UBM Development AG (UBS) Earnings Call Transcript & Summary

Thank you, Stuart, for the introduction, and welcome, everybody, to our full year 2021 conference call. And thank you for joining on a Friday ahead of an Easter weekend. Let me give you a quick overview of what we are presenting in the next 20 minutes or so. Please turn to Slide #3, the highlights. Highlight number one is we suggest to the AGM to pay out a record dividend of EUR 2.25. Not all of you might have expected this, year 2 of the pandemic did not result in a corona dent of the second-best profit in history. Three, equity and cash have reached the highest levels ever, and this could turn out as a major competitive advantage in the current environment. As the fourth highlight, we have defended our market-leading ESG position, something which proves to be another significant competitive advantage despite or even because of the current environment. Five, we have filled up our pipeline so that it remains at EUR 2.2 billion despite significant several hundred million completions in Q4 2021. And we take the lead in timber construction with more than 100,000 square meters firmly planned or under construction already. And finally, the biggest challenge in our outlook -- is our outlook. And all we can say, no matter what it is, it is better for us than for the majority of our competitors. But let's go into the details, and please turn to Slide #4. For years, we have now been one of the highest dividend-yielding stocks on the Vienna Stock Exchange. This is also going to be the case this year. Without changing the payout ratio, we suggest a dividend of 25 -- EUR 2.25. UBM has never ever provided a higher dividend in its 150-year history. UBM dividends are reliable, and you can set almost your watch on our payments. I dare to say that we have created a cash machine for our shareholders. Altogether in the last 6 years, we have accumulated EUR 93 million of dividends. That's an impressive number. Quite unusual for a project business as well. But may I now hand over to Patric for more financial highlights in these slides.

Thank you, Thomas, and welcome also from my side. Before I start to go through our set of full year numbers, let me quickly remind ourselves what we discussed last year same time. We were in the middle of another lockdown and convinced that corona will have its biggest impact on UBM in 2021. So the most important news for the financial year 2021, there was no corona dent as we had expected it at the beginning of the year. At half time of 2021, we provided you with the guidance that we expect a pretax profit from mid- to high 50s. In the end, we achieved over EUR 60 million of EBT and confirmed our guidance. This is even more remarkable, taking into account that we have turned the company upside down when it comes to the strategic anchor point direction from the biggest total developer in Europe to green. smart. and more. In our pre-COVID plans in 2019, the hotel development business was planned to be a major contributor to future revenue and profit streams. So when you radically change the focus, one would assume that short-term profitability suffers. We have compensated this by accelerating trading our projects. This means that we have sold a total of 4 projects in Germany and Austria pre-execution, a lesson learned from our pre-corona pipeline. You don't have to realize every single project, you can transform projects or sell them for profit in the middle of their development. But more details on the current pipeline will follow from Thomas. On top of that, we had the best year when it comes to residential projects. A big portion of our PLC and gains from assets held under