Deutsche Bank AG (DB) 2023 Q2 法說會逐字稿

Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Deutsche Bank Q2 2023 Fixed Income Conference Call. (Operator Instructions) And I would now like to turn the conference over to Philip Teuchner. Please go ahead.

Good afternoon, and good morning, and thank you all for joining us today. On the call, our Group Treasurer, Richard Stewart will take us through some fixed income-specific topics. For the subsequent Q&A session, we also have our CFO, James von Moltke, with us to answer your questions. The slides that accompany the topics are available for download from our website at db.com. After the presentation, we will be happy to take your questions. Before we get started, I just want to remind you that the presentation may contain forward-looking statements, which may not develop as we currently expect. Therefore, please take note of the precautionary warning at the end of our materials. With that, let me hand over to Richard.

Thank you, Philip, and welcome from me. It's a pleasure to be discussing our second quarter and first half results with you today. These results provide a good perspective of the progress we are making towards our objectives. We have strong growth momentum and our well-balanced business mix resulted in revenue growth of well above 7% on a compound basis for the last 12 months relative to 2021. This performance puts us well on track to deliver revenue growth above our 2025 target.

Strong revenue growth, combined with ongoing cost discipline led to a 2 percentage point improvement in the cost/income ratio to 73% in the first 6 months compared to 2022, despite significantly higher nonoperating expenses in the second quarter, which we would not expect to repeat in the same magnitude in the coming periods.

Our post-tax return on tangible equity for the first half of the year was 6.8%, it would have been above 9%, excluding nonoperating costs with bank revenues (inaudible) equally across the year, very close to our 2025 target of above 10%. Our capital position has remained strong and our CET1 ratio of 13.8% positions us well for capital distributions, investments and the implementation of regulatory changes. In short, our performance in the period reaffirms our confidence in reaching our 2025 targets.

In the second quarter, we also had good news for the rating agencies with 2 upgrades and a positive outlook change. We're very pleased about this external recognition of our strategic progress and balanced business mix. Let's just look at the drivers of the sustained revenue growth on Slide 2. Over the past 2 years, we have seen steady growth in first half revenues. We see ourselves well on track to deliver above the midpoint of our full year guidance of EUR 28 million to EUR 29 billion. We achieved this despite significant shifts in the operational environment over the past 24 months, as a strong post-COVID recovery in 2021 gave way to inflationary headwinds and economic uncertainties driven by the war in Ukraine.

We maintained our growth trajectory in a changing environment and delivered strong revenue growth in our corporate and private banks, which took full advantage of rising interest rates and new client mandates. We expect the momentum to continue into the second half of 2023. This, together with a stable contribution from the Investment Bank financing business more than offset normalizing conditions in our more market-sensitive businesses.

As we anticipate some normalization of interest rates, we aim to further compound our earnings mix. We are making investments in capital-light businesses, including origination and advisory and wealth management, together with technology-enabled high-return businesses in the Corporate Bank. Finally, across all businesses, we continue to make progress towards our sustainability targets. We added ESG financing and investment volumes of EUR 17 billion in the second quarter, bringing our cumulative total to EUR 254 billion since January 2020.

Before we move to some balance sheet related topics, let's just turn to provision for credit losses on Slide 3. Provision for credit losses in the second quarter was EUR 401 million, equivalent to 33 basis points of average loans, slightly up compared to the previous quarter reflecting the broader impact of the macro environment. Stages 1 and 2 provisions were EUR 63 million, driven by portfolio and rating movements, especially in the investment bank. Stage 3 provisions of EUR 338 million were broadly spread across our businesses and slightly lower compared to the previous quarter, partly reflecting a nonrecurrence of provisions relating to a small number of idiosyncratic events in the International Private Bank.

Overall, there are currently no signs of persistent deterioration in the environment. However, we observed a softening in some German mid-cap sectors, including automotive and continued weakness in commercial real estate. For the full year, we continue to expect provisions to land within our guidance range of 25 to 30 basis points of average loans, albeit at the upper end of that range. Looking at the first six months, provisions were in line with our expectations if we exclude the nonrecurring events in the international private bank we had in the first quarter. For the second half of the year, we expect the usual quarterly run rate of about EUR 150 million in the private bank, while provisions in the Corporate Bank and Investment Bank taken together are expected to lay in line with the first half of the year.

