Earnings Transcript for MURGY - Q4 Fiscal Year 2019

Operator: Good day and welcome to the Munich Re 2019 Financial Results Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Christian Becker-Hussong. Please go ahead, sir.

Christian Becker-Hussong: Thank you, Tracy. Good afternoon to everyone. Very warm welcome to our conference call on Munich RE's 2019 earnings strategic update on our business and on the financial outlook for 2020. We will start with a presentation and this will be followed by a Q&A session. It's my pleasure to introduce to you today’s participants, Joachim Wenning, CEO of Munich Re Group; Christoph Jurecka, our CFO; Markus Rieß, CEO of ERGO; and Torsten Jeworrek, CEO of Reinsurance. I will be back after the presentation. And now I hand it over to you Joachim.

Joachim Wenning: [technical difficulty] ratio is very strong with 237%. It is still well above the target range of 175% to 220%,and we propose to increase our dividend to €9.8 per share. And as you know, since the day before, we have again decided a share buyback of €1 billion starting in May 2020. So for over 2 years now, we have been working to become more responsive, embrace and adopt digital solutions in our incumbent business models, and generate new ones mainly digital ones, reduce complexity and take resources out and to ultimately generate new business growth and increase earnings. And in 2018 we exactly match the expectations. In 2019, as momentum and the positive impact from this is growing, we over delivered both in reinsurance and at ERGO. In 2019, we consistently strengthened our initiatives that we have launched in reinsurance already in 2018. So we have again grown business profitably in select markets like in key nat cat markets in the U.S., in Japan and Latin America. We did the same in specialty lines like credit, but also the life and health reinsurance business has grown. Second, our so-called transformation program, which intends to reduce resources in the traditional reinsurers, the more transactional reinsurers, while at the same time investing into building new business models or extending new business models is very well on track. And we established a global single risk unit, thus increasing the focus on that type of business and again, reducing complexity. Some of our innovation investments are showing very encouraging progress. So, for example, digital partners were already productive in 2018. In 2019, they have doubled business volumes. Cyber has grown by 27% as anticipated, but it's a strong success. And our ambition to partner in the Canadian group life market together with incumbent clients and TPAs, is generating new income streams and is scaling up now. On the ERGO side, if you look on Slide 6, practically ERGO is improving under all metrics and delivering on its strategic pillars. And we actually expect ERGO by the end of this year to successfully finish the so-called ERGO strategy program. And by then sales of ERGO will have further increased, they started increasing already in 2018, more so 2019 and mainly due to a very massive productivity increase at the end of the tied-agents distribution network. ERGO International consolidation is finished with the sale of 18 companies and we've talked about automation, we've talked about nexible, I think in -- on previous occasions. On this occasion today, I'd like to highlight that ERGO has a minority stake in a startup called Next that you're aware of, which is targeting the U.S commercial lines business in the SME area, which is, as you know, a highly attractive and a fast growing market. If you look on Slide 7, then during the past two years, we have to concede that market conditions have improved substantially in various markets, but mainly in select nat cat segments, in the U.S., in Japan and in Latin America. And as you know, nat cat tends to be a more capital intense line of business. And this is exactly reflected on this slide that the risk capital consumption is growing faster than the business volumes, but this higher risk intensity is very well rewarded and is creating new value, which then is reflecting an increasing bottom line IFRS results. And on the investment side, we have been also making very good progress. For one, we wanted to establish one consistent investment strategy in the Group and develop investment processes very much in line with industry best practice. And secondly, we seek improving our return risk profile and we do so by extending the number of asset classes, mainly illiquid ones, which still show attractive returns, but also managed more actively our portfolio and also use external asset managers where those are better or have larger scale [indiscernible]. And as you all know, Slide 9, beside the pure financial view, integrating sustainability criteria into our business strategies and the business processes is more and more important. What you see on this slide is where we are standing and how we are standing on the basis of various metrics that we are applying for this. And we just want to send out the message that our ambition goes even further than that, and we have become member beginning of this year of the so-called net zero asset on the alliance seeking a climate neutral investment portfolio by 2050. On Slide 10, you can see the evidence that in 2019 our total shareholder return was 44%, which makes Munich Re second best performer of the defined peer group of four globally leading reinsurers and four global primary insurers headquartered in Europe. And with a dividend of now €9.8 per share, the dividend payout increases to €1.4 billion. And if you add to this, the 1 billion share buyback, then we will practically cash back €2.4 billion to our shareholders. The outlook for 2020, you can see in a nutshell on Slide 11. It's mostly unchanged. I can keep it short and say €52 billion premiums, roughly 3% return on investment. We expected €2.8 billion IFRS result and how that is split down into ERGO and reinsurance. You can see on that slide, take the combined ratios only as an indication. I'm underlying this because we had those discussions. It's not promises, it's an indication. And on the life and health reassurance side, we are expecting an increased technical result going from €500 million to €550 million. I will finish my remarks inviting you to attend our Investor Day on the 8th of December in 2020. And on this occasion, we plan to inform you about any strategic initiatives that we are planning and what the financial ambition is that we will have beyond 2020. And I'd like to also add before that date, I would understand if you have questions of what the trend is, but please forgive us on the 8th only we will give you all the answers. Thank you so far. And with this, I hand over to Christoph.

