Hello, and welcome to the Hamborner REIT preliminary results 2023. My name is Natalie, and I'll be your coordinator for today's event. Please note, this call is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your questions. If you require assistance at any point, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Niclas Karoff, CEO and CFO, to begin today's conference. Thank you. Good morning, ladies and gentlemen. Sorry for the short delay, and welcome to our preliminary figures 2023 earnings call. A warm welcome also from my colleague, Christoph, from IR. He'll be available as usual for any subsequent questions regarding our ticket. Unfortunately, my colleague, Sarah, is not able to join the call today. For that reason, I will provide all relevant information on our business developmented out. As usual, we would like to share with you some information that relate to the transmission of the... Described in our invitation to this call, we recommend that you only use one of the dialing options. Either follow the presentation live via webcast or by telephone. Dial in via webcast and via telephone at the same time, there will be a technical delay. Be aware that you can only ask questions over the phone. But now, let's start with the presentation. After a short overview of the preliminary key figures of 2023, I will provide you with more details on the company's earnings situation, as well as our current financial circumstances, followed by an outlook. Let's start with the key figures. The 2023 financial year was characterized by significant headwinds on the investment market, enduring substantial inflation and, overall, a lack of economic growth. Despite such a challenging environment, Hamborner has managed to sustain the operational performance, growth in revenue and... Compared to year-end 2022, income from rents increased by 4.6%. Property addition expanded rent income. Our revenue figure is affected by reclassification of items within our income statement. As part of the preparation of this year's P&L, we recognize tenant prepayments for property taxes and insurance, which were previously reported under income, past costs, under rents. The earnings side, FFO, rose with a plus of more than 7%, to EUR 54.7 million, corresponds to an FFO per share of... At the decline in the NAV per share, which particularly results from the impairment of the property portfolio as part of the annual valuation plan. However, despite the challenging months that lie behind us, our financial position is still very comfortable. Let's now take a more detailed look at the portfolio revaluation that was carried out at the end of last year. On this slide, you can see a bridge showing the portfolio development in 2023. It includes effects from our transaction activities and external portfolio valuation, which, again, was carried out by our external appraiser. Basis of this reappraisal, the market value of our property portfolio declined by 10.5% on a like-to-like basis. The decrease relates to both asset classes, strongly influenced by the development of the interest environment, which is reflected in the higher discount and cap rates shown on the right-hand side. However, yeah, despite the value adjustments made, Hamborner remains confident in the quality and resilience of its property portfolio. Yeah, this confidence stems from several factors. Having a solid tenant base comprising renowned companies focused on local supply, along with the stable and creditworthy office tenants. Yeah, this is a key asset that contributes to this development of our property portfolio. In addition, indexation effect contributed to the stability and rental growth. Let's now turn to slide 4 with the preliminary key metrics for our portfolio for 2023. In the 2023 financial year, we made investments in two large-scale retail properties, one in Offenburg and the other in Hanau. Besides these acquisitions, and the sale of a smaller property in the first half of last year, there have been no other changes to our portfolio. It remains relatively stable and consists currently of 67 properties in total. The EPRA vacancy rate slightly increased to 2.8%, but continues to remain at a competitively low level. Yeah, having only 1.3% vacancy rate in our whole portfolio at the end of December is, in our opinion, a clear indication of the overall quality and stability of our property portfolio. Compared to year-end 2022, WALT has decreased only slightly to 6.4 years. As you can see on the next slide, the acquired assets in Hanau and Offenburg contribute around EUR 1.6 million to our annualized rental income. Based on year-end of 2023, our portfolio has experienced a like-for-like increase of 1.9%, mainly as a result of index adjustment. Positive effects from vacancy changes in our retail portfolio were countered by negative results on the other side. Total annualized rental income amounted to EUR 90.2 million. As I already outlined at the beginning, the increase in rental income in our portfolio was primarily driven by two main factors, namely property addition and indexation. The mentioned P&L reclassification of tenant prepayment led to an increase in income from rents and leases of around EUR 2.2 million. The revenue figure for the 2022 financial year was also increased by around EUR 2.1 million. Total maintenance expenses decreased year-on-year to around EUR 8.4 million due to the postponement of measures to 2024. Personnel expenses are slightly above previous year's level. One reason is that in 2023, our Supervisory Board remuneration increased following an AGM resolution, and at the same time was recognized under personnel expense. It used to be recognized under administrative expense. The increase in interest expenses is mainly due to refinance loans with higher loan volumes and yeah, also higher interest rates. Interest income totaled EUR 1.8 million, and mainly results from the investment of liquid funds in overnight and fixed-term deposit accounts. Obviously, a positive effect from the changed interest environment. Compared to previous year, we saw an increase in CapEx, essentially caused by measures implemented in connection with the reletting of the property. The next slide presents our current financial situation. Compared to year-end 2022, our financial liabilities have been reduced to slightly more than EUR 700 million. Most of the reduction refers to a large part of the bonded loans taken out in 2018, which we