Ladies and gentlemen, thank you for standing by. I'm Stuart, your Chorus Call operator. Welcome, and thank you for joining PATRIZIA's H1 2022 financial report with investor and analyst conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Martin Praum. Please go ahead.
Welcome everyone to our first half 2022 analyst and investor call. This is Martin Praum, Head of Investor Relations and Group Reporting, speaking. I'm happy to have our CFO, Christoph Glaser, with us today to present to you an update of our operating business on the market environment and on our financials. During today's call, we will refer to the first half 2022 results presentation, which you can find on our website in the Shareholders section under most recent publications.
The presentation includes the first half 2022 figures and details about our guidance for 2022, which we confirmed with results. In case of questions, the IR team is more than happy to help as usual. This call will be recorded and will be made available on our website, and we'll also offer a call transcript for further reference. With that, I'd like to hand over to Christoph to start the presentation. Christoph?
Well, thank you very much, Martin. Good afternoon, everybody, and welcome also from my side. I'm more than happy to present to you PATRIZIA's financial results for the first half of 2022, and then subsequently answer any questions you may have afterwards. That said, let's start on page 4 of the presentation with a couple of words about the current market situation. Now I'd like to discuss with you first what we're seeing today, and also then what we see in the midterm. Obviously, in the recent months, the real estate and infrastructure business has been impacted by changes in several macroeconomic factors.
There's been elevated inflation and interest rates, geopolitical risks increasing, supply chain disruptions, and also recession risks, although the jury is still out whether there will be one and if so, how severe it will be. What is probably more interesting at this stage is the overall speed of change in the environment and market uncertainty that led to what we probably would best call a temporary drop in investment activity. Again, the question being for how long that will be. You just need to look at the volatility of the 10-year German bund yield in the last couple of months to get a feeling for the challenges that our clients are facing.
Now, that said, our research house view sees the chance for some normalization in the second half of the year, given that occupational markets appear to remain robust and there is significant dry powder waiting to be deployed, and it will have to be deployed until year-end. We, however, only expect to have clarity on that at the end of the third quarter or maybe the beginning of the fourth quarter, depending on market pickup or the degree to which share market activity will pick up following the summer break. Now, in this uncertain environment, it's probably equally important to emphasize once again one thing that remains unchanged, which is the fact that certain structural trends support demand for real assets in the medium-term perspective.
There is every week a lot of noise as to how global pension funds, insurance company, state funds, and so on are dealing with the current situation and how they're gonna reallocate capital. For us, it's most relevant that we can cater to all their needs and that we can offer a broad range of products that can cover any possibly reallocation of funds. Now, PATRIZIA does have the platform and the products to offer both on the global real estate side and the infrastructure side. Investors can rely on solutions that are in alignment with four continuing mega trends. Decarbonization, number one. Number two, demographics. Number three, digitalization. Number four, urbanization.
Very importantly, it's also important to know what our clients are saying today, and I'm happy to inform you that a recent survey that we have conducted confirms a continued demand for real asset investments. To put it simply, 64% of our institutional investors expect an increase in their proportion of infrastructure relative to other asset classes over the next five years. Equally, it is important to note that this growing appetite for infrastructure is not coming at the expense of real estate investments, because we also hear that 60% of those who we have surveyed say that they intend to increase the real estate share of their investment portfolios over the next five years. That's maybe to set the scene a little bit here. With that, I would like to go to page five.
You may ask yourself the question why we have included this slide in the presentation, because it shows a rather long-term perspective going back to showcase the trends that have unfolded over the last seven years. You obviously know that PATRIZIA has a long track record. Company started mainly with residential property in Germany quite some time ago and has gone through several market cycles, which by the way, also speaks for our resilience. What's probably more important is that over these years, we have strategically grown and diversified our AUM base, which now offers a fairly resilient and well-balanced mix of real estate and infrastructure across multiple geographies. Whereas, 47% of all that are now sitting outside of Germany, it's almost half, and mostly in established geographic markets.