Christoph Jurecka: Thank you, Joachim. Good afternoon also from my side. I will give you a short overview of our current finance and risk topics starting on Page 14. We are very pleased with the 2019 financial performance and particularly as we’ve to digest very high one-time large losses in Q4. This IFRS result of €2.7 billion we are showing, this is clearly above our initial guidance of the year. And what were the drivers? First of all, the earnings growth in reinsurance where we’re able to improve our underlying combined ratio to a level of 98 to 99. Now this year, just to remind you, the underlying combined ratio is the normalized combine ratio where we take out some one-offs where we think that they are not representative for the operating performance of the respective year. ERGO, once ahead -- is ahead of its target, delivered nicely and more than in line with USP program. And then on top of that, this strong investment result we were having nicely showing an increased investment result. But on top of that our unrealized gains increased significantly, for the total return of 7.7%. German earnings came in lower mainly due to the replenishment of the equalization provision and some higher tax expenses in German GAAP only. Our stock of distributable earnings, and this is important now. Our stock of distributable earnings supports the dividend increase as well as the share buyback easily. Our economic capitalization with a Solvency II ratio of 237% continues to be very strong. And I remind you that in these figures we already deducted the share buyback and the dividend. And despite the fact that interest rates have been declining and we are guiding our book substantially. I'd like to particularly highlight the economic earnings of above €7 billion in 2019, which indeed have been exceptionally high and we're able to more than compensate the growth as well as interest rates with an increase of the required capital. On Page 15, then some details on the Q4 results and the major drivers. I'd like to start with the operating results us, not in the slide, but maybe a comment on the operating results. We achieved €580 million operating result where the consensus was €5.88. So on the operating result level, we were really meeting the consensus very precisely. Only on the net income level desegregation between the consensus and the net income mostly driven to the ethics developments we saw in the fourth quarter where the positive development on the FX side until Q3 was taken back to a large extent. Looking at the net income, the reinsurance contributed €160 million to the net income, and our goal contributed €101 million. And with it fully in line with the run rate for the full-year. Reinsurance was affected by high large losses in the fourth quarter. I mentioned that already. And then on top of that, we strengthened the assumptions for our Australian life business by approximately €200 million. This is reflected in the technical result. And especially the combined ratio and PNC shows this -- that this high large losses with the major loss ratio of 27.4%. The average combined ratios continue to be very low. Maybe one more personal remark on the Life and Health Re technical result. We thought this came in substantially higher than I would have felt, I would have personally expected with a full-year result of 456, we are pretty close to the 500. Where we did warned you throughout the year that it's probably not no longer possible to get close or to achieve the 500 that we are that close now at the year-end given the fact that we increased to sales By these €200 million is exceptionally good in my view, and has to do with an outperformance of our expectations in more or less all markets except Australia. On the investment result side, return on investment, 3.1 in the quarter, pretty consistent with the 3.2 for the full year. The investment yield in Q4 was a little bit lower than the other three quarters of the year due to investments into shorter duration securities. On the next slide, I'd like to talk a little bit about our balance sheet strength. On top of our high earnings level in 2019, our balance sheet strength continued to be very strong. That generally our practice is that we try to be very prudent in reserving and have a very stringent risk management approach to protect earnings, especially in times of elevated volatility. So let's start with reserving on the left hand side of the slide. You know that our prudent setting of reserves unwind over time, leading to releases, which then support the financial results of the respected year. In 2019, we were able to release 5.6 percentage points, despite significant reserve strengthening, we had to do for U.S casualty. And still and this is important, I'd like to underline that still over reserve strength overall remains unchanged. On the investment side, our defensive investment portfolio and the ALM have been the basis for delivering again a stable investment return despite the low interest rate environment. We have €33 billion of unrealized gains now and there it's kind of a normal course of things that part of this was being realized. We try to be as reluctant as possible with that, but still also this year, again, these realizations overcompensated the losses we had on derivatives for hedging purposes. Finally, taxes, very quickly, there the reserving approach is pretty similar to what we do on the claim side. So initial reserves are being set prudently and once the topics are clarified, usually we can enjoy releases from tax reserves as well. That's something which happened in 2019 again, and therefore, the