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Edited Transcript of CAST.ST earnings conference call or presentation 24-Apr-20 7:00am GMT

Q1 2020 Castellum AB Earnings Call

Göteborg May 9, 2020 (Thomson StreetEvents) -- Edited Transcript of Castellum AB earnings conference call or presentation Friday, April 24, 2020 at 7:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Henrik Saxborn

Castellum AB (publ) - CEO

* Ulrika Danielsson

Castellum AB (publ) - CFO

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Conference Call Participants

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* Fredric Cyon

Carnegie Investment Bank AB, Research Division - Research Analyst

* Tobias Kaj

ABG Sundal Collier Holding ASA, Research Division - Research Analyst

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Presentation

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Operator [1]

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Hello, and welcome to the Castellum AB Q1 Report for 2020. (Operator Instructions) Today, I'm pleased to present the CEO, Henrik Saxborn; and the CFO, Ulrika Danielsson.

Please go ahead with your meeting.

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Henrik Saxborn, Castellum AB (publ) - CEO [2]

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Good morning, everyone. This is Henrik speaking, and you can start with changing the slide, please. During this session, we will comment on the first quarter, of course, at the same time, looking to the future under this extremely special circumstances that are -- we are living in now for Castellum and for the real estate sector and, actually, the whole world. We will this -- during this web conference, give you a view of the results, of course, but also status on the market as well as we will see -- try to see in front of us, even though it's very hard to do any types of prediction under the circumstances that we are living in right now. But we will try, we will try to guide you and give you the knowledge we have.

So this is the circumstances right now. We are active in 3 countries. The 3 countries have different laws, support from government and so on. And if we start with Denmark, Denmark closed down very fast and are actually, right now, opening again for people running to work or their kids going to school. So for us 50% of our working force is back in office, and that is the normal now in Denmark. In Finland, we are -- they are planning to opening again. And so that's what's ongoing for the last days. Looking at Sweden where we have more than 90% of value, it's like a semi-opened. Everything is allowed to stay open, but the streets are more or less empty and the most people work from home. So the turnover in all types of services decreased dramatically, of course, like in the rest of the world and for other business as well like the traveling business and so on. So we live under different circumstances right now.

And if you look in the Castellum condition in brief, I would, with humbleness, say that we are in a strong position. We have 5,700 customers, spread over the last -- and the last single ones is only 2% of the contract volume. We have 650 assets located in 17 towns. We have a strong cash flow. We have a very strong finance situation. And we have more upcoming investments for the Swedish government that we'll come back to that are leased out, and will be leased out more than 100%. And 23% of the portfolio is government. And on top of that, the organization has capacity and competence to go through these difficult times.

Looking into the clients a little bit more then. We can see today that 96% of rents from the second quarter has been paid, and that's more or less a normal payment pattern. And that we have also given 140 customers some thought of -- we're going actually from annual quarterly ramp down to monthly ramps. Yes, there's very few, very little part is some sort of other supporting for these tenants. So it's actually -- everything quarterly going to monthly ramps. And that equals up to approximately 4% of the total amount. And even though the activity is very low in the market on the net leasing, it was like in this end of the quarter like a normal quarter, so March was actually in the same figure slightly, like a normal quarter.

Looking at costs and staff. On the cost side, we have prepared and are working even harder now with efficiency and cost-cutting programs, and has already giving results. We are all are working from home, everyone that can do it is doing that since 6 weeks back and we have no [left guard], no seriously sick at the moment in the staff.

And the investment side, if you look at the development, the development side, it's still under production and we have no larger impact because of the epidemic yet, and on the delivery or on staff. So everything is moving like normal.

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Ulrika Danielsson, Castellum AB (publ) - CFO [3]

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And from a funding perspective, Castellum stands strong. A well-diversified funding situation with many suppliers, good relations as well as a well spread cap in maturity. And that, together with the liquidity reserve of SEK 14 billion gives Castellum the possibility to meet the need from the operation and at the same time, handle mature debt in the coming year with all the existing credit facilities.

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Henrik Saxborn, Castellum AB (publ) - CEO [4]

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Yes. And again, we can change slide, please. Then looking into the Q1 result. We can conclude that we had a strong result, with 9% growth from property management. We had a net leasing that approximately was SEK 100 million, mostly because of the leasing out to the E.ON headquarter was coming into the figures. So we had what I should call a normal quarter and also March was in the figures with the net leasing in line with last year and note, no bankruptcies.

