Hello, and welcome to today's KRUK full year 2021 results conference call. My name is Elliot, and I'll be coordinating your call today. If you would like to register a question during the presentation, you may do so by pressing Star followed by one on your telephone keypad. If you have joined us online, you can press the flag icon on your web browser. I would now like to hand over to our host, Marta Jeżewska-Wasilewska from Wood & Company. Please go ahead when you're ready.
Good morning and good afternoon, everybody. Thank you for finding the time to join KRUK's annual results call today. I have the privilege to represent the host of today's call, Wood & Company. Now, without any further delay, let me hand over to CFO of KRUK, Mr. Michał Zasępa. Michał, the floor is yours.
Marta, thank you very much. Good morning, good afternoon. Thank you very much for taking time to listen to this results conference discussion. I hope it's not only a presentation. I'll be using the presentation available on our website, and I'll be pointing to the slides I'm referring to. Well, you know, it's a pleasure to have this call because these are the best results KRUK Group has ever had. Not only that, they are two times better than our so far record net profit of over PLN 300 million that we achieved back three years ago in 2018. It's a great pleasure to tell you the details of what has happened in Q4.
Great pleasure to present you something which I think is a very solid result on multiple markets with a business that still has potential to continue to grow. This is a breakthrough year, I think, for KRUK. We proved to ourselves we are an international business. We are able to succeed all over Europe, and that we are able to systematically improve our effectiveness which results in significant improvement in margins, market shares and net profit, also on our core markets in Poland. This result is one thing. The other thing is the transformation we're going through. On conference meeting with Polish investors through KRUK Group, I want you to remember two things, please. First, this is the results, which is very solid.
Second, KRUK is going through a digital transformation in a process in which we are improving our ability to contact and collect through electronic means, in which we are able to transform into more digital, more automatized company, which more and more uses sophisticated data processing for decision-making. This is a process, and 2021, 2022 is just an important next step in that process, which hopefully will lead us to have an even better market position and being able to accelerate cash flow, achieve better net cash flow with less cost on the cases that we're buying.
Now, going back to slide three, you see this almost PLN 700 million net profit, over PLN 1.5 billion net EBITDA, record high recoveries of PLN 2.2 billion, and significant investments of PLN 1.7 billion, which of course bode well for future years. This means a very nice increase of earnings per share, and they are at PLN 36 . This year, over 30% of that we want to pay out in dividends in the coming months. That means return on equity of 27%, possibly one of the highest in the industry, which we are able to achieve at a relatively modest indebtedness level, 1.7 x cash EBITDA. The business grew by close to 30% if you look at the balance sheet.
The value of our portfolios is now worth PLN 5 billion . Recoveries are of course the single most important measure in our business, and I'm pleased to tell you they continue to be very strong across all countries in unsecured consumer business, which is a good 75% of our business. In all geographies, they were a few percent better than we expect at budgeting in the budgeting process, and we see that this trend is undisturbed as of May sixteenth, and the recovery results for Q1 seems to be very good. New portfolio purchases, more detailed soon, but this is two very important news.
First, in the market, which is our core market, Poland, we proved we can put to work much more money than so far before, and invested over PLN 1 billion just in Poland. That commands a market share of 50% and is a result of improving effectiveness of our processes, which translate to more competitive pricing of the new books. That's a very good news. Of course, with over 50% of the market share in 2021, we have definitely a lot of competitors unhappy with their unrealized investment plans, and the competition is strong, and it continues to be strong in 2022. The second important news is that we're back on buying portfolios on meaningful scale in Italy and Spain, having proved to ourselves that we can do profitable business there.
At the bottom of the slide, you see the estimates of the returns at the purchase for these new books. They are, in my view, fine, 22% gross return, 2x money expected on all of the investments we made in 2021. I'll now jump to slide number six. We are well-funded. Leverage level is one of the lowest in the industry. We are well-funded, taking advantage of very good reputation of the Polish capital market, where we successfully placed bonds this year, before Ukraine conflict, before Russian invasion on Ukraine. We placed successfully over PLN 400 million of bonds. In a sense, we were lucky.
The market now is more difficult, but I would expect it will go back to some balance, to some normality in several weeks. On the other side, we are talking to our partners, the international and Polish banks in Poland about extending the lines and enlarging the lines of funding. We are prepared to continue to invest significant amount of money in portfolios in 2022. We have made a recommendation to the shareholders to pay PLN 13 per share of dividend, and we will wait for shareholders' decision at the shareholders meeting to be announced soon. Last but not least, we are all shocked in KRUK with the invasion of Russian regime on Ukraine.
