Aareal Bank AG

XETRA:ARL

Earnings Call Transcript 2021-Q2

[Jurgen Junginger, Head of Investor Relations]

Good morning, ladies and gentlemen. My name is Jurgen, as announced, and I'm with Aareal Bank for, I think, long, long time now. And I'm really happy that you can join our 2Q conference call, where our CFO, Marc Hess; and our CMO, Christof Winkelmann will present you the figures. And afterwards, we would be very happy to answer your question.So Marc, the floor is yours.

[Marc Oliver Hess, CFO & Member of the Management Board]

Thank you, Jurgen, and good morning to all of you from my side as well. Thanks for attending today's analyst call. Let me just start with giving you an overview regarding the latest developments in Q2, and this can be found on the highlights slide on Page 3.We had, I think, we can say a very good operating development and we are happy that our growth initiatives show their first positive effects still, so we can all see some light at the end of the tunnel with regards to the successful vaccination campaigns. The environment remains uncertain, as you know, especially due to the Delta variant. However, what we can observe is that the swoosh recovery scenario that we always expected is intact.So we have, nevertheless, shown an encouraging operating performance. You can see that here, the top line growth definitely drove the bottom line up. We had a strong NII development with the profitable portfolio growth that has been shown. Christof will give you all the details later on. We had cost discipline. That means we were able to grow here at very low marginal costs. And we had moderate loan loss provision despite the successfully concluding Italian derisking activities.With regards to the outlook, we are confirming our operating profit target. However, we have to cope with a higher tax ratio this year due to a nonrecurring tax effect that we communicated 10 days ago. With regards to the deferred EUR 1.1 dividend tranche for 2020, we intend to distribute that in Q4 if the conditions that are well known to you are met, which we would currently expect the decision, however, will be taken in Q4, as I just said.So let's go to the P&L on Page 5. As I said, we had a good operating profit of EUR 41 million, showing strong signs of recovery despite of the net EUR 13 million burden from concluding the derisking in Italy. Without the EUR 11 million burden from the tax effect, we would have been at EUR 52 million. Apart from risk provision, the good underlying performance was clearly driven by the top line, as I just said. And as you can see in the NII and in the NCI line, details can be found on the next page.Regarding net interest income, we had a significant increase of 16% or EUR 20 million quarter-on-quarter based on the strong new business. And this is not only materializing now, this is certainly also the base for future earnings. And also to say that very clearly, we have, of course, written this new business under our risk standards, which are strict, and you can see that later on in the LTVs, which were very good.So the portfolio increased towards our goal of EUR 29 billion. And I think we can say that we are very confident that we will be there at least at year-end. Fee income was up EUR 5 million, so nearly 10% versus the second quarter last year. Aareon was contributing with EUR 5 million including, of course, the M&A, which contributed with EUR 2 million in that increase with also good underlying performance. In BDS, we had a positive development half year over half year, but we also had a limited impact from the German high court ruling on DTCs. That was a relatively low number relatively, if I compare it to other German competitors with around EUR 1 million that has been digested in Q2, and we expect a final effect of less than EUR 0.5 million for the second half.Costs -- on the next slide. The cost increase overall is mainly attributable to Aareon growth. When we look at the bank, we were only EUR 1 million higher despite of EUR 2 million of the transformation cost that we announced regarding the implementation of Aareon Next Level. So as I just said, I think we can show that we can grow the book at comparatively low marginal cost.In Aareon, we are EUR 8 million up. Main contributor here is the M&A. You know that we have been successfully executing our M&A pipeline. Of course, this is associated with one-off costs and also some investments in our value creation plan. As we announced, the remainder is then attributable to the normal growth.Risk provisions in the second quarter, in the line itself, you can only see the risk provisions for those loans, which are not classified at fair value. So including the fair value P&L line, we had risk provisions of EUR 40 million in the second half of this year compared to EUR 65 million last year, so significantly lower. We have, as I just mentioned, successfully concluded our derisking initiative in Italy that we started in 2019. Netted with a loan loss reversal in 1 single case, the extraordinary burden in Q2 was EUR 13 million net in the risk provisioning line.You can find a financial summary of the derisking program on the next page. As you can see here, since we started in 2019, we reduced our Italian legacy exposure by EUR 1.6 billion. Within this initiative, the overall decrease was even higher, but associated to the derisking, it was EUR 1.6 billion. The NPLs that we reduced were EUR 730 million. So a reduction of 65% of the total NPLs in Italy from the derisking.Apart from derisking, we also had reductions and therefore, you can see the 80% decrease number in the chart below. We did not only focus on NPLs, as you know, but also on high LTV loans. So here, the amount was EUR 350 million with an LTV of more than 90%, and this was precrisis LTV. So I think we also had very good timing. I don't think that we would like to know where the LTV is today. So in that respect, I think we were early movers and this was good, and also the BTPs were reduced by EUR 530 million.What is at least as important is that by this derisking, we have not only seen an NPL reduction but also a net capital release. So if we net, let's say, the P&L burden with the capital release, we have net release here of EUR 150 million in the economic ICAAP, EUR 140 million under Basel III and EUR 110 million on the Basel IV phase-in. So I think we can say that we can -- we had a successful program, which we now concluded.Including these last 2 loans that we sold on Page 9, the effect of the derisking program on the NPLs can be clearly seen. So we have taken the risk provision just to avoid any misunderstanding already in the second quarter P&L, but the derecognition was now in August. This is why we have shown you numbers on Slide 9 as of today. And you can see that we reduced the NPLs since the end of second quarter, significantly mainly driven by these derisking activities, and we are now at an NPL ratio back to just below 5% at EUR 1.44 billion.So on that positive note, I would like to hand over to Christof.

