CLS Holdings plc (CLI) Earnings Call Transcript & Summary

Good morning, and welcome to this live presentation of CLS Holdings plc's Full Year Results 2021. I'm Fredrik Widlund, Chief Executive; and I'm here with Andrew Kirkman, our CFO. The world is changing. And as a scene-setter, I would like to start with the words at the front of this presentation, location, quality, flexibility. You might have expected location, location, location, but let me explain. The locations we invested is still the most important success factor, and we will continue to invest in and near large cities with great transportation links. What has changed is the need to ensure that offices are of a high quality, both from a customer perspective and a sustainability perspective. And this means that the lot size is increasing to justify the increasing investments required. CLS has always been flexible when it comes to lease length, breaks or contributions to fit outs. And this is now becoming the norm in the market. Different customers also need different things. And in addition to more traditional leases, which will still be the vast majority, we're also continuing the expansion of our plug-and-play flexible office on the base brand. Today, we will present you with the full year results, but also what we see going forward and in the market. So let me start with an overview of the year. We had a year of 2 halves, and the second half was much stronger. We did 40% of full year leases in the fourth quarter, and vacancy fell from 7.7% to 5.8% in the second half. Valuation was up in all 3 countries. It's now GBP 2.3 billion, as can be seen on the right. EPRA NTA was up 1.5% and NAV was up 4.7%. EPRA EPS was down from 12.2p to 11.3p from higher vacancy and FX, despite some offset from cost reductions. We launched our fully costed Net Zero 2030 pathway. And with inflation and interest rates increasing, we are very pleased that 85% of our debt is fixed and over 50% of rents are indexed-linked. Dividend was up 2% to 7.7p per share. And the policy will be reviewed following the conversion of our U.K. business into a REIT. We also have excellent opportunities in the existing portfolio, which we will talk about shortly. So on the next slide, I would like to talk in more detail about the valuations. Overall, the portfolio was up 1.6% in 2021. And on a like-for-like basis, it was up 1.9%. In the U.K. valuations were up 0.7% for the year, with a strong recovery in the second half. The first half was down 0.6%. Key drivers here were government leases and development opportunities in Central London. In Germany, valuations were up 3.1% for the year, 0.7% in the first half and a strong second half from significant letting activity. In France, valuations were up 0.3% for the year. They were flat in the first half and mainly driven by vacancy reduction in the second half. ERV was up in the U.K. and Germany with 1.3% and 0.6% respectively, while France was down 1.6%. We saw some minor yield compression in all our 3 countries. Next, acquisitions and sales. We had a busy year with 14 transactions in 2021, and we have so far in 2022 exchanged or completed on a further 4 transactions. We are continuing to improve the portfolio. And as you can see from the numbers, we're selling smaller assets and buying bigger and better. Starting with acquisitions. We acquired 1 property in the U.K. in Watford with over 50% of government income, but also with some good asset management opportunities. In Germany, we acquired 5 properties, 3 in a portfolio and 2 individual properties with deliberately targeted properties with some vacancy, and the reversionary yield from the acquisition was over 6%. In 2022, we have also exchanged on a further 2 properties in Germany for GBP 76 million. On the disposal side, we sold 8 properties, which were smaller or had a higher alternative value. 3 of them were in the U.K., 2 was in Germany and 3 in France. Overall, in 2021, we acquired for circa GBP 165 million and sold for GBP 37 million. And we do expect to continue to be a net acquirer in 2022 as well. I'll hand you over now to Andrew for a bit more details around the numbers.