But also renegotiation was, in average, increased by 15%. That's already in the P&L. And NAV increased with 8% compared with last year. And we didn't increase the value in Q1.

But let us come back to what we see in the market a little bit later. Now more details, please, Ulrika.

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Ulrika Danielsson, Castellum AB (publ) - CFO [5]

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Yes, on the next slide please. The P&L, the first quarter this year shows an increase in income from property management with 9%, and that is mainly due to renegotiation made earlier, the CPI uplift. And those 2 have increased the rental income, the continued cost efficiency control program and of course, a mild first quarter that has led to lower property and administration costs.

We have also an unchanged view of property values, even if there have been some adjustments on single assets. We have a negative change in derivatives and of course, on the bottom line, a tax of roughly SEK 150 million (inaudible) is actual tax.

So if we go to the next slide, please. The like-for-like portfolio stands roughly 8% of the total growth in income from property management of 9%. And that is due to, as I said earlier, an increase in rental levels of 3.7% on average, due to CPI and already made renegotiation.

And then you have some mitigation of that uplift due to higher vacancies, which means that rental income increased 3%. But the expenses have moved even more. In like-for-like, it's down 5.5% due to the cost efficiency program as well as a mild first quarter. And to give you a reflection of the expenses, if we exclude the co-working company, is SEK 53 million down in like-for-like, including administration. And of that, roughly SEK 20 million is from cost savings, SEK 20 million from mild first quarter, and the rest is changed in the portfolio. So this is a very good job done by the organization, I must say, and something that we are very proud of.

So the cost savings last year of SEK 60 million, together with this third quarter of '20 means that we're now at SEK 80 million.

If we go to the next slide, please. As you surely know, our industry is favorable in that way that our tenants, our customers pays in advance. So 4Q the payment was down at the year-end. And that means that the impact that corona brings on to the world from a financial point of view will not be seen in this report of Castellum for this first quarter. And as you can see from our industry split, our biggest sector is the public sector, on that stable channels and not so sensitive for up and downturns. We, however, have some exposure, if it's small to a hotel, restaurants and the service industry. That has -- it's like the first way of industries that got liquidity problem, and that needs some sort of help. And they have weakened as for them in order to support their liquidity is to go from quarterly payment to monthly. And in some cases, postpone the payment.

We do make individual assessments for each tenant. And so far, we have made strategy for the Q2 quarterly rent with an amount of SEK 58 million, equal to roughly 4% of the rental income. And the absolute main part is monthly payment.

Another sign is the pattern in payments for Q2 rent that was supposed to be paid in the end of March but with some delays in the beginning of April, the first date. So Q2 payments, roughly 4% has not paid at all or only paid part of the rent. A big part of that is part of the 4% that I just mentioned before that has got liquidity help. So that means in the end that the payment pattern is roughly the same as 1 year ago.

So all in, it's still stable. But however, we do assume that corona will have an impact, but we are not immune in Castellum. But so far, the exposure on the rental side is very limited. How this will continue remains to be seen. And for those companies that are exposed, the future rents will even be tougher we do assume and are [humble] before that.

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Henrik Saxborn, Castellum AB (publ) - CEO [6]

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Okay. We can take the next slide, please. This is the net leasing that you see in front of you right now. And as I said earlier, this was a strong net leasing in the Q1 and there was, of course, benefiting from that we could, after some months now, more years of work include E.ON contract on the headquarter.

But it also seen the pattern of a normal Q1. And the most important numbers is, of course, for the March figures, and that was also normal and new bankruptcies. And the best part is that it's more government contracts to come during this year and hopefully, a large 1 very -- in this very short term. So we can move to the next slide, please.

Looking then into the market. What we can see in the market is that the activity is low but not closed. So we have offers in the market and have closed new deals with normal companies as well as government contracts the last months. The logistic market, the activity there is normal. There's a lot of question of different kinds that mainly are driven by expansions in the market towards e-commerce, and the change of the sector, of course, that's still ongoing.

That brings me to rent levels. The short answer is stable. We don't have so much evidence, but we are not in, at the moment, changing any market trends in our office. But it's important to know this, that their rent levels are -- was increasing in our universe before the pandemic and are now standing still. So the -- and that includes all types of premises.