[Christof Winkelmann]

Yes. Hello. Thank you, Marc, and a warm welcome from my side, likewise.On Slide 11. As anticipated in our swoosh model, the rate of fully vaccinated individuals is rising across the board, also in our countries with some of them being a good portion above the 50% mark already. With positive economic forecast strengthening in North America, Europe and parts of Asia, we do see that real estate values are stabilizing in most markets with first very initial signs of slightly increasing values in parallel. As always, individual declines cannot be fully included in the light of a COVID development, but for the time being, this is a very positive momentum in this respect.The assumptions are underlined by a lot more market confidence by all the market participants that are in and investing with real estate as evidenced by a largely increasing real estate transaction volume across those 3 continents.On the next slide, I want to give you a brief overview of our different markets. While they all do have a couple of things in common, such as an increasing vaccination rate, very positive GDP development and an increasing transaction volume. North America has managed at this point in time to approximately reclaim 70% of the jobs lost due to corona-related issues and closures.Europe has experienced strong economic growth despite of the Delta variant. London has finally managed to go back into full position in terms of CRE transaction volumes within Europe, a place that didn't hold for quite some years now because of Brexit, and of course, COVID, so that is also a good sign for the U.K. and especially London.In Asia, we are seeing first signs of increasing cross-border activity, also a very positive sign with China already being at pre-corona levels when it comes to GDP.On Slide #13. New business doubled this quarter over last quarter at EUR 2.2 billion, leading to a total volume of EUR 3.3 billion for the first half of 2021. Average margin at the upper end of the range that I did communicate at 215 basis points for the first half year with a very acceptable and good LTV of 56% based on post-COVID valuations, which are fully in plan with our 2021 target.It is to mention because it does make a difference that 63% of the transactions closed in Q2 were portfolio transactions, of which 23% were cross-border shares. The good thing about this is that you have a granular setup and diversification by regions. And also, as I've explained in previous calls, cross-cartelization of these different assets. So should one of, let's say, 20 assets not perform as planned, the other 19 will pay up for that asset and guarantee adequate debt service.As always, a crisis also yields opportunities, and we are willing and able to take them. And furthermore, last but not least, as promised during our Q1 call, we have successfully implemented and underwritten our first green loans, totaling EUR 220 million for the first half of the year.On Slide 14, as I said, we are making progress on our green financing activities. In detail, we have also, in parallel, enhanced our portfolio transparency and have integrated the respective data fields into our IT systems. We are aiming to at least double our green financing loans by year-end to EUR 500 million or even more at the end of December.And as our clients get more familiar with the process, from whom we do have very, very positive feedback and demand, we are expecting volumes in this field to further grow and increase. We are, at the same time, limit the preparation of our Aareal green bond with internationally renowned rating agency, Sustainalytics that have already accompanied us in our green financing definition initiatives.On Page 15, as I said, we are continuing to foster our ESG transparency. It does, I can tell you, take a lot of effort on both sides that of our clients and as well as on our side. We today have identified certificates for approximately 60% of the total CREF portfolio, which, as I said, will also be partly feeding our inaugural green bond.Forward looking, we will focus on further financing and also enabling green assets. We can change that from today until tomorrow, but we are one of the facilitators of this trend going forward. So we are going to improve our data quality together with our clients and are looking to regularly and transparently as we have in the past, report on the progress thereof.On Slide 16. So what does all of this new business lead to? Our portfolio volume stood at EUR 28.5 billion at the end of June in line with plan. And for the benefit of a sneak preview, this volume stood at EUR 29.2 billion with KPIs in or, mind you, better than planned at the end of July. Therefore, the targeted portfolio size of EUR 29 billion per year-end seems a lot more than just realistic. We are sticking to our diversification and strict risk parameters, with an acquisition pipeline well filled going forward from today and KPIs, again, in or better than planned.At this point, I do and would like to take the time to thank both teams, the ones on the market side and the ones from the credit risk management side for contributing diligence efforts and expertise so far despite this being holiday season, and a lot of people have kids in school that need to be taken care of. They have shown a tremendous involvement also in July and in August to make this possible. So thank you very much.But I do believe that being there, supporting our clients in existing as well as new engagements, which is very important throughout the cycle and not just at a point in the cycle, has further strengthened our many relationships and has enabled us to acquire this high-quality new business.On Slide 17, just a quick recap. You probably gotten used to this slide at this point in time. As I've mentioned earlier, the LTVs across the board are and have stabilized and are even increasing slightly in valuing parts. The average LTV on the portfolio has improved to 59%, with an average yield on that slightly up at 6.4% at the same time.With the visibility improving, performance slowly picking up across the different asset classes, the demand for liquidity lines and amortization postponement is continued to decrease as you can see in the chart that we provided on the right side, and we are expecting that all but any other significant changes to continue as buildings open up, travel resumes and business gets to somewhat more of a, in parenthesis, normal level.On Page 18, also something familiar to you, but we wouldn't want to miss the transparency. Both of the above asset classes were largely subject to many closures and focused on by many stakeholders and externally. But as visible, LTVs also in these asset classes have stabilized at good average levels with first initial signs of improvement year-to-date.And yes, just to take better way, the Maldives also had a very good first half of the high season, which starts 1st of January until about March, and the books are filled for the second part, which starts in October going to the 31st of December. Actually, the first half of that season was the best for many of the properties that we have financed in their history, so also good signs on that part.On that high note, I will hand it back over to Marc. Marc, please.