equity is coming from this asset class. On top of that, we had also the income streams from our lighthouse office project in Frankfurt, the F.A.Z. Tower. And finally, we announced our balance sheet when it comes to our hotel lease business in 2020 already. As you can see on the chart, we have increased our net profit on a year-on-year comparison by 7.3%. We ended up with a net profit of EUR 43.7 million, the second-best result in our almost 150-year company history. The tax rate was rather low with 27.3% compared to last year's tax rate of 34.5%. The lower tax rate was influenced by the composition of our results. Overall, we managed to confine the corona impact to an absolute minimum and could even increase our earnings per share to EUR 4.50. Please turn now to Slide #6. In our current environment, we see an even higher uncertainty than a year ago. Being in the middle of a corona crisis, which is still not over, especially in China, we are facing a new crisis with the Ukraine war. The long-term effects of this crisis are difficult to predict right now, but it is already clear that Europe will have to cope with the new energy situation, the need to spend more money on its own defense and even more important, the new perspective on dependencies when it comes to foreign countries. I don't know exactly what the impacts will be on our environment, but what seems clear is that we all will have to cope with higher prices and inflation also mid- to long term. With this vague picture of the upcoming future, it is even more important to have a sound financial position. We are still in a very healthy position when it comes to our balance sheet. By the end of the year 2021, our equity stood at EUR 550 million, which translates into an equity ratio of 36.8%. Plus once more, we are strongly committed to our target range of 30% to 35%. We can make use of the strength of our strong equity for emerging opportunities at the right time. In line with our equity, our cash position has also grown steadily over the last 5 years. To be precise, it grew by EUR 348 million to EUR 423 million. We already proved last year that our cash position enables us to make sound acquisitions in a short time compared to others who are dependent on banks, which will be an even bigger headache going forward when it comes to risk appraisal and alike. We are confident that we can continue the strategy and leverage our financial strengths also in 2022. But let us turn to Slide #7, where we look at one of the reasons for our solid financial position, the capital market strength of UBM. Crucial for our solid cash position were the 2 successful ESG-linked capital market transactions last year. We managed to steer our repayment profile towards green financing. 35% of our outstanding bonds are already converted, and we have set ourselves the goal of increasing this number over the next 5 years. However, the graph on the left-hand side is also intended to show you that we can repay our bonds on time independently from the uncertain market situation in the next months. Net debt of EUR 381 million is still very comfortable, be it in absolute terms or, even more so, compared with the balance sheet total of EUR 1.6 billion. We have also been able to continuously optimize this key figure over the last few years. You might remember that before the war in the Ukraine, we, as well as many others, have said that UBM's loan-to-value is too low. LTV is currently at 25.5%. This is certainly not a disadvantage in times like this. Additionally, it gives us room for growth. In summary, UBM is financially very well positioned at the end of the 2021 financial year and also as for today. Now back to Thomas.