tax rate of 15% was pretty low due to some releases we are able to make. While at the same time, the overall tax reserve position is unchanged. On Page 17, some more details on P&C reserving. Overall, I mentioned that already, but again, very favorable reserve development. But on the U.S. casualty to enter something, which we've see in the whole market and the whole industry, and of course, we are also concerned about some of the developments we are seeing there. For our own large and diversified U.S. portfolio, it's important to distinguish between different areas. And in some of these areas, we have observed adverse development, particularly in the commercial liability space. And ever we saw that very much in line with our prudent reserving approach immediately and very significantly strengthened the reserves in 2019, after having taken action in 2017 already and also in 2018. So this is nothing new at all. It's just the usual course of things that we -- where we think it's necessary. On the other hand, there are other books in our portfolio, like personal lines where we did see a pretty normal development and overall our casualty book is quite satisfying. Furthermore, developments in asbestos as well as workers comp has been favorable in 2019. So overall in aggregate level, another year underlining our strong and very solid reserve positions in an environment with quite some issues in the industry, and as we said, also in some of our books. But -- and that’s again important to notice, as already in 2018 and '17 positive developments overcompensated Italy all the reserve strengthening, which we had to make in some of our books. And that we were able to on top of just compensating the pockets that we had to take action. On top of that, we were able to reduce to 5.6 percentage points of our net earn premiums this year. On average 5.4 for the last seven years, and this is clearly satisfactory. On the next page, the focus on the investment result. For last couple of years we were impacted by the low interest rates quite heavily. But then that's what you can see on the slide. Our investment return proved to be pretty stable. These stable returns are a result out of our well balanced, long duration, high quality investment portfolio, including managing some of the risks with derivatives. And then, of course, to some extent it's unavoidable that that reserves are being realized. We do so only in case really we need to do that, like for financing the ZZR in -- at ERGO or for ALM purposes, where it's really -- where we really feel very much under pressure to take action to optimize our ALM position. On top of that, the day to day portfolio turnover, of course, sometimes it's really unavoidable to realize something because there's nearly any security left in our portfolio without any unrealized gains. Out of these realizations, we think the impact for the future on the running yield will be minus 5 basis points roughly. There's another effect of minus 5 basis points from the lower reinvestment yields or the lower investment in the environment right now compared to what we have in the book. And so, overall, the attrition is expected to be minus 10 basis points. But then also we’re investing in non fixed income securities like infrastructure, like private equity, like real estate, which also helps us to partly at least compensate the negative attrition we have in our book. Page 19, quick view on local GAAP. Local GAAP result of €1.5 billion is lower than the capital repatriation in 2019. The main driver here is the significant contribution to the equalization provision, despite the year with very high losses. You know that generally our local GAAP result is protected against volatility and then stabilized by this equalization provision. But of course, on the flipside is that we eventually have to refill it. And especially in 2019, when the replenishment was pretty significant. If I would adjust for this replenishment of equalization provision and some tax effects, local GAAP would have covered the capital repatriation. These differences we have between local GAAP IFRS, economic earnings, which are much higher than IFRS, this is something -- and you know that, of course, which is just a natural thing with different accounting standards in place and just shows timing differences. So the money is not gone. It's just being recognized at a different point in time in our P&L statement, and therefore it's just a different distribution of earnings over time. The economic focus and the economic beneficial year we had in 2019 is not affected by that. For 2020, similar to IFRS, we expect local GAAP to be above the 2019 level. Page 20, the Solvency II ratio largely stable and still pretty high above the optimal range, 237%. And this includes already the deduction of the share buyback and of the dividend. And for the first time, we’ve been applying the volatility adjustment for some of the ERGO entities, which we think is an important step to improve the comparability to our peers. The impact on the ratio is 6 percentage points only, so there was not nearly a necessity to do so, but we think comparability is important here. There have been many debates around our capitalization in the past, of course. For some years, we have been asked why we are not more active in bringing the ratio down in Q3. The other hand, we’ve been asked what would happen if we would then finally be at 22%, 20%, or even below that. I can only say we feel very comfortable with the current level of capital we have. We were able to absorb the pressure from the low interest rates quite nicely. We