Branicks Group AG (0QGG.IL) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the half year presentation of DIC Asset AG. I now hand you over to your host, Sonja Warntges, CEO of DIC Asset AG.

Good morning, ladies and gentlemen, also from my side, a very warm welcome to DIC's Half Year 2023 Results Conference Call. Today, as usual, I'm joined by my colleagues from Accounting and Investor Relations Department. And also as usual, we will give a short presentation of our results for the first half year 2023, followed by a Q&A session. You all, you know the current challenges facing the economy, the global uncertainties, the interest rates, the inflation, of course, these conditions also affect us and had an impact on our half year results. And especially the returns action activity was affected by the lower macroeconomic outlook and the new interest rate environment in Germany. Let's talk about the highlights of the first half year of 2023. Our focus in recent weeks has been on generating additional liquidity, while at the same time, maintaining our financial flexibility. In addition to a major portfolio refinancing of EUR 505 million, which brought us around EUR 250 million in additional liquidity, we were able to notarize disposals of around EUR 132 million at the turn of the first half of the year. Thereof, around EUR 119 million were attributable to the commercial portfolio and will generate an equity release of roughly EUR 37 million after their transfer in the third quarter. With the launch of a new investment vehicle, the club deal for the Offenbach Unite property, we were also able to collect EUR 10 million of equity in our first placement. At the end of June, our cash position was around EUR 485 million. As announced, we used roughly EUR 201 million to further pay down the VIB bridge loan in July, shortly after the balance sheet date. Another EUR 150 million will be used to repay our corporate bond issued in 2018 at the beginning of October 2023. Operationally, we continue to see a high letting performance from our teams. We were able to let around 257,900 square meter in the 6 months of 2023. This represents an increase of 50% compared to previous year. In addition, we have seen like-for-like rental growth of 7.3% on the total platform. Due to the currently restrained transaction market, which particularly impacts our transaction-related income in the Institutional Business segment as well as due to higher than initially expected interest expenses, our FFO fell year-on-year to EUR 22.4 million. Due to additional write-offs on sold properties, the consolidated result for the first half year was minus EUR 16.6 million. Looking at the credit metrics for our green bond 2023, we continue to see sufficient headroom despite the current market challenges. In the context of the implementation of our action plan performance 2024, one of our primary goals is the optimization of our financial structure, first and foremost by the reduction of debt. Ladies and gentlemen, the ongoing uncertainties are affecting our business. Therefore, we have implemented an action plan to face these challenges with a strong focus on the following 5 key points. At first, we are looking to reduce liabilities and strengthen our liquidity. We have successfully reduced the bridge financing for the acquisition of VIB in 2 steps from EUR 500 million to now EUR 200 million and restructured it. For the remaining amount, we have extended the maturity by another 6 months until end of July 2024. In addition, we will repay the corporate bond 2018, 2023 with a total volume of EUR 150 million in full at the beginning of October, as planned. We intend to use the freed up equity from further disposals to further reduce our liabilities. In addition, we focus on the operating portfolio business. Our letting business remains at a high level. We expect this to continue, so that we will benefit from positive like-for-like growth on our platform also in the next month. With our ESG strategy in place and the current green building ratio of around 32%, the portfolio is attractively positioned for the needs of our tenant base. Tenant interest in our properties remains high, both for office and logistics. In addition, we continue to focus on smaller refurbishments in our portfolio to further create value. All these points stabilize our property values. On the basis of our internal analysis, we see a potential decline of the market value of around 4% to 7% at the year-end 2023, driven on the one hand by higher interest rates and changing yield requirements. We are also working on the reduction of our operating costs. With the aim of becoming more agile, efficient and focused, we are optimizing our operational processes. In addition to making the structures of our real estate platform more flexible, we are also planning cost savings of 5% to 7% of our annual operating expenses, and we will also optimize our portfolio through transactions. We were able to realize disposals even in a difficult market environment and will use the free liquidity from the sales proceeds to continuously reduce our leverage. A total of EUR 300 million to EUR 500 million of notarized disposals are planned this year. We are well on our way to achieving this as around EUR 119 million have been authorized, as already mentioned. And we want to