Thank you, Patric. And I think it's about time to give you and your team a hand as one of the most prudent CFOs in the industry. Let us now turn to another very important subject by looking at Slide #8. ESG, environment, social and governance is integral part of our strategy and at the core of whatever we do. While this might sound familiar from many others claiming the same, we have converted to real grades. Please have a look at the dialogues in our annual report with Reinhold Messner or Jane Goodall if you want to know more. The fact is that we are publishing our second ESG report, which is not only a step change compared with the first one, but is also audited by PwC. We do this without even being obliged to publish an ESG report at all. With this in mind, it might come as less of a surprise that UBM is best in class in terms of ratings. We have achieved Prime status with ISS and Gold status with EcoVadis. You give us credit for being the industry leader for good reasons. For us, this is an incentive to put even more effort into our future ESG excellence. Just have a look at Slide #9. We are determined to reduce CO2 emissions by 30% no later than 2030. Timber construction is our way forward in connection with renewable energy and green building certificates for 100% of our new developments. Building construction operation is the single-largest producer of CO2 emissions worldwide. Please just think of it. You find the details, by the way, in the backup. However, we are not stopping here. We have clearly defined targets also in respect of women in management positions and reducing employee turnover. I invite everyone personally to have a look at our office world in our headquarters. We are doing almost everything to entice our people to not only come back, but enjoy to stay in the office. This starts with comfortable couches in our lounge areas and ends to support the filter coffee machines in our kitchenettes. And of course, a lot of Cosywood throughout the entire office. Honestly, please come and see it yourself. Finally, governance is seen by us as a differentiator and competitive advantage. I have already mentioned our voluntary and audited ESG report, but we also require the highest standard code of conduct for our employees and our suppliers. May I also shed a bit of more light on our pipeline as laid out on Slide #10. Our pipeline for the next 4 years is a high-quality-only pipeline of EUR 2.2 billion, roughly equaling our total output. Assuming a 15% to 20% contribution margin, this would give you EUR 330 million to EUR 440 million or between EUR 85 million and EUR 110 million per annum. This pipeline includes no more hotel developments and 55% of our pipeline is in resi. Who would have assumed that we are capable of doing this within less than 2 years? Please follow me now to Slide #11. Taking a closer look to the nearer-term output volume, we have broken this volume down to EUR 375 million of projects under construction and EUR 420 million with a start of construction in the second half of 2022. We do this for a reason, but I bet you will have your questions on this anyway. In the light of the current environment, the projects under construction are almost like inventories for trading companies in a buoyant market, just think of the timber traders. We have fixed the construction costs for Timber Pioneer, for example, but have not approached the market for its sale. Demand, particularly for something like the first Timber office building in Frankfurt, is going to be very high, I dare to predict. The cost for such a building today would be significantly above our effective cost. And we benefit from it in terms of multiples and, to a lesser extent, from rent levels, depending how much of an ESG setup people want to stick on their head, if that is a way to express in English. I'm not sure. In other words, the current situation might even create some windfall profits for us. We have what everybody else wants. Medium term, we are all struggling with rising costs because of raw material prices, labor costs and broken supply chain. Let's not fool ourselves on this one. Relative to most of our competitors who, in many cases, have no access to the capital markets and much higher cost of debt, we are in a relatively better position. But let us, as I said, not fool ourselves, times are getting tougher. This is a natural transition to the last slide of our official deck, Slide #12, the outlook, which I must admit, is not an outlook but more establishing facts. There can be no doubt that the war in the Ukraine is changing times, both geopolitically and regarding monetary policy. Inflation came to stay as much as the pandemic. Still, at this stage, it is unclear how the European Central Bank is going to react as it is almost a catch-22 situation. On the one hand, we have the Southern European countries with already existing high debt loads and even countries like Germany or Austria catching up quickly. On the other hand, there can also be no doubt that the growth rates will melt like snow in the sun, and the ugly word of stagflation can be clearly read on the wall. However, we have no reliable and detailed-enough macroeconomic forecast data at this moment. Under these circumstances, I ask for your understanding that it is impossible to provide you with only a remotely reliable guidance. We do not know how the effects of the war and the Ukraine are going to impact us. And this can be clearly seen in a wait-and-see attitude by office tenants in particular. Most of them wait until the literal last minute to decide where and how many square meters to rent. The good news, they are still renting. To a lesser extent, this is also true for investors, and you see this in our markets outside the eurozones or, at least, first signs. We have seen erratic changes in currency rates and independent central banks like the Czech one have steeply increased interest rates. The biggest danger that I see for the transaction market, i.e., for the institutional transaction market, however, is a credit crunch. It is driven by banks reducing their exposure to real estate markets. This is driven by the central banks or many central banks, I should say, demanding increasing equity or [Foreign Language], to say it in German, for commercial banks and their real estate financing. This is also driven by some banks struggling with the current situation and their exposure to Russia or the Ukraine. Having flagged all of this, quite bluntly, the question remains, what is the alternative to real estate? Real assets remain the only real protection against inflation. There are 2 components to it. The one is the yield and that might be even shrinking, short term, a little bit further. And the other one is the value increase. In this respect, exploding construction costs leads to steeply increasing replacement costs. Yes, you've heard this correctly. We are talking about value of substance rather than earnings potential. And that doesn't come from me. That comes from a friend of mine at CBRE, who is one of the biggest assessors of real estate. Quite frankly, we do not know what the direction is the market is taking. By presenting you our financial strength, we feel well-prepared for whatever comes. This is true in general and particularly, in comparison to most of our competitors. Well, I'm sure you have questions on this and other aspects of UBM. And therefore, I would like to open the lines for your questions.

