Earnings Call: Q2 2024

Aug 8, 2024

Summary

H1 earnings reached €45 million as leasing new business rose 21.5% and receivables exceeded €6 billion. The cost-income ratio improved to 57.1%, while management maintained 2024 targets amid cautious risk provisioning.

Ladies and gentlemen, thank you for standing by. We will now start with the Grenke AG conference call. Throughout today's recorded call, all participants will be on a listen-only mode. I would now like to turn the conference over to Anke Linnartz. Welcome, ladies and gentlemen, and thank you for joining our Q2 earnings call. My name is Anke Linnartz. I am Head of IR, and I am here today with our CEO, Dr. Sebastian Hirsch, and our CFO, Dr. Martin Paal. We will start with the presentations by Sebastian and Martin, and right afterwards, we will enter in our Q&A session. If you like to ask a question later on, please press star followed by one on your phone. With that, I would like to pass the call on to Sebastian. Go ahead, please. Thank you, Anke. Also a warm welcome from my side to our earnings call, and thanks for joining us. Ladies and gentlemen, we are on track with our ambitious targets for 2024. Not only did our leasing new business reach a record level, but we were also able to increase our efficiency. This increase in efficiency is reflected in the positive development of our profits. The main drivers for this development were firstly the focus on leasing business. We see an unbroken demand for leasing solutions by our small medium enterprise customers. Leasing promotes investment since it puts a pay-per-use notion at the center. The question our customer always asks themselves, "Why should I own this object if I could just pay per use, if I could just pay the actual use of it?" Especially in an environment of elevated interest rates, a usage-based financing makes much more sense than a loan from a bank or taking own cash. Since we operate in the small ticket segment, the lease rates for our customers are quite affordable. Secondly, an increased efficiency. We continue on track of increasing efficiency among the entire value chain. Our digitalization program therefore plays a pivotal role in this context, and we will continue. Before diving into our operations, allow me to provide you with an overview of our business environment. Ladies and gentlemen, on the one hand, we are currently seeing a decline in inflationary pressure. This provides a more stable environment for cost management and pricing strategies, not only for our customers, but also for us. Overall, moderate economic growth and especially the continuing willingness to invest promotes a solid foundation for our operations in key markets on the other hand. Yet we keep a close eye on macroeconomic developments and vigorous in our risk provisioning since we see a slight increase in insolvencies amongst small medium enterprises that year. With the first interest rate decrease in June by ECB, we are confident that our own future funding cost will come down. We were already able to see the positive effects when issuing our second benchmark bond in June this year. Martin Paal will give us more details later on. At the same time, as I mentioned before, there is a steady investment need for small medium enterprises in the whole sector. The transition to net zero emissions and the transformation to a more digitalization, to a more digital business model for small medium enterprises to automation among factor contributing a constant anticipated demand for our business. Now allow me to provide you with an overview of our, let's say, internal highlights for the first half of 2024. As previously announced, we opened our second subsidiary in the U.S., namely in Chicago, Illinois. While still being a rather small company compared to other markets, we see huge potential in the U.S. market in the years to come. With our focus on leasing, we continue to grow our customer base with now over 680,000 customers and with more than 1 million running leasing contracts. This provides a foundation for our lease receivables. That's another milestone in Grenke history is that our lease receivables exceeded the EUR 6 billion threshold first time. We won't stop here, but want to become our small medium enterprise customers' best choice when thinking about small ticket investments and taking leasing. Currently, we are talking with several interested parties regards to our factoring business. You know we would like to sell the factoring business, and we are in very good conversation there. One of our capital market related highlight was definitely, as I mentioned, the success in issuing yet another benchmark bond. Additionally, we reached 3% of total shares as part of our share buyback program in July. We strongly believe in our unparalleled business model and are very pleased that we were able to have achieved the 3% line quite quickly at affordable prices. Now turning to an important figure for us and many stakeholders and many of you, the return on equity. Our increasing profitability eventually leads to a higher return on equity. With a return on equity before tax of 8.5% compared to 7.8% in the first half of 2023, we are quite satisfied with this plus. It should be a starting point for a development into a double-digit range of return on equity. We not only want to act sustainably in our profitability, in our business with small medium enterprises and figures and numbers. We also have some very important and successful efforts in our ESG behavior. The significant improvement of ratings by MSCI, by Sustainalytics and ISS encourage us that we are on the right track also in this regard. As