The Platform Group SE & Co. KGaA (TPG0) Earnings Call Transcript & Summary

So we are delighted to welcome CEO, Dr. Dominik Benner; CFO, Reinhard Hetkamp; as well as Board member, Laura Vogelsang. So the Management Board will speak shortly and guide us through the presentation. And afterwards, you have the opportunity to ask your questions via person, via audio line or place your questions in our chat box. So having said this, Dominik, I hand over to you.

Thank you, Sandra. Warm welcome also from our side to our guidance update, which we communicated last Friday. So let's start directly. We have published our half-year figures for 2024 and compared it to the pro forma figures from 2023. And this was quite a successful half year. And as you can see, our average growth rate was more than 20%. That means our revenue was 23% up. And also our profitability increased in a very strong way, even more than we internally calculated it. So we had quite a positive development, and this is already what you have seen in our previous presentation. When we look a little bit further on our current developments, we would like to give you an update on that. So first, you can see that we have a good development in the first half year. And if we have a look at July, August and also September, which is almost done, we see that we can see a very strong increase in our numbers. That means GMV revenue, EBITDA and also cash flow, they are increasing in the last month of the Q3 quarter, and we are quite happy with this development. Especially, we can also point out that we have a very good organic growth rate on our platforms. So we have more than 11% growth rate organically. And we will show you later how this development has happened and what are the reasons for the organic development in the first half year. Very important, and this is the basis of our growth rate, is that we have more partners that means we connect more partners in our different segments. We connect them on our platform. And with every new partner, we get new products, and with more products, we can increase our own figures, our own numbers, and we get more customers. And with more customers, we have more GMV and more revenue. And last but not least, we had some very successful M&A activity this year. So I just would like to point out 2 significant targets. The first one is [indiscernible], it's a little bit strange name, but it's a very good company from Austria, and they are positioned in the field of electronics and B2B trade, and they are more than 15 years now in the e-commerce segment and very successful in Austria. And we acquired 3 months ago the OEGE Group. Both of them have relevant -- both double-digit revenues and platform revenues with EBITDA margins of more than 5%. So all in all, we have a very good year so far. And Laura, Reinhard and me decided that we have to increase our guidance by end of September. And this has these reasons as a background for you.

Yes. Good morning also from my side. I will continue with our strategy to become, yes, the profitable or a leading profitable platform in Europe and how we want to achieve that. And there, we have like our strategic initiatives and also our strategic goals, which we are following. For example, the strategic initiatives are that we try to acquire 3 to 8 target companies every year. Of course, just when they -- only when they fit to our criteria. But -- and this year, it looks really, really good, as Dr. Benner already said. Then we tried to continuously improve and invest in our back-end systems and technology and software platforms. Also -- what also Dominik Benner already said is that we want to extend our partnerships and -- yes, partners, which we work on and which we connect to our software platform. Also, we want to improve our software capabilities and want to expand outside of Germany because most of our existing platforms are more located in the German-speaking countries, but nevertheless, they are very successful, but we want to expand also in countries outside of Germany and outside of German-speaking countries. Then with -- yes, okay, here, you can find our segments, and you can find [indiscernible] already and OEGE in our consumer goods segments, which are our newest acquisitions, Also, you find all the other segments we are working in, in already 23 countries, which are covered and all of them are working with our software solutions to connect partners in the B2B and B2C segments.

All right. So I continue with the GMV guidance report and the increase. Reinhard, do you want to take over?