[Operator Instructions] First question is from the line of Stefan Scharff from SRC Research GmbH.

Yes. Stefan here from SRC. I have a couple of questions. The first is about some fair value adjustments in your P&L. It was about EUR 6.5 million. Perhaps you can say a little bit more. We could read it, it's in Austria and also in the Netherlands so perhaps you can give a bit more color. I guess it's the hotel in Denmark. And the second question is about the topic of bonds. In the fourth quarter, there is due about EUR 81 million and another EUR 120 million in the fourth quarter of the next year. So I could imagine that you plan a bond placement of, let's say, about EUR 100 million in the second half of this year. Is this right? And also the question about your liquidity position. You mentioned the EUR 400 million in cash and -- but there was also the buys in Mainz in the first quarter, and I would assume then about EUR 70 million perhaps. So what is -- what are your plans on the bond side for this year?

Okay, Stefan, most of the questions, I guess, not to say all of them are in the financial direction. So your first question was the EUR 6.5 million write-downs we have and to put a little bit more color on these. It is a bunch of projects, which are inside of these with 2 who are a little bit bigger and the number is per se, if you compare that to historical numbers, on the lower end, what we sometimes are seeing in this kind of number. So -- and your assumption was right that it is a hotel in the Netherlands, where we took the opportunity to have a write-down. And the second one is in Austria, one of our older land banks, it's the asset [Foreign Language] where we also took a little bit of a hit in our books. Second question was on the refinancing of the bonds and our plans, what we want to do. I mean it's a difficult one to answer as we need a bond window, a window of opportunity in order to get the market and do the right thing because, let me remind you on this one, we are a smaller company, unrated. We can't do benchmark-size bonds. So we are -- normally, we at least need to have the right windows in order to come with the bond. What we clearly flagged in the presentation was that we want to increase the ESG part in our bond financing, and that shouldn't be done by shrinking down the bonds. It's more done by replacing bonds which we have, where we have the opportunity in bringing more ESG paper to the market. So I can't tell you in which quarter that is. What is for sure, we have a certain debt capacity at the market due to our good position, and we won't give that debt capacity up. Yes?

I see. And you can say something about the liquidity at the end of the first quarter after the transactions in mind?

Yes, of course. I mean we had the liquidity event, as you were saying, and liquidity came down a bit as we were paying for months. But on the other hand, we were not talking about that too much, but we had done a little bit of Schuldscheins, which we did. So we also improved the position again. Plus, I want to make you aware of the fact that there can be done refinancing also of these kind of projects when we buy them. It's not an immediate thing we are doing. But over the year, I'm sure we will do a refinancing also on things like Mainz, if they are in a stage where we can do so. So if we are acquiring a brownfield or a project which in a stage where we already have our act together, we can do a refinancing with the bank. So the hit won't be the full number you have in mind.

Okay. So one of the landmark projects is the Timber Pioneer here in Frankfurt. And you have the building permission now since, I guess, the end of last year. What about the current negotiations? Or are there negotiations and forward sale in sight? Or you wait for a more quiet period and perhaps also wait for an anchor tenant to move to this project and sell it then at a later stage?

Stefan, let me jump in here and then you can continue with your questions. It's a mix, okay? It's a bit of a mix of 2 aspects. So one is -- and I've mentioned it but maybe in the press conference, that you will never be able to erect the Timber Pioneer at the price at which we are erecting it. I mean we have seen now more than 14% of price increase in construction costs and even more, timber, okay? So we have no reason to push the sale, yes, because we have something which is very extraordinary. And we believe that we get a very good offer for this. And no reason why we should hurry in this environment, particularly in Germany, the investors are not hesitant. At the same time, you are right because we are still kind of checking the market for the right tenants. And one must clearly say that vacancy rate in Frankfurt is, again, more than 1 million square meters. It has been 1 million square meters, but it was reduced in the past time to 750,000. And so tenants wait to the literal very last minute, okay, to give you a signature. And as long as you don't have it, you can't sell it. So it's a mix of both, but you don't see me nervous in this respect. And again, let me point out that Timber Pioneer is going to be completed and handed over to tenants no earlier than second quarter of 2023.

Okay. Okay. Can you perhaps, Thomas, say more in general, what you expect for the future in this very shaky times for the rising energy costs, for the rising construction costs and -- which bring up the whole cost situation of each new project and the recession might come to Europe? And what this means on selling residential properties or also selling modern green offices? What this means for your total project calculation in mid-term or in long term?