mentioned before, our object portfolio reflects that ESG-related objects categories are increasingly demanded by our customers. Ladies and gentlemen, some charts and figures, and I would like to repeat, we are on track despite a challenging macroeconomic environment. With our leasing new business, we saw a strong double-digit increase, a plus of 21.5%, reaching EUR 790 million. On top of that, our contribution margins, the CM2, a key indicator of our profitability from the new business, we printed expanded by 19.4% to roughly EUR 131 million. This resulted to a stable margin of CM2 in 16.6%. So we did not grow at cost of our future profitability. With an average growth rate and volume of 16%, the compounded average growth rate, this success is evidence for our strategic focus and ability to adapt the current overall challenging environment. Leveraging small medium enterprises investment needs, effectively managing refinancing costs and passing them into our lease contracts. I will underline that numbers, that figures in new business is a base for our future earning growth. The satisfactory decrease of our cost income ratio we see here is a result of, firstly, our efforts in increasing our efficiency, and secondly, our rigorous cost discipline. With that being said, let me hand over to our CFO. Martin, the stage is yours. Yeah. Thank you, Sebastian, very much. I would like to start today's presentation with a view on our key performance indicators. In the first half of 2024, we saw a positive trend in our KPIs, which are very much aligned with our annual targets. Our group earnings rose as planned to EUR 45 million, driven by our strong leasing new business. As an additional result of this, our lease receivables surpassed EUR 6 billion for the first time at the end of quarter 2, which provides a solid foundation for future earnings. In the first 6 months, our loss rate saw normalization reaching 1.1% after 1.0% in the first half of 2023. This normalization reflects, on the one hand, our drive to further grow our leasing business and on the other hand, the continuous challenging overall market conditions for customers as seen in a slight rising number of insolvencies. With this result, we are on level within our guidance of below 1.5% for the loss rate. Our equity ratio changed in terms of gearing to 18.3%, mainly driven by the ongoing share buyback program, to which I will come later on in more detail. Aiming for an equity ratio above 16%, we retain comfortable headroom for future growth. Lastly, we achieved a significant reduction, as Sebastian already pointed out, of our cost income ratio in the second quarter. From 58.3% in the first half of last year to 57.1%. We anticipated this development as cost only slightly increased while expanding our net interest income and profits from new and service business. Let's have a look at our P&L. Here we can see the highlights, the drivers of our growth. Net interest income rose by EUR 8.5 million to EUR 176 million in the first six months, while profits from new and service business grew even stronger by EUR 13 million to EUR 102 million. In contrast, as I mentioned, our cost structure increased only slightly to EUR 159 million, while settlements of claims and risk and provisions increased to EUR 55 million. This reflecting the elevated uncertainty in the macroeconomic environment. Driven by the strong increase in income and new and service business, we grew our operating result by nearly EUR 6 million to EUR 58.3 million, achieving group earnings of EUR 45 million. Let's now take a closer look at our cost income ratio. In the second quarter, we continue to demonstrate good cost discipline with only slight cost increase of EUR 9.5 million compared to the first half of 2023, and that, as you can see here, almost exclusively stemming from increase in staff cost. On the income side, however, we saw the anticipated strong growth by around EUR 22 million in total, driven by steady growth along all income parameters. As a result, we successfully improved the cost-income ratio by 1.2 percentage points to 57.1% in the first half of 2024. This puts us well on track for our guidance target of below 58% for 2024. Our cash flow statement reflects the continuous growth of our lease portfolio, resulting in a steady payment stream from our lessees of EUR 1.3 billion in the first half of this year. We repaid just under EUR 1.5 million in debt and added slightly more than EUR 1.5 billion in new refinancing facilities, including the issuance of our recent benchmark bond, which we invested into new lease receivables. With EUR 565 million in cash and cash equivalents at the end of the first half of 2024, we retain a strong financial position for further growth. Let me add one sentence to our share buyback program, which we launched in the first quarter of this year. This is running smoothly. As of the end of last week, we have already acquired over 1.5 million shares or just above 3% of all outstanding shares. Currently, we have spent EUR 35.5 million of the budgeted EUR 70 million of our share buyback program. Lastly, our proven funding mix remained widely stable by the end of the second quarter of 2024. We continue to rely on our three debt pillars: senior unsecured with 42%, deposit business of Grenke Bank, which accounts for 23%, and our asset-backed commercial paper programs, making up 17% of our funding. A particular highlight this quarter was the successful launch of our second benchmark bond of EUR 500 million with a coupon of 5.75% and a duration of five years. The bond was significantly oversubscribed. This issuance is further evidence of our refinancing strength