[Marc Oliver Hess, CFO & Member of the Management Board]

Yes. Thank you, Christof. I would like to continue on Page 19 with a brief comment on the BDS segment after the strong increase of net commission income in the first quarter. The second quarter was diluted by the negative effects of roughly EUR 1 million due to the German high court ruling on DTCs that I just mentioned. But as you can see, it was a comparably limited effect on Aareal Bank. Deposits in contrast continued their increase from EUR 11.6 billion to EUR 12.2 billion, that is a good contribution to finance the growth of our loan book, as you have just seen.In Aareon, on the next slide, we kept our momentum executing our M&A road map since we have established our successful partnership with Advent. We have already closed 4 acquisitions, and there is more to come soon, I can say.With Twinq in the Netherlands, we substantially increased our market share there by 700,000 units in the private housing market. In the U.K., we have acquired 3 companies so far with high synergetic potential to build up a base for our planned European expansion in the SME property management segment. And in Germany, the launch of Wodis Yuneo end of last year has been a success. Since then, already 33% of our Wodis customers have subscribed, and even more, 42% if you look at the units.So at the same time, our intended license to SaaS shift is gaining momentum even more than planned. So of course, this is slightly diluting this year's ERP revenues, but that's clearly beneficial for future growth. And I can say that the CEO of Aareon, Manfred Alflen, is here with us today. So if there are more specific questions in the Q&A session, he will be at your disposal.With regards to the revenue growth of Aareon in the first half, next page, it was still diluted by the lower consulting revenues, however, recovered from the lows in the first quarter. You can see it here, second and third bullet point, digital revenues, excluding professional services grew by 17% and slightly below our target. However, in ERP revenues ex professional services, up 6%, so even slightly above our target.So all in all, the adjusted EBITDA, however, increased by another EUR 3 million to EUR 29 million, in line with the plan. Adjustments increased to EUR 11 million, mainly due to the M&A-related costs and the investments into our value creation program. Another supporting factor was the further increase of the EBITDA margin by another 100 basis points to 22%.Looking at the capital ratios on Page 23, capitalization remained sound close to the year-end levels. Slight dilution versus Q1 is mainly related to the growth of our portfolio, so not a surprise. The leverage ratio remained on a very solid level of 5.72% in despite of the balance sheet inflating effect of the TLTRO.And you have also seen the results even after the very severe scenario of the ECB stress test with a further reduction of commercial real estate values by more than 30%, and that's from the already COVID-impacted levels of year-end 2020, where, for example, in hotel and in retail, we had already been down 10%, 15%. I think we can say that we are -- even in this very stressed scenario, well above our thresholds.So let's move ahead to the outlook on Page 25. As I already mentioned, we confirm our operating profit target range and remain cautious on risk provisions due to the uncertainties related to the Delta variant of COVID-19. We are, however, very convinced that we will meet our ambitious top line growth targets without diluting on our strict risk standards. And as you all well aware, we have to digest a onetime tax effect, unfortunately, and have thus mathematically adjusted the EPS range accordingly.So let me summarize on Page 27. Significant profit increase in the second quarter driven by revenues up 14%, especially by net interest income despite of the persisting low rate environment, significantly lower LLPs, despite of the conclusion of the accelerated derisking measures in Italy. So an operating profit of EUR 41 million or EUR 52 million, if excludes the onetime tax effect. I think that shows that our growth initiatives are starting to pay off in all our segments. On that basis, we were able to confirm our operating profit target, and we are still planning for a second dividend in Q4 if the conditions are met.So on that basis, I would like to hand over to the operator back again to collect your questions, and we are happy to answer them.