were able to finance our growth and we were able to deliver a strong operating performance, which was usually compensating the growth and interest rate driven SCR increase. More details on the sources of earnings will be provided with the disclosure of our annual report on March 18. Page 21 a quick view on the SCR increase. The increase was almost €3 billion across all the risk categories, major driver of business growth and reinsurance in line with the risk-bearing capacity, which also was increasing. On top of that, the decline of the interest rates, of course, and also currency effects. Of all, we were able to further improve our risk profile, because the insurance risk now even more clearly exceed the investment risk than a year ago. We have now €15.2 billion of insurance risks versus €14.3 billion on the investment side. So we continue to be in a very sweet spot with respect to our risk profile. On my last page, then 22, only quickly some CFO housekeeping remarks. to improve our ability and the consistency across our segments and also with peers. To improve the ability and the consistently across our segments and also with peers, we decided to change our disclosure in 2020 in some limited aspects. We'll firstly concentrate more on the IFRS return on equity going forward and discontinue to present the RORAC. Secondly, we will harmonize the definitions for admin and other operating costs between reinsurance and ERGO, and will thereby move the reinsurance also somewhat closer to what market practices for some of our peers. By doing so, our P&C combined ratio will decrease to 0.5 to 1 percentage points. And then finally we will move other costs at ERGO for non-operating to operating to have a clear distinction between operating and non-operating result components to give you a little bit more transparency on that going forward. That's it for my side. Thank you for your attention. And with that, I'm happy to hand it over to Marcus.

Markus Rieß: Thank you. Christoph. I am very happy to present you the 2019 results of ERGO. I repeat what Joachim said, this is the last year 2020 of our ERGO strategy program. So 2019 was the second last year. And if you look at the development, I think we can be very happy across the board and can look at this as a confirmation that we are well on track to achieve our ESP targets by the end of this year. If you follow me on Page 24, you basically have the standard array of KPIs that we have presented to you from the beginning, and I'm happy to report that they are all at target or even better than what we anticipated. There is growth in premiums. You see that in the next couple of slides, which is widely dispersed around all our companies. We have -- and again, increase profit of €440 million after €412 million in 2018. The investments now for the first time in 2019, the higher than budgeted on the isolated 2019 year. We had a quarter of 117% and we can -- we are now confident to say that we will achieve the ESP targets without exploiting the full 1 billion that we have anticipated, but we rather currently estimate the overall investments in the order of magnitude of €920 million. The total cost savings come in as planned, current status is €234 million and the combined ratio of P&C Germany, obviously one of our key KPIs is now already down to 92.3%, which is pretty much on target as per 2020 already. The following page introduces again to you the progress that we’ve made according to the way we structure our business between Germany digital business and the international business. Now you know most of that, that's why I will again focus only on the highlights. In Germany, we have yet another year of increased sales. The sale increase year-over-year is 6%. The productivity of our tied-agents, which is one of the key leading KPIs, when it comes to customer orientation and profit orientation is 18%. Another year of 18% productivity increase is really remarkable and it shows that we are very well underway in the sales area. We have now integrated our brands into ERGO launched a new website, that shows this integrated approach. So what used to be a concept now has become reality in Germany and the number speak for themselves. On the Digital Venture side, we are going one step further with nexible. We have 23% growth in our pure digital player. We are now focusing very stringently on process automation and optimization because as you remember medium term, this should be a very, very scalable organization with very low administration costs. So one of the housekeeping items here is to make sure now that we have a critical mass of clients, 100,000 risks, that we really streamlined the processes as much as possible before we scale up further. Good progress in ERGO Mobility Solutions as well as in robotics. I think a more interesting KPIs here that every two weeks we come up with a new robotic solution that substitutes repetitive tasks by technology, and thus increasingly substitutes manpower by technology. On the international side, I'm happy to reemphasize what Joachim said. The portfolio consolidation optimization phase is over. Technically, we acknowledge in the footnote that closings will take place during 2020, but it's all being negotiated and signed. We have now very stable situation in which the core markets are well positioned and there we also have a growing franchise both in China and obviously in India. I will come to that in a second. And I'm very happy that we have now a strong and I'd say this low volatility effect, that’s kind of net income on the international side. Technology is one of the key drivers. And I'm