11% of our AUM base is allocated to infrastructure and it's growing rapidly. We, in fact, expect the infrastructure AUM growth to outperform in the short and the medium term. What does it mean? Well, simply speaking, we're not dependent on only one geography or one sector. As I mentioned before, depending on how our clients want to allocate, and we do have the expertise and the products for a broad range of investment strategies. It's globally diversified. At the same time, we are running an asset-light business model in comparison also to some of our German or European peers. This model is at this very time much less impacted than the business models of some of our other market participants by asset valuation discussions.
It does remain resilient because of its unique platform character. Lastly, the balance sheet's quite strong, and we keep enjoying high levels of liquidity. We feel well prepared to emerge even stronger from the current market conditions because we do have the dry powder or the strategic flexibility to harvest opportunities. We will do that only if and when they arise, and we don't follow the philosophy of doing deals at any cost, but rather in case of doubt not do them. There will be opportunities, I'm sure. With that, let's move to page 6, which gives you a bit of a short-term reflection of the past, focused on the first half of the year.
There's kind of four key messages here which really reflect on how we have progressed with regard to our sustainability strategy and a couple of other strategic items. Number one, we just invested EUR 75 million into the bio-LNG producer Biomet, who doesn't only create natural gas from waste processing, but is also liquefying it, which is quite nice to see from a renewable energy production, also, energy security point of view. It's actually the first investment for PATRIZIA Infrastructure post our acquisition of Whitehelm Capital, and we feel pretty good about this. It's really a prime example of what we will keep doing in the future. What's equally important is that we maintain our focus on technology and digital transformation.
You may have noticed that we've launched the Sustainable Future Ventures fund, where we wanna promote technologies within the property or property technology industry, but do that together with our investors and to contribute and co-invest at the same time. We continue to follow our strategic technology targets, but compared to the past, and it's important to note, we do not necessarily do this anymore on PATRIZIA's own balance sheet. But we rather do it together with our clients with a good amount of leverage and with a team that is really stacked with expertise and have closed the first round really quite successfully.
The third thing that we've done, which is somewhat more internal in nature, but I think it's important and it's a reflection of our continuation of becoming a more international and more global player. We have converted from a German AG stock corporation to an international SE or Société Européenne. That took place on the fifteenth of July when the transformation was registered in Augsburg, and it goes along with our strategy towards a more international setup, broadly speaking. It's also been accompanied by a change in our organizational structure, which I'm gonna allude to in a moment. The supervisory board has been replaced by a high caliber monistic board of directors.
You may have noticed already, but if not, then just once again, we also have just recently welcomed Saba Nazar, who as a newly elected and independent member, will not only contribute specialist banking expertise to PATRIZIA SE, but also strengthen our international expertise and diversity. Last but not least, point number four. Our net zero carbon strategy has been launched to permanently remove greenhouse gas emissions from our assets, which by the way, also includes implementing renewable energy generation and not only consumption on our sites in order to decarbonize, PATRIZIA's operations. I think all of these examples highlight really quite, in quite tangible way how we progress.
Now with that, let's go to page seven and talk a little bit more about how we're doing with regard to transactions, because there's a lot of talk in the market about no transactions happening. The reality is that, despite market uncertainties, we have been quite active in the first half of 2022. Now, the overall European transaction markets, as far as we know, experienced a slowdown and was basically flat or maybe declined by 1% or a little bit less year-over-year. Our pipeline was quite well filled as we exited 2021.
In a way, not surprisingly, we outperformed the market with a transaction volume growth of 32% based on signed transactions and 33% based on closed transactions. As we told you before, some of this was thanks to pipeline that reached beyond 2021 into 2022, which we have successfully engaged. Maybe further exemplary transactions were the acquisition of the project development of micro apartments in Münster, which is a sizable German town on behalf of private clients. Maybe a second example would be, that is more specific in nature, would be a strategic investment into a residential turnkey portfolio in Stockholm, in Sweden, which is comprising of four multifamily houses. Just to give you an example, that is a bit more tangible.
Now, that said, there's no doubt that the transaction pipeline has been temporarily reduced in terms of size, and that's quite visible. We do still work on transactions for our clients, and we do have the capital commitments to act quickly, once the dust settles and opportunities arise. We will see how we fare in that respect, in the later part of the third quarter and the first two months of the first quarter and then going into 2023. After those few words about the transaction environment, let me briefly touch again on the internal topic of our conversion to an SE. If you could go to slide eight for that.
