Good day, and thank you for standing by. Welcome to the SimCorp A/S Q1, 2022 Results Presentation Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you will need to press star one on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, CEO Christian Kromann. Please go ahead, sir. Thank you very much, and good morning to everybody. Let's get cracking, and let's go through the slides and then do the Q&A in the end of that. As normal. First and foremost, the disclaimer. You've seen that many times before. It's always important. I don't think we have to take you through it. We're gonna do the Q1 highlights. I will do that, then Michael will go through the financial review and the outlook, and then we will open up for Q&A. Let's go through the Q1 highlights first. First slide, where we talk about our forward-looking KPI, the ARR number that we do the last couple of quarters, as explained to you. That's the key KPI inside SimCorp. That's how we steer from, and that's also how we make investments. Obviously pleased to say that that's continuing a high growth rate, which is also a pretty good mirror on how our business is overall developing. We see a 10.4% year-on-year increase in ARR to EUR 283.2 million. That also corresponds to still little bit more modest, but also a good change in our revenue signed on contract up to EUR 356 million. As we also discussed in the beginning of the year, we continue to track the standard KPIs at the very least, to make sure that you also understand how the fundamentals of the business look in the traditional way. Let's quickly go through that as well. We come through Q1 with a very nice uptick on order intake. Some of it is linked to some renewals, but some of it is also linked to generally new business, both in terms of net new business out of existing customers, but also two new SimCorp Dimension customers were signed, and actually one SimCorp Sofia customers was signed in Q1. There's a few extra customers coming through that I will also talk a little bit about later in a slightly different context. That leads to a traditional revenue growth of 4.3%, which I guess i exactly what we expected inside SimCorp. It's almost on krone and euro, as we would say in Denmark, on budget. It is pretty much a normal Q1, where you're dusting off a little bit after the party in Q4, and then getting ready to build new pipeline for another party in the later part of the year. Nothing has really changed there from a license point of view. EBIT lands at EUR 15.5. That's relatively a direct function of the order intake and the fact that there's a few renewals into it. And then we have 2.5% increase actually in our software maintenance, which is a good evidence that we maintain to have a very solid customer base, staying and being sticky with us. We also continue to have growth on our professional services of just under 4% in Q1. Free cash flow, which I know, Michael will come back to in his part of the presentation. If we quickly look at the new client generation, as I said, three customers signed in Q1, two Dimension, one Sofia. That was actually the first North American customer in quite a while, which we're quite excited about. There will be some information coming out about this customer, shortly, which is actually super exciting about a new way to approach, some of the segments in North America b ut you will have to watch this space, in a couple of weeks, from now. We've also continued to sign, more business into Q2. Actually, Sofia has continued to sign more customers, but there's also more waiting in the pipeline. I think as a whole, H1 is expected to be a little bit slow, almost as normal as we also talked about in the beginning. We've also continuing to sign channel partner customers as part of the redistribution agreement. I'll also quickly touch on the other announcement this morning, which is yet another initiative that brings us further into the channel partner opportunity. We say. If you just count the number of people that are increased in terms of people that are using SimCorp Dimension, it's obviously going up quite nicely. Given that some of these customers are coming in through a different way of selling, you start to see the real impact of a service transformation into our revenues. To kind of continue that part of the conversation, we also signed three customers on the investment accounting service we announced a couple of quarters ago. We're obviously truly excited about the fact that we can build a service so fast that three customers are willing to basically jump on the wagon relatively early on in our development cycle. I would say those customers have been carefully selected, so they're actually somebody we can take live with a high credibility and build basic credibility around the entire platform. The first one is actually going live shortly, which for people that have known SimCorp for a while would realize that this is a different time to value than we are talking about compared to normal SimCorp Dimension. This is the area where we take full responsibility of producing the accounting entries. We do it in a multi-jurisdictional, multi-asset capability. It's a technology-enabled service, which is obviously important in this context because we're using our own software to fundamentally automate the customers' processes, and then in the end, allowing them to concentrate on their business, which I'm also gonna come a little bit back to. I also wanna say quickly related to overall market opportunity, there continues to be a very solid, transformational drive from our existing customers that we are translating into both licenses and services. We are very confident in that. We're also very pleased to see that for the first time after COVID, that