Thank you, Fredrik, and how great to see some of you in person again. So good morning, both to those in the room and to everyone tuning in. This morning I'm going to run you through our robust financial results for 2021, the considerable letting progress made during the year through our active asset management approach, and the resilience of our rental income in these uncertain times. My first slide sets out several of the key financial metrics for the business. In 2021, sterling strengthened by over 6% against the euro, which impacted a number of these metrics and is a key theme of these results. I'll run through the key metrics in detail over the next few slides. But here, I wanted to concentrate on the graphs on the right-hand side, which show our consistent track record of delivery. I will touch on EPRA EPS on the next slides, which has remained stable, whilst we have refocused the portfolio on long-term, high-quality growth opportunities. However, for statutory EPS, as shown by the red bars, during this period we've continued to deliver valuation growth and profits on disposal to drive increases in net asset value. In 2021, we again delivered valuation growth, but our balance sheet was also boosted by the release of deferred tax liabilities following the conversion of our U.K. operations to a REIT. In 2021, we also managed to achieve another record low cost of debt at 2.22%, one of the lowest in the sector. And finally, we've maintained our long-term record of growing the dividend with 2% growth in 2021's full year dividend. The waterfall chart on the next page sets out the main components of the movement in EPRA net tangible assets. NTA increased by 1.5%. This was due to the increases shown in the purple bars of EPRA earnings of 11.3p, more of which on the next slide. Valuation increases in all 3 countries as highlighted by Fredrik, which added 8.4p and the extinguishment of deferred tax and capital allowance liabilities of GBP 43.7 million, of which GBP 18 million were timing differences impacting NTA, hence the 4.5p increase. These increases were offset by the 9.7p foreign exchange reduction from the 6.3% strengthening of sterling and the payment of 7.55p of dividends. As noted, NTA increased by 1.5%, but if the sterling-euro exchange rate remained flat, it would have increased by 4.3%. The total accounting return, which includes dividend paid, was 3.7%. Turning to the next slide, we've set out the movement in EPRA earnings per share, which fell by 7.4%. As is clearly demonstrated, the biggest impact of 1.1p per share was from the strengthening of sterling. While sterling strengthened further in the second half, occupancy and letting activity also improved, giving real momentum into the start of 2022. The other principal movements, which I highlight in the graph are 0.4p per share reduction in net rental income, mainly as a result of 2 things: firstly, reduced income from lease expiries and an increase in our refurbishment program to improve quality and drive ERV; and secondly, reduced dilapidations income. Our one student accommodation and one hotel operation and now back to pre-COVID levels of occupancy. This rental income was though more than offset by a 1p per share reduction expenses due to lower staff costs following restructuring and lower provisions, including bad debt costs, reflecting our very strong ongoing rent collection. We do expect about 1/3 of this to reflect in our lower cost base going forward. And 0.4p per share increase in net finance expense and tax was largely a result of higher debts and lower cash balances, given net acquisitions. On the next slide, I set out the movement in CLS' liquid resources during 2021. Our cash position remains strong with nearly GBP 170 million of cash and GBP 50 million of undrawn resources. Whilst at the same time, we were able to carry out considerable acquisition activity. Cash from operations of GBP 73.1 million, less interest and tax of GBP 28.9 million, gave net cash from operations of GBP 44.2 million, which is almost the same as EPRA earnings. This net cash from operations also covered the dividend paid 1.5x, in line with our dividend policy. Overall in the year, cash went down by GBP 67.3 million as a result of our investment to the business to meet tenant demand for well-located quality and flexible buildings. The 6 acquisitions that we made plus capital expenditure invested into business totaled over GBP 200 million. The graph here shows the growth in our property portfolio during 2021, which was largely driven by those net acquisitions of GBP 142.4 million and demonstrating our ability to buy well, these acquisitions increased in value by 4.5% in 2021 as part of