Then we can change picture, please. And a little bit, very small part of their business, the [partnership], it's also give us a hint. The first to be hit in the crisis like this is short-term contracts, and therefore, it's extremely important for us to see the development in our co-working company, United Spaces. So far, we can conclude that approximately 13% of their member are using these spaces every day.

And that we have been giving notice for the contracts approximately for 10% of the total income. On top of that, of course, all meeting was canceled, and that is 15% of the income that disappears overnight because of this pandemic.

Since we are certain that this type of business will be the first to benefit from a recovery in the market, we continue to invest in new sites. In Uppsala, Helsingborg, expansion in Stockholm and a new site in Gothenburg, where we would be part of the tedious research and development headquarter.

And then next slide, please.

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Ulrika Danielsson, Castellum AB (publ) - CFO [7]

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The next slide, yes. And the balance sheet and short -- a short story, the balance sheet of Castellum is strong. The LTVs are 44%. And we do have to keep in mind that was part of the dividend at the end of March, and earnings are still to continue the rest of the year.

The valuation yield was unchanged on 5.1%. And in the NAV, the value of that depends on how you do your calculation. And we tend to look at the EPRA NAV, the long-term net asset value that earlier was EPRA NAV. And that was SEK 193 per share.

Next slide, please. The valuation of portfolio level is roughly unchanged, even if we do have made some adjustments on single assets, both positive as well as negative. We feel that even if the market was very positive with lower yields in the beginning of the period, it ended in a more modest yield at the end of the period. And at the moment, we experienced a more cautious view in the market in order to try to understand the long-term impact on society, the industry, the interest rates and the property prices.

As you can see, the public sector, it's not only the biggest from an income view, it is also the biggest from a valuation point of view. Retail exposure here is 7% from a valuation point of view. And consists of some box retail but much car retail and grocery stores.

And worth mentioning regarding logistic, it's very positive. Retail is hurt during these corona times, the e-commerce is doing well in our portfolio.

Next slide, please, and [maybe] the market.

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Henrik Saxborn, Castellum AB (publ) - CEO [8]

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Yes, the market. Looking in the transaction volume in Sweden. In total, Q1 was SEK 43 billion, maybe not so important. But what's important now is that the number of transactions has been postponed or canceled. But we can see more activity for every day and I don't think it will be take long before the market starts to pick up again or tries to pick up again.

Office assets with a long -- a really strong cash flow and attractive tenants are still very attractive. So think government, not very much municipality, but some municipalities. Logistics are growing and will continue doing so. The new sites and efficient locations and assets are very attractive still.

So I'm very pleased that we have been innovative. And because that means that we are more prepared now than we will -- when will we see changes in the demand from the clients, we are convinced that more flexible solutions will be asked for and that innovative companies in our sector to be more attractive than the others.

And we can look at the next slide, please. Here we have all the developments. As you can see in this picture, we have a lots of midsized and large developments ongoing. As I said before, we have no delays in the production. We are now in large in the investment pipeline with developments that are leased out to 100%, and the government tenants are the main tenants in that pipeline right now. And under 2020, we will start developments for approximately SEK 2.5 billion just for the government tenants. And we can go into some of them. Next slide, please.

First, looking at what we started this quarter. On the left side, infield development in Västerås, where we have a strong hold with assets and new developments on this side. This asset is more or less 100% leased out by the government, the insurance company that occupies 88% of the assets.

On the right-hand side is the development [that just started] Malmö, the headquarter for E.ON. That investment of approximately SEK 1.3 billion, and has a yield on cost under [6%] and will be completed in a little bit than 1.5 years' time.

We can take the next slide, please. Here, we have 4 different investments. You have on the right top -- the left top hand side, you have the court in Malmö that we hope to be finally start -- the start approval in a very soon time and that we would mean that we immediately started production of 27,000 square meters, almost fully let and invest SEK 1.3 million. And of course, this is a government contract.

And then on -- and then we have had on the right, right top side, you have Örebro, and there we're also be planning to building a new construction in direct connection to the railway station for the government tenant, and we're talking about investment approximately on SEK 220 million.

And then you have on the right-hand bottom, where we are planning to start also this production in the summer, hopefully, a new court and invest approximately SEK 300 million. Also, of course, with this 9,000 square meter for the government.