we see a real portfolio of qualified opportunities coming out of North America. We are tracking that quite carefully. Now it's all a matter of whether the customers will, in fact, make decisions, and then it's obviously also a function of our competitiveness and our ability to win them. As I said a couple of times today, there needs to be business on the table in order for us to be able to win it. For the first time now, in almost two years, there's now a real portfolio of qualified opportunities in North America. I'm actually going there on Sunday, which is my third trip this year. Real positive development on that side. Let me take you through a couple of more strategic ways of explaining what we're doing. A lot of these things are obviously evolving as we speak in our overall readiness to have a very exciting deep dive with all of you when we get to October, 6th, which I also know Anders will say a few words about a little later in the presentation. In essence, we are obviously spending all of our time understanding how the markets are developing both for us from an opportunity point of view, but in the end also how it's developing from our customers' point of view. It's becoming clearer and clearer. Well, it's amplified by the current volatility or the current whole market situation. I think it is, but it actually started way before that. Our customers wanna focus on the core, and they want us to help them focus on the core. Whether it comes from market drivers, inflation, sustainability, fee cost pressure, new regulations, whatever, or the fact that they are changing their strategic outlook to be more multi-asset to include passives or alternatives into what they do, or whether it's operational concerns about access to people, access to knowledge, or overall, potential, that we hear quite often, cyber risk. All of these things is pointing in the same direction that our customers and our prospect wants us to take a substantial bigger role in that all the way from operating the platform b ut as we also just talked about investment accounting as a service, they want us to take responsibilities for the parts of what they do that they don't see as differentiating in their business. In essence, focus on core. If we then put that into a SimCorp context, you ultimately have traditional versus new. The traditional is the on-premise software, which from time to time we still sell. We still have traditional, ALF licenses coming out of our existing customer base. When we look across the board, it is quite clear that this is shifting towards software as a service. On a traditional outside or outsourcing, area, I think SimCorp has never really tapped into that, but we can see the market is really changing that what you really want is your partner to use their technology to enable your business services. Because if the only thing you get is just cheap labor running the same legacy platform, then you're not really getting any business agility out of it. Everything we do now is centered around software as a service and technology-enabled services, and we are slowly but surely also changing the way that SimCorp operates to take full advantage of this opportunity in the market. To give you a good overview of how we think about things and what is on the shelf, if you will, we've created this slide to give you a flavor of how it looks inside the stomach of SimCorp as it currently stands. What does the salespeople have in their bag when they go out and speak to customers? It basically looks like this. You have our SimCorp Dimension, our reporting engine, our data management, and then you also have Sofia that just won a new customer for the first time in a while. Here it's ultimately the old school customers running the technical operations, customers running the business operation. Still exists. As you all know, still a big part of our existing customer base is operating that way. It's also clear that they are moving to the right in different speeds. From a SaaS point of view, SimCorp Dimension is now fully established. We're doing a lot of things with Azure and all of these things, but it exists in the market. I think we just crossed more than 35 customers that are running SimCorp Dimension that way. We also have Coric and Gain being delivered through a SaaS engine, and there we now crossed 55 out of the 300 combined customers we have. Here's where SimCorp is fully responsible for the technical operations. I think that area will continue a lot more towards automated testing and standardization, but already now we're responsible for the operational side. Still the client is responsible for running their business and configuring their business. Then we've got the new kids on the block, which is also evolving. Here you will also see some exciting news coming out in a couple of weeks, where that part of the portfolio is also evolving further up the value chain of our customers. Starting with data management, that is the most mature, where it's now around 15 customers. Investment accounting as a service, three customers were the first ones going live. Then you can start to guess on where we would go next on that one, but that will soon be clarified. That's where SimCorp not only take the technical operation responsibility, we also take the business operation responsibility. The beauty of all of it is that all of it can coexist in different delivery models, and we see more and more customers actually going that route. Even existing customers that still run the core SimCorp Dimension themselves, but they are acquiring and subscribing to our services around that all the way to actually, in the end, out-task some of the functions to us. That's ultimately what we are now scaling the organization to