the GBP 36.7 million valuation increase. We are also increasing our investment into the portfolio, both in selected developments and refurbishments, to improve the quality and ERV of the portfolio, more of which from Fredrik shortly. CapEx in 2021 of GBP 36 million was more than double the amount spent in 2020, and we intend to spend between GBP 50 million and GBP 70 million per annum over the next 2 years to upgrade the portfolio, including improving its sustainability credentials as part of our Net Zero Carbon Pathway. The next slide shows it was a busy -- another busy year for financing activity. The key metrics for us are that debt maturity remains stable at 4.4 years, closely matching our WAULT of 4.6 years. Cost of debt was reduced further to 2.22%, and interest cover remained healthy at 3.2x. The key metrics are also shown in the table at the bottom-right. This table also shows that our loan-to-value increased to 37.1% as a result of net acquisitions in the year. We are comfortable gearing in the range of 35% to 40%. We could even become through at a high level, provided that we maintain the protections of significant covenant headroom and substantial cash and/or undrawn facilities. In the year, we financed GBP 196.7 million at 1.62%, which contributed to reducing our cost of debt. As the vast majority of these financings were affected rates, they also contributed to keeping our proportion of fixed-rate debt very high at 85%, which clearly adds certainty in this period of rising interest rates. Finally, as shown in the chart on the top-right, the highlight of the year was another long-term green financing, this time with Scottish Widows. The GBP 61.7 million financing expiring in 2033, which includes a 10 basis point margin sustainability incentive means that over 20% of our loan portfolio is now green, well on our way to our 2030 target of at least 50%. Turning to the next slide. I summarize here our letting activity in 2021. The graphs on the right-hand side, both show the movement in vacancy during the year as there were a number of moving parts. In essence, vacancy increased through the first 9 months of the year from lease expiries, but equally from deliberately acquired vacancy in Germany. The final quarter saw significant letting activity with 40% of all of our deals done, which brought down vacancy for both the acquired portfolio, but also the rest of the portfolio. The number of letting deals done, whilst up year-on-year were still down on the usual pre-COVID level, but we are starting to see occupiers committing to more new leases rather than simply rolling over existing leases with a balanced split roughly equally. Although as shown in the bottom left box, the WAULT was reduced slightly as tenants are seeking and CLS is happy to offer greater flexibility in lease terms. We secured the deals at 0.4% above ERV. However, we executed a deal with Veolia somewhat below ERV, both to secure a high-quality tenant as well as to protect against the increasing vacancy in the Western Crescent in Paris. Excluding the lease for Veolia to fill up our building at Inside in Paris, the deals were 2.4% above ERV. Rent collection continued to be excellent at 99%, albeit this new normal is really the old normal. My penultimate slide sets out our high-quality diversified tenant base, which explains our continued excellent rent collection. The left-hand side of this slide sets out the hit parade of our top 15 tenants. As a result of our acquisition of The Brix in Essen, Siemens is now a new entrant to the chart at #4, with our building serving as a regional headquarters for the industrial powerhouse. The right-hand side shows the industry breakdown of our tenants. We favor multi-let buildings and have approximately 8 tenants per building with over 50% of our tenants from government agencies and major corporations. We are seeking to increase our government exposure and recently signed 2 large leases with government agencies in Hamburg and Cologne in Germany. Finally, this slide summarizes the resilience of our rental income with over 50% of rent index-linked. Although the positions vary slightly in each country as follows. Most U.K. leases are not index-linked but benefit from upward-only rent reviews. Spring Garden is the biggest asset in the portfolio. We'll see a rent increase of 8% in 2022. In Germany, 64% of our leases are CPI-linked. In addition, over 15% of our German leases have built-in step increases. And lastly, in France, all leases are index-linked. But unlike the U.K. or Germany, these can go down as well as up. And with that, I'll hand back to Fredrik to run through the considerable upside potential within the portfolio.

