Earnings Call: Q4 2020

Mar 17, 2021

ladies and gentlemen, welcome to the conference call of Fieragi, Mobili and Agi regarding the publication of the Annual Report 2020. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. May I now hand you over to Martin Thiel, CFO, who will lead you through this conference. Please go ahead, sir. Yeah. I mean, thanks, and good morning, everybody. This is Martin from TAG. Welcome to our conference call for the full year 02/2020. Thanks thanks for dialing in. As always, let's start, with page number four of the presentation. That's the highlights slide to summarize the main developments of the financial year 02/2020. Looking at the operational performance and starting in Germany, you see that we had a good development in vacancy reduction in the fourth quarter twenty twenty. Vacancy was down by 30 basis points in the fourth quarter and ended up with 4.5%. That's a reduction by 60 basis points over the course of the second half of the year. In the total portfolio, vacancy stands now at 5.6%. The difference between the 5.6% in the total portfolio and the 4.5% in the residential units is mainly the reason that we acquired portfolios of high vacancy rates in 2020. Like for rental growth, including vacancy reduction came out at 1.5% compared to 24% in the previous year, so weaker than last year and also honestly a little bit weaker than than what we expected. Reason or main reason for that was clearly the, the the pandemic voluntarily waiver on rent increases for several months during the course of 2020. FFO one came out at 172,600,000.0, so at the upper end of the already increased FFO guidance, which was between 170,000,000 and €173,000,000 Comparing this with the previous year, that's a year increase from the FFO by 7%, not only in absolute amounts, but also on a per share basis and also the dividend will increase by 7%. So the dividend proposal to the AGM, which will take place in May year, will be €0.88 per share. Looking at bottom of Page number four, you see the portfolio valuation results. As every year, the portfolio was fully valued by by CVRE, and we achieved a total value growth of 7.5%. The 7.5% splits up into a 6.260.2% pure annual valuation uplift, and the main difference of 1.3% is due to investments. The duration remains from our side of still conservative levels, so the TEG portfolio is now valued at €1,100 per square meter or a 5.7% gross yields. Moving on to page number five. First of all, looking at acquisitions and disposals in Germany, we have acquired nearly 4,600 units in in Germany, at an average gross seat of nearly 7%. So from our side, or from our point of view, clearly good acquisition gear. Most of these acquisitions have already closed. A smaller part of these acquisitions, such as something around 150 units, will cause a bit close the February. We've been also active on the selling side, so a little bit more than 1,000 units were disposed in financial year 02/2020. We'll come to the details a little bit later. Now looking at Poland, 2020, you know that was the first year we have been active on the Polish residential market. And in 2020, the business in Poland was still a purely disposal business. The first rents will kick in from 2021 onwards. So 2020 was a year where we had sales revenues, purely. The revenues from sales of properties came out at 73,400,000.0. That was below the guidance of 80 to 85,000,000, but that's nothing to worry about. We simply had some handovers that were originally scheduled for December 2020 now in January and February 2021. You see this a little bit below the table, 719 units were handed over in total in financial year 02/2020, 143 units originally scheduled for December have been handed over in January and February. So that's not really an economic difference. That's more something technical. Reason for this postponement of the units were some, permissions that we needed, to to finalize the handovers that were granted later than expected. But even though the revenues, as I said, more technically, were a little bit below guidance, the results from operations in Poland were within the guidance. So 9,100,000.0 was here the final results, and that shows from our point of view that the business in Poland is is very stable and that prices in Poland, so disposal prices, have even increased in 2020 despite the pandemic. Yeah. Talking about the pandemic, please forgive us that we have not a separate slide as in the previous, calls regarding the outcome of the pandemic. And from our point of view, the situation is unchanged, so nothing really new. The business is very stable, very resilient. Rent deferrals are still of minor impact. So the number of tenants in our residential units who is not who are not paying the rent currently as an outcome of the pandemic is still something at 0.1 or 0.2%. And you've seen that the vacancy rates have even been reduced in the third and fourth quarter two thousand twenty, so the business is clearly on track. Talking about ESG, perhaps you're a little bit missing more details on ESG targets or on ESG reportings. We will do this with the q one results that we will publish in May 2021 after we have published our new sustainability report on the 04/22/2021. I'm now moving on to page number seven. That's the income statements. And just some remarks from from my side about main developments. First of all, I want to point out the strong