be a reliable business partner. We have proven in the past that we are a sought-after partner for real estate investment in the German real estate market. We are constantly expanding our range of real estate services for national and international institutional investors in the Institutional Business. We are firmly convinced that we will generate increasing cash flow from property management of third parties, again as the transaction market recovers from next year onwards. What does this all mean now for our financial profile. As mentioned during the last weeks, we are working on the optimization of our financial structure. We are focusing on the short-term debt, which is currently the most expensive one. This is also reflected in the current average interest rate of 2.9%. After the repayment of roughly EUR 200 million of the bridge loan in July, our pro forma cash on hand amounts to roughly EUR 284 million after the balance sheet debt. With this liquidity, we will pay back the bond '18, '23 in the amount of EUR 150 million in October. We are currently also looking at the maturities in 2024 and are already in discussion to refinance bank debt and checking other refinancing options in addition to our general plan to reduce the outstanding debt through disposals. The average interest rate of 2.9% reflects the high cost of short-term debt. We are closely monitoring the development of the covenants. And as of today, and according to our business plan, we continue to have sufficient headroom under all covenants especially for the bond covenants. Now let's take a brief look at the results of our real estate platform in the first half year. In total, assets under management with EUR 14.2 billion, remained stable on a year-on-year comparison. The Commercial Portfolio saw a decrease from EUR 4.5 billion to EUR 4.1 billion, which was a direct result of the disposal activities year-on-year. As mentioned, our letting performance remains strong, and our teams once again performed exceptionally well. The letting performance on the DIC platform in the first 6 months of 2023 rose by 50% year-on-year to 257,900 square meters. Last year's strong rental growth continued positively in the first half year of 2023 as well. Like-for-like, the rental income rose by 7.3% for the entire portfolio under management. Both in the commercial portfolio with a plus of 4.8% and in the institutional business with a plus of 8.5%, rent increases were realized primarily through indexations. In the institutional business, the full lease of the Global Tower in Frankfurt had an additional impact. As of today, only 2% of the total annualized rental income would expire in 2023 if these contracts are not pre-launched. Roughly 68% of annualized rental income has a lease length until 2027 and longer. On our next slide, I'm giving you an overview of the development of our main income streams. As expected, after the end of the second quarter of our -- after the end of the second quarter, our main income streams look similar to the picture in the first quarter of 2023. On the one hand, there was a strong increase in net rental income due to the takeover of VIB and the like-for-like growth of our rental contracts. And on the other hand, we saw a sharp decline in the real estate management fees due to a muted transaction market, as expected. Therefore, our recurring income on the platform was slightly higher year-on-year and the share of recurring income in relation to the total income rose to 100% in the first half year. In addition, we generated income from associated companies of EUR 2.8 million, which is below the previous year result of EUR 16.9 million. This is mainly due to the sale of a joint venture investment for EUR 10.1 million in the prior year period. Now let's take a closer look on the development of the FFO year-on-year. The net rental income saw a strong increase of EUR 19.7 million. As previously mentioned, this was due to the VIB consolidation and the like-for-like rental growth of our commercial portfolio. Also, the recurring management fees saw an increase of EUR 4.4 million, but couldn't compensate for the decline in transaction-related fees, which was led to a negative effect of EUR 22.1 million. The net interest result was down mainly due to the initial recognition of VIB, the unhedged interest expenses for the bridge loan and one-off effect from the refinancing activities on the VIB level in Q1, 2023. Our OpEx slightly improved on a normalized level, including VIB. In the previous year, EUR 10.6 million of transaction costs were included. All in all, this resulted in an FFO of EUR 22.4 million for the first half year. Ladies and gentlemen, as usual, I'm concluding my presentation with a final remark on our guidance for the current fiscal year. We confirm the recently updated guidance numbers, as of today. We changed our expectation regarding the recovery of the transaction market. We now expect a recovery not before 2024. Nevertheless, we are confident to reach our disposal targets for the commercial portfolio. The freed-up equity after repaying any secured debt will be mainly used to pay down our unsecured debt. We will also check for all options available to secure our flexibility. Thank you for taking the time to join our conference call today. We are now able to answer your questions.