be able to do. Let me do a few words around the MOU that we have signed with an existing APAC customer. We obviously know who what the name is, but there is some confidentiality on the customer side that we need to get through. In not too distant future, the full setup will be revealed. It's super exciting, and it's yet another proof point on the platform mentality that we're trying to engage with at SimCorp. Here we talk about a customer that we've had for a while. They've done an extremely successful implementation of SimCorp with our help, and they now find a real opportunity in the market to leverage that platform in a much more bigger way. That, what that gives SimCorp is obviously it gives us some quite a substantial deal to allow our customer to take that route. It actually allows us reach both from a geographical point of view, but also from a TAM point of view, which makes it completely exciting. What is a little bit new here is that we've decided to co-invest with the customer into a new co that takes over that operational responsibility. We actually think it's a really good use of capital, and we're quite excited of going in and test that. Will we do that across the board everywhere? Of course not, because then you suddenly will start to erode the platform opportunity that we've been in, where you start to select what partners can go. In the end, net-neutrality is quite important for us, but in this particular case, it actually makes really, really good sense. We look forward to share you much more information about this in a couple of weeks. It wouldn't be right for me to go through Q1 without talking about Ukraine. Last time we talked about having a plan in the drawer that if shit hits the fan, then we would take it out. At least at that point, I didn't expect shit to hit the fan, but a few weeks after, it did. I can only express yeah strong feelings about what I think about that. In the end, my duty is to ensure that SimCorp's employees are well taken care of, and that's exactly what we've done. We've chosen to single out the cost that we are spending on this n ot because we are, It's a one-off thing, it's special circumstances, but we believe it's important to signal that this is real. Status currently is that half of our staff, roughly half of our staff has gone to Poland, where we are taking care of them, including facilities and everything required b ut there's also still a relatively large part of our staff that are still in Ukraine, but in the western part of Ukraine. Then there's a few examples of where family situations is forcing them to be in other places. This will continue until it doesn't continue anymore. Right now there's actually a feeling that some people might wanna go back, and we've asked them to hold their horses, because as we didn't expect the war to happen in the first place, it's fair to say that at least I don't know what to expect will happen next. The good thing about all of this, if there is any good thing, is that we are very close to 100% productivity, which I have to say is a big shout-out to our Ukrainian colleagues, that they are capable of working this amount of hours during a war situation. From a SimCorp operational point of view, we are very close to where we should be. In the end, I guess, an okay story, but obviously taking the viewpoint of our staff is obviously still an absolute nightmare and very difficult to deal with. I also quickly wanna take you through what we managed to do for the first time in a while as well, was to have our so-called famous IUCM, which is an annual get-together of customers and partners and SimCorpers. This year we were actually sold out for the first time in a very long time, which basically means that people really wanna get back together and see each other. It's clear that travel patterns has changed a little bit, so it became very much a European event, which also means we are repeating some of these things in our other regions later in the year. It was really cool, and the buzz was just phenomenal among this group, including both predominantly clients, but also a couple of really cool prospects. On those words, Michael, over to you to give a bit more deep dive on the numbers. Yes. Thanks a lot, Christian, and I will move on to slide number 16 for you, for those of you following the slides. As Christian said, the Q1 was as expected and also what we communicated last time. We had this call where we said that both Q1 and H1 we expect that to be a modest development in these two quarters, and then we are back-end loaded and also as normal. In Q1, we had a 4% increase in our revenue, both reported revenue and in local currency, and the margin was around 13.5%, again, both in reported and in local currency. If we go to the next slide number 17, the order intake. If you look at the picture on the right-hand side, you clearly see the pattern where we have by far the highest order intake normally in Q4 and normally also starting the year relatively modest. Despite that, this year we were having an order intake which was double the size of last year. Also as Christian said, to a very large degree due to early renewals of two agreements in North America where we will recognize revenue when the old subscription agreement is expiring, which will be in 2023 and in 2027, respectively. You can say the reason why we do the early renewals is of course also because we do some upselling in connection with doing the early renewals. So that's a good thing. It's also creating security that we will prolong these agreements for a longer period. If we go to the next slide number 18, the order book, you also see that the order book is increasing. It's increasing by EUR 8.5 million compared to the last quarter Q4, 