And the last one is one that you have seen before, is the airport, Säve in Gothenburg, where we right now are doing a lot of smaller mid-cycle investment on -- for the tenants. That's our government or other tenants. Activity extremely high. And on top of that, the planning process is undergoing in speed for the research and development part of the site. So that looks extremely good at this moment.

Next slide, please.

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Ulrika Danielsson, Castellum AB (publ) - CFO [9]

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The funding conditions. I have always liked 2 words, and that is flexibility and diversity when it comes to funding. That has been our strategy to get many tools in the toolbox and have many suppliers to talk to. And finally, on top of that, a good liquidity bucket.

So all that together, as I said earlier, makes us strong in this crisis where we are in. And if we do look into the 3 different buckets, customer experience, relatively good access to funding within the Nordic banks, and at the moment, stable margins. All our relation banks has announced that they will support us and offer liquidity if necessary, and that we are very grateful for.

Someone has said that the bond market is dead. And that depends on how you define dead. I would say it has -- it's alive in that sense that there has been some activity in the European bond market, more than in the domestic market, I must say. But the prices are much higher, roughly 2 to 4x pre-corona and sometimes even higher. And that means that if you don't need to accept that market at the moment, you don't do it. So the market is there, but the price is much higher.

And then the short part of the capital market, the so-called CP market is very limited. Here, the Swedish Riksbank was out supporting it, but only in the secondary market, which will not help. It's the primary market that needs support and that part of the market don't get support, there will be no -- any secondary market in a couple of months. However, from time to time, you can do deals, depending on how generous you are and Castellum has made deals in April, equal roughly to Riksbank's price setting in that market. In this market, the yields are much higher, but that includes also, of course, an impact from high Stibor versus year-end.

So if you go to next slide, please. What have we done in Castellum? We have renegotiated some bank debts and terminated some, the main part pre-corona. We have issued SEK 1.5 billion in the domestic bond market of this pre-corona. And at the same time, SEK 1.6 billion was matured. So almost all that matured during Q1, we did refinance before the corona impact. The CP market, as I said, is very sluggish, and we used that as an arbitrage. At the end of Q1, we have roughly SEK 4 billion outstanding compared to SEK 5 billion at the year-end. And those SEK 4 billion all was due during Q2. And we -- as I said earlier, had some -- done some deals, both in March, but even in April. For example, in April, we issued SEK 650 million. Maturity 1 to 4 months, yields all-in from 51 basis points up to 83 basis points. And that equals roughly spread from 40 up to 50 basis points. That means that at the end of the period, we do have SEK 40 billion, including SEK 1 billion in cash that are not used and that can be used to finance not only daily operations, but also debt that do mature in the CP and the bond market.

And that leads us to the next slide, please. On the right upper corner, we have the debt maturity. Apart from CP, it is only bonds in the domestic market that was due were spread out during quarters. Regarding 2021, we do have 1 bank debt in Q1 with the bank that we do have a very good relations with. And the rest that mature during 2021 is bonds. It is 10 bonds, equally spread out during the quarters. So with the cash from the operations, the SEK 40 billion in reserves, Castellum can finance all that matures and at the same time, meet the need from operations on a daily business, the rest of 2020 and a good way in 2021.

But we have not only worked with moving the property portfolio the last year, we have also worked hard with moving the funding side in order to get the diversified funding situation. And this slide is showing it. We have moved utilized volume in relative terms as well in absolute amount. Our financial KPIs are developing in a good way. Not at least regarding the LTV and the portion of unsecured assets.

The net debt-to-EBITDA has been rather stable despite increased interest-bearing volume in absolute amount and that key metric is -- and that metric is a key metric that is very relevant in those more turbulent times, maybe in some cases, more valuable than the valuation-driven financial metrics.

So let us go to the next slide.

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Henrik Saxborn, Castellum AB (publ) - CEO [10]

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Yes. Then come the hard part, the outlook. But let's us conclude where we started. Castellum is on stable grounds with our [tenant base], our strong cash flow and balance sheet. And on top of that, we have a very strong finance situation, and we have the capacity to, as Ulrika said, not enter the banks [more] over the last -- more than (inaudible).