So we start with the first person, Andre Remke from Baader Bank AG.

A couple of questions from my side. Sonja, you mentioned, you are confident to reach the disposal of EUR 400 million, EUR 500 million this year. Do you have already some interest here or in more concrete talks because as time goes by, we are at the beginning of August, there is a potential summer break, et cetera, et cetera. So is there already something more concrete in the marketing phase, as well in negotiation with potential investors. This is the first question, please.

Yes, definitely. We are in -- we have a pipeline of transactions, but we also are in close discussions with some disposals we would like to make, but it takes a little bit more time than in the past, so you can imagine. Therefore, we have a lot of interest in logistics. We have also a special interest in some of our office buildings here from our, so to say, old commercial portfolio. So that is -- there is a lot of interest from investors, but it takes also a little bit longer because if they need a financing and not all equity payers, so to say, they need a little bit more time. They need different calculations and so on. But we are in close discussions for some of them. We have also LOIs or in a closer discussion. So therefore, we have said, we are -- yes, we are still thinking that our disposal goals will be reached until end of year.

Yes. Excellent. Then another question. You mentioned the market value decline of 4% to 7% at year-end for the entire portfolio. I assume this is for the overall EUR 14 billion. So some questions on that. Why did you not make an update on the first half, at least for the commercial portfolio? Do you want to avoid too much transparency ahead of potential disposal activities? Or what is the reason for that?

No, the guidance is for the commercial portfolio only because it's for the value we have on our -- in our NAV and in the market value for the commercial portfolio. And as usual, we make the evaluation at the end of the year. So we have done this in the past because if you remember, we have the amortization in our balance sheet. So the market values are for the NAV and all these measurements, so to say, and we do not avoid transparency. But at the end of the day, we have established here internally department for evaluation for or 2 months ago, I think, to keep this -- to keep more focus on the evaluation internally. And we also have asked evaluators whether they have time and can do a evaluation for us. But to say it very clearly because we have not done it in the past, they are fully -- full, so to say, with other evaluations. It was not possible to do it until end of June. And as I said, I think we have a very good analysis here internally. And from this analysis, we see a 4% to 7% for, on the one hand, our own old portfolio and the logistics portfolio on the other hand.

And the 4% to 7%, is this more a status quo internal valuation? Or does this also assume further potential price declines in the second half of this year?

No. It's -- at the end of the day, it's the status taken from the evaluation from last year and keeping in mind what we have done this year and what we want to do until the year of the -- until the end of the year, so to say. And there, on the one hand, you have the interest rates; and on the other hand, you have the rental income. And as such, this is growing, so to say. And according to this analysis, we have made the -- yes, the spread or we have analyzed the spread we are talking about, and I think it's the status today, for sure. And it keeps in mind what we plan to do until the end of the year, and therefore, it's the best guess we can do internally now.

Okay. Excellent. You mentioned this only refers to the commercial portfolio. What about the EUR 10 billion assets under management. Are there no questions by third-party investors about the current valuation, [ as their fees ], I would assume at least partly will depend on market values, which are certainly lower than a year ago. So you -- do you expect in general also here a write-down on these values, i.e., the asset management fees, [ they are at ] risk of lower next year?

Yes. The institutional business is a other cup of tea, so to say, because there are other evaluations done step by step according to the time when they were bought. So some in March, some in June, and so on, not once -- not once a year. And what we see is, in general, the same trend, yes. So it's -- if we have bought the last 2 years, landmark asset it will be have -- it will have a little bit more decrease, and the older one, so to say, will not have such an impact and the trend is nearly the same here, what we see at the moment.

Then a question on your -- on the recent rating downgrade by S&P. Could you comment a bit more on your situation in the covenants with regard to bonds and as well as bank financing, what will be the risk, if LTV would move to above 60% in case of further write-downs and especially the ICR ratio will probably decline further before it starts to improve next year because it is probably based on the last 12-month EBITDA calculation. So any further risk here? Or what is the consequence out of this?