2021. If you look, go one year back, it has increased by EUR 32 million. Of course, part of it, and a large part of it is due to our subscription services like Data Care and so on, that is growing. As we revenue recognize these services over time, that will automatically add to the order book and have the order book increasing. For CDD, so client driven development, we have a quite stable order book. We have revenue recognized something, and then we have added a little more, added something as well. A stable order book for CDD. Next slide number 19, showing the different revenue streams. Christian mentioned earlier on a 4% increase both in software update and support and in professional services. You could say hosting and other fees are growing quite a lot, as we are having more and more hosted clients onboarded. When they are getting onboarded, we are then also revenue recognizing that activity, and thereby we are increasing the hosting and other fees. For the license part, we are lower than last year at the same time, and that is primarily due to last Q1. We had some renewals in North America, which was revenue recognized in Q1, which you could say inflated the add-on license last year. That's the primary reason for the lower license revenue this year. This can also be seen on the next slide 20, where you can see that the additional regular license sales is going up. It's EUR 6 million compared to EUR 5 million last year. On this slide, you see the impact from one conversion we did in Q1, where there were new conversions last year and a lower impact on renewals due to the large impact in Q1, 2021. On slide 21, we have the cost development, and as expected, we have an increase in cost in Q1, primarily impacted by investments into the future, where we are investing in our SaaS offering, including not least investment accounting services. We also had some additional costs related to supporting and helping our Ukrainian colleagues, which Christian also talked about earlier on. For the cash flow, we had a free cash flow of EUR 20 million, so higher than both EBIT and net profit, which is very normal because we do some annual invoicing in the beginning of the year. We also had some you can say late invoicing this year due to ERP implementation in some countries, which means that cash inflow will come a little later this year. At the same time, we had some timing of income taxes, payments, and salary related tax payments, where we paid them in the beginning of the year instead of in Q4. Instead of paying them in Q4 last year, we paid them in the Q1. There was a timing of payments in Q1. My last slide before we go to the Q&A. That is the full year guidance. We are maintaining our guidance with one exception. The exception is that the exceptional extra costs are related to Ukraine, which we believe will be around EUR 3 million-EUR 5 million for 2022. We maintain our guidance, which we stated in our annual report three months ago. You can say we paid that we had extra cost of EUR 0.8 million for the Q1, but in reality, that was primarily in March because of the you can say when the war started. We expect for the full year that the cost on an annualized basis will be between EUR 3 million and EUR 5 million in supporting our people. You can say the last thing, which Christian also mentioned, that he said Anders would mention, but I think I will take it now where I have the word. Please save the date. We will have a Capital Markets Day in at October 6th and we will host that in London, as we believe London is probably the best location for most of you. It's easy for you to either get there or you are there already. We hope to see as many of you as possible in October in London. Now we will hand over to Q&A. Thank you. As a reminder, to ask a question, you will need to press star one on your telephone. To withdraw your question, press the pound hash key. Once again, please press star and one on your telephone keypad if you would like to ask a question. Your first question today comes from Daniel Djurberg from Handelsbanken. Please go ahead. Your line is open. Thank you so much, operator, for taking my question. Yes, hello, guys. I have Hello A question starting with the pipeline. You give some positive comments that the early sales pipeline, i.e., the funnel, is improving, not least in North America. I was wondering if it's possible to somehow quantify this in terms of anything, number of meetings or number of somehow to quantify how you measure this. Yeah. No, the way we, as you would imagine, we are running a funnel. The way we track that in SimCorp is what we would say is a qualified opportunity, and that's when it becomes real. That's typically an RFI, an RFP. It's that number that I'm saying that is now back at pre-COVID level. I don't think we disclose what that number is because then you kind of start to calculate the wrong way anyway. Okay. Fair enough. Perhaps a question to Michael on the cost side. As the marketing cost is up, obviously on back of traveling, meetings, and sales commission being up, I think it's up 260 basis points year-over-year. Should we expect a similar lift around 200-300 basis points compared to sales also in the coming quarters of 2022, or will we perhaps see some leverage from the s ales commission or? I hope it certainly goes up because if that goes up, it's because we are selling more. Joke aside, I will say Q1 is a little special in terms of Q1, 2021. Some of the revenue we took there, that was actually something we sold in 2020, and therefore also you can say the commission paid on that was expensed in 2020. We didn't have that much in Q1, 2021 and then in Q1, 2022, you know, we pay commission when we do the order intake and not when we do the revenue