I would like to come back to the point I mentioned before, that together with the change to an international SE, we adapted a new organizational structure. Number one, the previous dualistic management structure consisting of a management board and a supervisory board, so sort of a classic German setup, was adapted to an international monistic management structure, with a single board of directors, which you can see in the upper part of the page. Now, the board of directors has appointed three executive directors, which are also members of a broader and very operations-focused Exco. Due to its deep involvement in our operational business and client needs, the executive committee can provide high operational standards across the company.
Not surprisingly, the company's founder and majority shareholder, Wolfgang Egger, is one of those three executive directors as well as a member of the board of directors, where he sits together with six external and independent directors. It is probably fair to say that the new board is the most international and most diverse board this company has ever had, and it builds the basis to delivering on our strategic goals. I've had the pleasure to interact with the ladies and gentlemen shown in the upper half of the page for a few months now already, and it's been quite a privilege, I have to say. Maybe two comments related to housekeeping. The audit committee and the nomination & remuneration committees remain unchanged.
With that, let's talk a little bit about the first half financials and also the outlook, on the following page, which I guess would be page 10, if I'm not mistaken. Okay. Assets under management growth. Now, the good news is that, assets under management continued to increase, by almost 17% year-over-year despite adverse, market conditions. Of course, the increase is largely impacted, by the completion of the Whitehelm Capital acquisition. No surprise there. There have also been organic growth and positive valuation effects and high assignment rates across acquisitions for the group's global client base. So that said, we believe that we are quite well on track to reach our guidance range for the full year when it comes to assets under management.
With that, I suggest we turn to page 11, where it's probably worth to once again look at the structure of our AUM in a little bit more detail, because we have become quite broadly diversified in terms of geography, especially covering Central European markets. I already mentioned that. Also in terms of sectors, covering broad real estate and infrastructure portfolio. The one point that has not been made yet is that, we've also been quite successful with our risk investment strategies, which offer further downside protection in an uncertain market environment because we will have very manageable risk premiums to deal with.
All this makes us rather robust, and it does also give us the confidence that we will remain resilient despite the current situation, which as we mentioned before, we expect to improve potentially as we go through the rest of the year. With that, let's briefly go through the composition of EBITDA on page 12. EBITDA came in at almost EUR 55 million, which does present a decline of almost 10% compared to the 16.3 we made in the first half of 2021. Now, this is slightly weaker year-on-year, but when you look at it in absolute terms, it remains rather robust under the circumstances. Total service fee income was stable at almost EUR 162 million of income. Our revenue mix has further improved towards recurring management fees.
The net sales revenue and co-investment income reached EUR 7.5 million. That's already above our guidance for the fiscal year 2022, judging by the first six months of the year. We feel good about that. The net operating expenses showed a slight increase, driven by the initial consolidation of advanto Capital and a couple of one-off effects, which I will explain later on. Now all that said, I think this result reflects a resilient business model in a very dynamic and challenging environment. It's probably fair to highlight that once again, the revenue mix has sort of gained in terms of stability, but probably at a lower pace than we would have liked to, again, given the circumstances.
We remain on track to reaching our current guidance range of EUR 100 million-EUR 120 million of EBITDA for the fiscal year. We feel pretty good about that. We will obviously, and that's important, we'll continue to monitor the AUM dynamics and the revenue growth dynamics and the revenue mix dynamics as we go through the remaining 4.5-5 months of the year. What's very important for you to know is that we are agile enough to quickly adapt if there will be further adverse market changes, if and when they arise, so that we make sure that we continue on our path of sustainable and profitable growth. That includes both the revenue perspective and the cost perspective.
I will focus on the total service fee income on the next few slides, and then afterwards, net operating expenses. With that, I guess we can go to slide 13 now. There's a visible increase in management fees, which is largely compensated for a decrease in performance fees and especially transaction fee income. We have talked about this already quite a bit during our last call. Performance fees came in lower compared to last year, which was in line with expectations, just based on what was in the pipeline. At the same time, the decline in transaction fees can be attributed to sustained shifts in favor of recurring management fees. That's one aspect.