Well, there's a reason why we've broken down our projects to under construction and start of construction on Slide #11. We have no problem. On the contrary, we have windfall profits probably with the EUR 375 million of projects under construction because almost the entire construction price is fixed. Why do I say almost? Because you have some interior build-outs that you don't fix until you know what exactly your tenant wants. You have tenants, they want to do it themselves, and we have tenants they want everything to be done. But other than this, okay, this EUR 375 million are fixed. And to put it bluntly, it's more the problem of our suppliers or the construction company or whatever. It's different with the EUR 420 million where we plan to start construction the second half of this year. We have a big headache because you can't negotiate with your buyers, with your investors that they have a price guide council, okay? But this is exactly what construction companies want at the moment because they don't want to be left with the bill. And that's a very difficult situation. Thank god we haven't been in this situation because we didn't start any construction right now. And therefore, I can't tell you really from experience, but I know that this is a headache. The big question is, is it getting any better? So you try to still fix a price where everybody has to take a certain speculative element, if you want. We have to speculate if it's going to get higher and give a full price to our suppliers, and our suppliers have to kind of work out if that might be sufficient, medium and long term. Don't forget that our product cycle is a pretty long one. But you have put your fingers into the right route. This is something that we are carefully considering with every project that we start, depending on the percentage of price that we have fixed.

Okay. Okay. I see. And in Munich, you have quite something, the Bogner area, which you acquired at the beginning of last year and the timber factory. It's about, I would say, almost 80,000 square meters, quite a lot. So in your presentation on Slide 16, the timetable says it's after '24. Perhaps you can say a little bit more concrete when we have the first completions in Munich here.

Look, we have very constructive talks with the city government of Munich. They, in connection with the timber factory, as the name says, have kind of pushed us pretty much towards, why don't you build facilities that are also good for companies that have laboratories or something like this and also need office space. From the talks that we had with [Foreign Language], okay, we are actually quite confident that this is not to our disadvantage. And this is, within the boundaries of Munich, something that is definitely missing, okay? So I believe, based on these talks continuing and not another wave of pandemic knocking out half of the civil servants, that within this year, we should get [Foreign Language], okay? In parallel, we are already kind of planning of what we assume is the most likely permission -- zoning permission that we are getting because that's basically [Foreign Language]. And then it takes another minimum 9 months, optimistic, or 12 months. And then the question is, how much do you push it until you have a ready-to-apply construction plan. So that's the Baubergerstrasse. And you hear me being pretty self-confident in our management team in Germany and Werner Huber in Munich, in particular, who's doing an excellent job because we listen, we listen what is the city wanting. We are a bit further away, of course, with the Bogner area because there, we want to do residential only and in timber construction. So both is very much in the interest of the City of Munich. They need more living area, and they need more ESG-compatible investment. So also there, we are on a good way but further away from any concrete plans. And that, at the moment with the uncertainty that I've described, is actually an advantage rather than a disadvantage. But don't get me wrong, the meter is running, of course. We have financing costs. And we actually want to provide tenants and investors, in the case of single sale of apartments, as quickly as possible because that is what is most desperately needed in Munich. Munich has a structural shortage of more than 50,000 apartments, and it's growing rather than shrinking.

The next question is from the line of Oliver Simkovic from RBI.

First, from my side, brief follow-up on the cost situation and the difficulty of fixing prices on new projects. Do you see the chance that some projects might be postponed, especially where the costs have not been fixed yet, in the current environment where it's difficult to reach an agreement with contractors until the situation normalized again?