Slide 4 provides further details on the development in our loan and deposit books over the quarter. All figures in the commentary are adjusted for FX effects. Loans have declined by EUR 5 billion in the quarter. [The development] in the corporate bank was the main driver of the changes at group level. Loans in the corporate bank have decreased by EUR 5 billion due to reduced client demand and continued balance sheet discipline in anticipation of regulatory RWA inflation. Profitability measures executed already in the fourth quarter of 2022 contribute further to the 9% year-on-year decline in the corporate bank loan book.

Loan growth for the Private Bank and Investment Bank has been flat during the quarter, driven by low client demand across products. For the remainder of the year, we expect the muted trend to continue. Deposits, client engagement and sentiment have improved in the second quarter, resulting in a moderate increase of EUR 2 billion. Corporate bank deposits have shown a stable to improving trend with 2 billion growth following enhanced client activity and normalization in pricing competition. Deposits in the private bank remained essentially flat. Inflows from our savings campaign of around EUR 3 billion have largely been offset by continued inflationary pressure, ongoing pricing competition and an accounting classification change of EUR 2 billion.

In the second half of the year, we expect modest deposit growth, taking us towards a EUR 600 billion level. Moving to the net interest margin development on Slide 5. Net interest margin in the Private Bank and Core Bank remained strong in the second quarter as deposit betas remained below our model assumptions in both divisions. We expect margins to begin to decline from this point, but that the tailwind from interest rates for 2023 will be larger than the EUR 900 million we guided at the start of the year.

Net interest margin at the group level increased to 151 basis points as the accounting effects we noticed in the first quarter partially reversed. As we noted at the time, these effects are held in our Corporate and Other division and are offset in noninterest revenues and do not affect the group's total revenues. Average interest-earning assets declined quarter-on-quarter, driven by lower average cash balances.

Moving to Slide 6, highlighting the development of our key liquidity metrics. The liquidity coverage ratio at quarter end decreased to 137%. This reflects a gradual normalization for the liquidity levels seen over the last 2 quarters and is in line with our guidance to return to a target LCR of about 130% over time. Throughout the quarter, we maintained stable liquidity position with a daily average LCR at 134%. We maintained a robust level of available high-quality liquidity reserves with the vast majority of total HQLA held in cash or Level 1 securities. The movement in the LCR surface above the regulatory minimum to EUR 55 billion was driven by TLTRO repayments as well as a small increase in net cash outflows. In the second half of the year, we will continue to manage the LCR structurally towards our target level. Net stable funding ratio at quarter end remained broadly flat at 119% versus the prior period within our targeted range. This represents a surplus of about EUR 97 billion above the regulatory requirement.

Available longer-term stable funding sources for the bank remain well diversified and are supported by a robust domestic deposit franchise, which continues contributing about 2/3 of the group's stable funding sources. We aim to maintain this funding mix over the course of 2023 with manageable TLTRO repayments of about EUR 4 billion per quarter. Repayments of about EUR 3 billion of TLTRO during the quarter brings our cumulative payments to about EUR 23 billion.

Turning to capital on Slide 7. Our common equity Tier 1 ratio was 13.8% at the end of the second quarter, 15 basis points above the prior period. Organic capital generation contributed 16 basis points to the increase, reflecting our strong net income, which was offset mainly by higher regulatory deductions for common equity dividends and AT1 coupons. Risk-weighted assets remained broadly flat this quarter at EUR 359 billion. We saw an increase in credit risk RWA due to our higher share of equity investments in guaranteed funds and asset management with growth in lending commitment offset by securitization.

The decrease in market risk RWA was driven by a reduction in our quantitative multiplier add-on. Second half of the year, we expect approximately 70 basis points of headwinds from various items we have discussed with you before, notably impacts from model and methodology changes, share buybacks and the Numis acquisition.

Capital ratios remain well above regulatory requirements, as shown on Slide 8. The CET1 MDA buffer now stands at 262 basis points or EUR 9 billion of CET1 capital. This increase of 11 basis points compared to the prior quarter reflects a 15 basis points higher CET1 capital ratio, which was partially offset by a 3 basis points impact from higher countercyclical capital buffer settings in the Netherlands, Ireland, France and Sweden. A buffer to the total capital requirement remained materially unchanged over the quarter and now stands at 278 basis points.

