Yes. Good morning. Thanks, Stuart. Good morning, everyone, from Dusseldorf. Welcome to our Q1 twenty twenty Results Call.
I'm here with our CEO, Lars van Lachem as well as our COO, Volker Wiegel. As usual, they will lead you through the presentation, and we will then open it up for your questions. You'll find the presentation document as well as the quarterly report within the IR section of our homepage. Please note that there is also a disclaimer, which you'll find on Page two of our presentation. And with this, I hand it over to you Lars.
Thank you, Frank. Good morning, ladies and gentlemen, and welcome from my side to our first quarter twenty twenty earnings call. In the first quarter, the world entered into a human and economic catastrophe. Our home state of Northrend, Australia went into lockdown by mid March and more than ever, we became the provider of a home, not just residential space to our tenants. We immediately decided to offer rent suspension, organized neighborhood assistance and put in place a set of additional measures to support our tenants and our employees during this challenging time.
Our business model proved again to be very resilient. The COVID-nineteen crisis hardly affected us operationally as well as financially. So far also in Q2, we experienced only minimal effects to our business. Therefore, we are very happy to present today a strong Q1 results and to confirm our guidance with an FFO one in the range of three seventy million to €380,000,000 This comes on the back of a strong balance sheet and our expectation of further revaluation gains in 2020. We also confirm our dividend proposal of 3.6 Let me briefly take you through some of our Q1 highlights on page four.
We record a strong increase of our FFO one of 11% to EUR94 million for the first quarter. Major drivers were the rent increases and the additional income from last year's acquisitions. On a like for like basis, rental growth was 2.8%. Our EBITDA margin improved strongly by 110 basis points to 74.1%, which is in line with our target. We put our acquisitions on hold by mid March, but we stick to our ambition to acquire 7,000 units by year end.
We expect markets to open up again after the reduction of some of the lockdown measures and already see substantial opportunities emerging. On Slide five, I would like to walk you through the different impacts from the COVID-nineteen crisis we have experienced so far. As you might have probably seen, we voluntarily suspended the increases according to the rent tables, the Mietzpiegel already by mid March. We have not canceled those increases completely, but plan to recapture some of the effect in the half of the year. We currently expect that the temporary suspension will have a 20 bps negative effect on our rental growth ambition.
While we continue to work on all modernization measures already started pre crisis, we postponed the beginning of all other modernization projects, which have not yet begun. Therefore, there will be an additional suppressing effect on the like for like rental growth. However, we might be able to recapture part of it until year end. As of May, we saw deferrals for significantly less than 1% of our residential units. The effect is therefore very small in the overall group context of our 136,000 residential units.
Due to the generous German social security system, we expect this to only impact liquidity, but not earnings. On new lettings, we have been able to continue new lettings despite the crisis. Certainly, due to the new regulations and distancing rules, the letting process slowed down somehow, but only to a minor extent. Since mid March, when the government put the lockdown in place, we only closed 200 contracts less compared to the previous year's period. Additionally, I'm happy to share with you the good news that lately we see an increasing activity as the society is reopening.
On terminations, we observed a positive trend as well, as the number of canceled contracts decreased by 400 compared to the previous year's period. This reduced the tenant churn rate by around 200 bps. We expect this number to normalize in the course of the year. Obviously, both numbers are very small being put in group context. CapEx spending remained nearly unaffected.
As stated, we have been able to continue the modernization measures, which we have started pre crisis. At the same time, we have continued our stronger investments into single flats at the time of re letting to crystallize additional value. With regard to our balance sheet, we could sign €250,000,000 of secured and unsecured financing with a duration of ten years at an attractive yield of 1.2%. The financing has been agreed at the very peak of the crisis mid March, emphasizing our ability to quickly act even in dislocated markets. Additionally, we are about to increase the total volume of RCFs to EUR350 million to EUR400 million due to the higher volatility and still difficult state of the commercial paper market.
As already mentioned, we experienced the residential real estate acquisition markets to revise. As we had a very healthy pipeline before the crisis and sourced some substantial interesting offers post peak of the crisis, we feel comfortable to stick to our ambition to acquire 7,000 units in 2020. However, as we cannot assess the effects of COVID-nineteen on the economy completely, and as the reopening of society and business increases the risk of a higher infection rate and therewith of another unexpected lockdown, we took some precautionary measures. As a step, we have decided to put all external hiring on hold. Additionally, we identified areas for potential non personal cost savings, mostly for back office activities.