decided to fully repay last year. LTV development in 2023 was negatively affected by the dividend payment in May, as well as the revaluation of our portfolio. Despite additional effects from the acquisitions closed in 2023, LTV and REIT equity ratio have only slightly changed compared to mid-year, and remain at solid levels of 43.5% and 55.1%. Further relevant indicators, such as net debt to EBITDA and EBITDA interest coverage, amount to 10.1 and 5. On the next slide, we are now going to provide you some detail on our current tenant structure. Hamborner's tenant structure remains very solid and reliable, which is also characterized by the long-term commitment of renowned tenants with strong credit rating. A significant proportion of the rental income is generated with companies that are lesser dependent on certain degree on economic cycles, food retailers in particular. The transfer of ownership of the two additional assets last July led to a further increase in the share of the food retail sector within our portfolio. As of year-end, 2023, it's contributed to around one-third of the company's rental. With the reletting of space in our managed core property in mind, the local authority moved up to 10th place, replacing an insurance company. Apart from that, there were no significant changes in the tenant structure or sector distribution within our portfolio. Next slide will provide you with some details from the current leasing situation. Operationally, we can look back on a very successful year, 2023. Compared to the third quarter of 2023, the WALTs of our retail portfolio decreased slightly to 7.6 years. However, the overall portfolio WALTs remain at a very comfortable level of 6.4. 2023, 28 new contracts were concluded, which means that a total rental space of around 14,000 square meters was let to new tenants. In addition, as a result of lease extensions and the exercising of options, the total area of around 96,000 square meters could be contractually continued. Also, in the next years, Hamborner does not see itself confronted with any substantial cash break risk with regard to upcoming relet. This is nicely demonstrated in the graphic below, showing our actual expiry schedule. After my explanations on our operational performance, as well as our financial situation, at this point, let me go into a little more detail about our recent major sustainability topic. Last year, our sustainability activity focused on the development of a company-wide decarbonization strategy. Understanding where Hamborner currently stands in terms of its carbon footprint and sustainability efforts was crucial for setting realistic decarbonization targets and a reliable strategy. The basis for its target is therefore the diligent balancing of its greenhouse gas emissions in terms of carbon dioxide and equivalent. Following a systematic evaluation of past carbon levels, and in view of the relatively high availability and quality of consumption and emissions data, 2021 has been chosen as the base year for defining long-term decarbonization goals. The resulting corporate CO2 balance clearly shows that our administration has negligible impact on our total balance. Relevant drivers of emission are our contractual energy procurement and emissions from other sources. Most emissions are attributable to tenant-managed energy consumption. Energy consumption accounts for the lion's share, just under 89% of all emissions. Directly, through the purchase of gas and heating oil, indirectly, through the supply of district heating, and electricity, and on the tenant side, through all energy purchases in which we are not contractually involved. Therefore, reduction and decarbonization of energy consumption across the entire portfolio. Given the extraordinary importance of energy for our emissions level, in the first step, Hamborner will focus its decarbonization efforts on emissions from energy consumption. The company aims to reduce energy-related emissions at portfolio level by 50% by the end of 2030, compared to the base year, 2021. This corresponds to a reduction in emissions intensity from 56.4 kg. Of carbon dioxide equivalent in the base year 2021 to 28.2 kg of carbon dioxide equivalent in 2030. It requires an average annual reduction in energy emissions of 5.6%. In the long term, we are expanding our decarbonization ambition to include all other sources of emissions. At the same time, with these targets, we are also supporting the national decarbonization target. Hamborner has made a commitment to achieving net zero greenhouse gas emissions at corporate and portfolio level by the end of 2040. The visualization of the target along the decarbonization pathway underlies the ambitious reduction targets for the companies. The decarbonization pathway of the risk assessment tool, CRREM, which stands for Carbon Risk Real Estate Monitor, in its current version and with the objective of limiting global warming by 2 degrees Celsius, serves as the target for the medium-term reduction by 2030 across the portfolio. In the long term, Hamborner aims to reduce its emissions well below this target pathway. Nevertheless, the company is expecting low residual emissions at corporate level until 2045 and beyond, which are to be compensated via carbon offset. On the next slide, we will take a closer look at the expected costs for working on this target. To optimize our real estate portfolio, we are primarily focusing on CapEx spending this year, assuming a total of around EUR 1.7 million-EUR 2 million. For the years 2025 and 2026, an average of EUR 1.2 million-EUR 1.5 million maintenance expenses and EUR 800,000-EUR 1.2 million CapEx per annum are planned. For these years, costs for tenant improvements are excluded, as the fit-out measures necessary because of the new tenancies are too vague to be considered yet. Hamborner is currently striving to focus on areas of action that combine high decarbonization potential with the lowest possible cost and at best, low complexity in implementation. An intensified tenant dialogue to further improve data quality and the decarbonization of energy supplies can leverage high potential. In addition, several maintenance measures that arise as part of the scheduled operation of our properties also have a positive impact on the portfolio's emission intensity. This way, cost increases due to measures exclusively for decarbonization in the planning years can be limited. So overall, as we