We're very unhappy about what's going on at our eastern border country. We are very moved with the humanitarian crisis that this invasion resulted in. We are helping as a company to refugees. There is a budget of over EUR 300,000 that we will spend on humanitarian aid in Poland, Romania, and Slovakia, the three countries that border with Ukraine and see the inflow of migrants. I'm sure many of KRUK employees is individually involved in helping in some way to millions of Ukrainian people, mostly men and women, who look for shelter now in Poland, Romania or Slovakia. We are not involved in business in Ukraine nor Russia. We have no assets there, so we're not directly affected by that.
Any effect on our business would be indirect effect on the macro environment in Poland. As we wrote in the report, there is no sign of such indirect impact at this point. Will there be an impact? I don't know. Maybe, but that would mean that we would see significant loss of jobs for some reason in Poland, Romania, Slovakia, impoverishing our, you know, home budgets, decreasing our home budgets, the money we have for daily spend. That of course is a possible scenario, but I don't think it's the base case scenario for now. We are of course watching the situation. We'll be carrying out some sensitivity tests. My view is that we are fundamentally strong and there won't be a very significant effect on us.
Of course, depending on the scenario we draw for this conflict. I'm talking about the scenario of this conflict not containing any NATO countries in which we operate. Slide seven gives you more detail about some of the achievements and some of the steps we are making in the area of operational excellence and technology development. This is very important to us. This gives us meaningful savings and gains that we already observe. This is something we want to draw your attention to and tell you, the KRUK you knew from a few years ago is not the KRUK you see now. It's a much more advanced technologically company with more focus on that and more promise that future gains will come from that.
Those future gains will be we do things faster, we are able to bring cash sooner, we are doing it more cost effectively, and we make better decision using the data we have about the debtors and the clients, how to manage the process. Now on slide number nine, you see our results by segment. Once more, it's very reassuring for me to see a very good turnaround in Italy and Spain, and positive results there. Great development of profitability in Poland. Excellent results in Romania, and also super results in Slovakia, Czech Republic, and on our small German assets. All of those business lines have been very nicely profitable. And this was the best year for most of our countries. Slide number 10.
Polish market was back to levels of activity we saw pre-COVID, in pre-COVID times. The value of nominal value of debt sold to consumer and mortgage portfolios was close to PLN 9 billion. PLN 1.8 billion of investments, of which KRUK took about 52%. Now, if you look at the results in Poland, they were very good. PLN 1.1 billion of investment. It's something we do not expect to be able to repeat this year. We probably will invest several hundred million PLN, but shy of PLN 1 billion. Maybe 700, maybe 800. Maybe something within this range because we expect very high competition, and because we expect somewhat smaller supply this year.
However, it depends on the scenario about macro, because if we are talking about the scenario of high interest rates and somewhat worse macroeconomic outlook, lower GDP growth, maybe the clients with bank credit will be under more pressure. Maybe we'll see the increase in defaults with banks, and that may result in increase of the market for NPL, but probably not in 2022 yet. If you look at Romania, the market also bounced back nicely to PLN 1.5 billion. About PLN 300 million of investment, of which KRUK took about 60%. We expect the market to be in similar levels, maybe somewhat higher, in 2022. If you look at the results, they were excellent.
We managed to place eventually about PLN 770 million. You may remember the beginning of 2021, that was a slow beginning overall. We're very pleased with this amount of money invested. In 2022, we had a more ambitious budget for investments, which is supported by one significant forward flow agreement secured already last year that will bring us additional investments. Of course, there will be a number of new portfolios to be bought. Italy, you see, a very large market, potentially PLN 55 billion. Not all of that is accessible to us. Some of that is mixed portfolios, too big portfolios for us. There is quite a few good opportunities for us to continue to explore the niche of banking and non-banking consumer finance.
We will be focused on that. We quite successfully invested close to PLN 300 million on this market in 2021. 2022 looks very good in terms of potential to invest, because we secured also a significant forward flow agreement, and we see a strong pipeline of portfolios coming in the next several months. Maybe we are able to invest similar amount of money in 2022. Maybe we can even do better or significantly better than what you saw in 2021. The performance is solid. A huge improvement over last year. If I look at recovery curves for Italy, it's an undisturbed positive trend of beating our expectations for the past couple quarters. We definitely are now in the area of risk on the upside.