[Operator]

[Operator Instructions] The first question is from the line of Johannes Thormann with HSBC.

[Johannes Thormann, Global Head of Exchanges and Analyst]

Johannes Thormann, HSBC. Three questions, if I may. First of all, could you elaborate a bit on your new business, a relatively high share of new German business, what's behind that and also in terms of margins? And probably if you can elaborate also on the high share of the logistics business in terms of margins?Secondly, please, on your NPL reduction efforts, surely nice to get from 6 -- whopping 6% to 4.9%, which is still a very, very high level compared even to peripheral banks in Europe. And what are the next steps there? Where is your targeted level to get down to in the next years?And last but not least, on Page 21, the Aareon story, which I consider not positive, but rather poor and disappointing. If you could elaborate a bit more how you want to come back to your old growth CAGRs and want to catch up this because you target in the digital space 22% to 25%. And then even on an adjusted level now, even with catch-up from a very weak Q2 at 17%, how do you want to catch up this?

[Christof Winkelmann]

Sure. I will start in terms of your questions of the share of German business and the logistics and corresponding margins. As you know, Germany is a highly thought of the market with very high density of banks, very large competition usually leading to not very favorable risk-return matrix. But sometimes, there are opportunities, as you have seen over the past 4 to 5 years, which we will then take, and we have taken one larger portfolio transaction in Germany that is where -- which came to fruition in the second quarter. So that is where the German share comes from.The second one, when it comes to logistics, we are planning to increase our share logistics, but it's not that we have just started financing logistics. As you know, we do have a logistics team in place since 20 years. And sometimes one opportunity leads its way, we will invest more in the one asset class than the other. And I think that there are lots of opportunities currently within undersupply in many, many markets when it comes to logistics space.Also one of our KPIs, as you know, are larger portfolios with granularity, mostly spread across different countries with either pension funds or some wealth funds, which do need the expertise in structuring and being able to come to the closing line in time, which we have done successfully. We have already announced some of them somewhere. We've just concluded and are looking to announce them once the client has agreed to do so.And therefore, yes, we would like to grow that further. However, it's not a never-ending volume. So also there, we are trying and we are in competition. But yes, you are right, the share is growing, and we would like to grow that a bit more still.

[Johannes Thormann, Global Head of Exchanges and Analyst]

The margins, please?

[Christof Winkelmann]

The margins are in...

[Johannes Thormann, Global Head of Exchanges and Analyst]

Is it above average, below average?

[Christof Winkelmann]

It depends on which country and which asset class because we plan for every country and every asset class. It is in line with our planning, as you can see from the overall margin at the tune of 15 basis points for the first half year.

