PATRIZIA SE (PAT) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by. I'm Timo, your Chorus Call operator. Welcome, and thank you for joining Patrizia's Full year 2019 Conference Call. [Operator Instructions] I would now like to turn the conference over to Karim Bohn. Please go ahead.

Thank you very much. Good afternoon and welcome, everyone. Thank you very much for taking the effort to join the call during these times. Let's start with our view on the current special situation. No one can reliably predict the final economic impacts of COVID-19 and the final economic impact on us, but our base house view is that we see a V-shaped recovery end of the second half 2020 going into 2021 after a deep recession in Q1 and Q2 going into Q3. Operationally, Patrizia is best prepared for this environment. We have ensured business continuity at early stage. Our group task force has prepared staff for every possible scenario. Our people are set up to work mobile and from home. And the moment, more than 50% of the staff is already working in home offices. More importantly, we also made sure that our people can take care of their kids and relatives in this special situation. Coming to the business. We have prepared for this moment for a long time. Stronger for clients and shareholders has been our model. With the transformation of the business model, we have replaced volatile cash flows from principal sales to long-term stable cash flows produced in the third-party investment management business. We have no direct balance sheet exposure to corporates, like private equity or volatile equities market whatsoever. We are a pure service provider and asset and debt-light model. We also have limited AUM exposures to sectors that are heavily affected by COVID-19, like travel, hotels and high street retail. There are indications that after a delay Patrizia could and will actually benefit from the new situation. We have a rock-solid balance sheet with a high equity ratio and ample liquidity of more than EUR 600 million. We have also announced last night a share buyback program with up to EUR 50 million which we want to use, in particular, as M&A currency going forward. We actually think that we, as a corporate, with significant available liquidity can benefit from the downturn and, at the same time, for our clients as we expect attractive investment opportunities of the asset side but also open up. Flight to quality will continue. Interest rates might stay low for even longer. The bond market is still now alternative, a safe haven. And the structural growth market case is still valid and confirmed. If you move to Page 3 of the presentation, structural market change -- structural market growth is still valid and the market is still growing, with a delay though. The demographic change will continue and our clients' capital will grow through inflows. Lower for longer might be even prolonged now. So the allocation to real assets is expected to increase even stronger. And with that, the consolidation will continue. Our clients will continue to reduce the number of investment managers going forward. On Page 4, we once again show you the resilience of our business. We have predictable management fees and a diversified client base. More than 70% of our funds have a maturity of 10 years or more. And our top 100 clients make up 78% of our AUM. And our top 5 clients make up only 21% of our total AUM. So we have a stable and resilient business model with long-term investors. Let's talk about the recent capital raising activity on Page 5. In 2019, we raised EUR 3.2 billion of new equity which is up 24.6% over the EUR 2.6 billion we raised in 2018. 73% of the equity raised came from existing or repeat clients. And we now serve more than 400 clients globally, and we won more than 20 additional clients in 2018. The latest Preqin numbers confirm that Patrizia has been the #1 real estate fund raiser in Europe and #6 globally in the past 10 years. So our investments into the fund raising and into our client relationship officers has worked out for us and has worked out for our clients. Now let's talk about the highlights of our financial performance on Page 6. We increased our assets under management by 8.4% to EUR 44.5 billion. As I said, that comes with an increased equity raise of 24.6%. We also increased our operating income to EUR 134.5 million if you exclude the income from principal and core investments. On a like-for-like basis, operating income is down 4.8%, mainly because the income from the sale of principal investments and core investments was significantly lower in 2019 compared to 2018 based on the strategy to sell our legacy principal investments. So far, we haven't changed the guidance for 2020 of EUR 120 million to EUR 140 million. And we are still cautiously optimistic to be able to get to close or to achieve our guidance based on a scenario of V-shaped recovery, with a severe recession until mid-Q3, followed by bounce back end of 2020 and into 2021. The visibility on the outcome of the corona crisis is quite limited at the moment and it's too early to fully assess or to assess at all the potential impact on the global and the European economy in our earnings guidance. Let's talk about the operating income in a little more detail on Page 7 and the components of our operating income that led to the outperformance of our operating income in 2019. Our management fees are up 8.8% to EUR 190.9 million. Transaction fees are up 24.8% to EUR 65.3 million, mainly because we had a very, very strong fourth quarter and a very good second half in 2019. Performance fees are slightly down year-on-year, as expected. And net sales revenues and co-investment income was also down 40%, in