Yes, of course. Yes. Good morning from my side as well, and a warm welcome to everybody to listen to this new guidance what we want to explain to you. So as already mentioned, we have had a very strong development of our already included companies in the group. And with regard to the very well running M&A activities, we have decided to increase second time our guidance for the year '24. So starting in January, you can see we have had expected for the year-end GMV up to EUR 800 million. In the first half year, we have made very good and bigger acquisitions. So we decided in May already to increase our GMV up to EUR 870 million. And with regard to the last acquisition and the expectation of the development of our business in the next month and the outcome of this time, we decided again to increase a second time so that the GMV expectation is now around about EUR 880 million up to EUR 900 million for the year 2024. The respective revenue will increase. So starting from EUR 460 million or EUR 470 million at the beginning of the year, second step up to EUR 5 million, and now we are expecting a range of EUR 500 million up to EUR 520 million for the year 2024. Next slide, please. Yes, the EBITDA or the adjusted EBITDA, for sure, will increase as well. So as you can see, first, in January '24, we started by EUR 24 million up to EUR 28 million and then over EUR 26 million to EUR 30 million. We are now expecting for the year '24 adjusted EBITDA by EUR 29 million up to EUR 32 million. And with regard to the partners, as you know, the partners are very important for our business and the development of our platforms. You can see there is a very high increase, so starting in March by around about 12,000, we are now expecting more than 30,400 partners for 2024 as a guidance, and we will, for sure, report in a later earnings call, maybe in November, when we are talking about the third quarter, how the development could be realized.

All right. So let's continue with our partner increase because this is a very important storyline and the basis of our growth. A lot of analysts always ask us, well, TPG, do you see that the market for luxury or the market for car parts and so on is declining or increasing? And we always say, well, this is not so relevant for us because we really depend on the number of our partners and how many partners we can get on our platform. Because as you can see here, we get more partners this year, so the number is increasing. And with these new -- more partners, we get more products, especially our acquisitions in the first year -- in the first half year were quite relevant for us that we can achieve a high growth rate, more than 3.2 million products went on our platforms. And with this, we get much more clients. Additionally, we see a very strong tailwind from the B2B sector. That means we have a lot of B2B companies in our sectors. And this is working quite well. And we also see a positive development in the Luxury sector. And this is also, for us, a very good tendency where we can make a good base and plan for this and next year. So a lot of analysts ask us also about our organic growth rate. We are quite happy with that. I mean 11% is not extraordinary, but if you look at the market environment, last year and this year, you see stagnating markets in the German-speaking countries for e-commerce, so there's no growth rate. And we can be quite happy that we achieved more than 11% organic growth rate in the first half year. And I think this is quite a good sign that our strategy is not depending -- absolutely, not depending on M&A. We just make M&A because we are anticyclical investors. And we think that now it is a very good time to invest good money for good companies, and we don't have to pay extraordinary goodwills for them. So all in all, we think that we have a quite good position making always our target between 50% M&A growth rate and 50% organic growth rate. And I think this year, it works quite well for us. This leads to our new guidance. As you can see in the summary here, we expect a revenue of more than EUR 500 million to EUR 520 million. The EBITDA, as Reinhard mentioned, we expect up to EUR 32 million. And also our GMV for this year is going to be until EUR 900 million. On the right side, you see our midterm goals. That means we always try to give you a better understanding of what we expect in the midterm range, midterm is next year for us. And we also increased this outlook here, so we expect a GMV of more than EUR 1.2 billion and a revenue of more than EUR 570 million for next year, and, of course, an EBITDA margin which is above what we achieved this year. So we expect 7% or more in the next year. The leverage, we will show you later. Here you can see our leverage range, which we planned for next year. And I think we are on a very good track on that, and Reinhard will give you some more details about that. When we also look on the long-term development, you see that on the long-term development, we make a very stable growth. When we started with our group's e-commerce in the year 2013, we had more than 7 years just organic growth rates, much more than 20% per year. So it's a very stable growth what we do, and we continued this stable growth also the last years. The same is for the revenue development, Here, you can also see that each year, we get more customers, more products and achieve also more revenue with that. The EBITDA development, as you can see here, the numbers for 2021 were quite a little bit lower in 2022. This is just because we combined Fashionette and TPG, and we had to make the pro forma numbers for this. Otherwise, it would be much higher when -- if you would exclude Fashionette from this calculation. But all in all, as you can also see here, we have a very positive trend here, and we also want to increase it next year.