improvement in the net income from services that grew year on year by 5,100,000.0. We will see the details a little bit later. The main growth here as a previous year coming from the energy business and from the multimedia business. If you look at the net income from sales, you will see a figure in a total gain in 2020 of 46,500,000.0. That's substantially higher than what we had in 02/2019. Out of this 45,200,000.0, a little bit more than 41,000,000 is coming from sales in Germany. And here, this nearly completely refers to the closing of the first stage of the commercial project in Munich. That's remember that we reported with the fully figures 2,019 that we have signed the contract for the disposal of the first stage of this commercial project. It has in total two stages. The first project was a hotel that was now realized, So construction was finished. The hotel was handed over, and that led to this, quite significant disposal gain of around €40,000,000. The second stage of the project, by the way, will be completed in the course of 02/2021. This will be an office building. It's not yet decided when we start the selling process, so we expect the signing of this, disposal in 2021 or in 02/2022. One comment on the personnel expenses. You see an increase here year on year by 8,300,000. 5,000,000 is coming from the first time conservation of Vantage, so our new acquisition in in Poland. An additional 1,000,000 is also coming from what is called a kind of corona bonus, so voluntary payment that we did to all our employees in the February, who did really a great job, in these difficult times of the pandemic. You see increased other operating expenses of 4,300,000.0 year on year. The main reason for that was already announced by us, I think, with the q three results. a one off effect of 3,600,000.0. We established in 2020 a new foundation, the TA gave me the Nanderschiefdom, who will do social projects in in our regions. That's also, if we want, sort of kind of increased engagement that we do as a result of the pandemic in social projects in key regions. Moving on to page number eight that shows the EBITDA, FFO, and AFFO calculation. And first of all, looking at EBITDA. The EBITDA for the full year 2020 grew by €7,600,000 Reasons for that is on one side, the higher net income for services that I already mentioned and also clearly the higher net rental income of 4,500,000.0. A good result is surely that also the EBITDA adjusted margin increased and stood now at close to 69% after 68% in the previous year. Looking at the FFO, I already mentioned that the FFO one increased by 7% year on year. If you look at the development quarter on quarter, you see a reduced FFO one in the fourth quarter, which is mainly driven by higher income taxes in the fourth quarter. So if you look more detailed on Page number eight, you see that the EBITDA in the fourth quarter increased compared to the previous quarter by around €500,000 But on the other side, we had €1,400,000 cash tax expenses in the fourth quarter compared to €1,800,000 tax income in the third quarter. So it was not unusual high cash tax rate that we had in the fourth quarter, but more a positive one effect for the third quarter twenty twenty where we had tax benefits from the repurchasing or the partial repurchasing of the outstanding convertible bond 02/2017, 02/1932. On page eight on right side, you also see how we calculate the result operations Poland. That's the 9,100,000.0 that I already mentioned. And you see the bridge from net income from Poland where we add back the results or the effects from the purchase price allocation. So these results from operations in Poland is purely cash result from disposals in Poland after taxes, after minorities, and without any more technical impacts or effects from purchase price allocation. Moving on to page number nine, you'll find more details on the balance sheet. Just to summarize one or two points, you see the cash balance at year end is quite rich with more than 324,000,000. The financial debt the total financial debt, in the in the noncurrent liabilities stands now at €2,900,000,000. Just, as an addition or as a comment, you see this also on the right side. We had further cash settlements of the convertible bond 02/2017, 02/2022, which we already have repurchased by 50 by 50% in August. And the outstanding nominal volume at year end 2020 was 82,800,000.0, and we repaid some of this outstanding convertible bonds in January. So as of today, the outstanding nominal amount of this convertible bond is only 17,500,000.0. Page number 10, see the APRA NTA calculation, which shows from our point of view a good development and a 9% increase year on year, and the APRA NTA stands now at 21.95. You see in a footnote that we did not add back transaction costs when calculating the upper end TA. We know that there is currently a discussion and there are differences within the peer group if you add back this transaction cost, which is mainly real estate transfer taxes or not to arrive at the EPRA NCA, we decided to do it not because we consider the situation about real estate transfer tax, especially the discussion around red free share deals in Germany is very uncertain. So if we want a more conservative approach that we're doing here. If we would do that, so if we would do this adding back of the transaction cost, you see this in the footnote, the APRA NTA per share would stand at €25.23 per share. So just if you want to compare this with other calculations. Page number 11 shows the financing structure. The average maturity of the total financial debt is nearly unchanged and at close to seven years. The average interest rate for the total financial debt has been decreased to 1.4100% and there's still refinancing potential. So looking at the years 2021 and to 2023 at bank loans that are maturing or where the interest terms are ending, the average coupon of this bank loans still stands at 2.7%. And as we're today financing new ten year bank loans below 1%, we will see further interest cost savings in the future. Page number 13 shows you an overview of the portfolio, Germany and Poland. The total JV stands now at close to €6,000,000,000. The very largest part of that is still, coming from the German portfolio. So the JV of the Polish portfolio is 150,000,000 at year end 02/2020. But as you know, this will, grow significantly over the next years. 88,000 units in Germany and the units in Poland that are all already secured, so our total contractually secured pipeline in the meanwhile adds up to €8,742. Page 14 shows the rental growth and the CapEx allocation. I already mentioned that the rental growth was or the total rental growth stood at 1.5%, including vacancy reduction. You see a detailed split on the bottom left of page number 14, how this rental growth is is is composite. Total maintenance and CapEx in euro per square meter was slightly increased from €20.4 per square meter to 21.6, but that's more or less in line with the development that you have already seen in the course of the year and also unchanged. If you look at the full year results regarding the re the regions where we allocated our CapEx and cabinets and Berlin regions were still clearly in the focus of our investments. Page 15 shows the vacancy development and, as I already mentioned, good development in the third and fourth quarter two thousand twenty. So 4.5% more than was the breakevens rate at year end 02/2020. On page number 16, you'll find a detailed split of our service business. Looking at the total results, the FFO contribution from all our service businesses, achieved more than 10,000,000 after roughly 8,000,000 in the previous year. So it's more than 6% in the meanwhile that after service businesses, contribute to the FFO to total FFO. And as in previous years, the main FFO contribution is coming from energy services and from multimedia services. On page number 18, you'll find more details on the German portfolio valuation overview. As I said, the total value growth was 7.5%, 1.3% from investment. And here on page number 18, we analyze a little bit more detail the pure valuation uplift, which was 6.2% after 8.6% in the previous year. Comparing the second half with the first half, you see that the results are very similar. So the semiannual valuation uplift was 2.9% after three point three percent in the February. If you ask us what you should expect for the February, I mean, it's clear as of today, we don't know any valuation results or we don't or we're not able to give a complete figure, but everything that we hear from our value, everything that we see in the market should point towards a direction that the relation result for the February should be somewhere in the range of the February '20. So that's from our point of view, nothing that should change this positive development. Page 20 shows shows a summary of the acquisitions in Germany in 02/2020. We were very happy with the total acquisition volume of close to 4,600 units. As I said, most of these units have already closed in the course of the financial year 02/2020. A smaller acquisition of 168 units will close in the February. On page 21, you see more details on our disposals in Germany. In total, we disposed 1,009 units. You can divide this disposal into two groups. First group is the disposal of non core assets. So around 800 units were were disposed in several regions with a vacancy rate of 22% where we consider these assets as not, good enough from the location or from the from the construction quality. And on the other side, in Berlin and Kiev, we sold around 213 units at a multiple of more than 26 times. So this is something that you already know from us from the last years that we're also selling here in somewhat higher priced markets. From pages 2,000 23 onwards, you see the act the current development of our portfolio in Poland. On '23, there's a summary. In the meanwhile, in Poland, we have three locations. So not only Watslav, this this was the starting point. Also Poznan and Lodz were following locations in the course of the financial year 02/2020. The total current projects, so that means really contractually secured or acquired, add up now to 8,700 units, out of which 5,700 units are designated for the build to hold projects. So this means after the first year of our operations in Poland, we are have already secured land banks and projects which are also at at least partially under construction for 5700 units. So we are already quite close to our midterm target, which stands at 8,000 to 10,000 residential for end units in Poland. Page 24 shows you more details on the build whole pipeline. And looking at bottom left of page number 24, you will see that the first rents were kicked in in Poland from 02/2021, onwards. Of course, in 02/2021, the, the result will not be very significant. But