line with the guidance we gave out in 2019 -- for 2019. Costs are slightly up 8.1%. If you adjust the increase in expenses by the noncapitalizable IT or digitalization expenses, mainly implementation costs, costs are only up 4.5% so well below the top line growth of 8.8%, which confirms the scalability of our business model. Now what's the major driver behind the increase in total service fee income in 2019? That is shown on Page 8. We had 2 major drivers: one, obviously, was management fees, going up from EUR 175 million to EUR 190.9 million; and transaction fees, which went up from EUR 52.4 million to EUR 65.3 million in 2019. And again, the majority of the transaction fees were collected and produced in the second half of the year, skewed towards the last quarter. Talking about transactions on Page 9. The markets in 2019 compared to '18 was overall down by 2.4%. And we at Patrizia outperformed the market both in signed transactions and closed transactions. Signed transactions were up 32.6% to EUR 9.0 billion, which is a record transaction volume for Patrizia and puts us right on top of competition. Closed transactions were up almost 46% from EUR 5.2 billion in '18 to EUR 7.6 billion in 2019. And with that, we also produced higher transaction fees of EUR 65.3 million in 2019. However, given the current crisis, we do see a slowdown in the transaction market, as you would expect it. And it remains to be seen how the markets will evolve throughout 2020. But we're still doing deals. We signed a ready deal in The Netherlands of EUR 50 million yesterday. But it is obvious that in this market, where the entire economy is slowing down, the transaction market is also slowing down. On Page 10, you see the performance fees we have produced in '19 and '18. Performance fees were generated across the board from around 20 different funds, so well diversified. And we still have a very diversified source of performance fees. The major drivers, though, were performance fees from Dawonia, WohnModul and our office funds. Now if you look at the performance fees or the performance fee pool and the performance fees we produced over the last years, we -- that gives you a pretty stable indication of around EUR 70 million on average. We already produced EUR 442 million of performance fees between '13 and '19. We have EUR 350 million roughly in performance fees on the balance sheet. And if you divide that by roughly 11 years, you get to EUR 70 million of performance fees on average. This year, a slowdown in sales transactions could lead to a delay in the rent generation of performance fees. But as I said, we have very limited visibility on the outcome of corona for this year and news change literally every day or maybe even every hour. Page 11 shows that we've done our homework. And Page 11 also shows why we, early on, started to prepare for a drastic downturn or an excellent shock to the system. In 2013, we had a total cost ratio of 1.2% over asset under management, which we reduced down to 53 basis points in 2019. If you exclude the investments in technology and digitalization, the total cost ratio was 51 basis points. And for 2020, we do expect -- based on the growth guidance we gave out, we still expect a total cost ratio of below 50 basis points. And the same is true for the EBITDA margin. We have reduced over the past years a very stable EBITDA margin in the third-party business. And with full transformation of the business model, we've been able to keep up a high EBITDA margin overall while transforming the business at the same time. So we've done our homework and we prepared for a situation like today. And Page 12 in our balance sheet also shows how we have prepared over the past years with a stronger balance sheet for a significant downturn in the market. We have rock-solid balance sheet with significant available liquidity. And this will allow us to play offense in a market where liquidity is needed and could dry up. Now one thing other crisis in the past had it common was a liquidity drainage and a liquidity shortage. Now with EUR 600 million of cash on balance sheet, that puts us into a very comfortable situation. We have an equity ratio of above 60%, a net equity ratio of 76% and a solid balance sheet in these times do help us to make use of upcoming opportunities on the inorganic or on the M&A side. Now let's talk a little bit -- before we go to Q&A, let's talk a little bit about the guidance for 2020. We gave out -- with the trading statements, we gave out a guidance of EUR 120 million to EUR 140 million earlier this year, before corona has really kicked in, in Europe and in the rest of the world outside of Asia. We gave out a guide of EUR 120 million to EUR 140 million. And at the moment, as I said in the beginning, we are cautiously optimistic to be able to get there and to achieve our guidance based on the assumption that there will be a V-shaped recovery in the second half of 2020 going into 2021. And you do remember that in 2019, we also had a slow start the first half, which we fully recovered in the second half. However, I have to admit that we didn't have a drastic downturn like we had or like we are seeing at the moment. But generally, our business in the past was very much driven by the second half of the year. Now these things can change every day or every hour at the moment and the shutdown in many countries have just started. But in a few weeks or maybe days from now, we should be in a better position to assess the situation. And hopefully, after the Easter break, we will have a better picture how the situation is expected to evolve throughout the rest of the year. And with that, I'd like to give back to the moderator for Q&A. Thank you.