Thank you, Andrew. As you heard earlier, location is and will always be the most important success factor. And our proven location criteria is still very much the bedrock for our success, and that will not change. What has changed is the requirement to invest in the properties to ensure we offer the quality and flexibility that occupiers are asking for. In addition, there are also significant changes in sustainability and legislation that is required. So all this means large lot sizes and acceptance that increased CapEx is required going forward. High quality modern space are key, both in terms of amenities and technology, and we have over 30 refurbishment projects ongoing or planned for 2022. And as you can see on the right-hand side, those are some of the examples what we're putting into some of the new properties that we are developing. Flexibility also hugely important and landlords need to offer different leasing solutions for different needs and occupiers. You also need to be close to our occupiers and our teams meet with them on a very regular basis, but also do more structured surveys, which gives some of the results that you have seen being highlighted here that we're very proud of. Next, I would like to talk about some of the larger projects that we have in the portfolio. We have presented projects in London before, so this is an update, but we also have new project at Park Avenue in Lyon. Firstly, at Vauxhall Walk, we are making good progress on our 28,500 square feet new office building. As you can see, is now at the fourth floor of the concrete frame. Delivery is Q1 2023, and we have had our first potential tenant visit earlier this month, which is very encouraging. At #9, Prescot Street in London. We're now investing GBP 29 million to completely overhaul the entire building. Often opportunity materialize for us to extend the project from the original plan of refurbishing 4 out of the 6 floors in the building. PC is in Q2, 2023. And here, we have also had our first potential tenant visiting. In Lyon, the city with an office market is doing very well. We're on site with the refurbishment of the entire building as well as creating additional space. PC is at the end of 2022, and we are already in discussions about the pre-let for the available space. I'm also very happy and pleased to again report the progress we're making on sustainability. The major progress in 2021 was the launch of our new sustainability strategy, including our Net Zero Carbon Pathway to 2030. This was a substantial project on a property-by-property basis, which has resulted in a fully costed plan of GBP 58 million to ensure that our portfolio will meet long-term sustainability goals. This is now an integral part of all capital projects that we undertake. We also increased our PV capacity over 100% and completed on our largest projects to date at Pacific House in Reading outside London. In addition, we're also proceeding with a number of smaller and medium-sized projects to improve energy efficiency across the portfolio. And all this work was also reflected in our increased GRESB rating from 72 to 85 out of 100. On this slide I would like to talk more about existing ratings of the CLS portfolio. On the right-hand side, you can see the current ratings by country and also overall BREEAM rating for the portfolio. The new sustainability strategy also addresses that all our U.K. properties will have an EPC rating of B or better by 2030, and that we meet similar targets in France. Although here, we only have 2 properties not already meeting the 2030 targets. The U.K. requirement by 2023 to have nothing below E is already achieved. In Germany, the regulatory landscape is changing, but this is the most modern portfolio we have, and we are confident that it will meet any future requirement that will be announced. We've also completed BREEAM In-Use assessment with the majority of our properties in the good or very good category. A bit more about the 3 markets that we operate in. So starting with the U.K., where we have seen more confidence in the real estate markets. And also the U.K. occupiers are now fully recognizing the importance of the office, which we have always believed is the case, but it's always good to hear that as well from our customers directly. There's also a lack of quality stock for some of these offices at the moment, 30 compared to historical figures. But we do think with some more positive letting momentum, we expect this to improve as we go through 2022. In Germany, resilient economy, strong office fundamentals, still with a very low vacancy and supply in the larger cities. We see very supportive and positive demand dynamics. The German energy dependency on Russia and potential cost inflation is something to be monitored. But with over 80% of our leases either indexed or having stepped rents, we are in a pretty good position in our German portfolio. Leasing has been strong, with both local and central governments are very active, something we have experienced in many of the recent deals that we have done in the second half, and you heard earlier Andrew describing the 2 big ones we've done in Hamburg and in Cologne. In France, we have a little bit more of a mixed picture with Central Paris and Lyon performing well, while there are some continuing supply challenges in the suburban Paris markets. Demand for smaller space below 1,000 square meter has been good, and our vacancy in France is now 3%, the lowest in the group. We like the diversification that all 3 countries offers, and we will continue to invest in our French portfolio. In terms of the opportunity within the existing portfolio, a few things to go through. We had a very strong second half momentum. We heard that the leasing activities was 40% in the last quarter of the full year. That has continued into 2022. The significant growth opportunities, both from filling up the vacancy from reversions in the portfolio and also from the net acquisitions that we have undertaken. And in addition to that, we also have indexation that is driven on driving further upside on the rents. What I would like to do here is go through the walk that you could see at the bottom, and this shows the ERV potential in the portfolio. So starting on the left-hand side, you can see that our contracted rent are GBP 107.6 million. We then have the vacancy in the current portfolio. We do acknowledge that we will never get down to 0% vacancy and neither would we want that. But there's certainly potential to close out and get closer to our long-term target. We have the net reversions that will come through as GBP 5.4 million. Those 2 together takes us close to GBP 120 million of rental income. In addition to that, we have circa GBP 3.5 million coming from the net acquisitions that we have already completed to date this year. And then there's a further GBP 9 million to come from the refurbishment that I mentioned earlier on. We have over 30 projects in the portfolio. Among the bigger ones is Prescot Street, you have the Park Avenue in Lyon, et cetera. Vauxhall Walk, which you saw earlier as well is now on the fourth story. That adds another GBP 1.5 million once that is fully let. So that would take the portfolio ERV GBP 134 million. We then have other developments further on that we're not yet committed to, which adds another GBP 5 million. So what I hope this illustrates is that there's a lot of opportunity and potential in the existing portfolio, and any acquisitions would just be on top of that, but there's a lot of things for us to do in the next 2, 3 years to drive growth in the CLS portfolio. Finally, I would like to leave you with a few key takeaways from today's presentation. So robust 2021 financial delivery from our resilient strategy and business model. Valuation was up in all 3 countries on a group basis 1.6%, on a like-for-like basis 1.9%. Earnings in 2021 were impacted by vacancy and FX. However, we do maintain a healthy margin between our net initial yield and cost of debt, which drives cash flow, as can be seen on the right-hand side here. We did launch our new sustainability strategy in August, including our fully costed Net Zero Carbon Pathway to 2030. There's significant upside from vacancy reductions, reversions and indexations. And we have over 30 refurbishment and will drive rent going forward. In addition to the GBP 165 million acquired last year, we will complete on a further GBP 76 million of acquisitions in April this year. And finally, our type of properties, quality and locations are very well positioned for future working patterns and it is what tenants are looking for. So with that, I'd like to conclude today's presentation. Thank you all for attending. And we will now open up for questions.