Andre, it's Peer speaking. Maybe I can answer this question. I mean, we have a clear plan in mind regarding the -- what we expected the development for the whole company regarding rental income, et cetera, et cetera, disposal gains or everything, which is relevant for the calculation of these credit metrics, and we see sufficient headroom till the year-end regarding development. There is some pressure on these covenants given the higher interest rates, but as Sonja also mentioned during her presentation, we see still sufficient headroom above the thresholds of 1.8% for the ICR and also for the LTV covenants under the bond documentation, maybe which is important to mention here that these LTV covenants are incurrence-based covenants, so not maintenance-based covenants. So that's what we can say so far, yes.

We are in discussions with S&P continuously, so to say, and we are preparing them with our ideas, as I said this [ year ]. And yes, the result is -- make it happen, yes. And that's what we are doing. And as Peer said, we are continuously yes, focusing on the covenant and the headrooms we have and controlling this as said, and is written down in the presentation, there is sufficient headroom according to the plans now. And I think the plans are not on a very high level, so that we think we can reach the plans and therefore, also the headroom of the covenants.

And the very last question from my side. You mentioned cost reduction plans of 5% to 10% that refer to the overall OpEx on an admin level or also on the property level? And do we have to expect any kind of onetime costs for the implementation of such measures?

No. This is -- we have started this yes, reorganization, so to say, beginning of the year, and this is a continuous process, according to our business, and we do not expect onetime cost effects or something like this. It's so to say, a continuously curve, bringing the cost down. It's an outcome of the reorganization, so to say, that we have looked at our processes and wants to be more flexible, more agile according to the circumstances of the market. And therefore, we have reduced the cost and looked on the costs, and we see the potential of, as mentioned, 5% to 10% over the next weeks and months.

So then the next question comes from Stefan Scharff from SRC Research GmbH.

My first question would be about -- you mentioned to be and to stay as a reliable business partner for your third parties and new equity inflow here could help for a higher fee level in future quarters. What is realistic here for the second half of the year and also for next year?

Yes, I think this point covers 2 items. So the one point is our existing institutional business. So -- as mentioned, we have got EUR 10 million in the second quarter, and we are focusing on the selling of the shares of this new vehicle. We also have some other ideas in mind, but I do not really know whether we can do this until the end of the year. So It's, I think, more realistic to establish this beginning of next year. In the institutional business, there is, at the moment, a lot, lot, lot focus on the existing business and on the other existing vehicles we are working on. And this brings me to the second item. What we see and hear is that there is a lot of focus from institutional investors on the asset and property management, and we had some who were interested to work with us on this asset and property management, new investors. And therefore, we are thinking about how we can do this and whether we want to do asset and property management without the equity of the institutional investor. So we have some ideas here. And it's difficult at the moment to create new business, that's for sure, because of the transaction market and the decision is it the right price at the right time from the institutional investors, but something happens always, and that's what we are seeing now and what we have done. And we want to establish the new fund until the end of the year. And we are also working on our other fund, where we sell the shares now and new funds, I think, will -- we are focusing on with beginning of next year.

Okay. Another question is your point with the selective reorganization. I could imagine this means also DIC Onsite, a lower number of branches or a lower number of staff, perhaps you can say here a bit more about the reorganization plans?

Yes. [indiscernible] it means the total company. So the idea is to get processes in place, which makes us more flexible and HR to get the work done, but to get more [indiscernible] responsibility in the part of the process. And we are still in discussion and still in finalizing. So therefore, I cannot say more at the moment. But I will -- when we have finalized this.

Okay. And I see in your presentation, the lease expiry is EUR 14 million in '25 quite high or a bit higher than the other years. Perhaps you can say a bit more what lease [ expiries ] coming in '25?