Yes. As Dominik mentioned, so the debt situation, for sure, is something very important. And not only with regard to the new acquired bond, lots of our interested investors and analysts are asking for the development and what is the situation currently, what do we expect. And so, therefore, you can see here roughly calculation about where we are and what we have already reported for the half year reporting and what do we forecast for the end of the year. So starting by cash and cash equivalent from half year EUR 15.1 million, we expect a little bit going down situation so that the cash will -- the liquidity will go down a little bit, but not losing or burning the cash. No, it's more the repayment of bank loans in short and long term so that we are coming here in a much more better situation. And for sure, what I already mentioned, not yet considered in the first half year because the payment was done in July. The bond is now something what we have to consider on -- in our debt calculation. So the EUR 30 million comes up in the calculation up to the end of the year. So that we have a net debt situation reported half year of EUR 53.2 million and that will increase up to EUR 79.7 million. But as you can see, the bond goes up and the long-term and short-term bank loans go down. And in that direction, and calculated with our LTM EBITDA, we are expecting a leverage or have realized the leverage in our half year reporting by 1.8x or 1.9x. And for sure, with regard to the bond, we are increasing up to 2.6x or 2.7x as you round it at the end of the year, but that is for sure a peak, so that further on our target of the leverage of the following year will be in between of 1.5x up to 2.3x of our expected EBITDA.

And maybe to add this, we are more than optimistic that we achieve our target for next year with 2.3x EBITDA, and we expect also to maybe get also a little better numbers than we currently see as a target range for next year. So maybe we get below 2.2x. But this is too early to make a real expectation management here, and we will come to that later next year. Also here, you see the PPA effects. That means the PPA effects from the first half year. You've already seen that. We published it in our first half year report and to give you a better understanding of how we come from the reported EBITDA to the adjusted EBITDA, about the purchase price education and the deferred tax calculation. All right. So just at the last slide, you can see our current number of shares here. So we have more than 20 million shares out in the market. The major shareholders, Benner Holding, and some research analysts always asked us, why do you make capital increases and always the small capital increases? This is just because we make some M&A activities with share where we pay a part of the purchase price of shares. Usually, it's a very small number what we do here. For example, when we acquired the OEGE Group, we paid EUR 1.5 million with shares, and they have a lockup period and so on. And this can be a component of the total purchase price, which we pay for the seller of the company. In the long-term development, you can see our chart here. So we are quite happy about the development. When we entered the market with Fashionette AG in December 2022, we started with EUR 3.8 on stock. And last year, we changed the name to TPG. And with our new guidance for this year, we achieved a stock level of more than EUR 8. And I think which is quite significant is the EPS calculation when you have a look on the EPS calculation on the first half year. And for the full year calculation for 2024, you can see that our PPA -- with PPA, we have a little bit more than EUR 2. And the EPS without PPA, it's more than EUR 1.1. And if you make a valuation on that, so we are currently traded with EPS x6 or EPS x3 when you look on the PPA level. So I think these are quite good numbers when you look also to peer groups in the sector. And, yes, we are quite optimistic that we can achieve higher values and better valuations on our stock. Thank you very much, and we are happy to get your questions.

[Operator Instructions] We've already received the first question from Robert-Jan.

So to be frank, even the increased guidance, especially considering the acquisition of the 0815 group, still appears conservative to me at least, but that has been your policy, and I'm fine with that. I do have a question, though, on the implied adjusted EBITDA margin for the second half of the year, which applies to be -- which appears to be below what we have seen in the first half of the year. So I was curious if you're just being cautious there or are there any specific effects like, for example, the lower profitability of the OEGE Group and also how the probably lower-margin car sales we've seen in H1 that won't recur in the second half of the year play into that picture? So just give me a little more detail maybe about how you see profitability in the second half of the year?

Thank you very much. So first of all, we always make conservative planning. That means we are never exaggerated and make creative planning processes here. We are very conservative because we started our planning always with our subsidiaries. Each year, we have a very detailed planning process with them, and then, we aggregated on the whole group. And we evaluate this 3x per year with all our subsidiaries. And this is the reason why we say, okay, we always start with a conservative case. And if we see that the development is with high organic growth and more M&A, we have to increase our guidance. Second, the numbers of car sales, they are not relevant anymore for us in the second half year, so this effect is done, and it's out of our balance sheet. And your third question was about the EBITDA development. To be honest, we always have the same development. That means in the first half year, we have a little bit lower revenue, but higher margins in percentage. And in the second half year, we have higher revenue and lower margins. And this is very easy to understand from our side because we have more than 50% of our revenues in the consumer market. And usually, you have to give more discounts, especially by November and December, like Black Friday week and so on and though there are a lot of discount weeks where you have to reduce the prices. And this is affected in a lot of our companies. So basically, we always expect a little bit less than 7% EBITDA margin in the second half year and higher numbers in the first half year, so this is as it is every year.