looking at 2022 and especially 02/2023, you will see that our portfolio, in the build to hold segment in Poland will grow quite significantly. So Poland for us is a clearly midterm project, but very visible. So it's not the case that we are now talking about a lot of years that we still have to wait until we see results. So if you want, for 2021 and to a certain part also 2022 is a kind of transition period where we are investing. And from 02/2023, onwards, we expect that we already have a portfolio in built to hold in the built to hold segment of around 5,500 to 6,000 units equivalent, and this will then, of course, lead to a material FFO contribution. On page 25, we give you more details on the build to sell pipeline. If you look at the annual handovers on the bottom left of page number 25, you will see that from now on, as planned, the number of handovers in the build to sell pipeline or in the build to sell segment in Poland will be something at around 300, 400, or 500 units. So that will be more or less a continuous business that we will keep beside the resi for rent business, but the the last one, the resi for rent business will be the clearly focus of the future. Page 27 shows you more details on ESG ratings, that we achieved in the course of 02/2020, and we're very happy that nearly in every rating agency we achieved significant improvements. As I said, you should expect more details on ESG targets, with our q one reporting after we have published the sustainability report in April 2021. And finally, on page 29, the guidance for the financial year 02/2021, which is unchanged to what we have published in November. In total, we predict now an FFO growth of 4%, not only in absolute amounts, also on a per share basis, and also dividend growth of 4%. This FFO one guidance for 2021 is based on the current portfolio, so without any further acquisitions. And as I said, it's based on the German rental business as the rental activities in Poland would start in the year or in the third and fourth quarter twenty 02/2021. So we expect here in Poland in future years, clearly, FFO contribution for 02/2021. That's still purely the German business. That's it from my side as an overview of our financial year 2020 results. Thank you so far already for listening. But now I'm, of course, very happy to take your questions. Ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial 01 on your telephone keypad now to enter the queue. Once a name has been announced, you can ask a question. If you find your questions answered before the turn to speak, you can dial 02 to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment please for the first question. The first question we received is from Annes Westholm of Green Street Advisors. Your line is now open. Please go ahead. Mr. Tony, your line is now open. So we go on to the next question. It's from Thomas Neuhold of Kepler Cheuvreux. Your line is now open, sir. Please go ahead. Good morning. Thanks a lot for the presentation and taking my questions. I only have two actually, and it's more on regulatory environment. Firstly, I was wondering if you can share your thoughts on the impact of the upcoming EU taxonomy on your portfolio modernization and construction strategy? And the second question is also regarding regulations. Is it a new federal funding regulation for energy efficient buildings in place in Germany? You might also be able to get up to 45 of of of your investments back as a subsidy. Can you give us an indication what impact that could have on on your business, especially the modernization business? Yeah. Thank you so much for the for the questions. I mean, honestly, we are, of course, looking carefully at that. But at the moment, we have doubt that this really materially changes our strategy. And materially changing our strategy would mean that we now really rethink about the possibility to do new constructions in Germany. I mean, at the moment, the answer is very clear. Contrary to Poland, where we achieved cross years in the new construction business between seven to 8%, You know that in Germany, this is materially lower. That's still the the primary view that that we have. But, I mean, of course, this could clearly help in the volume of energy efficient monetization programs that we're doing Mhmm. Also for reducing vacancy. And, you know, this has always been the focus of our of our monetization strategy. So please understand that we can't give you any details. But as of now, would say you should not expect a material shift in our strategy, but perhaps a slightly increased volume in modernization programs. But it's it's now too early to give you concrete numbers. Okay. Understood. Thank you. So we try again with Andres Thome of Green Street Advisors. Your line is now open again. Please go ahead. Hi, good morning. I hope you can hear now. So I was just wondering if you can maybe add some color on the rental market in Poland. And given that it's become a bit softer, and how does that affect your underwriting for for build to hold developments? Is the initial, letting going to result in the lower end of the guidance, 7% to 8% gross yield? Thank you for the question, Anders. And I think it's important to analyze why has the rental market in Poland, especially in the second year, been been a little bit softer. That's not an outcome of, let's say, underlying trend of a change in demand. It's simply an outcome