and secures our growth. Secondly, I would like to highlight here that both rating agencies, Fitch and S&P, have recently confirmed their investment-grade ratings of triple B with a stable outlook for us, which underlines the intrinsic value and profitability of our business. With this good news, I would like to turn the call back to Dr. Sebastian Hirsch. Thank you, Martin. Ladies and gentlemen, all our KPIs are on track. Yet we keep a close eye on macroeconomic developments while not letting our ambitious targets for 2024 out of sight. If you know me, you know that I am a passionate cyclist. Let's say the first half of 2024, we achieved an important stage victory, but we must not rest on our laurels. The coming months, particularly the summer months and the dynamic after the seasonal slowdown in August, are crucial for our Q3 figures and targets and also for the targets of 2024. One thing I would like to keep in mind is seasonality in our leasing new business. You know that the volumes in leasing new business volume in Q2 and Q4 is usually the strongest in a year. That are the strongest quarters over a whole financial year, and that would also be the case for that year. On this slide, you can see the steady growth of our lease receivables in the bar, which stems from the leasing new business development over the last 2.5 years on average. An increase in leasing receivables contributes to a higher interest income. Now, if you add an improving cost-income ratio on top of that, you will reach a better earning before tax, which evidently leads to an improve of return on equity before tax. Already on a year-on-year comparison, we anticipate a significant improvement of 2 percentage points, and the green line gives you an indication of where we might heading if all external conditions remain constant. In the end, our numbers can be easily translated. Higher volumes through leasing new business growth, combined with a stable contribution margin. Increasing efficiency, which is shown in our cost-income ratio, will boost our return on equity in the long run. Stay tuned on our journey, and we look forward to receiving your questions. Well, thank you, Sebastian and Martin, for your presentation. At this time, ladies and gentlemen, we will start our Q&A session. Anyone who wishes to ask a question may press star followed by one on their phone. If you wish to remove yourself from the question line, you may press star followed by two. We start with Marius Fuhrberg with Warburg Research, please. Yeah. Thank you. Two questions. First one would be on the macro environment outlook, with regards to your reluctancy from your customers to invest into also small products. Therefore, do you see any hurdles for your new business? Also in this context, maybe the insolvencies that you saw in Q2, is this higher than what you would have expected, or is it in line with expectations? Second question, with regard to cost development, do you expect the cost to continue to grow proportionally lower than top line? In other words, should we stay below 58% in the CIR also for the remainder of the year? The last one is, on bond side, do you feel a need for any further bond issues for the remainder of the year? I will take the first questions and I'll hand over to Martin. Thanks, Mr. Fuhrberg, for the question. Of course, the macroeconomic environment is challenging, as mentioned. Let's say the insolvencies and the outcome in our loss rate or in our risk provisioning is like expected, as you see in our numbers and our figures. So we are in line also with the KPIs on that. So it's on a level in terms of EUR as expected. But we are cautious to looking forward to that, and we have to reflect the current environment on the one hand and also the future environment. But again, it's like expected. There's no surprise on the development of that in terms of EUR per the first half of 2024. In terms of new business, it's also part of our way of making new business and we see a huge demand and need to invest in small tickets in the several objects I mentioned. So it's very stable. It's always the case when the macroeconomic environment is not that stable, then taking a loan is not that easy. Taking on cash is maybe not the best option. So leasing become more attractive for small, medium enterprises, which are able and willing to invest. So it's also more or less a good indicator for our new business. Yeah. I would like to take the other two questions. Thanks for that, Mr. Fuhrberg. First one on the cost development. Yes, we expect towards or in the rest of the year, still increasing costs, especially on the staff cost side, as I already highlighted in today's presentation. It is important for us to highlight this, that we are increasing costs, but as you mentioned, that we really increase the top line even stronger, although that the cost-income ratio stays below this 58%, which is the target for this year. We are confident that we will reach this target towards the end of the year. We have now 57.1 at half year, so we are on a good way to reach this target. The second one is the bond issue. The short answer is yes, we plan to issue another bond this year. This is necessary for our growth. It will, as always, depend on the market conditions, what the year and the next months of the year will bring. We have seen some turbulences in the last week. This lasted only one or two days. I am sure that we will find a good window when we will go out with a new bond and do another issue. Thank you. Perfect. Thank you very much. We move on to Roland Pfänder with ODDO BHF. Please. Go ahead. Yes, good morning. Two questions from my side, please. First, on