We will now move on with the questions from [ Frank Lehmann ].

Yes, and congratulations to the reported numbers and the upgrade. I have a question to Reinhard. And Reinhard, maybe you can shed some light on something which I couldn't make my mind up what it really means. There's a EUR 26 million -- EUR 25 million, EUR 26 million charge in the other comprehensive income in the equity sheet in your reporting. What is that exactly? And how did that come up? Because it wasn't there in the previous years or previous reporting circles.

Yes, I can explain. So this was very often asked by some of the interested readers of our reporting. So we have a lot of consolidation effects considered in the first half of this year or we had to consider them. And so, therefore, this has had an effect in our equity report, so the development of the equity. And so there are lots of details regarding the outcome of this more than EUR 20 million negative effect in the equity, but these are -- we are based on balance regulations and balanced entrances at this time. So I would not expand this calculate or this discussion here in this call. So if you like, we will set up a separate call, and then, we can go much more deeper in all these consequences.

Yes, we might want to do that, but just 1 more question. Is this a one-off? Are you seeing that by the end of the year repeating? Or the -- if I understand it right, what that means is that on an auditing basis or on a consolidating basis, you found book values in some of your participations, which weren't really standing up to the book values they were showing, so you had to basically write them down. Is that what it is? Or I'm just...

No. Just to make it clear, we have no write-downs. And if we would have write-downs, it will have negative impact on our profit and loss calculation. And we have -- we would have to announce that. So absolutely not. And as Reinhard said, we have a clear consolidation standard by IFRS. And when you consolidate a company, you have to consolidate all the figures from the P&L and from the balance sheet. And we did it in the first half year for 2 companies, for 2 new companies with all their figures. And we have even more companies in the second half year. And there, you also see that with consolidation effects, the balance sheet is slightly changing a little bit, but we have our impairment test each year, and there's absolutely no write-down this year.

So it's not an impairment, Dominik, but the -- basically somewhere that minus EUR 25 million must originate from, right? Otherwise, you wouldn't have booked it and written off against equity. What is it? We can go into details, but just give me 1 sentence. What is it conceptually? What is this EUR 25 million equity consumption?

As mentioned, these are a lot of effects what we have considered in the first half year. And with regard that some changes are still open, so I expect that this number will never come up again. So, therefore, this is something what is or what comes up in the half year reporting, and we are now looking for new consolidation effects in -- or will come up new consolidation effects in the second half year, which have a contra effect on that, so that this minus effect will not be that high at the end of the year.

But -- for example, if you buy a company, we also acquired this year 1 company with negative equity in the German [indiscernible]. And so you always have consolidation effects also on this balance sheet position. So for us, it is not a strange -- so for us, this is not a strange thing. So it could happen if we consolidate just the new companies.

So it's the reverse against when you usually buy companies where you pay less than what the equity is. Here, you might have -- because it's a profitable operation, you might have paid more than what the equity is, right?

Yes. For example, if you buy a company now, which has positive equity and you make an agreement that the seller can get some of the purchase price from the company and get it out from the company, and we acquire a company, for example, for -- with 0 equity, and we pay a very low purchase price or if you have negative equity in the balance sheet of the subsidiary, then you have this consolidation effects. So it is not a strange thing. It can happen sometimes, but it's -- I think it's more an exception, not -- that's not regular.

Sorry, I picked it up because that's something that I couldn't find in previous years. We will connect with Reinhard on that subject in more detail.

Please do so. And as Dominik said, so it's a very, let's say -- a liquid position. It goes up, it goes down, and it really depends to our acquisitions and how to consolidate them into the complete group.

So our next question in the chat box. Can you please elaborate on the numerical effort of acquisitions on your net debt forecast for the end of 2024?