The possibility of future positive revaluation is definitely higher than the risk of negative devaluation. That, of course, is also true for Poland and Romania on the larger scale, and Spain. On slide 16, you see markets of about PLN 13 billion nominal, PLN 1.2 billion in terms of investment value in Polish zloty, of which we had a small portion, 8%. Again, a good possibility to be bigger in Spain if you look at the market. We successfully invested in a few portfolios, placing PLN 130 million. That's slide 17. Also, you see significant improvement on results. Here, 2021 was very good performance on our unsecured consumer credit books. Still, unsatisfactory results on the small portion of business, which is corporate unsecured debt.
Fortunately, the value of the second part of the assets is relatively small, and all of our new investments is coming into the consumer. That will be also our focus in 2022. Also there is more risk on the upside than on the downside in Spain, although it's probably, you know, less secure situation, less comfortable situation than we have in Italy. It's improving and the prospects of growing that business are quite good. The other markets, which is mostly Czech Republic and Slovakia, had great performance. You can see profitability measure of 45% here is as good as it was for Romania. Very good recoveries resulting in significant revaluation, positive revaluation as of the value of the assets on that market.
Decent amount of investment, of course, the smallest market, but it is the best year for that business in our history too. You have Wonga, which doubled its EBITDA, but did not grow the revenues. There were a few important events in Wonga. One positive, we were watching closely the decisions of the Polish Office of Competition and Consumer Protection, we were able to release a significant part of the provision for so-called early repayment in the new year methodology. For those of you for whom this is unclear, please contact me. I will explain it to you.
It's a legislation change that happened in Poland a few years ago, for which we created a provision, and now we are releasing it, looking at this concrete stance and decisions of the Polish Office of Competition and Consumer Protection, which enforce this law. That's positive. That's an extra gain which reduced our costs if you look at the P&L. There is also negative. Wonga needed to create additional reserve provision for its revenues. The situation in which Wonga expanded its sales and many of its clients are repaying the debt earlier under this legislation enforced by the Polish Office of Competition and Consumer Protection means that people who took a loan in Wonga for, let's say, a year, but repaid it after three months, pay very low price because they get most of the money back when they prepay.
That meant that the new accounting model that we also introduced in Wonga at the end of the year showed us the necessity to create this additional provision. Both situations are really related to the same phenomenon, which is this earlier repayment of credit. Overall, that means Wonga has lower profitability than we assessed a few quarters ago. It needs to increase the cost of its loans, which it has been doing. The company has been doing it for the past few months. We had quite good results of that. The situation, as for now, it's stable.
We are profitable, but in Wonga, we need to also be aware of the fact that there is a piece of legislation, so-called anti-usury law proposed a few months ago by the Polish Ministry of Justice, which is today waiting to be discussed by the parliament. It proposes a very tight, very significant decrease of maximum cost of credit, non-interest cost of credit. That means very bad news for most of the industry and significant bad news for Wonga, for which the company is preparing for this change of law, but it will mean significant lower profits. However, we don't know when this new law will be passed and what exactly the terms of this new law will be, because it is a very negative news for all the industry, including Polish banks.
We are not sure how realistic it is that this law will be passed. We live with this uncertainty at Wonga, unfortunately, but there's nothing much we can do about it. The good information for KRUK shareholders, Wonga's share in our assets or profits is much lower than it used to be a year ago, two years ago. Whatever it means to Wonga, it will not be so significant, most likely, for KRUK Group as a whole. Hopefully, the situation is resolved in some positive way. The new law comes and is passed, but it's not as draconian as the first draft, and Wonga enjoys, you know, less competition, maybe somewhat lower scale, but still decent profitability. The outcome is uncertain at this point.
The summary of results is like 2022, very high profitability. If you look at KRUK business today, the scale of it, net profit of close to PLN 700 million, EBITDA of PLN 900 million. This is already one of the largest businesses in its industry in Europe, with probably one of the highest profitabilities and I think very good risk profile, low indebtedness. Our strategy for this year is to continue the path, you know, we followed in 2021, maximize the value of NPL investment across all of our geographies. The guidance I can give you is, looking at, for example, at Marta's report and her assumptions, we will be able to continue to invest at PLN 1.5 billion a year.