So let us not forget. When we went into this crisis, the rental market started from a situation with very low vacancy and low production volume in the market. So we have still seen the same market vacancy in the office and logistics markets that we are standing still. The high-risk is at the moment in the retail, hotel industry and so on, as you all know.

So some difference for -- in my prediction, it's our -- it's a little bit different between towns, and it's still a market that has not softened yet. On the retail -- real estate market, it's all about the required yields on going forward. What we see so far on the office and logistics portfolio, it's not a big change in cash flow. It will be about risk, cash flow assumptions, alternative investments and, of course, financing.

So as long as the financing, as Ulrika said, is there, I don't see we will see a huge drop. So our view is it's all about time. How fast can this market come back? Castellum will be active. The strength will give us opportunities on the rental as well as the investment market. But it's too early to see exactly what that is.

During the time, we will invest in our tenants. There's a lot of planning. It's all about supporting the government in different developments. And there is the next phase is around SEK 2.5 billion that we will invest for them. And hopefully, all of that will start 2020. Our objective is still to create growth, even though the 10% is hard to reach a year at this.

And with that, we'll thank you all and leave for questions. Thank you very much.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Tobias Kaj of ABG.

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Tobias Kaj, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [2]

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Yes. I would like to start to off regarding your -- the 90% -- 96% of income that you write that you have received in Q4. I assume that's of contracted income. But have you -- if you compare the income to Q1, are there any discounts that you have given that are not included in the 96%?

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Henrik Saxborn, Castellum AB (publ) - CEO [3]

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No, it's not. Simply, we have just giving extremely few contracts. It's actually about hotels. Some -- they will simply pay the rent a little bit later. That's the only thing we've given. But it's all about going from quarterly to monthly payment instead. That is what's happened in volume, and that's the 4%. Nothing else.

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Tobias Kaj, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [4]

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And since you're right that I think it was SEK 58 million or 4% of the income, which have converted to monthly payments, does that mean that you're at like 99% received for the remaining part of the portfolio?

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Henrik Saxborn, Castellum AB (publ) - CEO [5]

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Yes. Yes, more or less, I should say. So we have -- we're very close to a normal pattern, and you are correct.

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Tobias Kaj, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [6]

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Okay. And you talked a bit about developments. And obviously, when you have, for example, the big project in Malmö Nya Domstolsverket already leased and with the government tenant, it's no-brainer to start it, but if you exclude the ones which you have worked with for a long period, do you still aim to start new projects in the same way as you plan for, say, 3 or 6 months ago? Or have you become more cautious? I mean you already have an all-time high in terms of remaining investments in your ongoing project portfolio?

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Henrik Saxborn, Castellum AB (publ) - CEO [7]

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Right now, we're evaluating all developments, of course, and we've gone through everything that had to have a decision or start process, even if it was SEK 1 million or more. And the ones that -- so railway is fleeting right now, how we will look at the risks, and that will be just from project in the future because of the market situations. And of course, contract volume.

So no decisions that was made pre-corona is active right now. So we have to go through decision proceeds on all developments that's not under production. So let us come back on that on volume, but we are, of course, as you understand, focusing what's ongoing as well as supporting the government when they want to grow in a time like this. So that's the situation.

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Tobias Kaj, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [8]

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Can you give some more detail regarding your co-working portfolio? You came from a small gain to a small loss in the first quarter. You mentioned that 10% -- you have had termination of 10% of the contract. Is that the kind of decline we should expect in income for Q2 compared to Q1? And also, how flexible are you on the cost side regarding co-working?

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Henrik Saxborn, Castellum AB (publ) - CEO [9]

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Yes. Yes. The co-working, they have been reacting -- let me start on costs. We have worked very quick on the co-working side, and I'm very pleased with the start of what's happened there. So we're down to working hours only 60%. But as you know, we have also costs for -- and the biggest one is rents, that is really hard to -- like every businesses, to adjust. And on the rent side, that's the biggest cost that we have.

On all other costs, we are cutting so much as possible, but supporting that -- the arenas is open [city]. On -- yes, if you're looking on the 12-year month basis, if it should stop now, that means a decrease on income of 10%. So that's the situation.

Did that answer your question?

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Tobias Kaj, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [10]

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Yes, more or less. And I actually have one final question, maybe more to Ulrika, and that's regarding your average interest rates, a very minor change here in the first quarter. Should we expect a bigger increase in the second quarter given that the Stibor increased quite a lot towards the end of this quarter and also related to increased credit spreads?