[Manfred Alflen]

Okay. Manfred Alflen here. Thank you for your question. Coming back to the Digital Solutions growth rates. So we have seen 2 aspects. On the one hand, given the COVID situation, our customers still are very much focused on their business. But we do see that all those companies which already do have high digitization rate do much better in the crisis.And in addition, we have now launched a couple of new products in the Digital Solutions space, like the Predictive Maintenance. We have the Neela, the assistant and just launched the digital agency and have very positive feedback from the market in there. So with this existing -- and with the new product base, we expect that we will increase the Digital Solutions revenues here and come back to the growth rates we have promised before. Does that answer your question?

[Johannes Thormann, Global Head of Exchanges and Analyst]

Not really because I can't see how you want to catch up. You need to -- probably for the next year's 30% growth, and then just via new products, the core business is struggling.

[Manfred Alflen]

No. The core business is doing well, and we have always said that we will have additional investments in our Aareon Smart World portfolio. And we expect to -- that this will pick up soon. We see high interest from the market, and that's why we believe that we can make this up again in the years to come. So there is no deviation from the commitments we have given earlier on the midterm.

[Marc Oliver Hess, CFO & Member of the Management Board]

Sorry. Sorry, there's a third question to be answered. Johannes, it's Marc. On the NPLs, I think we were quite successful in reducing the NPLs to around EUR 1 billion before the crisis, then we have seen the inflation. I believe we have reached the top now in Q2. And as you can see, we are already within the last 1.5 months, significantly down. So I think our next target is to be back at around EUR 1 billion over the next quarters, certainly not this year.And also, let me state that this is not a defined program that we would need for that. That is within our normal workout and within our planned risk providence. So we have to work it down again from this inflated level due to COVID, but we are also very confident that we can go down to that level.What I would like to mention, however, is that if you look at our PDs as it is, let's say, basis of our modeling, for example, for calculating the RWAs, et cetera, and the typical workout time, then a level of EUR 1 billion or even slightly above is not unusual for a portfolio like ours, which is a mature portfolio. So I think going to around EUR 1 billion is a good target for the next quarters, years.

[Operator]

[Operator Instructions] The next question is from the line of Mengxian Sun, Deutsche Bank.

[Mengxian Sun, Research Analyst]

Two questions from my side as well. So the first question is on the cost side. As you stated on the presentation that some of the -- that the Q2 still benefits from the COVID underspending. Would you mind telling us how much of the cost benefit is coming from the underspending from COVID in this quarter and also in the last quarter?And the second question is, I'm trying to figure out the organic growth on Aareon. And could you please tell us what are the financial contributions from the M&A from the 4 newly acquired companies in this quarter, both in terms of revenue contribution and profitability? And where do you -- and how do you see the run rate for the fee income on Aareon for the next 2 quarters?

[Marc Oliver Hess, CFO & Member of the Management Board]

Yes, sure. Thank you for your question. First of all, when we're looking at the bank, we gave you the number for the transformation costs. This is around EUR 2 million and then the COVID-related underspend is not much. It's around EUR 1 million or EUR 2 million in the second quarter compared to around EUR 4 million in the Q2 last year, yes. So this is coming down.What we had on top was the fluctuation of the provisions for the share price-related issues, so that is around EUR 3 million in the second quarter. With regards to the fee income growth, we had, out of the EUR 5 million increase in Aareon, EUR 2 million from M&A.

[Mengxian Sun, Research Analyst]

Can you give us a breakdown of the revenue contribution and the EBITDA contribution on that?

[Marc Oliver Hess, CFO & Member of the Management Board]

Well, the revenue contribution is the EUR 2 million, yes. They only generate fee income. The profit contribution from the, let's say, ongoing P&L is still very low, yes. So it's below EUR 1 million, much below EUR 1 million. We have just done these acquisitions recently, and many of them are more in a start-up mode. And what was your last question, sorry?

[Mengxian Sun, Research Analyst]

The run rate on the fee income from Aareon for the next 2 quarters.

[Marc Oliver Hess, CFO & Member of the Management Board]

The run rate. Well, we typically don't give an outlook here on the NCI. What we have given in our target number, and this is confirmed is the revenue contribution of Aareon. You can see them on Page 25, with the EUR 276 million to EUR 280 million for this year, and this is what we have confirmed.