recognition. That means that I would expect less increase in sales and marketing costs for the rest of the year. Hopefully it's still going up quite dramatically because we simply want our salespeople to travel and have meeting activities. As Christian also said, for the first time in two years, we hosted our IUCM. That is not, there is a cost related to having such a conference, but it's absolutely worthwhile. Again, that should also fuel selling to especially existing clients going forward. A long answer. I expect the sales and marketing costs to go up, but less than what you saw in Q1 percentage-wise. Perfect. Thank you. If I may ask you also a question. I'm really impressed by how you have managed the Russian aggression in Ukraine with your employees and so forth. My question is, really, there is also obviously a cyber warfare out there trying to from both sides, I guess. Can you comment if the risk for your operations has increased on back of this cyber warfare? Have you had any incidents or something that would be worth talking about? Thanks. Yeah. I think it is good and relevant question. Of course, this is something we are following extremely closely. We have an IT security team who is doing nothing else than monitoring such things. I think we have taken some preventive actions. We have closed all of our lines to our office in Ukraine. The way people are, you can say, working is from a safe or a relatively safe environment. We don't have, you can say, an open internet door to our office in Ukraine. We are taking preventive actions, and I think that I can say very clearly, we haven't seen an increased activity in attempts in any way, so far. It's something we, of course, is monitoring. I think we're also doing pretty much the same as what the customers are doing, is that they are pushing their operational environments to a well-recognized cloud provider. What we are doing is building our services on top of Azure for those exact reasons. Yeah. We are also pushing our internal environments onto Azure. For that reason. That's actually the key selling point to our customers when they go from on-prem to as a service as well. Agree. Thanks. I will go get back to the queue. Thank you. Thank you. Thank you. Your next question comes from the line of Hannes Leitner from UBS. Please go ahead. Your line is open. Yes, thanks for letting me on. Maybe you can just double down on the sales pipeline in the U.S. It sounds very encouraging, and by you, Christian, traveling three times over there, that seems good. Is that also something to last? Maybe you can talk about the different customer cohorts within that group. Then the second thing is just like on those cloud or SaaS investments on operations at post-portfolio services. You were not able, or at least you didn't want to quantify what upside it is there. Just like thinking that putting this in context also with the inflation environment, a little bit preloading the Capital Markets Day in October. Can you talk about should we expect that growth accelerates from here? Will this be supportive, or is this a measure just to keep trying to tick the 10% constant currency growth going forward? Thanks. Yeah. Good questions. Let's start with North America. I think we touched briefly on it last time is that a couple of different steps, actually, also leading up to to the 6th of October. Obviously, we'll share what we know, right? I guess I felt that especially after COVID also, that I wanted to have a re-evaluation of the size of the opportunity in North America. Here I don't think about the pipeline as such. I think about what is the market opportunity if you take our current definitions of the market, which typically we little bit depending on when you ask us, but somewhere between EUR 15 and 20 billion under management is kind of where our market starts. The team has done that quite diligently the last couple of months and has actually come to the conclusion that the size of that addressable market has gone up a bit, which actually, to be honest, surprised me a bit. The reality is that there might be mergers and consolidation going on, but there's quite a few asset managers and investment managers that has gone from very small to now breaching that floor that makes it interesting for us to speak to them. There's no doubt in our mind the North American market remains a very important part of our growth story. That's kind of step number one. We will obviously kind of share data on that once it's fully qualified. As you would imagine, next, the next step is now how do we invest our money to maximize our probability of winning in that market? That's basically what we are now working on as part of our normal strategy process. That breaks that market down to asset owners versus asset managers, what type of asset managers, bank treasuries and all the kind of those good sections. Plus the fact that you need to have a good understanding of is it the front to back story that sells? Is it the servicing story that sells? And all of these things, and there are certainly some trends that indicate that it was a good decision to make to go down the services path. Now we need to build credibility around that services path, so we can combine that with our software offering. I think that's probably one of the bigger decisions we have to figure out how do we amplify that also from a geographical point of view. That's somewhat also why the MOU discussion is quite interesting, because that's actually one example of how you can amplify your reach and your credibility about your service by taking an existing customer and take out that service. I would say market is intact. There's RFP, RFI processes to the same level of pre-COVID. The real hardcore decisions that we