The other aspect is more centered around increasingly cautious investor sentiment, which we believe is a temporary phenomenon. Again, let's see how the season will go and what type of private transactions will happen in the next four and a half months. We do expect market players to return to the table gradually. Price finding will settle. At the moment, it's not settled yet. Market activity will pick up. There's a few players who have already indicated that they will become quite active in the market, and we will see what kind of price points that creates. We are quite optimistic that they will positively differ from what we see in equity markets right now.
We will continue to monitor that transaction market situation, in particular, between September and November, early December, what's the peak time of the year. Looking at all these three revenue streams together, maybe the last and the quite important point to make is that total service income was nice and stable. Not a great result when you look at it compared to the past, but I think it's a decent result given the environment. We feel relatively good about this, but I wouldn't use the word great in this context either. With that, let's move to page 14, where we look at the net operating expenses.
Looking at the cost base, the net operating expenses increased somewhat from EUR 109.7 to a level of EUR 114.6 in the current period. If we break it down by category, obviously, we need to talk about personnel expenses, staff costs and other operating expenses or SG&A, and then other expenses to get to the total. The increase in staff cost is driven by basically two factors, the consolidation of Licom Capital, but also the addition of a couple of heads in PATRIZIA's core business, in the context of strategic investments in the operations area or the back-office operations, in particular.
Now the other operating expenses or non-personal expense related expenses are driven by three items, organic cost growth, no surprise there, relatively moderate. A number of one-off items, in total about EUR 5 million, and the first time consolidation of Licom Capital once again, which has added non-personal expense costs to our cost base. As I already briefly mentioned, the one-off items in the other operating expenses category had a negative impact of roughly EUR 5 million in the first half. There was, for instance, transaction costs linked to the Licom acquisition, and there were a couple of other aperiodic payments.
Now, in addition to that, there was also some restructuring expenses that we incurred, which one could consider one-off, but they're sitting in the other column, which is the second one from the right. The last important thing to mention here, and I'm sure that some of you are interested in understanding this better, we also had some positive one-off effects. Normally the other costs column which in this walk represents a positive impact of EUR 9.8 million, i.e., it's reducing costs. Normally, this item would be somewhere between EUR 5 million and EUR 10 million of a real cost. It is positive right now, i.e., cost reducing because we've seen positive one-off effects here.
Not really one-off in terms of the underlying business or what we do because we do the type of activities that trigger these positive one-offs quite regularly, although not very often. The magnitude of this positive impact this time was a bit extraordinary because it was around EUR 18 million. It was in line with our financial plan for the year. The question that may arise or will give rise to is what was the background for this? In simple terms, we deconsolidated the project development in the city of Hamburg in Germany, which we had temporarily held on our own balance sheet for around about the last probably almost two years or maybe a year and three quarters since the end of 2020.
It has a significant relieving effect on net operating expenses, because our experts on the ground delivered substantial value to the benefit of our shareholders. You do know that from time to time, PATRIZIA has been taking a market view on certain assets of projects, and we will continue to do so, and occasionally bring them on the balance sheet temporarily. You will primarily see this in the form of continuous co-investments going forward, and we can talk about that a little bit more in the Q&A session if you wish. That's it in a nutshell on net operating expenses. With that, let's turn to page 15, where it's time to talk a little bit about the balance sheet. Now, picture here is very good.
Net equity ratio of 72% and available liquidity of slightly north of EUR 400 million are probably testament to our strength and stability. We were able to redeem a significant portion of our corporate debt. If you use current cash reserves effectively, we're holding a net cash position of EUR 264 million as of the end of June. We have plenty of flexibility and a liquidity profile that enables a very active capital deployment, which is part of our new capital allocation strategy. Our share buyback program shows progress. We're now holding 4.1 million treasury shares that can be used as M&A currency going forward. Let's see what opportunities come.
Therefore, as I said before, I guess, you know, not I guess, I do know that we are fairly well prepared to emerge stronger from the current market conditions and that we have the ability to harvest opportunities. That said, I guess we are nearing the last page of the presentation, if I'm not mistaken. I would like to come to our guidance for the full year on that page. I want to point out in the current market sentiment that it's even more difficult to see how markets will develop, but we're quite positive that investment activity will pick up again after the summer break. Our financial guidance for the fiscal year therefore remains valid based on that scenario.