On the following slide, on Slide six, we wanted to illustrate the limited impact of the great financial crisis on LG, which from our perspective is due to three key factors. Firstly, housing is a basic human need. Secondly, LG in particular provides affordable living with an average rent of €5.88 per square meter, we offer a value product for an affordable price. Thirdly, this is clearly a result of the strong social system in Germany consisting of several layers of social security and offerings. These factors contributed to the fact that German residential as an asset class was nearly unaffected by the last crisis, neither by the great financial crisis nor by the crisis following the burst of the Internet bubble.
You will not be surprised to hear that we are of the core belief that within this asset class, LG is uniquely positioned, which we depict on Slide number seven. While we clearly operate in a resilient sub sector, LED offers all the attributes to navigate successfully through the crisis. We do not only offer stable industrial environment. We also hold a strong balance sheet and sector contacts with an LTV of only 38%. Simultaneously, we provide an attractive gross yield of 5.1% in times of negative interest rates and at peak volatility in capital markets.
However, the strongest differentiator is the simplicity of our business model. We focus exclusively on German residential. We avoid adding complexity to our business model by increasing domestic or international regulatory risks, dealing with limitations in cross border synergies or adding significant tail risks via development activities in times of economic uncertainty. We believe that our lean and admittedly simple setup makes us a stronghold in the crisis and the time thereafter. With this, I hand over to Volker, who will take you through our portfolio and our operational highlights.
Thank you, Lars,
and good morning from my side. Let us now have a look at Slide nine, where we provide an overview of our operating performance. Overall, the in place rent in the LG portfolio rose by 2.8% on a like for like basis. Our free finance units, which account for 75% of the portfolio, contributed 3.1%. In January 2020, as in every year, we could also adjust the cost rent of our subsidized units.
This led to a like for like rent increase of 1.7% for the restricted part of our portfolio. Looking at our portfolio as a whole, it becomes obvious that the rent development in the commuter belt areas did not lose its momentum. Actually, like for like growth in these areas, which we define as our stable markets, was 3.2% or 10 basis points higher than in the high growth markets. Both market segments benefited from our modernization program. In the higher yielding markets, modernization activities were less pronounced, and we only had a few new rent tables meet Spiegel in 2019.
Nonetheless, rents in this segment still rose by 1.8%. In the free finance part of the portfolio, we realized the strongest rent increases in the stable markets with plus 3.7% like for like, followed by the high growth 6% and the purple markets with plus 1.8%. We have been able to increase the occupancy rate for the total portfolio by 20 basis points. This translates into a like for like EPRA vacancy rate of 3.4% at the March. In our high growth markets, mostly all of our units are led, I.
E, the overall occupancy rate amount to 98.1% like for like. The lowest vacancy rates we still realize in Munster with 1% and Gutersloh in Westphalia with an even lower 0.9%, all on a like for like basis. The vacancy rate in the stable markets was down by 10 basis points to 3.4%. Even in the higher yielding markets, we could reduce the vacancy rate by 20 basis points year on year. The organizational measures implemented in these markets further improve operational efficiency and are now clearly taking effect.
For the portfolio as a whole, we still expect a further slight decrease of the vacancy rate as at year end 2020. This guidance, however, is subject to unforeseeable consequences of the corona crisis. Let us now move to Slide number 10, showing that the like for like rent per square meter for the overall portfolio at the March stood at €5.88 or at €6.25 for the three finance units. Let me add a bit more color to this. The following examples are on a like for like basis.
In our high growth markets, Monheim was once again the top performing city with a rent increase of 7% year on year to an average rent of €7.29 per square meter and month. Monheim is the most important location for our investment program. We are the largest property owner in the city with around 3,300 units. 30 kilometers further south, in Cologne, the average rent growth was plus 5.3%, I. E, average rent rose to €07 0.6 per square meter.
In the stable markets, Bupatal and Solingen, which are located 30 kilometers east of Dusseldorf, were the best performing cities of the stable markets with rent growth of 4.5% or 4.7%, respectively. This once again underlines the momentum in the commuter belt areas. In Dortmund, our largest single location rents grew by 4.1% to 5.42 In the purple markets, we saw the strongest growth in Dusburg with an increase of 2.3% and in Reichenkausen with 2.6%. On the following Slide 11, you'll find more details on the investments. Overall, the investments into our portfolio increased by more than 45% to €73,000,000 On a square meter basis, we spent 8.25 the bulk of which was for modernization measures.
