Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Deutsche Konsum REIT-AG Q1 2022/2023 Financial Results 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 touchtone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Rolf Elgeti, CEO. Please go ahead. Yes. Good morning, everyone, and thank you for your time and interest in Deutsche Konsum REIT AG and our Q1 2022-2023 figures. Just for the avoidance of confusion, we're talking about calendar Q4 last year. The presentation's online. As you know, you've seen the press release. What I suggest I do I just highlight very few data points that are worth mentioning, in my opinion, relative to the last quarter and in particular in the backdrop of the current environment. Let's start with the operational business. Our rental income is up. It's up 2% year on year. What's actually more interesting, personally, I think, is the like-for-like rents increase, and our like-for-like rents have increased by 1.1%. That's quarter-on-quarter. The in-place rents have been increased by 1.1% quarter-on-quarter. If you were to annualize this, obviously that'd be about 4.5. We wanted to show the quarter-on-quarter impact because as we mentioned in previous calls, we're now, of course, benefiting from the indexation of the leases kicking in. By the way, 0.7% of the 1.1% quarter-on-quarter was due to CPI-linked rent increases. As we mentioned before, as you know, these indexation clauses typically have a hurdle. Given the inflation picture in Germany, we're always talking about sort of this wave that's going to positively impact our rental income will likely sort of peak in Q1 this year or Q2 this year. In any case, it's stronger than in the quarter before, and therefore we wanted to show this quarter-on-quarter. 1.1% quarter-on-quarter, that's not bad for retail real estate. It's interesting also to note that the CPI link is 0.7% of that. In other words, that's 40 basis points of non-CPI linked rental increases like-for-like quarter-on-quarter. I stress this with this clarity because we've discussed in previous calls and also in many of the investor relations meetings always this relationship of, you know, what will happen to the other rents. As you know, approximately 84% of our rental income is legally contractually inflation-linked. We've always sort of also said that obviously that will push up the market data, the market rents and the rent comparables, and therefore one should expect rental increases also for the non-CPI linked sort of rental contracts. I think those 40 basis points coming from 16 basis points, sorry, 16% of the portfolio is a very strong indication that that thesis is true. The rent increases are not just happening with the CPI-link clauses, but they're of broader nature, again, sort of, you know, supporting our arguments that, you know, the affordability of the rents are very strong, supporting the arguments that we always said that the rent in place, EUR 6.70 at the moment, is still way below the rent that's needed to trigger sort of new construction. Therefore, that's fundamentally strong reason that our rents should continue to grow. I mean, not exploding, but growing. That's the first important point I wanted to make here on the like-for-like rental increases. You can see if you look at the P&L, that our rental income was also up. It was up by only 0.2%, so we had a small operational margin contraction, but the net operating income is still up quarter-on-quarter and year-on-year. Now, that's also important because, as I sort of get the impression from many investor conversations we have is that if you look at the real estate industry more broadly, then obviously there's the big question, well, there's two big questions for the operational cash flow is. The first is, will the positive inflation impact on rents outweigh or not the negative inflation impact on the cost picture? And of course, for many, you know, real estate segments, that is already sort of a negative total relationship, i.e. cost inflation in total worse than positive rental inflation. For us, that's not the case. The net impact of inflation on our net operating income is still positive because the damage that the cost inflation does is smaller than the positive impact of the rental income. That I think is also worth stressing. It takes, for us, in order for the FFO sort of to be negatively impacted, it takes the interest costs. Interest costs are up, as you see, we're now at 2.3% weighted average debt costs, and therefore the FFO year-on-year is actually slightly down by 5%, which is sort of mainly due to these high interest costs. Still the FFO is EUR 10.2 million on the quarter. That means already sort of in the first quarter, we are sort of above the lower end of our FFO forecast range. That obviously is before we're talking new acquisitions, and before we're talking further rental increases. We are already sort of annualized, sort of in our forecast range. That means that we haven't explicitly said so because it's an awkward thing to do with the Q1 numbers, but we would obviously reiterate our guidance for the FFO for this year, which would then be broadly flat compared to the last year, which I guess is good news if we're talking about this development ex new acquisitions. That's the first part. The second part, briefly on acquisitions and sales. It's short and sweet because we haven't acquired anything at all in Q1, Q4 last year, calendar Q4. Which is unusual because usually that's a strong sort of acquisition quarter. We have sold one more asset. We actually sold a DIY property