Kieran Lee from Berenberg. Just a few questions from me, if that's all right. You talked to the sort of potential increase in weighting towards government tenants. Do they differ from the private sector in their building requirements, what the return to work and building occupation looks like? Are you changing your refurbishment plans for that? Secondly, there are some of these long-term development projects like Spring Gardens. Are you able -- I know the lease expires in 2026, when should we be thinking about potential sort of catalysts from planning or other gains to come from there? And then lastly, are you able to comment a little bit more on dividend plans following your REIT conversion that you touched on at the beginning?

Right. Thank you, Kieran. Why don't I start with the first 2 and then hand over to Andrew for the dividend question. When it comes to government tenants, I would say that these days they are not very different from a private tenant. In the past, government tenants might have asked for slightly less specification. But I think as everyone is now competing to have the best staff employing, including government, they are asking for very similar specs for us when we do this. Credit risk, and they normally go for fairly long leases, which means that, yes, sometimes you have to give them a little bit more contribution than you would perhaps do with it for a shorter lease that a private tenant might ask for.

Do you want to jump in and take the dividend question?

Dividend, yes, for Spring Gardens. You have probably some of the good questions, Kieran. So I think everyone probably want the dividend question. I put in my CFO review that probably being a bit prudent, the GBP 3 million that we are going to save at the bottom end of the range is probably what comes through EPRA earnings and then the amount above that all depending on what we said in the year. Of that GBP 3 million, very simply, if we maintained our 1.5x dividend coverage at the moment, then that's an extra GBP 2 million to shareholders. So therefore, we will get some growth in the dividend over and above what you would normally get in a normal year. But as we have highlighted, we will very much be looking at dividend policy going forward and whether that 1.5 to 2x cover ratio remains appropriate or whether we might lower that cover ratio. I think it is going to depend on the views of all stakeholders, both in our Board, and be interesting to see where investors and analysts are. So I'm sure you will have a view.

Thank you, Andrew. Going back to Spring Gardens. As you pointed out, the lease does not expire until early 2026. So it's still a little bit early to know exactly what is going to happen with that. We are in ongoing discussion with them. And I would expect that we will know a little bit more about their long-term intentions towards the end of this year. And that is when it's time to start planning for different routes for that building. But it's a great opportunity. It's a big site in Vauxhall. And yes, there's a lot of different opportunities to work on for Spring Gardens.

It's James Carswell from Peel Hunt, asking more about the dividend because you kind of promised to me. Just on -- obviously, you're going to review the payout rate. I mean, is that a direct kind of repercussion of becoming a REIT because the payout ratio means you have to? Or is it more a broader kind of review in terms of what, as you say your stakeholders are thinking?

Yes, good question, James. No, it's absolutely not a requirement. I mean, making this overly simplistic, but if half of our profits come from the U.K. and we've got to pay out 90% of those, effectively 45% therefore is the minimum payout. It obviously gets slightly tweaked by capital allowances and the pit rules around that. So if we were currently paying out half to 2/3, you can see then we would top it up with the French and German divvys to get to that ratio or range. I think it's probably just something to look at because unwittingly we are becoming a high-income stock at the moment. And maybe that would be something that will encourage more investors.

Absolutely. And then maybe just one, I know you gave a bit more information about some of the index-linked leases and I probably should know more about the structure of the lease in France and Germany. But can you just talk a little bit about the lease length in France and Germany? And I guess also how at the end of the lease, presumably potentially reset back to the market rents. So I'm just thinking, obviously, in the U.K., a lot of index-linked are 15, 20 years. I think I'm right saying it's shorter in Europe. Is that the case?