I think it's a good target for us for 2022. We have an ambition of growing net profit this year versus last year. We have a budget which assumes that. Of course, it is more difficult today to achieve that than it was a few weeks ago because the interest rates have risen significantly in Poland. Possibly we will have more, or about PLN 30 million of more financial costs this year than we budgeted for. Our goal will be to compensate it with higher recoveries, higher effectiveness, maybe more better investments, and still meet the target that we have for the net profit. We're absolutely not giving up. We see potential for that business to continue to grow even that we are already at a relatively high base.
In this presentation, for the first time, you also have a number of new disclosures in pitch analysis of the profitability or cash results of the investment in portfolios in historical years between 2004 until 2021. Please analyze it, draw your conclusion. My conclusion is you see that overall that business is highly profitable, that this profitability significantly increased over time. What you see as results today is far better than what we anticipated several years ago. You also see that there's a high degree of diversification. It's not one or two or another year that brought us those results.
This is investments in hundreds of debt portfolios across the past 15 years, which I think give us a very good credibility as a stable business. Thank you for listening to this summary, and I would be very happy now to take your questions.
Thank you. For our Q&A, if you'd like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind, please press star followed by two. Those who have joined online, please press the flag icon, and when preparing to ask a question, please ensure your device is unmuted locally. As a reminder, that's star one on your telephone keypad or the flag icon if you've joined online.
While we are waiting for questions, can I start? Its Marta from Wood .
Please, go ahead.
Maybe I'll start from the big philosophical question, because you suggested in the press comments earlier today that your ambition is to deliver PLN 1 billion of profit in the next several years. Without like, what do you consider to be the key driver for KRUK as a company to be able to deliver PLN 1 billion of profits, like, on a more sustainable basis, not on the basis of some super extra hyper strong exceptional year? What does it take? Does it take entry to the new entry, or does it take a complete turnaround in some of your geographies? How do you want to achieve that?
Well, you know, this PLN 1 billion, it's a Piotr Krupa, you know, a target. Please treat it as this. It's not, you know, operationally now within the plan, definitely not for this year, maybe not for the following year either. But having said that, you know, it is possible to draw a scenario like that for KRUK in the coming markets in which we are. But for that, we need to increase the scale.
The easiest way to imagine it, you know, to write this scenario in numbers, would be to increase the scale of our portfolios, our bank book significantly, so that with, you know, similar or somewhat lower profitability than you see now, we would be able to achieve this PLN 1 billion. We would, you know, I don't have the scenario in front of me, but you know that would probably be a scenario where we invest closer to PLN 2 billion a year, not PLN 1.5 billion a year. That would give us similar results to PLN 1 billion.
If you look at the markets, if we would be able to sustain investment, say, PLN 700 million annually in Poland. You know, PLN 250 million in Romania. PLN 15 million in Czech Republic and Slovakia. That totals PLN 1 billion. Add another PLN 1 billion annually from Italy and Spain together, then that adds up.
Okay. It's mostly the scale and PLN 2 billion of annual investments could be enough.
Yeah. That's you know the easiest way to imagine that. Of course, we could talk you know some efficiencies, but then we could talk okay but maybe with bigger scale we need to give up some margin because of higher competitive pressure. We have cost of funding which is now on the rise. It's taking away some of the profit. You know the biggest sensitivity is really on how much we invest, and of course then what the efficiencies beneath that in terms of recoveries.
Okay. Another question referring to the comments that you've made to 2022 budget. Can you share with us what kind of benchmark or either what kind of cost of financing increase you've been expecting so far? And maybe
Yes.
On a different note, if you could actually tell us what is the potential increase of cost of financing that you see with the current state of market interest rates that we've seen so far?
Yeah.
on your current, like, where the cost of financing is gonna go?
One point of reference is that when I told you that we will exceed the budgeted cost of finance. Now, we budgeted 2.7% of three months WIBOR, the Warsaw Interbank rate, in our budget from January 2022. Now, this is underestimated. Every additional percentage point of increase, let's say if it was on average 3.7 or 4.7. Each point will give us roughly about PLN 15 million-PLN 17 million of additional costs. When I'm looking at the Polish zloty-denominated debt on our balance sheet, which is not hedged by IRS contract.
I take some assumptions about how much money we will invest and how much money of the new debt I will draw. Roughly that would be PLN 1.5 billion-PLN 1.7 billion of Polish zloty debt. From that point of view, I'm saying, okay, if on average, the interest rates will be in Poland 4.7%, which means by the end of the year, they may be 5.5%-6%. Then it probably means for us about PLN 30-something million of additional non-budgeted financial costs, which we will need to find a way to compensate likely on higher efficiencies coming from debt purchased line.