As I mentioned, we will use our financial flexibility for capital allocation that is focused on accelerating flows in infrastructure, number one, expanding our geographic footprint, number two, and number three, taking advantage of opportunities, if and when they arise. On top of that, point number four, we will continue to buy back shares. All of these measures and strategic focus areas with the capital allocation should hopefully significantly benefit our clients and shareholders going forward. With that, I guess, Martin and operator, I would like to hand back to you to give our audience today an opportunity to ask questions and to get answers.
Ladies and gentlemen, at this time, we will begin the question-and-answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. First question is from the line of Lars Vom Cleff from Deutsche Bank, Germany. Please go ahead.
Yeah, thank you very much for taking my questions. Four, if I may, and I would ask them one by one. I guess that's the easiest way to do it. With regard to your growing assets under management, you also speak about continued positive valuation effects. Do you already see any signs that this trend slows down or even reverses in the current market environment?
Hello, it's Martin speaking. We obviously lost the line of Christoph temporarily, so he'll be back in a second.
Okay.
Let me take that question, if that's okay. In terms of valuation, you're right. I said we've seen not only with other players in the market but also in our AUM a positive valuation impact at the first half of 2022. You might remember we always highlighted in the past that the valuation of our asset management was based on conservative assumptions and long-term DCF and earnings models that has a kind of smoothing effect through the cycle. On the way up, our valuation impact was somewhat limited on the positive side. If the market should turn and we really see price evidence on the way down, then also our AUM would most likely react with a time delay.
The second point is, and that's the point that Christoph also mentioned, is that, the quality of our AM is above market average with the high focus on core and core plus assets. Short answer is, we don't see any pressure on AUM valuation overall at this stage yet. If we would mostly expect that with a time delay, say, in the private market of 12-18 months.
Perfect. Thank you very much. In your comments to net operating expenses, you say that the deconsolidation of ServiceOne had a relieving effect, so rather was a positive one-off, and then there were also negative one-offs, I guess around about EUR 5 million, if I understood you correctly. Are there any other extraordinary effects we should already include in our model, for the second half of this year when we're thinking about net operating expenses?
Perhaps coming back to the first, you're right, that the one-off effects were around EUR 5 million in the first half. In addition, we had EUR 2.3 million restructuring costs that we booked in the first half. Below the EBITDA line, we had around EUR 10 million of one-off write-downs for the tech investment that we communicated to you in the first quarter of this year. For the second half, the only one-off we could see at this stage would be the remaining EUR 2 million of reorg expenses related to the tech investment wind down, and no further one-offs we would expect at this stage.
Okay. That's crystal clear. Thank you very much. The tax rate in relation to your EBT was 43% in the reporting period, and it was 33% before. You say in your report that the reason for the increase mainly resulted from additional tax expenses for previous years. Was that it now, or shall we assume that H2 will also be hit by that?
No, exactly. We believe that this finalized a tax assessment for previous years. A little detail about that, we had a total tax spend in the first half of EUR 11.4 million, as you can see in our P&L. Of that, around EUR 6 million were tax expenses related to previous periods. The look-through tax rate was actually around 23% in the first half. For the total year and as a general guidance for recurring tax rate, we would still guide for 28%-30%.
Also clear. Thanks. Then one last question, if I may. You have not upgraded your guidance for net sales revenues and co-investment income, although you have already exceeded the upper end of the range after six months already. Is this because you're expecting a loss in the second half?
No, we don't expect a loss yet. Technical reason really, because this position includes temporarily held assets for our private client business. As you might remember, we have to consolidate certain assets before we place them with retail investors. The rental income that's booked into this line in the first half will probably be going away in the second half via the deconsolidation. That's why we still believe we will be in the guidance range, probably at the upper end, given the profitable sale of one of the last assets on our balance sheet, so-called Focal House this year.
Okay, perfect. Thank you very much.
Lars, my apologies for not handling your questions directly, but just when you started to ask the first one, I lost connectivity for whatever reason. I apologize for that. I can confirm that all the answers given by Martin are true and correct.
Thank you. Glad that you're online again.
As a reminder, if you'd like to ask a question, please press star followed by one on your touch tone telephone. Next question comes from the line of Manuel Martin from Oddo BHF. Please go ahead. Mr. Martin, can you please unmute your telephone?