Can you repeat?

Can you please elaborate on the numerical effort of acquisitions on your net debt forecast for the end of 2024?

I don't understand.

So it's a question from the chat box, but maybe the person has written it, can -- explain a little bit more. So in the meantime, we move on with the next question. Your guidance for 2025, does imply M&A or just operating numbers?

We always make the planning and our guidance on existing companies and then on existing revenues and earnings. So we have no planned M&A included in our guidance. So if you make M&A in the next year, of course, there will be an additional attribution to our guidance.

And next question, we have Mr. [ Pittman ] in the line. Unfortunately, we cannot hear you, Mr. Pittman.

Thanks for having me. The question on the effect of acquisitions on your net debt forecast for end of 2024, and that was from my side. So I wonder -- basically, I wonder whether for your existing portfolio of end of last year, you would have a positive free cash flow. Is that so?

Yes. We have a positive free cash flow, absolutely. And we also have it in the second half year, although there is no doubt about that. And we've always had a profit -- positive cash flow, operative cash flow in all our holdings in the last year. So we will also achieve it in the second half year, yes.

And the second question would be a special one, it's on ViveLaCar. I wonder how after the development in the sale of the cars that you had acquired this business is doing. Is it gaining traction? Does it live up to your expectations?

Yes. I think it's quite interesting because the market for car rental -- for car subscription is quite new market. So 7 years ago, there was nobody who offered car subscription. And only in the last 4 years, this market is going down -- is going up. And this market is quite impressive for us because the younger people, the people below 40 years, they really prefer to have only 1 or 2 months contract durations. And additionally, we have a lot of B2B clients, that means, for example, if you hire people in Germany, in the first 6 months, you have [indiscernible]. And I think it's quite a good move to make a car subscription in that time because when you do not continue with this person, you can just get off the car. When you compare it with leasing, you have to stay for usually 3 years on this car, and it stays on your fleet. So basically, we see growth numbers at ViveLaCar, and we also see that they have a very good turnaround management. That means the numbers also on the profit side are getting up. We have positive numbers. And we see that we get more traction in Austria, for example, in Switzerland. And this is quite important because only on the German market, it's important to make some surrounding markets like Switzerland and Austria to really increase the total numbers and to get more customers here.

We will now move on with the person who has raised up the virtual hand, but unfortunately, I cannot identify you. So maybe you could explain to us who you are. So same as with Mr. Pittman, unfortunately, we cannot hear you. So in the meantime, we will move on with questions from the chat box. I would like to hear a bit more about your customers of your partners in terms of satisfaction.

Well, on all of our different companies, we make evaluations of our customer satisfaction. And we always work with 1 partner on that. And for example, we have a lot of shops running with trusted shops. We have some shops running with trust pilot and so on. So each shop has 1 partner, like always, Zalando, ABOUT YOU, and that's the reason all these players are making the same process. So on average, we see good numbers. That means we are always between 4 to 4.5 out of 5. So I think we are quite good with that. And you always should consider that we work with some thousand partners. And that means if you work with partners, sometimes maybe you have a delay of 1 day for a customer because the parcel has to be sent from the local shop, from the brick-and-mortar shop and the customer is getting it, not the same day, it's the next day. But all in all, we are quite happy with that.

So we will come back to the person who raised up the virtual hand. So maybe you can unmute yourself.

Sorry, I just got some technical problems. My name is [indiscernible], I'm a private investor and engaged in the stock of The Platform Group and the bond as well. My question refers to the financing costs. Can you give me some number of the average financing costs? And if I see the cost of the bonds on a stand-alone basis, it's above the EBITDA margin. So I think the financing costs must be very lower than that. And how do you finance acquisitions in the future? Is it with stock upgrades? Or is it with exceeding bonds or exceeding bank liabilities?