leasing new business. Your midterm growth target is here around 12%. Could you please decompose this figure by growth related to number of new contracts sold and certain increase of the ticket size? Right now it looks like a split of 50/50. Would you expect further growth linked to actually higher ticket sizes going forward? What's the relation here going forward? That's the first question. Second question, coming back to the cost side. If I'm not mistaken, your headcount grew around 7% in the first half year, and the number of new leasing contracts sold also increased by 7%. I'm missing a little bit operating leverage. What's the outlook for headcount growth maybe for this year and also going forward? Because I think this development and personal costs are very important regarding bringing up your profitability for the group. Thank you. I think I can start with a question on the cost side. Morning, Mr. Pfänder. Thanks for the question. Yes, you are right. We have currently more or less, in parallel the development of number of new contracts, with staff, number of staff. We still see this increasing staff costs in this year, and we have planned for that as well. We do not see the operating leverage, what you are mentioning already in this year, because as you know, we are running in parallel our digitalization program, and we will see the first effects of that at the beginning of next year. We are aware of that growth currently is mainly driven by growth in FTEs. But from the beginning of next year on, we plan increase in staff costs, which is at a lower rate as we do for this year. Yes. Thank you, Mr. Pfänder, and thanks, Martin, for the first answer in terms of new business. There, we have to take into account also the group average. When we look into the ticket size on the group level, we have to see what the portion of, let's say Germany, France, Italy, for example. We had a strong growth in the last quarter in countries where we have no e-bike business today in place, and the e-bike tickets are a bit smaller than our average ticket size, and that's why the average came a bit up. The plan is not to go in bigger tickets, but as we mentioned in our annual meeting, the definition of small tickets is more EUR 50,000, or smaller than EUR 50,000. In former times, we said it's smaller than EUR 25,000 because we see more investment in that area, especially robotics, for example. It is 20 to EUR 30,000 and a very good investment for us. From the overall strategy, we see that the average ticket size should be a bit smaller than EUR 10,000 as it was in the past. I think we are very close to the number of 2019, there we had also a bit more than EUR 9,000 average ticket size. It is very stable on the long-term run. You would assume this 12% growth outlook is more linked to number of new contracts sold in terms of growth? The 12% growth outlook is linked to number of new contracts, but also to volume. When you see, let's say, a stable average ticket size, maybe we can see some deviations there from quarter to quarter. The 12% growth outlook is a long-term average outlook per year, and that is our, let's say, long-term target to grow 12% in volume and in number of contracts. Just a last follow-up. Could you provide us maybe headcount growth estimates for the next midterm years, so to say? Is it coming down from the 7% we have right now, or what do you expect? Will that be held constant? Yeah. We are internally planning more on staff costs and a little bit less on headcount. This year we plan for still double-digit growth in staff costs, but this will come down next year below 10%. Okay, thank you. Okay, then we move on to Johannes Thormann from HSBC, please. Morning, everybody. Some questions from my side as well. First of all, we saw a big uptick in the new business and service margins in the second quarter of this year versus Q1. Can you elaborate a bit on that? Because there's always some volatility between the quarters, but the uplift of 30 bps or so, or more than 30 bps, is quite dramatic. Normally, we talk about some basis points. Secondly, can you elaborate a bit more how July volumes were? You gave us a reminder that Q3 is always seasonally weaker. How was July? Was it in line with expectations? Last but not least, any update on the factoring sale? Sorry if I missed that. Okay. Hi, Mr. Thormann. Thanks for your question. At first, yes, there was an uptake in new business and service that is linked to the new business development and also the strong growth. There is also a portfolio impact inside over the last couple of quarters and years. You know that because there was a down in 2020, 2021. Especially the service business is very hard linked to the existing contracts and the existing portfolio. We had now a strong growth over quarters and we are, let's say, now more or less in a stable environment that the service business is growing linked to the new business growth of the last two years. There is no down on the portfolio from two or three years before. That was the case in 2023 and 2024. That is why the growth rate in service business over the last quarters and the last years is not that stable. We are, let's say, today more or less in the normal Grenke environment in terms of growth, and also for that P&L figure. The new business, it is a bit the same. It depends a bit on the development on new business in the quarter. Is the new business more in the first months of a quarter? Is it more in the last months of the quarters? That is also linked to that figure, and there is always a bit volatility, and that is the reason for that overall and the half-year figure. When you look to the