Yes. That is -- those are 2 assets, which are coming in '25. And these are 2 big assets, so to say. And therefore, we are in discussion with the existing tenant. What we want to do is a little bit that what we have done with the [indiscernible] in Darmstadt [ some ] years ago. So we have a lot of time now to get this done, but we are, on the one hand, in the discussion with the existing tenant; and on the other hand, we are thinking about repositioning of these assets, but we are still working on this point yes.

Okay. It's on the office side, I guess.

Yes. This is office.

Okay. Okay. And perhaps you can also say a little bit more about the CapEx this year, what you can spend or what you do in CapEx measures? And also what is the plan here for the coming year?

Yes. So let me calculate in my head because I have to do VIB in addition to our normal exposure. So at the end of the day, it will be [ around ] about EUR 23 million for the total company, so to say, for our own portfolio is like the last year is around about EUR 14 million, EUR 15 million. where we do the CapEx, very selective CapEx on the one hand, the security ones; and on the other hand, the ESG ones. But as I said, we want to stabilize the values here and not as normal on the letting side, to get the occupancy down. And on the other hand, on the VIB level, we have not only CapEx, but we also are in developing new assets here. So therefore, it is compared to DIC old commercial portfolio a little bit higher, but it also represents the number of creating value and getting the development done here. And I think this is also the run rate for the next 12 months to 18 months here also for 2024.

Next question is from Jochen Schmitt from Metzler.

I have 2 questions, please. Firstly, did gross interest income include a major positive contribution from liquidity in the second quarter? And secondly, the investment fund of VIB Retail properties launched last year. Has this fund already been settled balance sheet-wise? Or has there been not any relief on LTV by that yet? These are my questions.

Thanks, Jochen. Can you repeat the first question because we didn't get what you said...

Yes, gross interest income. Interest income in Q2 was, if I'm right, almost EUR 6 million compared to a bit more than EUR 2 million in the first quarter this year. And my question is, was there any boost from liquidity in the second quarter due to interest rate received?

Okay. Now we got it. So the interest, we can say, on the one hand, we have -- or let me say it in general, yes. We had a lot of liquidity on our balance sheet, as you have seen, is coming, on the one hand, from the refinancing and on the other hand, from the normal business. We were in discussions with the banks for refinancing or not refinancing, but for the bridge volume and the extension of the bridge volume. And therefore, we were discussing the payback amount and the payback time. It takes a long time to negotiate these things with the 3 banks. And therefore, we had the liquidity on balance sheet, and we brought it to banks, so to say. And because we get interest now for the -- for the amount we have on our bank accounts. Therefore, the interest income increases incredibly. On the other hand, we paid, so to say, double interest because we have the liquidity there and didn't pay the bridge back because we were not -- we have not finished a negotiation. And therefore, the interest income is much higher and also the interest expenses are [ around ] about EUR 4 million higher than it would be normal if we had paid back the bridge volume of EUR 200 million beginning of April instead of beginning of July. The second question was, let me see the new fund. Unfortunately, there was no finalized progress in the second quarter. So we are still in the discussion here with some investors. So it was also more interest coming in the second quarter. But at the beginning, this all takes a long time to get done. And now there are holiday time and so on. So we have no changes from this vehicle in Q2.

The next question comes from Manuel Martin, ODDO BHF.

Two questions from my side. The first question is on the financing. I mean, the LTVs are relatively elevated and might go a bit up by the end of the year, depending, of course, on disposals as well. But maybe can you disclose a bit your financing rates when it comes to mortgages and bonds. So what's the current situation right now for DIC?

So we have -- as you can see in our webcast presentation, we have split it up here to give a better picture on this side. And as I said, what you see is that our short-term debt is on a very high basis according to the long-term debt, which is on a lower level, it's logical, yes. And therefore, we try to refinance -- payback at the first step and also in discussions for the option of a refinancing for the short debt position, so to say, and the refinancings we have done on a mortgage level were around about 4.4%. And I think this was exactly the right time to do this refinancing because the interest rates grow -- grew during the last weeks and months, and I do not really know whether ECB will increase the interest rates again. But at the end of the day, we were here at 4.4% on a short-term level here for the bridge. And yes, especially for the bridge we are on a higher level of around 8%. And yes, we have not placed promissory note or a bond the last week. So I cannot really say how the interest rates would be there. But we are in discussions with banks, whether there is an option and what does this mean, so that we have a clear picture what makes sense and how the calculations would look like if we do something on the refinancing here.