Moving to Slide 9. Our leverage ratio was 4.7% at the end of the second quarter, 4 basis points up versus the prior quarter on our strong organic capital generation. The impact from FX adjusted increase in leverage exposure was not material. We continue to operate with a significant loss-absorbing capacity well above all our requirements as shown on Slide 10. The MREL surface has our most binding constraint decreased by EUR 7 billion to EUR 12 billion over the quarter. This includes a reduction of EUR 4 billion due to the higher MREL requirement and general prior commissions, becoming subject to deduction as mentioned in our first quarter 2023 fixed income investor call.

We have consciously reduced our buffer to improve balance sheet efficiency. Actions taken include the successful execution of a EUR 1 billion senior nonpreferred tender offer in May 2023 and the decision to not replace EUR 2 billion of MREL eligible instruments falling below the 1-year maturity threshold with new issuances. Our loss absorbing capacity buffer continues to provide us with the flexibility to pause issuing new eligible liability instruments for approximately 1 year.

Moving now to our issuance plan on Slide 11. (inaudible) guidance to issue EUR 12 million to EUR 15 billion to meet 2023 requirements. Year-to-date, we have already issued EUR 11 billion or roughly 80% of the midpoint of the full year target. Since the last call, we have been active in covered bonds, senior preferred and senior nonpreferred notes. We issued a EUR 1 billion Pfandbrief, EUR 500 million senior preferred and a $1.25 billion senior non-preferred note and were otherwise active in private placements and retail targeted issuances. Residual issuance activity for 2023 remains focused on covered bonds and senior preferred notes. Regarding the LIBOR transition, we have completed the migration of our U.S. dollar LIBOR exposure with the exception of 3 so-called tough legacy capital securities. For these notes, we have informed the bondholders about the full back provisions, which encompasses a dealer poll and if unsuccessful, usage of the last available fixing. The next upcoming resets occur in 2025 and 2027.

Before going to your questions, let me conclude with a summary on Slide 12. First half revenues above EUR 15 billion, we believe that revenues above the midpoint of our guidance range of EUR 28 million to EUR 29 billion for the full year 2023 are achievable. Interest rate environment remains favorable, supporting strong revenues in PB and CB and the market now expects interest rates to remain higher for longer than early in the year. In addition to this, (inaudible) in our stable businesses remain below our model assumptions. Taken together, these effects will mean that the rate tailwind is materially above the EUR 900 million we had guided to you previously for 2023.

Adjusted costs for the full year 2023 are still expected to be essentially flat compared to 2022, benefiting from strict cost management, lower single resolution fund charges for the current year, as well as potential restitution payment from the National Resolution Fund. Provision for credit losses is now expected at the upper end of our guidance range of 25 to 30 basis points of average loans, reflecting the current macro backdrop and lower loan balances than initially anticipated. Our capital guidance is unchanged. Our second quarter CET1 ratio of 13.8% allows us to absorb roughly 70 basis points of headwinds in the second half, reflecting the impact from model changes, share buybacks and numerous acquisition.

We recognized the positive rating actions in the second quarter from S&P, Fitch and DBRS, which brings us closer to our peer group. As mentioned on the prior slide, we have completed 80% of our issuance plan for the year, and plan to issue primarily in more senior instruments during the remainder of the year. With that, let's just turn to your questions.

(Operator Instructions)

And we have the first question from Lee Street with Citigroup.

I have 3 for you coming back to points you've mentioned. So -- on the rating entities, obviously, you've had some positive pricing actions, as you mentioned. Based on your latest discussions with them, and obviously, still on positive S&P -- do you think you've got scope for more upgrades or more positive activity from them over the coming -- for the remainder of this year? So that's the first question.

Secondly, on the LCR, obviously, bringing it down -- down towards the target of 130. I guess, my question is, what is the right level for the LCR and how do you actually calibrate and -- is there any risk you need to have a buffer? That's my question there. And then finally, as it relates to the LIBOR and the H1 that you've essentially announced that coupons would fix if the dealer poll fail. Just -- have you had confirmation that's not an incentive to redeem how should we think about that being an incentive to redeem as obviously a fixed coupon and implies a credit spread that would move around as a function of what rate to do. That would be my 3 questions. Thank you.