average, it is in line with our expectation, with the thing we planned. In terms of new business development and volume, July was like planned. We are well on track, and it was a good July after the second quarter and a good June. It was a good July, and in the same way we explained before in terms of investment behavior, investment needs of our small and medium enterprises. Maybe you would like to say something to factoring? Yes, sure. Morning, Mr. Thormann. Thanks for the questions. You can expect for the summer quarter, as always, a little bit less volume than in other quarters, given especially the vacations in Southern Europe. That is always the case in our normal, typical Grenke year. Coming back to your question on the factoring sale. Yes, we are here full in plan. We are now awaiting the final bids of our potential investors, and then we will evaluate them and do the next step there. You cannot expect that we then have signing in two weeks or so, as you are familiar with M&A processes. So it takes a confirmatory due diligence and SPA negotiations and so on. But we are confident that as we planned, we will see signing of potential buyers with us in the course of this year. From our side, and I think from all potential bidder side, the faster the better, then can we concentrate on our profitable business on leasing and the potential buyers then can concentrate on further growing the factoring business. Okay. Simon Keller from Hauck Aufhäuser, please. Taking my question. I have two. First, I am looking at the loss rate. What do you expect to see in Q3? Could you specify any noticeable regional differences in the loss rate as well? Secondly, how is the digitalization program developing? Are both progress and costs in line with your expectations in H1? Thank you. Okay. Morning, Mr. Keller. Let me start with your first question on the loss rate. Actually, we plan for a loss rate of below 1.5% for the whole year of 2024. There is no special planning on a quarter-by-quarter basis because this is always a look on the whole portfolio when it comes to the loss rate. Planning on quarters is not that easy. We have always the full year in mind when talking about loss rates. But as I said, we are confident to reach below 1.5% this year. In our portfolio of over 30 countries, we always see regional differences there. There are a handful of countries maybe where we see slight increases in the insolvencies, and we have taken measures to handle that. Our portfolio effect helps here in some instance to really diversify. But yeah, we see a slight increase in losses, and this is covered by our risk provisioning. I would like to start with the digitalization program in terms of costs. The short answer is yes, we are on plan there. In the first half of this year, as you know, we have planned about EUR 50 million P&L in each year 2023, 2024, and 2025. We are still for this year and for the whole program, in the middle of the plans there. Okay. Thank you. Then we have Mengxian Sun from Deutsche Bank, please. Thank you very much for taking my question. Three from my side. The first one on the business seasonality. Thank you very much for giving us a little bit more information on the following or the July numbers. Just help me to understand the quarterly development a little bit better, because if I look at 2023, we see there has been quite a strong variance in terms of growth rates. Q3 2023 growth rate was quite weak and Q4 is strong again. Are we going to see the similar development for this year as well? The second one is on the bond issuance that you just mentioned. Could you please give us some more color on the current financing condition that you got, compared to the last bond issuance, probably, and what does that mean for the net interest income margin development for the next quarter and also for next year? The last question is on the guidance. If you take the Q2 run rates, we are probably going to land at the end or at the lower end of the full year guidance. What do you need to do or what needs to happen for you to reach the midpoint or the upper end of the guidance? Thank you very much. Thanks, Ms. Sun, for the question. I would like to start with the quarterly development. On the one hand, yes, you can look on growth rates. On the other hand, it's maybe a bit easier to take the guidance, maybe the midpoint, and to look to the first quarter, second quarter, and then project that to Q3 and Q4. Normally, as I mentioned before, Q2 is a bit stronger than Q1 and stronger than Q3. With, let's say, sales run per end of the year, Q4 quarter is the strongest in the year. Growth rates quarter by quarter, so comparing Q2 to Q2, there you always have to take care of bank holidays, especially Q2 and Q1, the Easter holidays, it is very important to take care of that. Normally in Q3, there's no bank holiday on the calendar, so it's free from bank holidays, and Q3 is more reflected by the summer break in South Europe. As more business you make in South Europe is more important the summer break is. So when your portion of Italy, France, and Spain is higher than maybe the year before, then the summer break impact in the whole portfolio on the group level is a bit bigger. Q4, last but not least, it's always the strongest quarter in a normal year when you're going to grow. It's because of the year's end rally at Grenke, of course, but also in all the small, medium enterprises, they are going to invest per end of the year, taking some budgets or something like that. So it's a quite normal environment. It's like a bit a small wave. Q1, it depends on the development of Q4 in the year before. Then Q3, it depends a bit on