My second question would be on the depreciation and amortization in the second quarter. This item was exceptionally high with, I think, EUR 41 million, driven by write-offs. Can you elaborate a bit on the write-offs, I think they are related to disposals? Maybe you can give us some background and highlight that a bit?

Yes. So as such, we have a plan for the disposals for this year. And yes, there are the market conditions as they are in the transaction market. But on the other hand, we have some assets, which are non-strategic, so to say, for us, and we are trying to do this, as we have done last year -- end of last year with [ ex-Kaufhof ] in Chemnitz. And that's hard work for our transaction team, but they are still making progress. And so we sold 3 assets from our portfolio from a logistics portfolio end of June. We also sold one asset from the institutional business, also logistic asset beginning of July. And what we see at end of June is that we sold one asset from the logistic portfolio, which was very big, and which has a lot of [ CapExes ] over the next years and with 8 separate parts, so to say, in this one asset. We made the decision to bring this on the market and to try to sell this even with a discount and this was what happened. So we sold this asset with a discount. And because we had an authorized contract, we had to do this or we had to bring this new, new knowledge on the value of the assets into the balance sheet. And therefore, we had a depreciation of around about EUR 23 million here. On the other hand, we sold 2 assets also from the logistics side with nearly no discount. So because they are -- these are good assets, but at the end of the day, non-strategic assets. And also the fourth one, we saw beginning of July for the institutional business has nearly no discount. So it's a spread according to the special situation of the asset. And the one we sold with a discount was, as said, one with 8 parts and a lot of CapEx coming out -- coming up also from security reasons, but especially from ESG reasons. And therefore, we decided to do this -- to not do this in the future and to sell it with the discount we see now.

Next one is Philipp Kaiser from Warburg Research GmbH.

Just 2 follow-up questions. One, regarding the financial result. You also -- you already elaborated the high interest income in the second quarter, but also your interest expenses was kind of EUR 3 million below the Q1 level. Could you elaborate a bit more on that segment, what the run rate for those positions for the next quarters? That would be my first question.

So it's the effect I mentioned some minutes ago. So on the one hand, we have -- well, not on the one hand, we had a lot of liquidity on our balance sheet and on our bank accounts, and we brought them to work, so to say, therefore, we got the target scaled or [indiscernible] interest income. And on the other hand, we couldn't use this to pay back the bridge. So we had to pay the interest of the bridge because we had to finalize the negotiations. And therefore, we have run about EUR 4 million, if you want to say, double payment because we had this interest payment for the bridge. And now we have paid back the EUR 200 million. We will not see this in the upcoming months. But for the second quarter, this was, so to say, the 2 effects of having that lot liquidity on the balance sheet.

Your interest expense was lower than in Q1, so it had a positive effect of EUR 3 million out of this effect or I'm missing something here?

Yes. This was -- this was the other effect because we had the disposal, so to say, for the new vehicle for the fund we brought the assets in Q1.

My last question is regarding the real estate management fee. So your -- sorry, your recurring management fees amounted to almost EUR 22 million. By just doubling it would be below the -- your guidance, so I think you assume transaction and performance fee in the second quarter. Could you shed some light on the visibility on those fees? Are they already locked in or in discussions? Or could you shed some light on this visibility in the transaction and performance fees in the second half?

Yes. We are also there still in discussions. And in different discussions on the one hand, as you said, selling some assets and getting disposal and performance fees all of that. But on the other hand, also in doing a club deal or 2 club deals we have in mind here. And we also have -- or we already have defined some assets here, where we're in discussions with institutional investors for the interest and for -- yes, bringing the right investors together to do this club deal here. So it's in an early stage, I would say, but this is, yes, a good view we have now on this and the interest is still there. And now we have to prepare on the one hand, the assets that we get this done; and on the other hand, the investors, so that we can bring them together and both are there when we finalize it. But we are still in discussion and have a clear picture on this. And now we have to make it happen.