Okay. Fair enough. Thank you. Wonga, this one-off provision, creation and releases, what was the net impact? Where would be the venues-
The net-
If it was with us?
The net impact of those two events is roughly PLN 3 million+. Well, this creation of provision on the revenue level is something that will continue in 2022 because it just shows a different, somewhat lower, profitability level. However, the company, knowing that that is going to happen, has significantly modified its product mix and also increased prices. This effect will be mitigated this year by higher prices and also some cost-cutting that the company has planned.
This model change wasn't really only a one-off. It is just a structurally higher cost to risk.
Yes.
Uh-
Yes.
The fact that Wonga books like, let's say half of the revenues on segment basis, as you show it, actually only 30% of it can be assigned to one. Yes?
Can you please repeat? 30% of what? I'm
No. It was PLN 3 million of provision positive net impact, yes? Net was positive.
Well-
Basically, you really.
Yes.
Have faced a major slowdown in repayments and higher cost of risk on lending activity, yes? If I understand correctly.
Yes, it's not coming from larger default rates. Please remember, it's not coming from larger default rates. No, people are repaying, not defaulting on Wonga's loans more than we thought. They are repaying the credit earlier. The current legislation in Poland says that if they repay early, this credit is very cheap.
Oh, those are not defaults.
So this is, this is basically-
Yes. Those are not the full.
Okay. This is small consumer reimbursement?
Yes. Yes.
Okay.
Well, it's really goes into the fact that Wonga's revenues are smaller because a big percentage of Wonga's customers are prepaying the credit.
Yeah.
This is more costly in a sense. It's generating much less revenues than Wonga, you know, forecasted historically, and they needed to change these assumptions accordingly to the reality and also follow with price increases now.
Thank you for this clarification. I have misunderstood your earlier comments. Thank you.
Yeah. It's a little complex, so sorry.
No. I have no more questions. Thank you.
Thank you.
We have a question on the phone line from Radim Kramule from Erste Asset Management. Your line is open.
Yes, good afternoon. Hello. Thanks for the presentation. I just wanted to clarify a couple of things. You were suggesting that probably it will be much tougher for you to, let's say, maintain or let's say surpass the 2021 figures, right? If I understood correctly from your comments in 2022.
Yes. What I told is we budgeted at the end of the year that we will achieve a growth of net profit, some moderate growth of net profit in 2022 versus 2021. I want to tell you today that it will be more difficult to do it because we will have higher costs of funding because of the interest rate increases in Poland. However, I'm also saying we're not giving up on achieving this plan despite the higher cost of funding, because it is possible that we will have higher recoveries or somewhat better efficiency on versus debt. I'm saying this because the first months of 2022 are very good. It is a possible scenario.
Nothing guaranteed, but we're, you know, not giving up on showing growth of net profit this year.
Let's say the sensitivity, let's say to the recoveries. One would consider the unemployment rate as a major driver for the success of if we start seeing, let's say, the unemployment rates picking up in the region. That this should have an impact on the recoveries.
Yes. It's not, you know, we don't have a mathematical formula or statistical formula to translate unemployment into our repayments, but definitely there is an indirect relationship. It's a more complex relationship because, you know, unemployment will cut some of the money. On the other hand, some of these debts are repaid by families, not only individuals. Even if one person in a family loses a job, another can help him repay it. Second, you know, it's a statistical game. Today, if we look at Poland and Romania, we're looking at very tight labor markets where salaries are increased by probably about 10% annually.
Now, that situation will not change overnight, because there is lack of qualified people in Poland and Romania. This is environment that is favoring us. In addition, today, KRUK is a company who collects mostly, maybe already about 75% of our recoveries are related to the legal process, where it's not decision of the customer to repay or not to buy this thing or repay to KRUK, but it's a decision by the administrative system. If you have the money on your accounts, then the system, you know, the representative of the court or the bailiff will collect from your account.
I'm saying that being in the legal system, being focused on collection in the legal system, also gives us some more certainty that these recoveries will not stop from, you know, one week to the other. In addition, in the environment of increasing inflation, which is the case in Poland and Romania, relying mostly on the legal collection gives us some cushion against this inflation because when you collect through the legal system, usually, in this case, in Poland, there is an administrative interest added to the debt every year, which comes from the legislation, and which is indirectly linked to the level of interest rates in a given country.