the Easter holidays. Then it come down in Q3 for summer. Then there's an acceleration of that. In a normal Grenke year, the second half of a year is a bit higher than the first half of a year, but just a bit. It's not a huge higher portion because Q1 and Q2 are bigger than the Q3. So that's a bit explained, but you can see there also in the empirical datas we provide you, or we can also provide you. Martin will say something to the bond issuing, and I would like to say something in terms of guidance. Let's say first what should happen to reach our guidance is to being on track and staying on track in new business development, to being and staying on track in efficiency and costs. We are well on track on that. And also having, let's say, a more or less stable environment in terms of loss rate and taking care for risk provisioning. There we have to take two things in mind. On the one hand, the risk provisioning or the bad debt accounting for real bad debts for the non-performing loans on the one hand, but on the other hand, also the expected loss accounting for all running and performing contracts. It depends on the macroeconomic outlook per end of that year and what's happening and what's going on. Let's say if last Monday would be the 31st of December, and to make then a risk model looking forward for expected loss, it's made different than four weeks ago. That's always the case since we have to deal with IFRS 9, but you are aware of that. The macroeconomic outlook is an important parameter, and as long as our portfolio is growing, new business is growing with each basis points of growth. The expected loss for the new contract is bigger than in the quarters or years before because of the volume impact. To reaching, let's say, the midpoint of the guidance, we have to fulfill our volume targets, our CIR targets, and as I mentioned before, not only the growth of the past quarters, the growth of the next two quarters, and also the development in loss and risk provisioning. Of course, the interest rate environment should be more or less stable as we see that today. But I think the new bond we would like to go is not that important for the financial year 2024, isn't it, Martin? That's right, Sebastian. Good morning, Ms. Sun. Thanks for this question. The current benchmark bond that we issued had a coupon rate of just below 6% compared to the green bond last September of 8%, so already 200 basis points cheaper. We will see what the interest rate environment will bring towards the year. There might be some speculations whether interest rates will go down further, but that's not the decisive point for us. The absolute interest level is not so much a point for us because we are able to pass on the interest rates, be it high or low, to our customers. That's the decisive question, and I think we have shown over the last one and a half to two years that we were able to do that. It's more than the relative interest rates in terms of a margin from a P&L perspective, how to hand them on to our customers. If you're just talking about the absolute levels, we have seen, compared to our issue of the last benchmark bond in May, that our own credit spread has tightened a little bit, which is good in terms of absolute interest expenses. But as I said, it's decisive that we pass on the interest rates to our customers. Thank you very much, that is very clear. Congratulations on a good Q2 result again. Thanks. Thank you. Yeah. We have a follow-up question from Roland Pfänder, please, from ODDO BHF. Yes. Thank you. Just coming back to the loss rate below 1.5% guidance for this year. Do you expect for this year or maybe the next year some releases from risk provisioning, maybe linked to former COVID years? Or do you have any management overlays in place you could use, or how could we see this? Thank you. Compared to the last year or the last years, there were some, let's say, management overlays or management adjustment. Of course, you can use that. We saw over the first half of that year that some of that overlays, or to go for accounting of some of that overlays was right because of the development. So it was not just an overlay, it was just a right adjustment in terms of expectations and macroeconomic development and how we will deal with that per end of that year. It depends on the macroeconomic environment, as I mentioned that before. As always, our risk provisioning is careful, and we taking in account our performance or the performance we see from the payment behavior, from the bad debt development of our customers and clients across the landscape on the one hand, and we have to take into account the macroeconomic outlook and development. As I mentioned before, the macroeconomic outlook is very important for the expected loss level of the running and the performing leasing portfolio, and as long as we are growing, it's much more important than, let's say, the bad debt and development from a portfolio which is made two years out. Okay. Thank you. Okay. So in case you would like to ask a question, just to remind you, it's press star followed by 1. As I can see, we have no questions resulting from the webcast. So I'm waiting. I'm looking at you. I'm looking at you. But I guess that's all for today. So ladies and gentlemen, thank you very much for joining us. If questions spring to your mind right after the call, please don't hesitate to give us a call or drop us a line. On October 2nd, we are going to release our new leasing business figures for the third quarter already. Of course, it was our pleasure to have you. Take care and goodbye, and have a nice day. You may disconnect now. Goodbye from Baden-Baden. Bye-bye.