are working on is how do we add additional capacity to the investments that makes us maximum competitive in that space. That's really work going on now, so we can be a little bit more outspoken about what should you expect as a good result out of North America going forward, so we don't sit and talk about something that was said many, many years ago. That was that one. The services transformation, as we spoke about. We just, we've gone from, I think we talked about that journey a couple of times, where you go from a standard install on-prem relationship. You add basically more licenses because they wanna do more front to back, more multi-asset, etc., what have you? You add the software as a service element, and you potentially add some business process as a service, but data management on top. That journey, we kind of done three, four, five times now with customers that has committed. That's where I think the last time we said that it's not uncommon to see a triple of the run rate, potentially even quadruple based on what you get. We feel we have a value proposition in that space. The question is how do you scale that? Because as I think we also said, we have around 250 customers that are still on-prem, and if we take them one by one, then I will be, I don't know, 150 years old before we're done, and I don't expect to work that long. Somehow there's a scalability discussion inside that with that we needed to do here. It's fuelled our growth massively, but it comes with a cost. I think that's the other big discussion. How do we make that scalable and profitable? I think all of you have said, now you need to explain how you intend to do that. That's also what we are working on. We actually just earlier today announced to the wider organization that we are basically doubling down on the SaaS transformation and in what ways we are doing it. The opportunity is there. Not to sound arrogant, but it's almost how quickly can we grab that opportunity and still deliver quality? I think that's for me, the essence of it, because if we go too far and start to unbundle stuff and people get abandoned, you know, then it goes very quickly the other way. I think that's the way you have to see it. You know, for every quarter it goes on, I'm pretty certain that there will be some new strategic transformations, transformational deals that would start to give you more data to feel how this is looking. That's great, and very clear. Maybe just to follow up on both topics in terms of headcounts, do you see that you have been replacing or hiring in the U.S. the right salespeople? Then also in terms of the SaaS opportunity, does this demand a new breed of employees and engineers? I would say, I hope we hired the right salespeople in North America. We've recently been through a restructuring, and we got some good existing talent mixed up with some good external talent. Now they have a pipeline in front of them, and now they need to show that they are the right people. Okay. Great. Thank you. Thank you. What was the other question you had? Just on terms of the SaaS capabilities, do you need to hire the new people or is that you can transform existing employees? No, but I hear it's a very, very good question, right? Because that is really down to the bottom of the foundation of what we are doing. We need a lot of good people that really understand SimCorp, and we're lucky to have a lot of good colleagues there b ut it's also clear we need to add substantial amount of new talent to kind of get. Because it's kind of a two-way street. How do you build that capacity in a credible way? How do you make it profitable? It's both a growth and a cost optimization task. You know, it's not super straightforward, but we are hiring some good people at the moment. Great. All the best. Thank you. Thank you. Your next question comes from the line of Poul Jensen from Danske Bank. Please go ahead. Your line is open. Yes, thank you. I have two questions. One question is about the full year and the guidance. Of course, you talk about an improved pipeline and especially in North America. My question is more given the macroeconomic uncertainty you see when you look out the window and billing cycle, which typically is quite long. Do you see a higher than normal risk on delivering on the full year, or is it just a normal business as you see it? No, I think there's two ways to look at that. The first one, and I think I've also said that a few times over the last quarters, is that SimCorp is now in a situation where it's not black and white whether we win the right ILF deals anymore. It's still important to win ILF deals from a competitive point of view and fuel the engine. From a financial result point of view, we have a lot of handles, if you will, also in the existing customers to do that. I think that's from a risk point of view, especially given that the, I don't know what the right word is, the volatility across multiple sectors is also driving our existing customers to do these transformations. Actually makes us quite feel okay about that. It's you know we wanna win in America, and we said that for years, right? That's also why I say now the deals are there. Will they in fact make the decisions now that some of their fees are under pressure given that the valuation of their portfolio is down, and can we win? Then both have to point you know it's not fun to win at a process where they then don't make the decision in the end, which unfortunately we've seen a few times. It's a good question, Poul. Then a more structural one. You have now been published these ARR numbers for a number of quarters so that we can do one and half year, I think, on year-on-year growth. I know that you are more backward-looking than others. If we compare