Yes. Why don't I start, and Fredrik will jump in when I get it wrong. So France and to an extent Germany typically are sort of 3-, 6-, 9-year leases. If you look at Germany, Germany in terms of indexation, if you get to 5% increases in CPI since the start of the lease, then it kicks in and then it kicks in again at the next 5%, et cetera. With Germany, they often have the opportunity to prolong the lease at the existing ERV plus that indexation. And so for us, and Fredrik touched on it, actually vacancy is often a good thing sometimes to reposition the assets, sometimes refurbishment -- refurbish it, but also actually because at the end of that lease allows us to then reset back to ERV. So there are a number of buildings in Germany where there's a very significant ERV jump that we're expecting at the end of that lease.

That makes sense. And just there's no caps, is that right, in terms of the French and German?

In general, no. I mean, it is a free market. There will be some leases that would have a cap and color on them, but the majority of them will have no caps, no.

We have just one question on the webcast from [ Richard Pearson ]. Will you be taking powers to buy in your own stock given the sort of different discount EPRA net asset value? Such purchases were given immediate return of over 75%.

Again, why don't I start on that one? We do already have the existing powers to buy our shares. It's that we will look to review, as we do, at the AGM. It is something that we keep under review. Actually, we have looked at some of the metrics around it, and it is actually moved depending on how well we do with acquisitions as to which is the better use of capital. But clearly, it's something we will keep under review.

Just one from me. Charlotte at Panmure. Just in the GBP 50 million to GBP 70 million CapEx that you're planning on spending, so does that include kind of the Net Zero spend and also the kind of minor refurbishment projects that you're just kind of doing to uplift as you're saying, the 30 projects ongoing and the major projects as well?

Yes. So in the past, we have spent GBP 20 million to GBP 25 million a year, excluding any large one-off development projects. That is definitely increasing. Last year, we spent GBP 36 million. And that's the amount that we think will go up, closer to GBP 50 million a year. It does include the GBP 58 million over the next 9 years to meet Net Zero Carbon targets. That is now very integrated in all projects that we do. So it's a little bit difficult to single out exactly how much is pure sustainability versus normal refurbishment. But it covers everything on what you mentioned. It does not cover things like the Stuttgart developments that we have not committed to yet. So if we do decide to go ahead with some of those developments, that would be in addition to what we talked about.

[Operator Instructions] We have the first telephone question is from the line of Marcus Phayre-Mudge from BMO Global Asset Management.

I just want to pick up, if I may, on the comment -- 2 comments. So Andy's comment about, I think you said unwittingly becoming a high-yielding stock, which would imply that it's not a core focus. So if you could comment on that. And then secondly, just to pick up, I think you'd rather glibly blushed aside the comment, the question from the web around the discount. I think stock sadly had the [ ignominy ] of not being on a wider discount than some heavily overly indebted retail companies or owners of retail property, which is obviously still undergoing structural issues. And quite simply, this is a request, the Board needs to have a proper branch review of the strategy. The reason you don't want to buy back stock is purely because the family owned more than 50%. And so essentially, the family to understand in order to encourage institutional investors, they're going to have to buy back in line with the company to allow themselves to stay at 50-odd percent. So really, this is a complete plea that we cannot have a company sitting on a 50% discount when you produce a perfectly good set of results. It's disincentivizing for everybody involved, management, shareholders, staff, et cetera.

Fine. Why don't I start on that one? There was [indiscernible] may be glib about the word unwittingly. I mean we have a dividend payout compared to our balance sheet of just over 2%. As I said, we retain cash in the business to reinvest. As you highlighted, with the discount, we are now at more like a 4% to going to 5% yield on the dividend, which is not what we want to seek to do. So yes, clearly, share price appreciation, which we would all would want to see would lower that dividend yield.

Yes. And Marcus, maybe to comment just a little bit on the NAV discount. I mean if you look back at the CLS shares over the last 25 years since it was listed, it has always fluctuated, which is true for other companies as well. I mean, clearly, at the moment, it's not satisfactory to trade at a very large discount. But we always believe that if you continue to deliver on your numbers, that will sort itself out over time. I can assure you though that the Board is definitely discussing this, and that is something that's very high on the agenda for the Board going forward. Thank you all for attending. Thank you all for the questions. And we will then conclude today's presentation and Q&A. Thank you.