At the same time, we continued our strategy of value enhancing investments in relettings. The increase of those spendings in combination with relatively low maintenance expenditures resulted into a capitalization ratio of 74.6%. Recognizing and living up to our obligation to contribute to a carbon neutral industry by 02/1950, we continue to modernize 3% of our portfolio per year to improve the energy efficiency of our assets. This is and clearly stays one of the ESG targets we have set ourselves. At the same time, we are clearly aware of our responsibility towards our customers, and we therefore carefully balance potential rent increases from modernization, adaption to climate change and the affordability for our tenants.
All this is part of our strategy. With this, I hand back to Lars for more insights into the financials.
Thank you, Volker. At please have a look at the chart showing the financial highlights on Slide 13. The numbers once again demonstrate that LAG's margin expansion story is well on track with further noticeable improvements across all P and L lines. Our net cold rent increased by 4.9% to €153,500,000 This is driven by our rent increases as well as by the new unit added to the portfolio last year. The adjusted net rental and lease income as well as the EBITDA rose by 6.5% and with this even stronger than the net cold rent.
Hence, our adjusted EBITDA margin improved by 110 basis points year on year to 74.1%. This is in line with our margin target of around 74%. Our FFO I grew strongly by almost 11% to EUR94 million, which puts us well on track for our financial year guidance. On Slide 14, we present the calculation of the NAV. The NAV increased by 1.1% to EUR106.55.
This reflects mainly the profit contribution from Q1. We expect revaluation gains to add to the NAV in the second quarter. In general, we expect a positive development for the first half of this year. In these times of economic uncertainty, we feel it is unreasonable to communicate a precise number. However, based on our activity in the market and our ongoing discussion with our evaluator, we expect as of today revaluation gains for the first half of twenty twenty at around last year's level, where we recognized valuation uplift of around 5%.
This clearly assumes that we experienced no material effect from corona until the end of the first half of this year. We will certainly provide you with a precise number at our Q2 financials presentation in August. By then, we know more about the impact of COVID-nineteen on the society and on the economy. On Slide 15, we have as usual put together the key valuation metrics broken down by markets. I would like to reiterate that we feel very comfortable with our asset profile.
Our assets still offer an attractive gross yield of 5.1% in a negative interest rate environment. The gross value per square meter amounts to EUR $13.56 at the March, which translates into an in place rent multiple of 19.7 times. This compares well against the market multiple of 17.5 times. Coming to our financing structure on slide 16, we are very proud of our strong financial position. We continue to have a low LTV with 38% with an average maturity of eight point one years at an average interest cost of 1.46%.
At the peak of the crisis, when debt markets turned out to be illiquid and dislocated, we even managed to place €215,000,000 of secured and unsecured financings for a maturity of ten years at an attractive yield of 1.2%. This proves our strong standing among market participants and our ability to proactively tap markets. We signed the agreements in March and April expecting the funding in Q2. Therefore, those funds are not yet reflected in our Q1 numbers. As already mentioned, we are about to increase our RCFs from €200,000,000 at the March to around $350,000,000 to €400,000,000 in Q2.
This provides us with sufficient flexibility to deal with potential market turmoil and to take advantage of rising growth opportunities. Otherwise, our financial profile remains long term geared. As of today, we have no maturities until 2023. Let me shortly summarize our achievements and key takeaways from our 10 program, which you can see on slide 18. We disclosed our initiative in mid March to protect tenants and employees with a clear ambition to help and manage the implications of the crisis together.
Clearly, our decision to suspend rent increases was one of the biggest driver for that program. However, it was more than that and we are happy to help also with a bunch of smaller measures. Since the introduction of our 10 paper, we have done the following. We offered a 20% discount on the net code rent for new lettings for system relevant professionals. We are proud that we could give 78 Corona heroes, people with jobs like nurses, cashiers, or firefighters a new home.
We displayed 30,000 lists to organize neighborhood self help, e. G, to organize shopping support for our elderly tenants. We distributed boxes with toys and playing material in our premises for the children of our tenants and boxes with suites to local hospitals to support the medical staff. For our employees, we bought protection gear and allowed fully flexible working hours as well as far reaching home office solutions. Additionally, we offered a reduction of the weekly working time by up to five hours for employees with kids to cope better over the burden of home office and home schooling at the same time.