with a yield of 5.7%. That's worth noting. It's not particularly huge at EUR 7.4 million, but it obviously was above the book value. Again, it was at a very high rent multiple, and in particular considering that this is sort of DIY, so not exactly sort of the typical plain vanilla food anchored retail. I'm striking that just to say because, you know, we often get asked like, "How's the acquisition and disposal environment changing?" And the answer is, obviously, and that's what everyone sort of assumes, is that we are in a position that we see a very attractive acquisition pipeline. Sounds awkward saying this, having just said that we didn't acquire anything at all last quarter. That has more to do with the fact that we're looking at almost so many different options and are weighing our options here a little bit. More crucially and maybe less intuitively, we still see the disposals pipeline, even in this environment, and even sort of for DIY, even in Eastern Germany, if you, if you wanna add that. Also again, still at those yields of 5.7%, which means that the story that we don't actually need, but we have delivered last year on, is that we can sell at much tighter yields relative to where we buy is still very much intact. That was the second key point. The rest is just to say that obviously our balance sheet remains what it is. Our LTV is just over 50%. Very strong interest cover, still at over 4x EBITDA. Clearly, of course, we increased the FFO per share. That's logical given the operational cash flow. We continue working on our debts. We've extended some of our loans into this year and extending some for longer. That's all very much sort of course of normal business. Lastly, just to mention that we. I mean, there's no real news, but we have, of course, appealed against all sort of the tax action that we reported in the last quarter and will continue to do so, but have nothing concrete to report on that. I'd like to stop here actually and see whether there's any questions or comments on any of those points. 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 selection. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. Our first question is from the line of Kai Klose from Berenberg. Please go ahead. Yes, sir. Good morning. Thanks for the presentation. I've got 3 questions for me. The first one is on page 10 of the Q1 report. There you mentioned we had about EUR 300,000 of one-time adjustments in the admin expenses, and then we had about EUR 800,000 of adjustments for one-time effects in the FFO. Do these two numbers belong together, or could you maybe have more details on each of them? Second question would be, you mentioned the still stronger growth in NOI compared to like-for-like. At which portfolio size, or assuming you will be a net seller in this year, at which portfolio size that positive spread would, so to say, reverse? The last question would be if you have maybe more details on the investigation which the BaFin was asking for in the last year? Thank you. Yeah. I answered the second two question to give Christian time to look at the numbers for the first. Read the margin and size. Actually, there's no real relationship because, I mean, yes, the margin would expand, if we were to grow and shrink slightly if we were to shrink, but that effect is really marginal given our size. The effect of why we sort of increased the NOI in spite of cost inflation has simply to do with the fact that, you know, even if the cost inflation percentage-wise is maybe higher than what we achieve on the rental indexation, the cost in absolute terms is so low in our business, I mean, relative to other real estate industries. That the net effect is still sort of a positive one on the NOI. You know, to maybe illustrate this, I mean, clearly we're talking about cost inflation for maintenance, and there's also energy. I mean, the service charge leakage sort of naturally increases in times of high inflation. Those are the effects here. They've got almost nothing to do with size. We are working on them to work on sort of, you know, minimizing the cost inflation as best as we can. I'm sure we'll achieve something then, particularly with regards to the service charge leakage, because that's something that, you know, post-acquisition of new properties can take 2-3 years to properly fix. Not really a relationship on size, but sort of just lies in the nature of the P&L structure, basically. With regards to the BaFin inquiry on our accounting, there's no news. We've supplied the information BaFin has asked for, but that has only been sort of five or six months ago, so it's not logical to already expect a response. We're simply waiting is the short answer. We tried to contact BaFin and so did our lawyers, but obviously that didn't have an effect. That's just probably normal for these sort of accounting inquiries. They take that long. The difference to sort of previous years is just that the in previous years, they haven't been published before there was a result, that policy has changed and therefore it's out there. We are out there, I think together with 800 other German companies at the moment. It's, it's embarrassing, but we just have to wait until BaFin responds to our letter. Good morning. Hi, this is Christian. You, you asked for the, the reconciliation items regarding the FFO. We have made two adjustments as we regularly do. The first one are non-cash expenses. This has to do with the IFRS 9 valuation, which we have to do on our financial assets we have on the balance sheet. You know, we have to estimate every quarter