that a lot of short term leases came to the market, short term leases that were normally done by students or tourists. So all these apartments in cities that are rented out by the Airbnbs and and so on, of course, as a result of the pandemic, we're not let in this volume as in the in the prior years. We expect only we see it to a certain part already that this is just something temporary. So if we do underwriting today, if we do calculations for new projects, we're absolutely convinced that our return yield that we expect between 7% to 8% is still the right number. Okay. Fair enough. And I was just wondering on the reported like for like as well. It seemed that back in third quarter, you were quite confident that you achieved above 2% for this year. Is there any specific reason, that didn't come through? I would I would not say that there's a specific reason so that we can say, well, especially in this field, we've been, behind what we expected regarding rental growth. It's coming from basically every every cluster. So, yes, the vacancy reduction was good. In the fourth quarter, we were down 4.5%. We initially hoped that it was even a little bit better. And if you look at the like for like rental growth from tenant turnover, which was 0.6%, we hope that this number was also a little bit higher. So and also some some rent decreases for existing tenants that we did were were slightly below that, what we've we've been doing before. Also, honestly, we've been a little bit more careful with rent increases in the current environment. You know that in this time the pandemic, getting rate decreases is perhaps not really, of what come by by by everyone. So there's nothing nothing specific. Yeah. But it's clear. Like, for like, rental growth at 1.5% is is weaker than in the year before, but also looking, I would say, in in in the peer group in total, that's not really a completely different picture as to what you see in in the market today. Okay. Thank you. And then last question on maybe transactional activity in your own markets. What are you observing year to date in terms of pricing? I know there have been few quite sensible transactions in in your own markets. Well, in Germany, it's it's clearly unchanged. The market is very competitive. We've been very happy that we were able to acquire 4,600 units last year. You know, the market is competitive, and that requires to some extent an opportunistic approach. So we're really working hard on that. And if we have, opportunities, we will clearly, try to get them. It's also clear that the times where we were able to acquire in Germany, the 8% gross yields are perhaps over. I mean, the average gross yield in 2020 was 6.8%, still attractive. So something around this number, so anything between 6.57 gross yield should be a realistic pricing for today's acquisitions. As in years before, we're not giving concrete guidance on the acquisition volume, in in Germany. In Poland, I think we have here more visibility. Here, the market is also competitive, but not that hard as in Germany, and we clearly try to to make use of that. Also, slotty is, at the moment, compared to the pricing one year ago, a little bit weaker, which is good for us because this enables us to buy and to invest at a more attractive pricing in euro. And so when we have this 5,700 ready for rent pipeline today, getting that to a number that is then already in our target range of eight to 10,000 units by year end, that should be a realistic assumption. Thank you very much. That's all from my question. Before we take the next question, just a reminder, if you would like to ask a question, please press 01. And the next question received is from Kai Klose of Berenberg. I've got two questions. First one is on Page 32 of the presentation. Could you give us a little bit more details on the evolution of the change of the position of of the change in vacancies across the portfolio? Just curious, you spent almost the same amount in Roastock for CapEx as in Berlin, but next year, it went up. And just in that context, is it fair to say that except for some changes on a regional basis, the current vacancy rate of 4.5% is a level or is a kind of floor from which a further reduction might be lower or only be achieved by spending higher CapEx on a regional basis? Yeah. Good morning, Kai. I'm starting with the with the second question. That's clearly not our assumption. So this 4.5% that we currently have is from our point of view definitely not a kind of structural vacancy rate. The structural vacancy rate should be more something at 3% or that 3.5%, depending then on on the individual region. And also with the investment volumes that we're doing today, which is something around $20.21 euros per square meter, it should be possible to to get that. And so it's not the case that we now are in a kind of minimum vacancy rates already. And it's it's true. I think you see the details on 33 paps picture. The three paps a little bit more clearly that we have regions and test this. This is mainly true for for Horsock. There is also increased vacancy rates, but that's not an outcome of any structural change or fundamental change. Here in Rostock also included is not only city of Rostock, also the city of Karlsruhe, where we normally rent out quite a significant number of apartments to students. And this is clearly a a sector which is a total for the whole group, not that material, but