Thanks, Lee, and I guess, welcome, everyone, for joining on a Friday afternoon for the last weekend in July. And so we'll also see if I can get through these questions relatively quickly, so we can break for the weekend. But -- starting with your questions, Lee, I guess, the first one around the rating agencies. So I'd say, we'd be very happy with the rating trajectory, I guess, since we embarked on our transformation strategy back in 2019. On the back of the profitability improvement, strict risk management, continued balance sheet strength. We've seen the rating agencies upgrade our ratings twice in recent times.

And in the second quarter, as you said, we made significant progress with 2 upgrades and a positive outlook change. I'd say we're working hard towards an upgrade with S&P. We feel our ratings with the other agencies are now sort of appropriately positioned for where we are right now. And regarding, I guess, the economic environment, we don't see pressure to our own ratings through sharp deterioration on a macroeconomic level could have implications for the banking sector as a whole.

Risk management continues to be a strength at Deutsche Bank and continues to be a focus across all the different risk types. And so we don't believe our ratings are going to be impacted to the downside. When it comes to LCR and look at the right level, good question. I think the -- how we think about it internally is -- starting point is our own internal stress testing and risk management frameworks. So obviously, we kind of know our own portfolios, our own historical outflow numbers. We know our clients, we know our products, we know our geographies. And so that whole stress testing framework that we have, essentially in the buffer we kind of we need to hold for those is kind of what really what informs the LCR. And so that's kind of where -- how we kind of -- how we think about it.

And then we kind of think a little bit about our peers as well as sort of just to sort of level set a little bit. (inaudible) U.S. banks typically have lower LCRs, sort of the 110, 115 kind of area, some European banks a little bit higher, but given our business mix, I think we're pretty comfortable with 130 being the right target over time.

And I guess the last question, I guess, on the incentive to redeem on those securities. In our opinion, reliance on the last available fixing does not constitute an incentive to redeem, as this relates solely to the interest rate aspect of the coupon, whereas the spread over development reset rate remains as per issue dates. So in other words, we do have to bear in mind the credit component of the issuance. And we're not aware of any conflicting regulatory pronouncements in this regard and the recently published EBA monitoring report on own funds and MREL also do not suggest any concerns relying on existing fallback provisions. So -- so that's kind of how I'd respond to that question. So hopefully, that answers your question.

Next question is from the line of Robert Smalley from UBS.

Thanks for doing the call. Thanks for doing it at least in our morning, but I'll be brief so you can get out and enjoy the weekend. Three quick questions. First, on Slide 18, you have an increase in provision for credit losses, you pushed it up your expectations to the upper end of the range. It looks like it's primarily in this quarter coming from the corporate bank and the investment bank. Could you put some detail on that? And is that where you see the provisioning continuing to increase or stay at these levels through the end of the year. Seems like it's come down in the private bank, so any color there would be appreciated.

Secondly, just on Germany, IFO (inaudible) lots of indicators of sentiment have grown very soft around the economy. I know that you run a global business, but at the same time, could you talk about the impact of that on the balance sheet and the income statement. And then third, just in general, could you talk about capital generation? How it came out this quarter, how you're seeing it for the rest of the year? And what you think the right run rate is for Deutsche Bank.

Robert, it's James. I'll start on the first 2, and Richard may want to add on the third. So you're right, there was a shift in the quarter. So it was a normalization for us of PB closer to what we'd expect to be a run rate sort of in and around 150 per quarter. And as we look at the forward-looking credit indicators, that seems like a pretty solid view for the back half of the year. And our guidance for the rest of the year, which would be around 350 per quarter would suggest that the CB and IB taken together are more or less in line with Q2. Now CB was a little bit elevated relative to what we'd expect in sort of a general run rate to be. And that was driven by what we mentioned was some softness in mid-caps in Germany.

So between the 2 of them, we'd expect it to be more or less where it was perhaps a little bit better in Q3 and Q4 than it was in Q2. I think it's important to note that we're not seeing a broad-based deterioration in our book or based on the leading indicators, but we're obviously traveling at a level higher than where we've been in the recent past. And again, that all feeds into our guidance of in and around 30 basis points for the year. There has been obviously some data from Germany around the economy that we've been in a relatively speaking, a stagnant economy now for 3 quarters. If I step back to where we were last year, that isn't bad given some of the challenges that Germany faced a year ago around the energy market situation.