So thank you for this question. So our average bank interest rate is not so high, so we have around 5%, but a lot of them have a long-term duration, that means, for example, they have a 5 or 8 years duration. And the short term, when we would now make a bank loan, it will be around 6% to 7%. And that is the average for a new short-term bank loans. And as you mentioned, we have a bond with 8.8%. When we make acquisitions, basically, we really focus on the ROIC, so the return of money which we invest. And this is quite high because we do not look on the relation between revenue, EBITDA and how much loan we receive. We focus on how much money we spend for the company and how far do we get how much money. And this is a quite attractive interest rate for us because we have a very high ROIC. And so it's a good investment for us to make these M&A cases. Otherwise, if we only would rely on 5% EBITDA margin, it would not be useful, but we do not pay factor 20% for a company. We pay around 3% to 5% as a factor for new companies for the EBIT level. And as you can calculate there, this is quite attractive for us and has a high ROIC with us.

So in my understanding, that is -- I can see if you acquire more companies, there should be a significant accelerating of the net profits in the company.

Absolutely. So we do not pay a purchase price regarding the revenue. This is not relevant for us. We always pay for a company which has good profits and where we can see a good profit increase in the next years according to the business plan. And when we say we invest EUR 1, we don't want to get EUR 2 back. So we have a much higher -- we have a much higher need for the margin for our own equity. And this is a relevant factor, how much equity do we have to pay? How much of this equity has to be by a bank loan? And what is the return for that? And basically, this is much higher than 8% of course. Otherwise, it would not make any sense now.

So we move on with the next question from the chat. Are you planning to change your auditor this year? The company is getting bigger and more complex, and it's questionable whether the current auditor is still well suited to evaluate on the financials of TPG.

The auditor is elected by the AGM, and the AGM is going to be by June next year -- June or July next year. And then we can decide which auditor we could suggest, and the AGM can select and vote for that.

So our next question in the chat, which subsidy is exceeding your expectations the most at the moment or is doing very well?

Well, we always decided not to make a deep dive on 30 different subsidiaries because it would explode and our -- all our whole reporting. And we see a lot of very positive developments because as you can see, when you look on our announcements and the news which some of our subsidiaries are making in the market, you can see that they have very good growth rates right now and you see that they have good organic developments. And for example, we showed in the last meeting, and also on the Capital Markets Day, 3 examples on companies with very much details on that. And you can see that we grow our partner numbers, our revenue level is increasing and also our profitability is increasing. And I think these examples, what we showed you there, it is published on our web page. You can realize that we have very good and detailed examples about that. Maybe one thing because a lot of people are always asking, why do we have 30 different companies, 30 different subsidiaries? It's very complex for us. The average size of a company which we acquire is 20 to 30 people, and the average price is between EUR 3 million and EUR 10 million. If you have a look on companies who make no M&A at all, they make no M&A or other companies, and they just announced we have a new contract with this company, we have a new client business and so on, usually, the numbers of this process is like a new client or like a new contract with any third party. It is much bigger regarding the revenue, regarding the impact and so on. And usually, people do not make critical questions about that. We do not get bigger M&A, we do not get big B2B contracts or new customers, and we announced that. We just make very -- consequently, small M&A tickets with very low risk portion. And we think that this is a very successful way to run our platforms and enter new markets, new industries. And I think this is a very low risk profile. And compared to other companies with these new clients and new contracts, I think there is not really a big risk for us. These are low numbers, low employee numbers and very low risk appetite from our side.

So now we have 1 question in the chat box left and 1 follow-up question, a further question from Mr. Lehmann. So if -- there are still things or topics you would like to know, just let us know. And so, yes, Frank, you can ask your questions.

Here we go. Just 1 other thing I'd like to come back, and it's, again, Reinhard question. I can see in your forecast on the debt situation that you have a cash consumption of EUR 26 million between 30th of June and 31st of December. What exactly is the cash going to get used to? Is it working capital buildup? Or Is it purchase prices?

It is a mix of everything. So as you know, we have cash and cash equivalents. We are at start year in our calculation. And with regard that we are looking forward to take our liquidity for investing in the right items, so as you know, at the end of the year, we have to -- for example, in the Fashionette GMV, we have to look for increase of our stock so that we have well material for sale, we are using it for bank loan repayments. And for sure, we are also taking the cash for acquisitions. So as you know, our investment -- or when we are doing M&A acquisitions, we have own cash, we have bank loans. We take partly the cash out of the bond, and we are also taking additional shares from the AG to spend this with our new acquisitions.