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

I have couple of questions, starting with your -- what you mentioned your base scenario, the V-shaped recovery. Does this refer to the real economy or the direct real estate markets? And from my perspective, should this not be called as a bull scenario, a strong recovery? And what -- could I take it that this, let's say, your base scenario or the V-shaped recovery, to reach your guidance you gave 1 month ago or 2 months ago already, that the basis really has to be -- or this could really be then the bull scenario? So this is the first question.

Andre, yes, thanks for the question. It's a good question. And the V-shaped scenario for us is a base case scenario. And your question is right, is it for the real economy or the real estate market? I think it's both. I think the real estate market is not -- in particular, the transaction market is not fully detached from the real economy. Whereas our EUR 44.5 billion in assets under management are very solid and they produce a very solid and stable management fee, the transaction markets, obviously, to a certain extent, depends on the real economy. But more importantly, it depends on the ability of people to transact. Just as an example, in Italy, it's simply impossible to go to a notary to sign a deal. In the Netherlands, in Germany, it's still possible. So what we see in the market is that market participants do want to transact on deals, but it simply has become very, very difficult to do so. Even -- also in the U.K., with the complete lockdown, people are simply not able to transact. And also people have to get used to working from home and perform from home. That's not only true for us, that's also true for the banks.

But I did -- I get it right that to fulfill your guidance -- of course, I know it's quite too early. But the base case is really this strong recovery in the second half.

Absolutely. I think we need to take -- if you look at our guidance and the transaction fees and the transaction volume we guided, but also partly performance fees, they depend on transactions. And if the market is not recovering in the second half, then it will be very difficult to achieve the guided operating income. But at the moment, I think it's far too early to assess this. But what you also saw last year, Andre, is that 4 or 5 months at the end of the year can make a huge difference.

Yes, fair enough. Well, you already mentioned this. Where do you see potentially higher risk on your fees, at least from today's perspective? Do you deliver on the transaction fee or the performance fee? So what would be -- have a higher leverage on your earnings or on your cash flows? And how flexible are you when it comes to the cost side? So in case of a most fear freeze of the transaction market, how could you adapt this on the cost side?

Yes. Well, first of all, both transactions and performance fees are important for the guidance and for the complete set of earnings whereas we have banked some of the performance fees already. We've also banked a few transaction fees. They both depend on a recovery. On the cost side, we think that the variable cost portion is probably somewhere around 15% to 20% of our overall cost base if the downturn continues. And if the downturn continues, I think not only us, but the entire industry and also the entire economy probably have to be creative about turning -- about variable expenses.

Okay. Probably coming back to the overall transaction market. So again, I'm fully aware that this is difficult to answer now, but you are talking to the clients. What is their initial reaction? So yesterday, we get the message at BVK announced the 4 weeks freeze. Well, what is -- what are your clients are reflecting to you at the moment? Is there could be a standstill? And what is your own approach or recommendation to the clients? Because you are the adviser, so are you also recommend to stand still at the moment and then recalculate or so and wait with acquisitions or disposals? What is your recommendation to your clients?

Well, it depends a little bit on the situation. I mean there are some deals where we recommended to wait, in particular larger transactions. There are some deals where we are going ahead, like the deal we did yesterday in The Netherlands. So it's really a mixed picture. The general investment management recommendation is to emphasize on resi, emphasize on core and accumulate dry powder and cash for value-add and opportunistic investments. And there is a strong evidence that resi, logistics and core real estate remain very resilient. And the good news is that, if you look at our asset under management, 3/4 of our assets under management are in the core and core plus area with a large portion in resi and also in stable office. And I think in these times, it is very important is when you look at office, for example, you look at credit quality of your tenants and core and the conditions of the building, but also location, becomes even more important.

Okay. Then a very last question. On Page 4 of the presentation, you show this chart with a maturity breakdown of the assets under management. So I like the chart, but just a short question on that. Is this based on remaining maturities as of, let's say, year-end '19? Or is it contractual maturity at the beginning of the contract?