the various default probabilities on our receivables, and therefore we have to make a kind of impairment or write-off, which is a non-cash effect. This is what is included here, mainly in the EUR 0.9 million. Then on the other hand, we have cash items which are non-recurring. This is included in the EUR 0.8 million in the line below. All right. Many thanks. May I ask one follow-up question on page 14 of the presentation on the debt expirations this year of EUR 86 million, when you would expect this amount to be renewed and to be extended, and roughly speaking, at which cost? Yeah. This is the 28 of that is loans that are expiring sort of at the middle of this year, which we are in talks to extend. The remaining roughly 50 are loans from last year that we had only extend to the first half of this year, with a view to have more time to talk about terms, possibly refinancing, et c. That was two sort of short-term prolongations we've done basically to give us more time and options to look at other alternatives, better alternatives, and also to see what we would do with regards to interest rates fixing and that sort of thing. What are your thoughts on the extension? Well, I think the real answer is we haven't really decided yet what we wanna do. I think in all likelihood, we will do what we have done in previous years, which is simply sort of extend for between 5 and 7 years. But we may decide differently because we're also exploring options whether we can refinance parts of those portfolios with other banks. In particular here, we're in talks with local savings and loans and cooperative banks. They're one sometimes or often actually gets better terms for longer term, longer term loans. We may split these portfolios, and we simply want to optimize sort of costs of debt really, rather than having a very specific view on the maturity. It may turn out that we'll go for parts of this for longer and cheaper. Yeah. Understood. Thanks so much. Ladies and gentlemen, to confirm that star followed by one to ask a question. The next question is from the line of Manuel Martin from Oddo BHF. Please go ahead. Yes. Thank you. Good morning, Rolf. Two or three questions from our side, please. The first one is rather mathematically, I think, the like-for-like rent increase, which you said it's 1.1% quarter-on-quarter. On an annualized basis, to compare it a bit with other companies, is it fair to assume that it would be 4.4%? Please excuse my simple calculation. Yeah, I mean, the correct way to do it would be 1.011 to the power of 4 minus 1. That's either 4.4 or 4.5. Sorry. We're badly prepared. We could have done the math ourselves, but that ballpark, yes. Yeah. Okay. Regarding the high interest cost that you had in the first quarter, is that related rather to the higher amount of financial liabilities that you have now on the balance sheet or is it also linked to more costly refinancing? Maybe you can shed light on that, please. It's both, of course, but the first, so the fresh debt at higher cost is by far the bigger effect. Okay. The fresh debt, is there any special reason why you increased your leverage on the balance sheet? I think that has mainly to do with the fact that we had devaluations of the properties, sort of, from end of June to end of September. We have refinanced acquisitions, in calendar Q4. If you remember, we had valuations upwards, sort of, in the first half to end of June, and then we've exceptionally done a revaluation of the properties to end of September to reflect the new market environment. There, of course, the values have come down. Then as we have acquired assets, sort of, over the course of the year, which we then refinanced in Q4, calendar Q4, the LTV has slightly risen as a result. Right. Right. On an absolute basis, I think the liabilities might have gone up on the balance sheet anyway. It seems that Dutch consumer has taken a bit more and more debt. Yeah. About EUR 20 million quarter-on-quarter. Yeah. Okay. Yeah. That's refinancing of the acquisitions. Yeah. Okay. Okay. What I've seen. That's my last point. In terms of your cash management, it seems that your lending has decreased. Maybe you can give us some details on that. Yes. That has decreased. I mean, as we always said, I mean, that was sort of the cash reserve. As Deutsche Konsum has acquired assets out of cash slash, sort of, lending short-term, interest bearing investments. The way this works in the balance sheet is obviously first you increase the real estate assets, decrease the lending. That already, by the way, sort of, increases the LTV because the net debt position increases because of the cash position being lower. Then thereafter, we have refinanced by EUR 23 million, to be precise, in calendar Q4. Yeah. That's what happened. Yeah. That's always what was meant to happen, of course. I mean, that's what these short-term interest bearing investments are for. Okay. Okay. Thank you. We've reduced them. Obviously we'll continue to reduce them, you know, as fast as possible. Okay. I see. Thank you. Ladies and gentlemen, as a final reminder, if you would like to ask a question, please press Star and one on your telephone. There are no more questions at this time. I hand back to Rolf Elgeti for closing comments. Thank you very much. Thanks for organizing the call. Thanks everyone for joining and for your interest and questions. If there are any more questions, we are around to help and we'll be pleased to do so. Thanks very much. Speak soon. Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for joining and have a pleasant day. Goodbye.