it to at least the four peers who also publish ARRs, you consistently over those six quarters have grown at the slowest rate in the market, and your numbers include conversions. What's your take on any potential structural issues why you are behind on the growth rates? Just from a technical point of view, you know, you don't get any ARR effect from conversions. Just to make that clear, that has no impact on ARR if you do a conversion. You are right. We do see some of our peers, they have been growing quite fast. I think for some of them, they are in other segments than we are. You can of course argue, are you in the wrong segment? That's the segment we are in. I think, you know, for some of them, they are also growing without profit. That's of course a strategy as well. We would like to grow with profit. That's I think because we are in many ways a more mature organization than some of the peers. I'll finally say that our peers, they're growing more than us. It shows that there is a potential for us and there is a market for us as well. Okay. Thank you. Thank you. As a reminder, if you would like to ask a question today, please press star and one on your telephone keypad. Your next question comes from the line of Lukasz Wojcik from Goldman Sachs. Please go ahead. Your line is open. Hi, Christian and Michael. A couple of questions from me. First one mostly on cash flow. You flagged delayed invoicing and payments. How should we think about the working capital for the rest of the quarters and this full year? Do you expect some reversal in Q2, or this is something that you're observing that will carry on? Then second one, on the memorandum of understanding that you've signed, will the combined entity have some sort of preferential pricing for licenses and SaaS solutions from SimCorp? And is it gonna come at the group level gross margin, or is there some better pricing that you will offer to that combined entity? I can start with the free cash flow. I think for the last three years at least, we have had an improvement in our working capital. You can say we have really optimized our working capital for quite a long period. Of course, there is a limit to how much you can do. You cannot do it forever, improving every year. I think the level we had last year is close to what we believe is optimal from a cash flow or from a working capital perspective. You could say the timing between Q4 and Q1, that will be permanent. That's, that will not regain. For the receivable part, there we believe to regain some of it during the year. If you look at the receivable, that should be better during the year. For the tax-related part, which will be either on the tax line or accruals, that will be something we cannot regain. For this memorandum of understanding, it's on normal pricing terms. There's no special discounts or anything like that. That is quite important for us because we do also have other clients in this field, so it has to be on a market conform way we are dealing with this. That's also the case for this deal. It's a market pricing and no special discounts. It's the knowledge and the experience of the client, that is gonna make this competitive. Yeah. Got it. Thank you very much. Thank you. There are currently no further phone questions. I will hand the call back to you. Great. I think we actually have two questions here on the webcast. The first one is from Ron. Basically says, "If I understood correctly, markets needs are moving more and more towards customized solutions. If this is right, how do you explain this trend? What is the reason for that?" Yeah. I certainly need to improve my communicative skills because that's pretty much the opposite of what I was trying to say. So good that you ask. I think for us, it's more a matter of the fact that our market, the clients that we serve, they wanna focus on their core part of their business. They basically want to outsource or out-task, if you will, the non-core part of the business. Here's where we step in because utilizing our own technology, we can automate that and standardize it. In the whole environment, it's an assumption that through our knowledge, we can actually standardize it. It's pretty much the opposite actually. Right. Then the second question is from Fred Henson, who says, "Firstly, thank you for the detailed info about the Kyiv office. It seems like you're handling the crisis very well until now." So thank you for that. Thank you. Where are the people doing the investment accounting services placed?" Yeah. The way it basically works is that the investment accounting services ultimately subscribing to the SaaS services from SimCorp. The SaaS service is delivered through a global organization now, close to being one of the biggest ones inside SimCorp, actually. That's everywhere, and it's global, and it's 24/7 because it has to be. The additional layer on top ultimately to deliver the investment accounting services is people with accounting and business knowledge. We basically hire them where they are. Quite a big part of them sit in London and the U.S., and we also are now building up a commercial organization that is global. It's that mix that makes it quite powerful. Also the SaaS people, the people who deliver the platform, the daily services, they're not in Ukraine, they're all outside Ukraine. That's a good point as well. That's Georg Hetrodt, our COO, that commented that we have no business operations interruptions from our Ukraine location at all. Okay. I think that was all. Great questions as always. Good to talk to you. Hopefully you now put a big cross in October 6th b ut we also obviously see you and talk to you before that in August. Take care, everybody. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.