for that region material, which has has suffered by the pandemic more than than others. Thank you. And then the last question on page seven regarding the other OpEx, the other operating expenses. Beside of the special kind of special contribution or special event from the from the foundation, is there anything from COVID or, let's say, anything specific for the setup of the operations in Poland which was driving the uplift in the the other operating expenses? No. That's that's not the case. So the total uplift was 4,300,000.0, out of which 3,600,000.0 is coming from the establishment of the KGA Foundation. So the difference is 700,000, and this is then mainly the effect from the first time consolidation of Vantage. So there's nothing in this number that is anything that is worth mentioning regarding COVID impact or any special cost developments from my point of view. The next question we received is from Manuel Martin of Auto VHF. Your line is now open. Please go ahead. Three questions from my side, if I may, please. The first question, maybe one by one. First question is on your valuation results. Are there any any regions in particular outstanding when when it comes to in in regards to your valuation results? Any regions producing, especially, a lot of valuation results? Yeah. Good morning, Manuel. You you see on in the appendix on page 34 of the presentation, a detailed split of the valuation result on based on the on the the regions. Not very much changed to previous years, especially in the Berlin region, which is in our case not the Berlin city, but the commuter base around Berlin. And in in in in the Eastern, Nazi, Hamburg regions, the variation result was was stronger compared, for example, with with candidates or with. Every region had a positive variation result that should be clear, but a kind of focus, not materially, but if you look at page 33 for 34, you see this, a kind of focus was in the these regions that I mentioned. Okay. My my my next question would be concerning Poland. It's a bit maybe looking forward in in terms of COVID. It's quite tricky, But, I have an impression that, COVID nineteen in in Poland is somehow a bit more nasty than than in Germany. Do you see any signs or indication that COVID nineteen might hamper construction progress, for example, or or any other impact on on your new market there? We're looking at financial year 2020 not only in in our group, but also on the market in general, looking at the results that other developers that are listed in Poland Poland published. It it seems to be that the market is very resilient also in Poland. So none of these development developers really had significant reduced sales numbers. None of them reported about, reduced sales prices, especially, what we see in the market is, still enough demand, especially demand for the ready for rent product. I mean, you just commented on some developments in the short term leases that were clearly a result of the pandemic, which is then attributable to students that are not renting apartments or to to people who are normally on vacation, Airbnb apartments and so on. Also interesting perhaps, there have been some results published on m and a transactions in Poland where listed developers were sold, like ICCOM or like Budimax, that that's all public. If you look at the pricing there, you see that's partially significantly about what we have paid for our acquisition, which gives us the the feeling that we are on the right way. I mean, also other people are looking at the market and not only at the pure development market, also on the ready for end market. But we are a little bit ahead to curve if you want so. And so it's not that he the case that TG has the the only idea to enter this market, but we're very happy that we're now really very close to renting out apartments in Poland. We're still convinced that this business will have a very attractive future. Okay. I see. My my last question is a bit on acquisitions and disposals. Do I mean, given the the market situation in Germany, do you remain confident to to be still a net buyer in 02/2021? I would say that's a clear yes. I mean but you know know us that we are here acting disciplined and would also have no problem with with a year of being a net net buyer. That's from our point of sorry, net seller. That's from our point of view, not nothing nothing negative. I mean, if the market is really that competitive, the prices are materially higher than than today. And on the other side, there are disposal opportunities. I mean, why not taking this into into account? Again, we don't see this for 02/2021. And but we're really here in two different markets. In in Germany, it's not a target to have a growth in absolute terms, which is honestly contrary in in Poland where we need a certain portfolio to really have efficient platform, to really have a certain volume. That's already done in in Germany. So, therefore, as in the previous years, you will see us disciplined on the acquisition side. But, again, if you ask us, will it be a net seller in 02/2021? That's nothing that we expect. Okay. Thank you very much. And the next question is from Mario Espazso of Societe Generale. Your line is now open. Please go ahead. Mister Pastou, your line is now open. Are you still on mute? So we take the next question is from Simon Zeppeig of Warburg Research. I have a couple of questions, if I may. And the first