[Operator]

[Operator Instructions] The next question is from the line of Philipp Häßler, Pareto.

[Philipp Häßler, Analyst]

Philipp Häßler from Pareto. I have 3 questions, please. Firstly, on your green loans. How is the margin situation on the green loans? Is it below or above those of nongreen loans? Then secondly, on the U.S. portfolio, this declined by 6% quarter-on-quarter, if I calculated it correctly. Was it a strategic decision? Or is it just due to higher maturities or lower new business? And then last but not least, on the BTP reduction. Why now? Have you lost confidence in Italy? Or was it just due to attractive pricing?

[Christof Winkelmann]

Yes, yes. Thank you. So let's start with the question towards the green loan margins. That is -- it is always assumed that giving a green loan or green bond has a benefit for the ones that do take it. I think it has a benefit for all sides. So what we have seen is that we have an interest to foster the development of green buildings of ESG and likewise to our clients. So to be very honest, there is no difference in the pricing of these loans. Whether that's going to stay that way or not or whether the other way around, let's call it badly, a brown loan will be priced differently than a green loan, and green loan is a new standard when it comes to planning. I think that's a question to be answered going forward.But for the time being, we do not provide in any way, shape or form higher or lower margins because the actual work involved in these green loans on both sides is quite a lot and also bears cost with it because these are strict covenants that bores on an ongoing basis, we'll have to comply with over the term of the loan. And everybody, both sides have to monitor that. So for the time being, there is no difference in the green loan margins per se.When we when we go to the U.S., first of all, the clear answer, no, it's not a strategic move. The only strategic idea behind it is that the U.S. has been much quicker in terms of assumed recovery. So that the competition that we have seen for the high-quality buildings that we like to focus on in the U.S. has been fierce, as fierce as we haven't seen that kind of competition since '06, '07. That is, I think, has slowed down again a bit, so things are getting more to normal levels. So we have entered the one other transaction. But the only strategic move behind it was that opportunities were much more attractive in other parts of the world at the same time.And also, I can let you know that there's been a very, very large amount of time spent on the U.S. portfolio with making sure that, that stays in TAM, which we have been very successful. And as you can see with the overall LTV decreasing and just as a pre sneak view there, the -- likewise, U.S. is seeing a turnaround in many pockets of markets when it comes to valuations, but also in terms of performance because they're simply ahead of us in terms of opening. And yes, some states have reintroduced or are reintroducing mass. It is very heterogeneous in this respect. So for the time being, we have not seen any impact on the performance there in the country. I think the performance looks up quite nicely.So as I said, that is more a business opportunity driven, and that's the only strategic reason behind it. Other than that, we are not changing our point of view in the U.S. in any way to perform.

[Marc Oliver Hess, CFO & Member of the Management Board]

Yes. Philipp, your question on the BTPs. The bulk of that reduction was already executed in 2019. We also communicated that at that time for several reasons. One is that we simply had a bulk risk with a BTP exposure of EUR 1.1 billion, which we consider as being too high. There was also some legacy because we inherited that from one of our acquisitions. I think it was WestImmo, if I remember it correctly.So this was, let's say, working that down at that time. We had further reduction steps last year, this year as well in the first quarter, but this was a double-digit million euro figure. But as I just said, we also looked very much in this program on the capital efficiency. And as you can see, even the ICAAP, we were able to free up EUR 150 million in capital. As you all know, BTPs don't have RWAs, so they don't really contribute to the relief on the normative level. But the market risk attached due to the volatility of the spreads was quite high. So the reduction was also driven by this optimization idea for the ICAAP.

[Philipp Häßler, Analyst]

Okay. So the BTPs you are still holding, you're happy with those. So there are no plans to further reduce them.

[Marc Oliver Hess, CFO & Member of the Management Board]

Well, we now have around EUR 500 million, which I think is justifiable from a size point of view. And if there are some opportunities, if spreads are contracting more, we could also think about reducing further. But this would -- it's not planned, yes. This is then opportunity driven. It's not a part of a program.

[Operator]

Ladies and gentlemen, there are no further questions at this time, and I hand back to Marc Hess for closing comments.

[Marc Oliver Hess, CFO & Member of the Management Board]

Yes. So thank you very much for participating today. Of course, our IR team is available if you have further questions, studying what we have published today. Happy to talk to you soon. Have a good day. Bye-bye.