What we would say is that -- I think it's sort of sectoral driven. There clearly are areas of the German economy that are recessionary. There are others that are doing a little bit better. And at least for now, we see Germany muddling through. Our house view is about 0.5 percentage point of growth for the year and that would represent really the balance of parts of the economies that are growing and those that are shrinking. We do see order books, talking to clients, weakening in some areas. But again, we see that offset in some instance by exports and investment-driven growth and in other areas like the service sector recovery still from COVID. So short version of that is mixed picture.

On capital generation, you've seen us step into, call it, 25 basis points per quarter sort of ballpark. I don't want to give sort of forward-looking view on earnings necessarily, but that the earnings tends to translate right now into that kind of ballpark or a little bit better. And we think that is teeing us up well for the capital build around some of the items we've called out and also the capital distribution strategy that we've laid out, I think, very clearly for investors. Richard, anything to add?

I think that's right. I think we -- I guess on the capital side, CET1 ratio at 13.8 at the end of Q2, sort of, call it, 70 basis points of, I guess, headwinds, if you like, from models, share repurchases, the Numis acquisition between now and the end of the year. That's a -- and then you towing the earnings generation and the business growth is kind of trade-offs. We have to think about kind of from CET1 ratio perspective. We're still pretty comfortable with being at least above 200 basis points to our NDA by the end of the year.

The next question is from the line of Daniel David from Autonomous.

I just have 2. Just interested if you can provide a guide for the impact of the ECB's decision on minimum reserves yesterday, any detail would be great. And the second one is just a bit more broadly. Just with regard to what's happening in the U.S. So I guess I think that U.S. banks generally seem to be well capitalized and is the Fed is saying that you now need 20% more capital under Basel IV. I realize it doesn't have any impact on yourselves, but do you worry that investors and maybe counterparties think that European banks now need hold a bit more capital? And I realize you talked about 70 basis points increase in requirements. But I guess I'm thinking about in addition to that, any thoughts would be welcome.

So I guess I'll start on the ECB announcement yesterday. So I guess sort of disappointed, but with what they came out with. I guess we don't necessarily see it particularly helpful to change a bank's risk profile in this unexpected kind of way. I think in terms of just back-of-envelope calculations, in terms of our minimum reserve requirement holdings, and apply 350, 375 basis point impact then guess just over EUR 200 million per annum, it's going to probably be the impact on those to us. So clearly not insignificant. And then in terms of kind of implications, it's pretty bit too early to sort of take form a view on that, but I would note that other central banks I guess take a different approach regarding remuneration of deposits and how they think about the effect on the monetary transmission mechanism.

On the U.S. capital situation, look, the NPR came out yesterday. So early days to react. I guess my own view is Europe should continue to focus on a capital regime that makes sense for the European economy. I think the work that's gone on in Brussels has been through good work that represents a workable solution for the industry and is reflective of some of the characteristics of the European economy and European banking system that the United States will go down a different path. And perhaps, I mean, on some levels, the more stringent application of the Basel III final framework is obviously a decision the United States can make and reflects the current environment in the U.S.

I don't know that the comparison of capital between the 2 systems is as easy to do as it appears on the surface. So I wouldn't just conclude that if the U.S. G-SIBs have to go up by whatever it was 16% in the QIS then that would put them 16% above the Europeans on a like-for-like basis. For one thing where we've been raising the capital in Europe based on TRIM, based on the EBA guidelines and now based on the expectation for Basel III implementation here in Europe.

For another, there are some elements of the capital regime in Europe that in my judgment are more stringent in the United States, and that's particularly true, I think, on deductions from the numerator and in some cases, interpretation of RWA, so I would not just take the view that the -- if you like one upmanship on the 2 sides of the Atlantic is the appropriate response. I think, first of all, each side needs to do what makes sense for their marketplace. And before you get to conclusions like that, you really have to do an apples-to-apples comparison between capitalization of banks on both sides.

The next question is from the line of (inaudible) from Point72.

Two questions, if I may. Coming back to your point about CRE and German midcaps softening. Would it be possible to have some data points around Stage 2 or cost of risk for German midcaps to get a sense of what softening means on the ground, so to speak? And secondly, is it possible to know or to understand why you think it's just a softening and more -- not an outright deterioration. So on Wednesday, Christian Sewing mentioned that German midcaps were much better shape from a liquidity standpoint. Could you give us some other pointers to -- basically to understand better why it's just a softening and not an outright deterioration? .