one would be regarding FFO per share and EBITDA adjusted margin. As we can see in the full year 2020, the margin is 69% and Q4, it was 66.4%. I know there are seasonal effects always coming in q four. I just wonder, is there anything else, any impact, any reasons to it that the margin was that low at 66.4 below q three and below the full year average? Good good morning, Simon. No. That's that's not the case. So we have I would perhaps say not really a seasonality, but a kind of swing in EBITDA margin depending mainly on things like maintenance that occurs in one quarter or also quarters where we do more service charges or not. So from our point of view, it makes more sense to look at the full year development, and here you see the the improvement from 68 to 69%. And that's, from our point of view, the better way to look at that. There's nothing, especially in the fourth quarter, behind the EBITDA margin. Okay. Great. And just one more question, especially to Slide number eight. You also have higher capitalist maintenance. Could you also, I mean, compare to April 02/2019? Is there any explanation for that as well, please? That's you're right. That's an increase by 1,900,000, which is in part of the total CapEx of around 70,000,000. But, again, if you ask me, do we hear more in this category? I would say not. I mean, for us, honestly, how do we look at that? We don't look when we decide on investments so much if this from an accounting perspective, maintenance, if it's capitalized maintenance, or is this CapEx? Is it in general capitalized or not? We look at that really from a cash flow perspective, and therefore, that doesn't make any difference. And, also, if you follow our reporting, how we handle that, we're always talking about in this year, €21 per square meter total investment, and that includes everything. So from time to time, it's more an accounting question. If you ask me if there anything behind it regarding any strategic decisions, that's not the case. Okay. So no no categorization. It's just a high a higher capitalized due to your cash flow view and accounting view, but no underlying changes that capitalized maintenance is higher. That is correct. And we always decide on a project based on the, let's say, cash out. And then the second question, this is still more something technical. We capitalize it? And is it from the category capital maintenance or or or mobilization CapEx, which is, you know, that also something which is not white and and and black. That's we we try to be as accurate as possible, but always not basically how to separate that. Okay. Okay. And and then maybe another question. We got to revaluation of your portfolio, and it's it's lower than h one twenty. Maybe if I compare it, for example, to ADGs, a little bit on CapEx. And is there is there any reason for this, especially because the share of yield compression is higher? So in regards to the operational effect, is there is that driven by by COVID nineteen impact, or do you have any other reason for that? Well, how do we look at the valuation result in the second half, and how do we compare it with the first half? You're right. If you look at the the percentage wise, we had now 2.9%, and I think in the first half, it was 3.2 or 3.3. That's a difference in absolute amounts, if I remember that correctly, of around 20,000,000 out of a 6,000,000,000 portfolio. For for for us, that's not really something something something different, and I think it's not correct to get into debt. It's it's in detail and to try to find out, are there any specific developments behind it? We simply see here, as in previous years, a continuous positive trend. So as I said, also for the February, are optimistic. Why is that? If we look at the acquisition markets in in our regions, I mean, we don't see here any pressure on prices. And to to to the contrary, I mean, the markets are competitive. We also see this in our acquisition growth yields, which are still on a very good level with 6.8% in 02/2020. But, yeah, the development is clearly there, and then it's for us, or from our point of view, question of time until this is then fully shown in the in the in in the variation result. Okay. I'm I'm I'm just asking, Frant, if I open the argument that there could be a lagging effect of operational efficiencies or growth, what we saw in, for example, rental growth and a little bit maybe lagging vacancy reduction, then, you know, you could have a catch up effect in h one twenty one. That's my back the background to my question of the split between yield compression, operational performance. But it's all answered. Thank you. But I would have another question in regards to sales. And in Q4, you sold some assets. I would categorize it into one part. It is Berlin Kiel, which is quite strong locations with higher rental growth. Berlin, IG, Eberswal, Starsberg, etcetera. But I wonder that on the one bracket of higher vacancy, you show actually high book profits. But on the other side where you might have larger expectations of growth, you do not show any book profit. Is could you could you is there any inference I could draw as to the reasons of this? I would say in this group of non core assets, there was especially one very successful portfolio sale of, I think, 300 units in a quite small city in East Germany. Please understand that I can't give you the name because that could perhaps hint to this