That's as of end of 2019.

So the remaining is 71% with maturity from starting this year until, what, 2030?

Yes.

Okay, perfect. And it is stated in the notes that is based on legal maturities -- well, what if we really have severe scenario if, prices fall from a cliff. We all experienced 2007, 2008. Have clients -- if clients decide to cancel the asset management contract or needs money, what would be the legal consequence out of this? So just to really get a feeling how -- it sounds nice 71% above 10 years, but how secured is this?

Well, I mean, first of all, as you know, in augmented fund -- in augmented special fund, there is a majority vote required to decide to terminate the funds and sell the assets. We think that, actually, the opposite will be the case. At the moment, if you look at the flights to assets, people are selling fixed income to accumulate cash. I think the need for real assets is -- or will increase. And one of the outcomes of the current crisis is that demand for our products will most likely increase. It will come with a slight delay, but we already see -- we are going to see actually in the bond and cash market, the flight to real assets and into security. And Germany has been seen as a safe haven in the past and part -- and the more mature parts of Europe as well. And we do expect that investors will stick to the stable on long-term cash flow produced by core real estate. And also one -- let me give you one more comment, Andre. What you saw in the last financial crisis was, in particular, open-ended funds on the retail side that experienced a huge pressure and a huge selling pressure. Back then, we didn't observe it in that magnitude in the institutional world.

Okay. Well, if prices go down 30%, so we all remember to standstill in the market in 2008, 2009 so if there are virtually no transactions anymore. And the other point is, of course, it's a quota of the large pension funds, the equity quota is 50% or 40% below 4 weeks ago and now automatically see is the real estate quota increases. So -- but let's hope that this will not be an issue. Okay. That's on my side.

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

Yes. A follow-up question on Andre's last question of the possibility of cancellation of AUM contracts. Could you maybe remind us on the nature of the clients that you have, of maybe some more pension funds or investors who are really interested in long-term cash flows and now clients that have to liquidate positions off because of margin calls or whatever? Could you give us some color on that, please?

Yes. Sure. Manuel, now as you remember, the majority of our clients are pension funds and insurance companies that depend on long-term cash flow. And this won't change. I think the current crisis shows to all the investors that need to match maturities in the long term is that the -- one of the few asset classes that gives them a long-term and resilient cash flow is in real estate or in real assets. At the moment, 46% of our institutional investors are pension funds, followed by 27% of insurance companies. And that -- and the next group is savings banks of 11% that invest their money in real estate as well. And what we also see, even on the private side, that over the past weeks, the demand for product from private investors for real estate and our closed-end fund business hasn't really changed. I think there is a good argument, Manuel. I think there's a good argument that the flight to quality and the flight to real assets might accelerate when the majority of the crisis is over. I think there is a delay because it's simply impossible for people to make quick decisions. So decision-making generally in the transaction market is delayed. But we do expect that with a prolonged lower-for-longer environment, it'll support and help our business model. So let's look beyond -- the way we think about it is we look beyond the crisis. We try to manage the crisis and we do. But this is another time where we, as a company, as we did in the last financial crisis, need to look beyond the crisis and find ways to make use of opportunities. Now we can shape the market for us.

Yes. I understand. That leads me to my next question, actually. A bit tricky, and you talked about that partially before. I mean, you maintain your guidance for 2020, and it sounds reasonable that transaction market could pick up in H2. However, when would you start sweating? I mean, if the crisis still in June, if the crisis still in September, when -- what do you think -- how much months would we need to pick up in transaction markets and to reach your guidance? Is there any point in time, inflection points on which you think?

Well, it's -- I think that's the million-dollar question for the entire company. If I had to guess, I would say we need a strong recovery after the summer break.

Okay. I mean, it depends also on the capacities of the acquisition and disposal teams and the various clients. I mean, you can handle an amount of x transactions and not more, I would think, in the...

Yes, that's why we can't recover in 4 weeks. That's why I think we need a few months. The market needs a few months. And it's not only us in the -- not only the company investment managers, you also need the banks, the law firms that advise us to be able to support transactions. So my guesstimate would be, if the market is not recovering after summer break, it'll be very difficult.