Our next question is from Kai Klose from Berenberg.

I've got a few questions from my side. The first one is again on the write-downs, you recognized [ certain ] amount of EUR 24 million. Could you give -- so again a question on that again? Could you ask -- can ask again what was the average discount in disposals in H1? And what was the range from high discount to probably low discount?

My colleagues calculate the range. I'll tell you something about the range. It was 2% from the 2 assets I have said to 19% from the big asset and the range was, I think, 13.6%, nearly 14%. The total range, so to say.

And in the context of the targeted EUR 300 million to EUR 500 million disposals for the full year from the commercial portfolio is -- this average discount you [ just ] mentioned something to be expected, whether you expect to materialize?

Hopefully not, yes. So as I said, the high discount we had on the asset, which had a very high volume and which was a special case. I think it will be -- yes, I also said it will be a mix. But at the end of the day, yes, we would not like to sell with 20% discount. So if it is strategically wise, so to say, then yes, but if not, then not, yes.

And 2 last questions regarding the splits of the disposals of up to EUR 500 million. Could you indicate how much you intend to sell into the, so to say, open market and how much into the funds if any?

No. At the moment, we have not planned to sell into funds. So we have brought a Unite into a fund, and this is in place, so to say, but we do not have plans at the moment to bring the assets into new funds.

And the last question...

So selling on the market, so to say.

And the last question is on the funds business. I saw in the annual report on Page 57 that there was about EUR 250 million of committed equity is still available for transactions. Now I saw it was about EUR 180 million is the reduction by EUR 70 million due to transactions you did? Or did you -- were the redemptions?

Yes. We had EUR 180 million open here, and this was due to redemption. So there are some funds, which have time lines in place, so to say, where the idea is if the equity is not used until a certain point of time, the equity is not there anymore, so to say. And we also have in the EUR 180 million additionally, I think, EUR 50 million, which are also based on such a contract. So if we do not use them for transaction, they will go away until the end of the year. So -- and openly said, I do not really know whether we can bring this EUR 50 million equity to transaction at the moment. So it's the decision of the investor, and it's not easy to get these big transactions on the market at the moment.

And sorry, 2 last questions. Regarding the extension of the bridge loan, could you indicate what is the step-up in the coupon in H2, I guess, and then, H1 last year? And [ is it ] renewed or is a new repayment date now kind of a fixed date or is there a chance to get that extended in the case of lower disposal volumes in the second half?

The next step is 50 basis points, I think, in October. And yes, it's not our goal to extend the bridge once again. So we have a clear plan, and we are focusing on this plan. I think there are always possibilities to extend, but that's definitely not our plan, yes.

And then we have a 50 bps increase in the coupon in October, assuming it will stay in place until June next year? What would be the additional step-ups in '24?

No. The additional step-ups came beginning of the next year, every 3 months with 100 basis points there.

So the next question comes from Markus Schmitt from ODDO BHF.

I have just one, and that is on the ICR calculation. I do not see here a reconciliation of that calculation when I dig into the documentation of the bond and take the LTM EBITDA and the LTM net cash interest, I get rather to 2.4x, not 2.6x. Maybe I missed something here. Is it possible to get a reconciliation of that calculation?

Yes. Peer speaking. Yes, that's due to the thing that they are not part of this one-off expenses we had. So that's why we calculated under the -- on that basis and came to 2.6% by the time.

Okay. But basically, when I take the EBITDA, what you publish and take the net cash interest according to the cash flow statement, you should guide me. I mean, I should not be too far of that?

Yes. That's correct. And then based on the last 12 months basis.

For the moment, this was the last question. [Operator Instructions]

Okay. As we see there are no further questions from the audience, thanks, again, for joining our today's conference call. As usual, if you have any follow-up questions, please don't hesitate to contact the IR team, either via e-mail or via call. We are available through -- for the whole day. Thanks a lot. Bye-bye. Have a nice day.

Thank you. Bye-bye.