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Ulrika Danielsson, Castellum AB (publ) - CFO [11]

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Yes. Yes, if you do assume that Stibor will be here to stay on roughly 30 basis points. Then you see how much closing we do have. The other thing that you have to make assumptions about is if will the CP market be there or not, because if it will not be there, then we have to swap that to bank debt in relation to CP prices are a little bit more pricey.

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Tobias Kaj, ABG Sundal Collier Holding ASA, Research Division - Research Analyst [12]

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And are we talking about potentially 10 to 20 basis points higher average interest rates? Or can it be more?

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Ulrika Danielsson, Castellum AB (publ) - CFO [13]

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No, not more, not 20 basis points. I would -- it's hard because it's assumptions you need to make on the CP market, and I think that will have the impact in that case. So maximum 10 basis points, I would say, from what -- but that is assumptions in it.

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Operator [14]

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Our next question comes from the line of Fredric Cyon of Carnegie.

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Fredric Cyon, Carnegie Investment Bank AB, Research Division - Research Analyst [15]

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Few questions from my side. Starting off with the 96%. That is obviously reassuring. But could you put that into context? What is a normal level for Castellum?

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Henrik Saxborn, Castellum AB (publ) - CEO [16]

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Yes. Yes. I should say we are in a normal pattern. And we're charging normally this quarter, SEK 1.4 billion. And this is SEK 58 million that we're talking about, and this is the 4%. So a normal pattern.

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Fredric Cyon, Carnegie Investment Bank AB, Research Division - Research Analyst [17]

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And obviously, the corona situation worse than the -- was only a minor impact in late March perhaps. Shall we expect that, that 96% will be a lot lower when we conclude the second quarter?

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Henrik Saxborn, Castellum AB (publ) - CEO [18]

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It's very tough to say that to -- I mean, the effect and the worries when everything was due to pay. And also the liquidity situation for all our clients was tough at that moment, I'm very impressed. I'm impressed of the work done from our normal company. And I said that and what they're doing. So we have a good contact, and we know that we have had discussions with a lot of tenants during this time. And what we will have in front of us is really, really tough to say, but this, I think, believe is proving that we have a very strong customer base. And that is actually what we usually see in that. So I'm impressed with what the clients are doing here.

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Fredric Cyon, Carnegie Investment Bank AB, Research Division - Research Analyst [19]

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And then my final question related to valuation changes. The net effect is very limited. Are there any big variances within different type of premises? I guess, for instance, I noticed that logistics was -- the reported value yield was up 10 bps, which could be, of course -- could have been less than 10 bps, a rounding error, but it seems so that logistics will be more affected than other segment?

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Henrik Saxborn, Castellum AB (publ) - CEO [20]

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Yes. I mean it was before the epidemic, we was in a pattern of good growth on cash, actually because of renegotiation as you see. So that is 1 value going up. And then you have in different sectors, of course, you have hotels, for example. We have very few hotels, but they are, of course, effective in this valuation. So we have variations in it. And then we have stated that it's very tough for, say, where we was in the first of it -- the last of March when these valuations reflected because of its no evidence in the market, on the office portfolios. So that's our view on it.

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Fredric Cyon, Carnegie Investment Bank AB, Research Division - Research Analyst [21]

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Okay. So basically, it's not huge changes to the yield assumption. It's more about renegotiations. So then I would imagine that offices on Gothenburg has been decent in the first quarter than compared to [other segment]. Okay.

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Henrik Saxborn, Castellum AB (publ) - CEO [22]

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Absolutely.

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Ulrika Danielsson, Castellum AB (publ) - CFO [23]

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So it's a prudent valuation also depending on that we don't know, as we said earlier, the long-term impact. So it's a more cautious way to look at it at the moment.

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Operator [24]

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(Operator Instructions)

And there are no further questions at this time. Please go ahead, speakers.

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Henrik Saxborn, Castellum AB (publ) - CEO [25]

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Okay. Then we thank everyone for listening, and we hope to see you soon, but at least hear from you in the summer when we come in with the next report. Thank you very much.

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Ulrika Danielsson, Castellum AB (publ) - CFO [26]

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Thank you.

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Operator [27]

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This now concludes our call. Thank you for attending. Participants, you may disconnect your lines.