Yes, hard from the -- hard to go too far, [Stephan], beyond the disclosure. When we're building the reserves, it's especially obviously in Stage 3, it's individual reserves for individual events. And then in Stage 2 on ratings and Stage 2 triggers. I would say that there was a handful of events in the quarter in -- particularly in the corporate bank that showed us it was more than we would normally see, sort of 5, 6 events. And there wasn't necessarily a pattern to those events, although we call that automotive as an area where we are seeing some more weakness. And again, that's why we wouldn't -- we don't see it as pervasive. The Stage 2 is just -- is really reflective of ratings changes. So as you see more strains in the economy, strains in a supply chain like in automotive, you see that affecting certain players and then reflected in our ratings, doesn't necessarily mean that there's a wave of defaults coming. So that's why we've used the word softening rather than a more dramatic language. Hope that helps give you a little bit of color about how we're thinking of it.

(Operator Instructions) The next question is from the line of Andrew Lim from SocGen.

Apologies for gatecrashing the fixed income call. So the first question, I think, James, you said that you'd be able to disclose the estimated impact on NII from the ECB's decision yesterday not to pay interest on bank reserves. So I don't know if you can outline that. And then secondly, I think earlier today when we talked about capital, you talked about the Basel III impact to come for Deutsche Bank and then separately, the output floor impact -- and then you talked about a potential EUR 15 billion to EUR 20 billion benefit. I didn't quite catch the detail of that. And I thought in my mind it was related to the litigation, but perhaps I might be mistaken. Perhaps you could talk about that in more detail as well, please.

Sure. Thanks, Andrew, and welcome, don't worry about gatecrashing. So on the -- so for the -- on the reserve remuneration, the number that Christian -- that Richard cited a little over 200 million on a per annum basis based on our current reserve level is sort of, call it, 5.5 multiplied by the 3.75 (inaudible) billion at 3 and 3 quarters would get you there, which means in the back end of the year, we would think it's sort of, call it, 60 million for the last 4 months of the year.

As Richard mentioned, we're disappointed by that result on a number of levels. One is the sort of cost transfer of monetary policy, again to the banking industry as it was for the 8 years of negative rates. As Richard mentioned, it's a sudden change in the risk modeling for interest rate risk in the banking book purposes of that part of our liability stack or asset stack in that case. And it also, I would say we don't see a monetary policy benefit or an obvious argument from a monetary policy perspective. So we're disappointed and somewhat surprised by the decision.

On Basel III, we've got sort of moving parts, but our most recent guidance, I think, was EUR 25 billion to EUR 30 billion of increment on January 1, 2025. And that probably still holds. It moves around actually only because with -- or not only, but the principal movement in our forecast has to do with op risk and which is largely driven by revenues, but assume the high end of that range. As we mentioned in April, we've been working to offset actually sort of, I guess, related but also to support our capital-light sort of shift in the business model, identify offsets of EUR 15 billion to EUR 20 billion over the same period of time really to the end of '25. And that's a variety of different measures. Some of it's just optimization in the detail of our calculations.

Some of it is a balance sheet movements in the client business, notably less mortgage originations than in the past and some reductions in trade finance lending that is sub hurdle. So sort of more disciplined balance sheet extension. And then also building on the securitization programs that we have going further into securitizing risk from the balance sheet. So a number of initiatives of that nature that add up to that EUR 15 billion to EUR 20 billion.

Sorry, just to complete the output floor. As we talked about on Wednesday and we sort of went back and looked to make sure that our guidance was the same, we would think about EUR 30 billion of a day 1 impact in -- of the output floor in '29 when it becomes biting the 72.5. And we'd initially guided around 10% of the then RWA when we put out that guidance was about our RWA was about 320. So that all sort of aligns with that hasn't changed meaningfully, although that's a number that is really pre-mitigation. And we've been focused on the implementation of this first phase of Basel III final framework, so once that's behind us and we get into the '25 to '29 period, obviously, we'd look more carefully at ways in which we can offset some of the impact of the output for -- and I'm sorry, just to correct myself, it's 2030 is the implementation.

So far there are no further questions, and I hand back to Philip Teuchner for closing comments.

Thank you, operator. And just to finish up, thank you all for joining us today. You know where the IR team is, if you have any further questions, and we look forward to talking to you soon again. Goodbye.

Ladies and gentlemen, the conference has now concluded, and you may disconnect. Thank you very much for joining, and have a pleasant day. Goodbye.