Yes, if you look for, you know, a sensitivity analysis on which we're mostly exposed to, it's when, you know, millions of people in Poland and Romania will have less money. They will have less money because they will start losing jobs or the inflation will be so high that the money that they have is not enough to cover their needs.
Yeah. Understood. Could you say that, let's say, this increasing interest rate environment will also impact the pricing of the portfolios and competition? Because I would assume that with higher rates you should also require, let's say, higher returns from the purchase portfolios.
Definitely. Yes. It's a direct relationship. I think the market will be adjusting to the fact that the cost of funding will be increasing. It will be increasing directly for Polish złoty investors because their cost of funding is related to Polish złoty interest rates. It has also increased for foreign euro-denominated investors because the FX risks of Polish złoty versus euro is today larger, while the Polish złoty depreciated versus euro. Yes, we already adjusted somewhat our minimum acceptable IRRs, and I'm expecting that our competitors will be doing the same. How much, when exactly, that's you know a combination of individual decisions of the boards of those competitors.
Yeah. How big actually is, let's say, because the e-commerce is, let's say, gaining market share and-
Mm-hmm.
The company start offering, you know, Buy Now, Pay Later.
Yes. Yes.
Are you somehow cooperating or offering some, let's say, services to these companies? Because they should also do their kind of, you know, scoring-
Yes.
recoveries.
This is a potentially very interesting market. In some markets, for example, Germany, that is already a large market. But this is supported with legislation about debt collection, which allows adding collection costs to, you know, the regular invoice for unpaid product. This is relatively small. I'm saying in some countries, like Germany, there is a very good legal framework for debt collection business. Poland and Romania for those reasons offer less opportunities here. Also, the Buy Now, Pay Later is not so popular yet in Poland, Romania or Italy. We, you know, we're open for that business, both in servicing and in debt purchase. We've done some of that business, but it is relatively small.
We're looking at how quickly this business develops in Western Europe, especially in Germany, and we're, you know, thinking how we can join this, you know, this train because it's a fast-growing train in some countries. When we are interested to do that business, if it comes to us.
Understood. Maybe last question to legal changes. I had some impression or I remember reading some news that the Polish state is again preparing some kind of changes for the debt collection market.
That is correct. Thank you for this question because it escaped me to comment it in my presentation. Yes, a few weeks ago, I believe, the Polish Ministry of Justice announced that they have a plan to regulate the debt collection market in Poland, creating a more debtor-friendly legal environment. Now, what is available in public domain is some 12 points from journalistic article, but no bill, no actual legislation was made public at this point. All we can do is relate to a press article where some journalists talked to the Ministry of Justice and wrote something. Based on what this is, we say we welcome this change. It will limit competition. It will improve the position of the debtors.
You know, there is regulation proposed there to limit amount of number of times you can call a person a week, hours in which you can do it. You can only visit this person if you pre-agree a meeting. All of those changes are. We are in some way observing through our internal industry good practices. If they are stricter but are even same for everybody, we're happy to comply. Also, this legislation calls for some necessity to be a licensed business, which is the case in many markets. Also it calls for a necessity to license every employee who is engaged in debt collection. It's unclear what it would be, but it needs to be something practical. We look at this, and we're not scared of that.
We think in longer term that will help the industry.
You would see more as a-
-not engage-
A positive. You would see some kind of like a perfection of-
Yeah. We would see this as setting firmly rules in which you can do the debt collection, and the big players should have no problem with complying with that. Eventually, I hope that would, you know, take away some bad, possible bad publicity for some smaller debt collectors who maybe are aggressive. You know, at this point, we don't think it's a major issue, but we need to see the actual legislation to get a solid opinion. Right now, you know, no lawyer can say anything because it's bullet points, not, you know, paragraphs that we can analyze.
Okay. Understood. Thanks, thanks very much for the answers.
You're welcome.
We have no further questions. I'll now hand back to the speaker team for any final remarks.
Thank you very much for taking part in this call. The business is solid. We probably will be having a very good start of the year in terms of recoveries. Pipeline is building up for second quarter, but already there is some meaningful investments done or secured this year. You know, we're looking forward to another solid year. We don't know, you know, what this conflict in Ukraine will exactly mean for our business, but we're definitely in a position to withstand any possible difficulties. Thank you. Have a good day and hope to speak to you and meet you over this year.
This concludes today's call. We thank you for joining. You may now disconnect your lines.