That's a very good question. The question -- I would pose back a question to you. Do you think it's going to get any better? As I said, thank god the EUR 420 million of construction that we are starting in the second half hasn't started yet, okay? So I think it's also a question of getting used to this new situation, however. And I think I've been very clear on this one. I believe that the situation is getting worse. I think that there are broken supply chains, particularly from China. And you've seen the pictures as much as I've seen them from Shanghai. I think it's the biggest part. I've been, every 6 weeks, in Shanghai when I still worked for Lenzing. I can't imagine such a city to be locked down for more than 5 days. And now it seems that it's locked down for weeks, okay? That is going to have an impact. Let's not fool ourselves. And then you might say, but you're a real estate developer, what concern do you have? Well, we have it because it's amazing how our global economy has led to interdependencies. And the other thing, of course, is that we will see, from the situation in the Ukraine, that we will face even stricter embargoes as we see them right now, and we have to see what the impact is. I know, and that's not the question that you've asked, but let me add this to my statement, that many people say, but look at the timber prices, how they've increased. I think we've seen, in the timber area, already the peak. I don't think this is true for steel. And I don't think this is true for concrete because obviously the cement production needs a lot of cheap gas, okay, for its production. So I think we are rather at an advantage than at disadvantage. This is not a very clear answer, I understand, and it will depend on the situation when we could start construction and the situation with the suppliers then.

All clear. On current projects that are ongoing, do you see those material shortages already? And even though costs are -- and prices are fixed, that suppliers can't deliver on time?

I was prepared for this question. So we had a phone call last week. And until last week, we didn't see any significant impact. I mean you always have this, and we always helicopter in some people who lay the tiles or whatever from Syria. We know this from our hotels, and we have the same situation now in the F.A.Z. Tower. But we don't see shortages where people say we can't deliver. I wouldn't say that they don't try, but they know that it's very difficult and they put themselves risk. So bottom line, so far with the ongoing construction projects, we don't see any unusual problems until end of last week.

Perfect. My last question. You have the high cash position, a relatively strong balance sheet. Previously, you have also mentioned that you continue to look at acquisitions. Now the situation has changed, as we have established. Is this still the case? Or do you -- are putting this on hold and take a wait-and-see approach in this environment?

No. We are clearly on the acquisition side. But we are, as much on the acquisition side as we have been in the pandemic. We haven't done anything stupid, look at the acquisitions that we've done. Bogner, we know what the balance sheet situation was. Mainz, we know the strategic decision of CA Immo. Pelkovenstrasse, it has been a group of people who've inherited the piece of land, and it took us a while to kind of synchronize their interest. We have had special situations in every acquisition even though there was no opportunity. And I know that I've talked about opportunity hunting during pandemic. And I'm here to tell you, I was wrong. However, the current situation is a much more difficult one, particularly for people who have availed themselves of extensive mezzanine financing and now have a cost overrun problem with their projects. I don't know what they do because they need to put up the equity themselves to get additional bank financing, if they get any additional bank financing. So again, I might be wrong like I was the last time or I might be right, also in the light of the potential credit crunch in the transaction market, that there are opportunities that come to the market, and we are ready, sitting there. We are a reliable counterparty. We have proven that we are a fair partner to negotiate even if the counterparty is in a difficult situation. And therefore, we think that the current cash situation can be justified, and we are not at all in a wait-and-see position.

[Operator Instructions] Next question is from the line of Simon Stippig from Warburg Research.

My first one, I guess, is for Mr. Thate. It's regarding the bond, your ESG placement going forward, did you already or have you already screened for some indications in regard to coupons?

Difficult one to answer. Of course, we are carefully looking at the market. And under current conditions, circumstances, you can see that also where our bonds trade, even if you are saying it's not a fair picture, but they are trade currently below par. So we would have to increase interest rates if you come from this equation. I'm not sure where it's running to. But currently, I would say we are at least marked 50 basis points higher than we used to be.

Okay. Great. And same covenants, I guess.

Same covenants, yes. No covenants because in the bonds, there are none.

Okay. And then in that regard, also last year, the bonds you placed, I'm just interested in the premium you're paying for the sustainability-linked characteristic. And can you say anything about that, about the coupon premium you're paying? Or is it actually a discount?