transaction, where we achieved the very largest part of the total book profit that we've shown. So in general, we are selling today with a slight book profit, I would say. Often, we have kind of technical effect that we sign that at least then towards very small for profit. This is this case when we sign a project or sign a disposal, and then there's the next balance sheet date, for example, end of a quarter, then automatically we do a variation uplift to this disposal price. And then if we hand it over and if the closing occurs, then the book profit is zero. So it's basically part of the valuation result. I mean, looking at the total valuation result, this effect is not material, but that leads that leads often in our in the group or in our figures to affect that the book profits are quite small. But in general, we're setting above book value. And here in this non core assets, I think there was one very positive transaction. Okay. And but then referring to what you just said in regard to the Berlin Q disposed assets, did you have a book profit then by which you showed in an earlier revaluation or in the revaluation of h two '20? Yeah. This was included, but that that was not material. But I just want to to make it clear because I think if you look at this slide and there's even a small loss of €100,000, so that seems to lead to the picture. Are we selling below book value? That's not the case. I mean, the the the book profit is done. That's based on the fact that it's just 200 units of the material. If I have it right in mind, perhaps something around 1,000,000 or something around it. But we're selling up below book value. That's just the statement I wanted to say. Yeah. Okay. Okay. Great. And maybe if I may, just the last question in regards to Poland. Is there could you give me the quick definition between the current and planned projects? And second part of the question would be on page 23, the difference of total projects to Q3 is exactly what you told. First of all, the difference in the definition is that the current projects that's really acquired or this secured and the planned projects, these are projects where we concrete looking at. So where we are perhaps already in a kind of due diligence process where we are really perhaps in some negotiations or we have really concrete view on it, but not yet signed and not yet 100% sure. We are publishing this this figure to give an kind of overview where will this this total portfolio growth growth end in in in rough numbers. So that's more in mid term outlook. So that they're really secured projects and the really acquired projects, that's defined as current projects. And then perhaps when you can repeat your second question, this was something Yeah. The second question, maybe I I give you some more I I also give you a figure to that. It's on page 23, and you show the total project is 14.4 k, 14,400.0. And you showed in q three, you showed 14,900.0. So I assume you sold those 500 assets. Yeah. Even a little bit more. I mean, in, yeah, I would like to think in the future that could be correct, but it would be more coincidence. So the total handovers in 2020 has been 719. The very largest part of that was in the fourth quarter. And Mhmm. That's that's then something that leads to a reduced number in total project, but on our side, it also some on smaller acquisitions in the in the fourth quarter. And that that could would be a coincidence if this is exactly the same number. Yeah. Yeah. Okay. So because, I mean, that's a net number. Then but just that will also translate to your accounts receivable changes within your core '4 q four cash flow statement so that I can I can tie those two numbers? Those 420 units you potentially sold in q four is exactly tied to your accounts receivable changes in your cash flow statement of q four. Is that right? Which is, I think, around 82,000,000. That would also be a coincidence. If this is the case Okay. Because for the disposals in Poland, that should be a bit the very largest part, I would say, maybe 100% cash in our now balance sheet. That's that's a small amount that is deferred where we hand over the partner to December, and we receive the final payment then at the January, for example. So that that's that's not that's not really the reason. Also, all the disposals in in Germany, especially the first project, as the first stage of this project in Munich, the cash inflow was in 02/2020. Yeah. Well, this this differently ask what what would you say is the the cash in is your your sales number is a 100% cash in literally from your sales in Poland. Yeah. Yeah. And I assume, Simon, but perhaps we can and that's what you were a little bit more detailed. This number that you're pointing out in cash flow statement is not only if I have it correct in my mind account receivable, that also includes change in other short term assets. Is this right? So that could be a mix of several effects. Okay. Great. That's that's interesting. Okay. That was on my side. Thank you very much for answering. Yeah. Thank you. As there are no further questions, I hand back to him, Satir, for closing remarks. Yeah. Many thanks, all to to listening to our call. As always, if there are any questions left, please do, feel free to contact our our department or or myself. Wish you a good day, and talk soon in the next days and weeks. Thank you very much. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.