Is it better now?
Yes.
Okay. Some problems with the headset. Two questions from my side, if I may, please. The first question is on the clients willing to increase the real estate exposure. If I understand that correctly, 64% of your clients are willing to increase the allocation to infrastructure and 60% to real estate. Do you have in mind how was the ratio in the past? That means, do we see clients now being more defensive in increasing real estate? Was it hotter before or is it the same?
Yeah. I would generally say that the interest in reallocating or allocating into infrastructure is probably stronger than it was before. Secondly, on the real estate side, it has always been strong, but right now it's maybe a little bit weaker, relatively speaking. It depends again on the geography and the player where it differs quite a bit. Broadly speaking, I would say infrastructure demand stronger than in the past and real estate demand is as strong as it was, but maybe directionally a bit weaker.
Okay. I see. My second question would be on your pipeline. Can you give us an idea or a flavor on how big is your pipeline on which you're dealing? How much has it decreased or increased over time? I mean, we are having a difficult environment, would be-
Yeah.
not surprised if it has become a bit smaller.
No, look, I mean, the good news is that we still do have a pipeline. Secondly, the second good news is that it's not insignificant at the level of roughly EUR 1.2 billion-EUR 1.3 billion. And that is defined as being in due diligence or in a very solid exclusivity. Now, the third point I would probably make is that no doubt it has become a bit smaller than it used to be. Relative to other players, I think we're faring reasonably well, I would say, having this size of pipeline at the moment.
Okay, sorry, follow-up question came to my mind on that. Any regional preferences for the pipeline? I mean, are clients asking more for real estate in the Netherlands or in Germany or is there a trend somewhere?
I would maybe not tie the trend to specific geographies, but rather call it a flight to quality, which is something I think we talked about already on the last call. It's quite visible right now. That flight to quality occurs in Scandinavia, it occurs in Benelux or Germany of course, but also in places like Spain, I would say, or other jurisdictions. I would not really tie it to geography, but rather to quality. Interestingly, residential is still on our radar screen. When I was just listening to our house view very recently, and it's interesting that there's a strong interest in apartment type of residential buildings. I give you this example of this Stockholm-based turnkey multi-unit multifamily investment that we recently did.
There's a lot of demand for apartments and there's also a lot of demand for certain industrial assets, I think, not when you compare that to some of the other activities happening on the retail side or in the hotel space or office space is probably more subdued. Living sectors in general are quite hot. Resi or residential is still on the radars and as I said, there's a flight to quality. By the way, one thing I forgot to mention, related to your previous question, when we talked about 1.2 of a pipeline being currently, I mean, as of today in place, you know, there's 0.8 of signed, settled, or post-acquisition. The quality of that is quite good.
If you would allow me maybe to make one last comment. There's a lot of debate as to whether residential is decreasing in value right now or not. The reality is it's very little new gets built because there's construction cost inflation. The supply side contracts, right? The demand side is still there. There's a lot of indirect support for valuation levels even on the residential side, which is I think why the demand for residential is still there. With the caveat that it's very much focused on high quality living structures, in particular multi-family apartment structures in good locations.
Okay. I see. Thank you very much.
Welcome.
If there are any further questions, please press star followed by one on your touch tone telephone. There are no further questions at this time, and I would like to hand back to Christoph Glaser for closing comments. Please go ahead.
Well, first of all, thank you everybody for listening. It's been a pleasure to present our results as always. We have posted all the relevant documents online, including a short video that summarizes all the key points. In summary, we do believe that we are faring quite well under the circumstances and also compared to competition. Secondly, we obviously do see a bit of a subdued transaction environment at the moment. As we mentioned before, the season is ahead of us and it will tell us a lot about how the year will be wrapped, but also how we're going to sail into next year.
As we are in the process of completing our midterm planning and as we are building the budget for 2023 in the second half of the year, we will keep you apprised as to how we go through the season and what our views are emerging on next year. Will be interesting. With that, I would like to wish all of you a good summer break and see you on upcoming roadshows and conferences or our next investor call three months from now. Thank you very much for dialing in, and I appreciate your time.
Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephones. Thank you for joining, and have a pleasant day. Goodbye.