think, ambitious goals. However, we are committed to work consequently on the execution side, which will also require a good part of perseverance. Let me now conclude the presentation with the brief. Based on last year's results, as well as the overall corporate and market situation, the Executive Board intends to propose to the shareholders to distribute for the financial year 2023, a dividend of EUR 0.48 per share. This would represent FFO payout ratio of approximately 72%, slightly lower than in the previous year, but a further confirmation of our reliable and attractive dividend. Now, looking forward. Fundamentally, in view of our high-quality property portfolio, the solid financial earnings and liquidity situation, yeah, we are still looking positively to the future. For 2024, we expect a further increase in income, assuming income from rents and leases between EUR 91 million and EUR 92.5 million. FFO is expected in a range between EUR 49 million and EUR 50.5 million. Total income from rents and leases should be positively influenced both by the acquisitions made in 2023, and by further index-based rent increases as a result of inflation. On the other side, we expect a lower FFO compared to 2023, especially driven by expected uncertainties on the letting markets, and higher costs, including shifts from last year. Please keep in mind that this guidance does not include effects from potential transactions. Yeah, ladies and gentlemen, with this, I would like to end the presentation and move on to the Q&A part. Thank you very much for your attention, and we are now looking forward to your questions. Thank you. As a reminder, if you'd like to ask a question on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. Thank you. Our first question comes from Kai Klose from Berenberg. Your line is open. Please go ahead. Yes, hello. Good morning, everyone, thanks for the presentation. Just a very quick one on the comments on the last page, on page 14, you see as influencing factor, support from indexation effects. At the same time, you mentioned uncertain letting markets. Could you give more details what you expect on your renewal profile or let's say, lease expiry profile, how this is likely to come out in terms of tenant retention rate and, or lease renewals to the up or to the downside? Yeah, I mean, if you see that the volume of expiry is as of today, we still believe that the retention rate should remain on a high level. Our commitment, more general driven, firsthand, because what we see is generally on the letting market, certain signals that bring us Hello? Hello, hello. Hi, can you- Hello. Sorry, Kai, can you hear me? Might be a problem. Yeah, it looks like Kai has disconnected. Once again, if you'd like to ask the question, please press star one. We will now take our next question from the line of Ben Cece Ivey from Kempen. Your line is open. Please go ahead. Hi, good morning. Thank you for taking my questions. Unfortunately, just joined, so I'm not sure if these have been asked yet, but first one on yields in the transaction market. So we've seen parts of an EDEKA portfolio recently refurbished, transacted 6.5 net yield, and also now, Branicks is selling a portfolio at 6.7 gross. And if I'm not mistaken, your portfolio is currently valued at 6.1 or 6.2. So do you expect further yield expansion in 2024, or is it a quality difference? Yeah, first of all, good morning, and thanks for your question. I think there are a couple of, couple of effects, or a couple of, points that, that you have to consider. One is, for obvious reasons, it always depends on the individual assets, size, location, condition, et cetera, and you always have a certain, range here within, even clauses, and, and other factors, tenant structure, et cetera, et cetera. So therefore, you obviously have the range that, that you're moving in. Secondly, with the core portfolio, we feel very comfortable with, with our own quality here. Looking at the market, I think it would be fair to assume that there might be some additional expansion on the yield side during the course of this year. How much is difficult to estimate for obvious reasons. Obvious point, I think, is that based on the fact that the transaction market is rather limited so far, there are not too many data points available. And I mean, many market participants, I would assume, are hoping that, as we do, that the market gets up to a different speed again, and that we see more data points, and then it should be also easier to make any kind of predictions. Okay, thank you. And then the second one would be on the FFO guidance. So, at the midpoint, there is basically a 7% decline, and that's excluding one-off. So the positive one-off from 2023. In euro terms, that is EUR 3 million-EUR 4 million. And then looking at maturity, there is limited maintenance, of course, is postponed, but then in 2023 and 2022, it was already higher than 2021 and 2020. So then, I would assume that you're also a bit more cautious on the top line. Can you share the assumptions you're working with? Yeah, I mean, I think we are on the top line, we expect some positive effects from the two acquired properties of last year, of which the rent obviously was not fully reflected last year as the transaction happened during the course of the year, based on the time of transaction. So we expect a full effect in our P&L on a year basis here in 2024. And secondly, we also expect some additional effects from indexation. But overall, concerning the like-for-like development, as of today, we would yeah, we would rather expect a bit lower level than in 2023. But that's just a guess at the moment, because we have so many influencing factors as of today. Yeah. Okay, thank you. That's it from my side. We currently have no questions coming through. As a final reminder, if you'd like to ask a question, please press star one. There are no further questions, so I'll hand this back to Niclas Karoff to conclude today's conference. Yeah. Thank you very much for participating and for your patience. A bit longer today concerning the presentation of our decarbonization strategy. And should you have any questions later on, please feel free to give us a call and or get in touch with us. And apart from this, also on behalf of Christoph and our team, yeah, have a good remaining day and a good remaining week. Thank you very much. This concludes today's call. Thank you for your participation. You may now disconnect.