Okay. I see. Last question from my side. Maybe -- could you remind us on the hotel exposure in your AUM -- hotel exposure and retail exposure? How much is that in terms of percent? And would you see a certain risk for your fee income in case there are insolvencies of hotels or whatever? Have you had a simulation on that? Or what do you think about that?

Well, at the moment, we do a lot of simulations. Now the good news for us is that the exposure to hotels is roughly 2%.

Okay. Sounds pretty low. Okay. That's it from my side, Karim.

Thank you, Manuel.

The next question is from the line of Kai Klose with Berenberg.

I've got a question on Page 5 of the presentation where you mention that you raised EUR 3.2 billion of equity. Could you indicate what kind of clients are these? Are these -- in terms of type of clients or type of investors and also maybe where they are based, just want to get a feeling about the internalization of the business. And then the second question, you mentioned that some transactions were signed in the last year, but not yet close. Just to make sure that also transactions which have been pulled into 2020 have been closed.

Kai, let's start with the first question. Now on fundraising. The majority of the funds which were raised came from -- again, from pension funds and pension institutions, so it was actually pension money. And a little more than half, I think it was 54% or 55%, was raised outside of Germany. Can you help me again with your second question, Kai?

If I remember correctly in the press release, you mentioned that the number of transactions signed and closed, so those which were signed were larger than those which were closed, probably the totally expected in 2020. Just to make sure that the closing has taken place in them.

Kai, some have taken place, some not. The last one, the logistics deal, we did have close, for example, the EUR 1.2 billion deal. The majority have closed, but not all of them. And the ones which haven't closed were in schedules to be closed in the first quarter. So when I -- I think you press is probably are there risks that a deal wouldn't close after it was signed? I would say this risk is very low. What is more difficult at the moment to get deals signed, because the closing conditions are usually around registers and banks being able to finance. And the majority of the financing work has been done and the banks do perform on their credit agreements. So that hasn't changed.

Understood. And the very last question, just on the market. There was the announcement of the merger between PIMCO and Allianz Real Estate that they will act together. Just what do you read from this combination of 2 larger -- I won't say competitors, but 2 larger players in the market? Any positives or negatives or any windfall you can take from there?

Well, first of all, I think it was more an internal reorganization because PIMCO is owned by Allianz. So I think what it shows though is that also Allianz puts a greater emphasis on the real estate side, so basically in line with our strategy. That's how we see it.

The next question is from the line of [ Nero Sujack ] with [ JMS ].

Yes. The first one would be about -- again about corona. What are the measures that you have taken now internally in terms of resource planning? What is happening within Patrizia right now at the moment? You know that activities in the transactions markets are going down, you cannot visit your clients anymore and so on. So in terms of resources, what changes are going on within your company?

Yes. [ Nero ], we're doing a lot of things. We started to establish an internal task force almost 4 weeks ago that meets on a daily basis. And we also in the Board are discussing measures on a daily basis. Now what have we done as of today? As of today, the entire company is able to work from home and to work remotely. The entire company is able to work online, to use modern communication means to continue to work. We think that continuity in your team in this market is super important to keep up business continuity. As of today, out of Germany, all the offices have been closed, had to be closed based on local regulations. In Germany, since Monday, we're on a 50-50 percent rule. That means we have divided the teams into group 1 and group b and each team -- in group 1 or A spends office time this week and next week. And afterwards, the other team comes in and team 1 works remotely from home. So business continuity is ensured. I think the entire world has to get used to working remotely, to communicate remotely and to keep up business continuity from home. And one of the signs that the world is a little bit struggling with that is that communication services like Webex are struggling with the sheer amount of volume taken up. But it works for us. And I have to say, I think it actually works quite well for us. How do we speak to clients? We do speak to them. We give our clients guidance. Our clients relationship teams across the world have been talking to our clients since the beginning of the corona crisis. I think -- we think it's very, very important to stay close to the clients, talk to them, give them guidance. And we also have a very good, as you know, and experienced in-house research team that gives guidance to us and to our clients, not only on what we should do now, but also on what we should focus on, talking about the transaction side, in the next weeks.

Okay. And in terms of hiring and so on, is there any change in your plans?

Yes, I think -- I mean, practically, it's almost -- in such an environment, and -- I mean, this is all the reason, it's almost impossible to interview people or hire people. So the focus right now is on business continuity and the business rather than on hiring additional people. But I have to say, if the crisis continues for a little bit or little longer, it'll also help us, if needed, to hire people from -- high-quality people from other companies that are struggling. So it really goes both ways.