Before we turn to your questions, let me just reiterate our guidance on Slide 19. As mentioned earlier, the COVID-nineteen crisis will have an effect on our like for like rental growth. It will come in lower than our original target of around 2.8%. The reduction comes from the temporary suspension of the rent increases according to the Mietzpiegel and the postponement of net not yet started modernization measures. Due to the remaining uncertainties, we cannot give you a precise number for the full year already today.
Similar to the like for like rental growth, we also will see effects on the vacancy as well as on the investments. We will provide you with a clearer guidance in this respect together with our Q2 results when we all will have hopefully more clarity. However, we think we are in good shape and well positioned to navigate successfully through the crisis. Despite this qualitative softening, we feel comfortable to confirm our guidance of three seventy million to €380,000,000 for the FFO I as well as the 74% EBITDA margin target. Certainly, this is based on the strong Q1 results we are happy to present today.
Additionally, on a weekly basis, we observe an improvement of all operational indicators like new lettings. At the same time, we noticed that transaction markets are picking up and we are receiving new interesting offers. Therefore, we also confirm our ambition to acquire around 7,000 units this year. We remain fully committed to all aspects of ESG and set ourselves targets along our ESG agenda. We continue to modernize 3% of our portfolio per annum to improve the energy efficiency of our assets.
We are also working on the new ESG standards like TCFD and FASB in order to allow for a better insight into our ESG framework and reporting. With this, I conclude our presentation. LeFouca and I will certainly be very happy to take your questions.
Thanks, Lars. And with this, we begin the Q and A session. Back to you, Stuart.
Ladies and gentlemen, at this time, we will begin the question and answer session. question is from the line of Thomas Neuhold from Kepler Cheuvreux. Please go ahead.
Good morning, gentlemen. Thank you very much for taking my questions. I only have two. The one is on the voluntarily and temporary suspension of rent increases. We have seen unemployment rates shooting up quite strong in Germany recently.
Strong is currently the political pressure to not increase rents as long as the crisis lasts? And do you think that it will risk that the German government could think about implementing a law forbidding rent increases as long as the crisis lasts? That's the question.
Good morning, Thomas, and thank you for your question. So currently, there is no political pressure in the way that we receive on a regular basis, politicians by phone and asking us to just suspend rent further. But we just thought ourselves to be obligated in this very crisis to help people which were forced to stay in their flats and the size average size of our flats is 64 square meters. Very often we are renting out to families. So therefore, we did not want to increase additional pressure on those families.
We have suspended it for the time being. You might know that in Germany, the number of measures is now being reduced. You can already feel a bit of more freedom in the society, people are allowed to leave their flats, go for a walk, etcetera, so which is very helpful. And we will certainly very closely observe the situation, but there is no political pressure for persistent rent suspension. So therefore, our assumption is that we will be able to resume and restart rent increases most probably in H2 and already.
Okay, understood. And my question is on acquisitions. You mentioned you put acquisitions on hold, yet you still target the acquisition for roughly 7,000 units. I was just wondering what needs to happen before you start again doing or looking for acquisitions? And can you also maybe elaborate on the potential acquisition pipeline?
Is it still in place? Or do we have to rebuild it after putting everything on hold in March?
Yes. Thanks a lot for your question, Thomas. So with regard to acquisitions, I think we had a very healthy pipeline before the crisis. We spoke about the 1,200 units, which we were about to sign before the crisis, but pulled back because there was just too much uncertainty in the market. We have seen that over the last two weeks, there is a strong pickup in the acquisition market, so much more offers and quite substantial offers of new portfolios in the market.
So the one or the other seller has rethought its portfolio setup, it brings new material to the market. I mean, it's probably it will just take us a few more weeks to really sort out what we want to do, but the current pipeline feels very strong. So it's in different stages of the due diligence phase. We are talking currently about 15,000 units. So if we talk about that we put our acquisitions on hold, this does not mean that we stopped to look into portfolios.
We have still done the work possible in the current restriction and meaning that we did technical due diligence as far as possible, etcetera, just to prepare ourselves for the situation where markets are reopening. Currently, the markets are reopening, it's already restarting And we are quite confident that we are going to have portfolios to be acquired already in June and July. And therefore, we are very confident to also stick to our target of 7,000 units for this year.
Very clear. Thank you very much.
Thanks a lot, Thomas.
Next question is from the line of Christopher Fremantle from Morgan Stanley. Please go ahead.