And you can be a little bit more detailed what that EUR 26 million has been used for, say, working capital buildup, purchase prices.

Basically, we have not such a big increase in our working capital. As Reinhard already said, it's always a mixture. We have, of course, an M&A investment of more than EUR 30 million or EUR 40 million this year. So this is quite a relative big number. It's lower than last year, but it's still high for us. And we have no forecast for the inventories to be honest for the public here. But you can think that -- I think you can expect that we have more or less or slightly higher or same level of inventory by end of this year. And we also invest in our software. That's what we always do each year. We spend between EUR 6 million and EUR 7 million for the development of our software and make new layers and so on with that. And -- but I think, yes, you have the cash flow statement for the first half year, I think this is quite representative for also the next half year.

So next question from the chat box. Could you get a few more details on the [indiscernible] takeover? I would assume that the purchase price is between EUR 10 million and EUR 20 million so that there is not much left from the bond for further takeovers. Is that correct?

Well, we give no details on purchase prices because we have an NDA on that, and it would not allow us to give you specific numbers. What we will announce in the annual report is our badwill or goodwill on these acquisitions because we have to make a calculation with our auditor, and then, we publish this number. We have enough fuel power to buy more companies, and we have enough liquidity to invest even more in this half year and also in the first half year next in 2025.

And the last question, does TPG plan to take up further bank loans in the next few years?

If we take more bank loans in the next few years?

Yes.

I mean we always take bank loans and repay bank loans. So this is part of usual business in the corporate. Of course, we work with bank loans. Some of them we repay. Some of them, we make renewable loans. And so, yes, it depends on our strategy how much to invest and how much M&A we do in the next years. We have no guidance that we have to acquire so and so many companies next year. If you see strong rise in prices for M&A, if we see not realistic price expectations, we buy exactly nothing. We don't have to buy. We only buy if we are really deeply convinced that this is a good target and the money is good invested. Otherwise, we don't make any M&A. And then, we do not need any bank loans, and we do not need any other kind of liquidity because we have very good operative cash flow.

And refer back to the already earlier given answers regarding our debt situation. For sure, when we are taking additional bank loans, that's only for additional investments and so on. So as Dominik says, coming out from our very strong cash flow, when something needs to be invested internally, like our IT infrastructure, which is for sure, a very important part of our business, that's all done by internal cash generates and that's nothing what we will invest or what we will pay by bank loans. So it's really, as Dominik says, when we are taking over new and additional bank loans, so it will have an impact on our debt situation that is directly caused by additional acquisitions, which are not completely able to pay out of our cash flow.

And all in all, we are really -- to repeat that, we are a very conservative company. That means our company, it's a family business at the end, and we are making retail and retail management since more than 140 years. And we always have to give a very conservative outline. We give very conservative guidance. And we have to make sure that our leverage is not too high that we do not exceed 3x EBITDA and so on. So this is really important for us because, otherwise, we have too much debt and too much expensive debt, and we don't want that. So there should be always a good balance sheet with 30%, 40% equity ratio, and we will expand our equity ratio. That means we will increase it. And our long-term guidance is at least 50% equity ratio in our whole group. And this is not a project for 10 years, so we will achieve it much, much more before in the next 3 or 4 years.

So in the meantime, we have received no further questions, and we, therefore, come to the end of today's update call. Thank you, everyone, for joining and to showing interest in TPG. And also, a big thank you to the Management Board for your time and for answering all those questions. So should further questions arise at a later time, please feel free to contact Investor Relations. So from my side, I wish you all a lovely short week and hand back to Dominik or some final remarks, which concludes our call.

Happy to really go with you together in this year for the last 3 months. We have a quite positive development, as you have seen here in our Q3 announcements and mentions. And I think we have a good year coming up next year. In 2025, our numbers have a very good tendency, and we think that we are working in an environment where we do not have so many competitors where we can really expand our software in new industries. And there are not many competitors there. So I think this is quite a good development and environment for us where we can really use our strength and go forward with that. Thank you very much.