Good morning, and welcome to the DDM Holding conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Mr. Florian Nowotny. Thank you and over to you, sir. Hello, everybody. This is Florian Nowotny welcoming you on behalf of DDM to our half year conference call. We put together a short presentation of today's call, which is also on our webpage, ddm-group.ch, investors, financial reports, presentations, if you wanna have the slides in front of you. With this, I jump right into this presentation, on page three, to again give you an overview on the platform that we are running. We have structured the business along four lines. The first one, of course, is our core business, which is our debt purchasing NPL business. This obviously is something where, given the current volatility in the markets and the general expectations about rising pressure on households and companies from inflation, et cetera, we expect interesting momentum to come towards the end of the year with hopefully more portfolios coming to market. For the moment, things are still quiet, but this is definitely an area where we see more dynamic coming up in the next quarter. Our second business line that we're trying to build up is our investments in financial institutions and consumer banking in a wider definition. This is really where we try to invest into situations where we see value dislocations in financial institutions coming out of pressures on behalf of bank owners or banks needing to restructure and then similar things. That's where we have on the one hand our 10% stake in Addiko Bank, and on the other hand, the pending acquisition of Swiss Bankers, which I'm gonna talk about later. As a third business line we have what we call real estate and special situation assets. As the most of our NPL portfolios are based on secured real estate loans, we have quite a significant experience and exposure to real estate and gonna try to put this experience and investments into a little bit more structured approach. As part of this, we also acquired a small stake in an Italian real estate platform, and are looking to expand also in the Italian distressed special situations real estate sphere. The fourth line, that's something where we've made some changes now, is the loan and asset servicing. As you recall, AxFina, which was a sister company to the DDM Group, has been doing our loan servicing. We've got repeated feedback that this adds to the complexity of the group to have this totally outside the consolidated DDM platform. We now acquired a 51% stake in AxFina to bring this closer to our core operations. On page four, the key highlights of the second quarter 2022. If you look at the collections lines, it was pretty much in line with what we've seen the previous year. I think it was, as I already explained during the last calls, at the moment we are dealing with a number of also larger real estate-related situations where it's always quite more chunky than granular consumer unsecured collections. We expect some more significant collections in the third quarter and have more or less business as usual in the second quarter. What we did see in the second quarter is mark-to-market effect, a negative effect of EUR 2.4 million from the share price volatility in Addiko. Hi, this is the Chorus Call operator. May I know your name and company name, please? Any volatility in the share price shows also in the P&L, which was the case in the second quarter. Of course, once this goes up again, it will reverse. This just brings some volatility on a quarterly basis in the P&L. We had some positive effects in the second quarter, counterbalancing this a little bit. On the acquisition process of Swiss Bankers, we are still in the regulatory approval process, which is dragging out a bit longer than we had expected and had hoped for. Regulators seem to be very busy these days, and that's why things took a little bit longer. We are now evaluating jointly with Swiss Bankers and with the sellers how to optimize the situation. Fourthly, as I already mentioned earlier, after the end of the quarter, so in the first week of July, we acquired a 50.2% stake in AxFina, so to bring this servicing business closer to our DDM platform. At the end of the quarter, we had [EUR 55 million] of cash on our balance sheet, which obviously on the one hand is earmarked for the Swiss Bankers acquisition. Most part of it was used also for the AxFina acquisition, and we are now evaluating how to prepare ourselves for what we expect to be market opportunities towards the end of the year, given the volatility in the markets. At the moment, the markets are still a little bit hard to read on the investment side, because everybody is expecting more pressure on the credit side. I think we are not fully there yet, but this is where we expect to have more visibility on some more investment opportunities towards the end of the year. Jumping to page six, where I think there's not much change to what we presented the previous quarters. As I said, a key characteristic of our portfolio is that we have a significant portion of our exposure on a secured basis and ultimately tied to real estate. To be more specific, a lot of it really to real estate in Croatia, which is why we are quite confident on the values in our NPL portfolio, because so far we have not seen significant impacts from either inflation or other pressures on the real estate market in Croatia especially, as that is a market that has been performing very well over the last two years. If it is stabilizing now, it's still stabilizing at a level which is stronger than what we had when we actually did the underwriting for most of these portfolios. That's why I think we're pretty confident on the values and expected collections on our current portfolio, and this is going pretty much according to expectations. Also looking at the various markets, I think, although the nature of our exposures, even in places like Hungary, where clearly there was a lot of also volatility in currency, et cetera, actually performed quite well. I mean, it's a rather long tail portfolio we have there, very few surprises. I think we have a rather defensive portfolio that should help in general market situation as we are at the moment. On the financials, I think it was... This is the Chorus Call operator. Over and the small effects that I mentioned earlier. I think there were no surprises in the P&L, which overall also, if you look at the last 12 months figures compared to where we were in 2021, it's pretty stable. I think for us, the key thing will be to deliver on some of those larger real estate-related tickets in the next quarters so that we actually achieving our goal of having, you know, higher overall collections in the coming two quarters than we had in the last two quarters. We're quite well on track on this, especially this one larger Croatian real estate asset where we have signed an LOI and expect to go into signing and execution in the third quarter. I think that, in a nutshell, and finishing off with page nine of the presentation. Summing up, as we said, it's, I think, operationally pretty stable and in line with the prior year. On Swiss Bankers, we are dependent on the regulatory approval to move ahead. We are, you know, liaising closely with everybody involved to progress there. With this, I hand over to the operator or to Fredrik to see if there are any questions in the line or by email. Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been unaddressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. A reminder to all participants, you may enter star one to ask a question. The first question is from the line of Frank Lehmann from Thelo K apital. Please go ahead. Yes. Hi, Florian. Thank you very much for the presentation. I hope I can be heard well. Yeah, good. First of all, happy summer. You have broadened the footprint of DDM over the last six to nine months, even 12 months. While I initially thought when we invested into the bond that we're buying an NPL manager with an Addiko Bank attached, you've come forward with a strategy where you kind of say, "Hey, we do NPLs. We'll be owning financial institutions in very special situations where there is a huge hidden value or where we see value," et cetera, et cetera. You also have that real estate platform. That's, I think I find that quite interesting. That in itself is actually something I don't have necessarily a problem with. I wonder how you can finance all that with your limitation on the cash, because of course, there's EUR 50 million in cash right now, end of June. You will have to pay the Swiss Bankers acquisition. You already agreed on that. You're gonna pay AxFina 51% of the EUR 28 million, so that's EUR 14 million. Of course, in October you're gonna pay the interest on the outstanding bond. How is your aspiration in being something more than just a focused NPL manager? How is that matching up with the resources you have available? If you can just give me some comfort here, that would be extremely helpful. Thank you. Well, this is obviously something we are closely monitoring. Let me maybe start with this, that actually I think the key challenge is or a key problem even is that we've been having too much cash on our balance sheet for too long. Actually, as obviously, you know, the regulatory process for Swiss bank could take a little bit longer than expected. I think we at the moment have a situation where we have a negative carry or cost of carry for this cash position. That's actually, you know, where on the one hand, having cash is good, but it also comes at a significant cost. That's why this is probably something really to watch. There's a key aspect to bring our P&L also into a better shape is that we actually see more of the asset side contributing to the bottom line. The financial resources, obviously, as we have, the amortizing NPL portfolio, there's also cash coming in. We are really trying to then towards the second half of the year, synchronize the cash inflow from the collections. As I mentioned, we are also expecting some larger single-ticket collections to synchronize those cash-ins with selective investment. Having said that, it's also clear that to really move this forward or you know also get to a larger scale, we need to also add equity to the capital structure. That's why we also at the moment actively looking at options how we can bring in capital, which would then constitute equity on the DDM Debt AB level where the bonds are to also then stabilize a larger balance sheet that equity is carrying. I think we are fine with the immediate pipeline that we have on our hands. Of course, to do more, we would need additional capital, and that capital should be equity in order to have sensible ratios in the balance sheet composition. All right. Do allow me one more follow-up question. Actually two, if that's okay. One is, initially there was when you bought the 10% of Addiko, there were also options involved that you could tap and double and go up and do more. Is that something you still contemplate or is there something that you kind of are comfortable with your current stake? I understand that this is market-sensitive information, if you cannot really comment on that, because Addiko is a listed company. Yeah, yeah. As a follow-up. Please. Well, as I said, typically at the moment, of course, there are no further options or pending acquisitions or so on regarding Addiko. This 9.9% stake that we have is- Right. What makes sense to us at the moment. Of course, you know, it's Addiko is a quite interesting. Yep. Bank in the region where, you know, a lot of people are having ideas on. I think at the moment that the base scenario it's good to assume that there won't be much change to the 9.9%. If I may just say one comment. In the past, we as investors in the debt, we have been told and communicated that you have a strategy that goes beyond just owning 10%. You wanted to take Addiko to 20%. You also wanted to get on the board. You wanna get closer to their NPL portfolio, possibly do something. There were all kinds of these, let me say, aspirations or goals or ideas kicked around. None of them materialized. Now it's 10% and that's fine. It is clear that when you show all these graphics with all these strategies and what you wanna do, there's some skepticism here on the bond side, bondholder side. I just saw this morning, some broker showed me your bonds at 82.50, which is not necessarily a big endorsement of the strategy and what's going on here right now. Although I must say it doesn't trade a lot, so, and the market is volatile, et cetera, et cetera. I would appreciate as a bondholder and probably speaking for more than just myself, if you could also keep an eye out there on keeping us happy in the sense that what you communicate kind of, and I understand that was in the past, that a few years ago with Addiko, et cetera. This is also something the bondholders will measure you against and therefore the price somehow reflects not just market volatility, also reflects a view on what's going on in DDM. Thank you. Just wanted to highlight that. No, I fully hear you and understand what you're saying, and that's also why I think also with respect to the bondholder perspective, a key focus should be also making sure that our P&L is strengthened again, so that we have sufficient enough earnings also to really earn our interest or more than earn our interest. There, as I explained earlier, I think a key factor is that we actually put the cash that we currently have to use. That hopefully should already improve then the overall ratios, because at the moment the too large portion of the asset side is not contributing to the bottom line. By adapting this, we should hopefully have a stronger P&L, which should then also be clearly a positive for the debt perspective. Thank you very much. Okay. Appreciate your clear words. All the best for the Q3. We speak soon. Bye-bye. Thank you. Bye. Any further questions? Thank you. No. No, we don't have more questions. Ladies and gentlemen, if you have a question, you may press star and one to ask a question. A reminder to all participants, you may enter star and one to ask a question. There are no further questions, and I'm not sure if Fredrik has received any via email. But in any case, if you have any questions, of course, Fredrik and myself are always happy to be available also for a one-on-one call. Unless there's anything more from the operator, I thank everybody for dialing in and wish you a nice remaining summer, and looking forward to talk to you for the Q3 call the latest or to let us know whenever you need any information or call with us. Thank you very much. Bye. Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.