Hi, good morning. I just wanted to ask a question around the valuation guidance. I appreciate this is only for the half and it excludes the corona impact. Can I just ask, have we seen any transactional evidence since the corona crisis began? Is there anything you can share about what your values are telling you about the potential impact of the crisis on values?
Or if you have any other views about the potential impact, your own views internally about that value impact and valuation impact going forward, that would be very helpful, please. Thank you.
Thanks a lot, Christopher, for your question. Certainly very happy to give you as much insight as we currently have. And as you know, we are in constant contact with our evaluators from CBRE. So from them, we can hear that there is enough transaction evidence also during the crisis that we are feeling very comfortable to say that we are expecting evaluation increase for H1 in line with what we've seen in the first half last year. It is quite difficult because we have there are still some weeks to go until the end of the second quarter.
So therefore, we do not want to come up with a precise number. So it's still with uncertainties attached to it. But the valuators are giving us quite a lot of comfort that due to the fact that we always are having a certain time lag between recognition of transaction multiples and those being included in our books as part of our valuation, that there is still substantial headroom, which we are going to see then in the first half valuation. At the same time, our activities in the market show that there is new material coming to the market. The asking price are in line with what we've seen pre crisis and it remains to be seen whether we are going to see lower pricing going forward, because there is at the same time quite a strong demand of a lot of market participants, not only strategic buyers, but also pension funds, which are in a negative interest rate scenario, are looking for interest bearing assets.
Residential, and I think we've pointed this out during the call is one of the most stable asset classes. And therefore, we also expect a lot of additional pension as well as insurance money flowing into the sector. And this will also contribute to stabilization of prices going forward.
Thank you.
Thanks a lot, Christopher.
Next question is from the line of Japkim from Kempen. Please go ahead.
Good morning. Also two questions from my side. If I look at Slide five of your presentation, you highlighted the impact on your like for like guidance from the mid speaker suspension was only 20 basis points. And you also indicated earlier that you expect to resume rent increases maybe already 2H. So then thinking about the other headwinds to your guidance on the postponement of modernization measures, do you also expect that to resume soon, especially given the minimal impact of corona year to date?
And should we then also view this impact of CapEx postponement also likely, let's say, a fairly modest amount of basis points, all leading to the kind of the final question. Does that mean that in any case, your like for like will be close to between 22.5%? Is that a fair assumption?
Thank you, Jack, for your question. And yes, I think that's a fair assumption. So it is quite difficult to give you also there a precise number. With regards to the mix being increases exactly as you pointed out, we made the assumption of restarting those in H2. So therefore, we can give you a precise number.
With regard to the modernization measures, it depends very much on the time when we restart and certainly when we finalize the modernization work, because only then we will be able to increase rents. And the later we start, the lower the probability that we are going to finalize this work within 2020, But it might be then move forward into 2021. So also those rent increases are then not gone, but will just be realized a year later. So that's the uncertainty, which still persists. Some of the modernization measures which are just being done in the interior of the buildings is something which is quite difficult still under the current regulation and the restrictions being put in place in Germany, JEP.
So therefore, this might be something which just postponed some of the works. But certainly we're observing the situation very closely and we try to just fulfill our modernization measures as much as possible. So we are really looking at it on a regular basis, meaning from week to week in order to resume work as quickly as possible.
Okay. Thanks a lot. And then my question would be, if you could maybe expand a bit about thinking about LG and the industry in general, seeing that corona has limited short term impact. What do you think is the long term impact of corona on on your business and perhaps on the industry as a whole? And then maybe also earlier referred to Nicole, does it increase chances from perhaps something like a nationwide meet and tackle?
Thanks.
Yes. Thanks a lot for the question, Jatt. So the long term impact. So from my perspective, I think everyone in the industry, including all our competitors publicly listed, mutuals or those being owned by states or cities. I think we all have tried to do as much as possible for our tenants.
So there have been plenty of initiatives not only by ourselves, but by most of the companies around and I think this has reduced this difference and some of it was really artificial difference and criticism between tenants and their landlords. So this has really had a strong positive impact. And we especially at LAG because we started the wave and all the initiatives in the German market, we received tremendous positive feedback and by our tenants. So a lot of letters never seen before and neither by Volker as our COO, but people really being very happy about the measures which we have put in place. At the same time, it was also not going without political consciousness.