Okay. In your current scenario, so at the moment, down, then recovery afterwards. What would be the impact on your AUMs so during the year? And what do you think that will have an impact at all in terms of valuations of your properties and the funds and so on? Or what would influence the AUMs besides net new money flows?

You mean on standing AUM.

Exactly, on the existing funds.

Yes. Now on existing funds, as you know, as opposed to the stock markets, our assets are usually valued on an annual basis, some on a quarterly basis. But what you usually see is 2 things: a, a delay -- an evaluation delay, so that gives us time to react; but also what we talked about over the last years really is that we think that there is a buffer between the actual evaluation and the market price. And that's why we -- over the past years, we always sold at a premium to our fair value or the fair value of the AUM. And now the big question is, how the markets will -- how the economy will impact the valuation of real estate. What we also saw in the past is that assets like -- or generally, core assets and resi used to be quite resilient even in uncertain times, given that that there are 2 drivers which usually have a big impact on the valuation: that is cash flow, long-term cash flow, and the interest or the discount rate.

Which is now positive, of course, right?

Yes.

Okay. And on the performance fees, so -- also taking into account your current scenario. I mean if the slowdown doesn't sound promising, right, for the first 2 quarters at least or maybe even to third quarter, what would that mean for your performance fees?

Well, a certain portion of performance fees which we think are stable and can be produced even in these times. For the rest, I think we do depend on a functioning transaction market, so we can realize transaction fees based on -- sorry, performance fees based on realized transactions. So I think it's probably too early now to be able to fully assess this. But in the scenario we're currently discussing or foreseeing with the V-shape after -- the recovery after the summer break, we should be able to recoup both transaction fees and performance fees.

Okay. That -- I mean, the question that I had was basically, why don't you reduce guidance? Because you had given the guidance before we knew about corona -- or about the impact of corona. Now there is a delay, certainly marginally negative for your -- for both maybe the transaction and the performance fees. You probably can't catch up everything in the second half. It's also less secure whether V-shape recovery will happen. So wouldn't it be prudent to reduce the guidance, just, I don't know, like hundreds of other companies do at the moment? Do you have so much buffer in your previous guidance that you think that you can still make it?

Actually, we have talked about the guidance, and we talked about the guidance a lot. And if you look at other companies, they actually didn't adjust the guidance. They just said the guidance is not valid anymore. So we think -- we actually think 2 things. First of all, I wouldn't even know how to adjust the guidance because it's so early in the year and with the news that it would be impossible or the only way to do it, run 10 different scenarios with 10 different guidance outcomes. And that's why we decided to keep the guidance until we have evidence, real evidence that the business year 2020 will have a significant different impact on our earnings guidance. And in 6 weeks from now, after -- I would say after the Easter break, we should have a better picture of how the summer and the rest of the year might look. And that will then give us a better and a more prudent basis to make an assessment on our earnings.

Okay. Last question from my side -- sorry.

What you saw other companies doing is simply take the guidance off the table, and we thought it wouldn't be prudent to take the guidance off the table and leave the market with nothing.

Okay. But still, you're not super confident about it, right? So...

Well, what we said is we're cautiously optimistic. Remember 2019, the first half, you look at the transaction volume and the business on the transaction fee side we did in the first half and compare the first half with the second half with a business that is pretty much skewed to the second half of the year, that makes us cautiously optimistic that we can turn the year in the second half.

Okay. That's true. Last question from my side, an update on Dawonia, the question about the future of Dawonia and the realization of the accrued performance fees or already crystallized performance fees. Was there anything going on in the meantime or still the same picture as 3 months ago?

It's the same picture. I'd like to make one caveat though. I think the investors are even more happy to own a very resilient piece of resi in Southern Germany. From that perspective -- but from that perspective, the picture really hasn't changed. Investors are very happy to hold on to the portfolio and to the assets.

There are no further questions. At this time, I hand back to Karim Bohn for closing comments.

Thank you. Thanks, everyone, for joining the call. I know that we are all at uncertain times. No one really knows how the crisis is going to pan out across Europe. If you have any questions on the business, please reach out to us. We continue to be available from home or in the office, but I think you know where to get us by e-mail or by phone. And stay -- take care of yourself and stay safe. Thank you very much.

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