No. I mean it was not a discount. So what we are doing is we linked it to the ratings, and we are paying certain basis points, it's 0.15 -- so 15 basis points, sorry, not 0.15, basis point on the 1 bond. And I think it's 10 in the hybrid, which we are paying, if we are not comply with the link we have set. So we need to see plus or a Gold standard with EcoVadis. 1 of the 2 is enough. And if we are not reaching this, which currently seems not to be the situation because we are quite confident that we can at least stay at this level, we are not paying anything more than the coupon which is on the bond itself. So basically, that is a mechanism where we are paying if we are not compliant.

Sorry for jumping in. So it's 10 basis points more for the senior bond and 15 for the hybrid. As Patric said, I guess, if I understood your question correctly, for us, it's not an advantage necessarily that we get a lower coupon. But for us, it's an advantage when it comes to volumes, because, I mean, we raised EUR 250 million in less than -- or in a month -- or a bit more than a month. I can't remember. And that is for a company of our size, not rated, la-di-da, even with the transparency that we offer, quite a success. And this is what we are playing on from a finance technical point of view. Let me remind you still that the reason why we do it is because we say, that's a natural consequence. We are green. We are green in terms of green building. And if you haven't read the dialogue of Patric and a banker on green financing, it's worth looking it up. I think it's very revealing and very good. So we have green building, green financing and ultimately, green thinking. And we are very consequent in the way we follow up on this one.

Okay. Great. And then just maybe one last question in regards to the financing, there will be one more. So if you go back 1 year, so how much has the market moved in regard to your financings? Or also in regard to the banks, what the banks would offer if you have any comparison on maybe project level, et cetera?

So maybe, I mean, it is very different from market to market. That is the first observation. So obviously, in the Czech Republic and in Poland, we have much different rates just from the central banks, which are then going also into the credit, if you are in the local currency. If you are in the euro world, I have not seen many moves when it comes to residential projects, for example. So the ball still where it used to be. The risk appetite of the banks when it comes to resi is also, I would say, okay. And there is still competition when you come to the resi project, which gives you a lever to get the margins to the level where they used to be. If you have to financing an office project, currently, it's a little bit less of a competition with the banks, but we are still in the phase that we have quite some competition on every project we are offering. And as long as there is competition, margins won't move too much upwards in the euro environment. And I mean the good question is what is the ECB doing? If they are increasing the interest, for sure, the margins will also go up.

Okay. Great. And then one question in regards to the pipeline. On Page 11, thank you. That's really an advantage in regard to increased transparency. So our first question in that regard would be the projects you're showing under construction, so what would be the duration of those projects? And another question to that EUR 375 million would be, how much of that is actually forward sold?

Okay. On the forward sales figure, we are somewhere around EUR 230 million, which is pretty good. The big one that is then missing is the Timber Pioneer. And as I said, it's cautious predictions, so we don't go for the maximum prices that we expect to happen. And -- now, I forgot.

We need to...

Now I forgot the second part of your question, sorry.

Simon, what was the second thing?

So the first question was how much of it is actually forward sold? And second or the first -- and the first one was, what's the duration of the project? Is it half a year? Or is it probably 9 months on a weighted average view?

Until the projects under construction are finished, is that the question? Because I would love to actually refer you to the backup slide where we give our pipeline and where we have the completion dates are fully given on Slide #15 and Slide #16, okay? And that kind of tells you how much is still outstanding.

Yes, exactly. Okay. I still don't know when those projects under construction will be finished that you have listed there with the EUR 375 million, that's why I'm asking. So if you would say, okay, those projects are a duration of, let's say, 18 months, I know, okay, they will be finished in the next 1.5 years. That was the gist of my question.

Okay. But there are 10 projects which are going to be completed by 2023. And there is 1 project only that is completed by 2024.

There are no further questions at this time, and I would like to hand back to Thomas Winkler for closing comments. Please go ahead.

Thank you, Stuart, and thank you for you guys bearing with us, as I said, on a Friday before the Easter week. I appreciate your interest, and it's also kind of an appreciation of all the efforts, particularly, Chris, and Ines have gone through in the preparation of this. And we were not sure if the interest is high enough, so all that I can say is I wish you all a happy Easter time and looking forward to hear from you back after. Bye-bye.

Thank you.