? Do you expect some more impulses or more dynamic coming from the new offices? That's one part of the question. And the second part of the question is, what do you think about acquisitions in the environment in which you are, I mean, inorganic growth? So these are my questions.

[Karim Bohn, CFO & Member of the Managing Board]

Yes. Now to your first question, Manuel, on fundraising, we have -- we closed TRIUVA 1st of January. We closed Rockspring end of March. And the fundraising team has been a unified and integrated fundraising or client services team since June this year. And the new team is already marketing internationally in a -- in the new shape. So just to give --you an example. Robert Gilchrist, the former CEO of Rockspring, and Wolfgang Egger have roadshowed together in Asia twice. Teams -- client services teams consisting of TRIUVA, Rockspring and all PATRIZIA people are all joined together in the U.S. They are marketing together the new products to be placed this year and for the years to come. So I -- we already see and figure the dynamic and the feedback -- and you can also sense by the feedback from our clients that it's working, and that we have a broader reach, in particular, to international clients. So that is certainly working. Now with regard to inorganic growth, as we said, the shop is open. We do have the liquidity to buy other companies. But the rationale, the M&A rationale, remains the same. It's got to be a company that has our products and services. So it has to be complementary in terms of product, services, assets and also geography. And we have, as you know, we have a functioning M&A department that is screening M&A opportunities across Europe.

[Operator]

[Operator Instructions] There are no further questions at this time, and I would like to hand back to Karim Bohn for closing comments. Please go ahead.

[Karim Bohn, CFO & Member of the Managing Board]

Thank you, Stuart. And also thank you, everyone, for attending the earnings call on the Q3 or the financials for the first 9 months of this year. I wish you a great fourth quarter, and I look forward to speaking to you at latest when we announce the full year earnings in March 2019. And as I said, we will be roadshowing heavily for the remainder of the year. And if you'd like to see us and have time to see us, please get in touch with Investor Relations, and we will try to accommodate further meetings or calls. Thank you very much. Bye.

[Operator]

Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.