So a lot of politicians also have said that LG is outstanding with regards to its commitment. But this is also holding true for a lot of other companies in other parts of Germany. And therefore, I think this is something which is going to help the relationship between tenants and landlords. And it's also therefore helping the political discussion which we had before on the Mieten Deckel for example in Berlin. This once again from our perspective is really limited to Berlin.
We do not see it in any of the other German states we are active in. You know that we are active now in North Westphalia, in Hessen, Rhine and Palatinate, as well as Lower Saxony and Bremen. But all of those states and the responsibilities there have said and made very clear that the meet and decor will not part of their thinking about regulatory regime for the rental markets. So therefore, in a nutshell, and from a long term perspective, we're saying the crisis helped us a lot. And the right things and measures have been put in place by ourselves, but also by our competitors, so that we are very confident that we also can now very much prove that claims being made by the one or the other politician from the very left side of the spectrum saying that publicly listed companies are not living up to their promises with regards to their tenants that this is just not true.
Okay, great. Thanks a
Thank you,
Next question is from the line of Kai Kluse from Berenberg. Please go ahead.
Hello, good morning. I've got three quick questions, if I may. The one is on Page eight of the Q1 report. We had an increase in staff costs by about €1,600,000 to €17,700,000 Is this a level which is broadly stable to be expected for the coming quarters? Or do you expect any further increase in staff costs or maybe a reduction in staff costs as you're looking into the cost side?
question would be on the letting activities. Could you maybe indicate what was the average rental uplift on new lettings in Q1? Of course, I know that Q1 was a lower volume, but may you have a bit of an indication what is the uplift on new lettings? And the last question would be on the taxes. So you mentioned that you had applied a lower tax rate in Q1.
Is it why was this? And is this lower tax rate also to be expected to maintain for the full year? Yes.
Thanks a lot for your questions, Kai. I will try to give you an answer for number one and number three, and Volker then will follow-up with an answer on your question. So with regard to staff costs, we did very intentionally invest more into staff and already last year, you were able to see it over the last quarters as well. And that's very much driven by the fact that we've hired additional craftsman into our organization, especially for those services, which have been difficult to source externally. And that's the major driver for it.
At the same time, we also thought to be well advised to get into closer contact with our tenants. So also there at the one of the other operations in customer facing functions, especially those taking care of demands from tenants we have invested. So that's a level we feel currently comfortable with. Going forward, as you heard, as one of the precautionary measures, we put on hold external hirings. So therefore, that's a level also going forward, which will persist.
With regard to the tax rate, the tax rate is on a level which we also feel comfortable at around 1% to confirm for the full year. There has been a few changes done last year. You might remember that we've bought a minority share for our company, which is providing energy services and that's now included in a tax group that's reducing partly the tax rate. We've also been able to include another company and apply a reduction with regard to trade taxes. So all this is adding up then to this lower tax rate, which we also expect for the full year.
And on the reletting rent question, about onefour of our rent growth was attributed to reletting. So 0.1% out of the 2.8% was caused by reletting above the previous rents.
The next question is from the line of Doctor. Georg Condors from Bankhaus Lampe. Please go ahead.
Good morning from a few straight away. I just want to ask here also as with in combination with the tax rate, you also had a positive contribution from minorities, and you mentioned that you have bought out minorities in two companies. Will minorities also now virtually disappear in the FFO calculation?
So at least this was the impact, Georg. If you're referring to the FFO bridge, which we are showing, and it's on Page 24, and the minority change was exactly that we bought out innogy as our partner in the energy services company. And therefore, the profit contribution now goes with us and not with a partner anymore. And that was the driver for the change there.
And this is now also for the whole year, we can what we expect that there are no more minorities anymore. Is this true or?
Yes. So we certainly do still have minorities. So for example, with the Craftsman organization, that's a joint venture we are holding together with B and O, which is quite a big provider for craftsman services in Germany. So there will still be minorities, but the change you were referring to was accepted the change from this acquisition of the minority chair of the energy service providing company, ESP.
Thank you.
Thanks a lot, Georg.
There are no further questions at this time, and I would like to hand back to Frank Kopfinger for closing comments. Please go ahead.
Yes. Thanks, Stuart, and thanks for your participation and your questions. And as always, should you have further questions, then please do not hesitate and give us a call or write us an e mail. Otherwise, please note that our next scheduled reporting event is the August 7 when we report our Q2 results. And with this, we close the call, and we wish you all the best and hope to see you soon.
Thank you, and take care.