very happy that I could write down a couple of interesting sentences for you. Basically, we are much more better in providing digital solutions and digital assets throughout the group. We work on portability of digital assets and we use them primarily on the sales side when it comes to using them for pure omni-channel behavior on the customer side. Now there are a couple of numbers with slides, which I understood -- numbers, which I understand that Christian Becker-Hussong has already related to you, the key information. So again, I'd be very brief and very happy to be available for questions later. You see here our segments strong performance across the board. The only number that is negative compared to the last year is the life number. Here you have to bear in mind that we obviously have the run off effect of the back-book, which is still more significant than the new business in the new book, as expected, I can say. And also on life Germany, the last year had one -- very significant positive one-off effect, which we didn't have again in 2019 and still €187 million net profit, it's a very interesting number. The other thing I'd like to comment is on the international net income. We had in 2019 €50 million of adverse effects because of the portfolio optimization and we were still be able to achieve €105 million net income in the segment, which is very positive. If I look at the combined ratios, it's 94.3%, which is a record low on the international business. The combined ratio in Germany has come down. So these are very nice sets of KPIs. If you go into the segments and starting with Life, the new book now accounts for 20% of the overall share of Life Germany. It is composed of 49% biometric and 59% capital market related. As you call, we will -- we will built a book with low interest rate sensitivity and we are well underway. What I find very pleasing is that our products are very well accepted both with the clients and with our distribution partners. And testament of this is the 29% growth in 2019 over 2018. You'll remember also from our previous discussions that we had notable deficits in the IT and the back-book, and it's too early to claim our efforts a success. But I'm very positive that the migration of the first task that will be a quarter of all of our 6 million policies will take place this summer, probably in July. We are very happy that preparations are going very well. And so when we talk next time, I can talk to you about the results, but already currently you find me quite optimistic with regards to the IT migration on the back-book. The following page deals with Life and Health. And you know that in health we have a pretty strong position in Germany. We are number two in the comprehensive insurance and number one in the supplementary insurance. The number of insured persons which we use as a KPI has again increased by another 60,000 to €5.231 million, which gives us a market share of a little over 21%, which is a strong leadership position. The composition of the book is also good. We have now 32% of supplementary insurance as opposed to roughly 30% four years ago. So it is going into the right direction and we are very happy about this. On the P&C side, I can report two positive things. As you might recall, in 2016 when you asked us what is the expected growth rate that you could give us in terms of a compound annual growth rates on the premium of P&C? I reluctantly said 2% because I knew that there were a lot of portfolio cleansing that need to be done. I can happily report now that we have achieved 3.1% since the beginning of the program and the last year, even 3.6%, which technically is a growth above the market. And I think it's too early to tell whether this is a trend, but it's very clear that this positive development in P&C insurance has come together with a higher goals than anticipated, which is plus minus around the market growth, plus significantly increased profitability as you see on the right hand side, and that obviously is a very strong message. On the right hand side, you see the combined ratio, it's now down to 92.3%. Out of the 4% that we promised to achieve an improvement in expense ratio, we now have cashed in, so to speak, more than 3%. So three quarters of the way is already accomplished. We will lose -- we'll get the last quarter in 2020 and also decline ratio has significantly come down. So I think that is a very strong combined ratio that we can present. The last picture of mine deals with the international portfolio. And I have already said most of the things that are on the slides. The only thing I would like to say again is that we have a very interesting triangle of observations. We have growth in premiums, we have better technical results and we have cost savings, which makes me personally optimistic that this strong performance is not only a one-off, but we have created the basis now into a strong performance for the medium term. And you see this, for example, also in our growth markets, on the lower right hand side, where we have been able to achieve a compound annual growth rates of 30% reaching now €700 million and that is only for the roughly 49% that we have and 50% that we have in those markets. So that is now already part of a significant level of our overall premiums in the international business. My summary is, ERGO is well underway. We have yet another year where we have outperformed our targets. You can rest assure that we will be extremely focused for 2020 to drive home and bring home the ESP fully, and therefore, then translate into €530 million net profit. That was the target that we set ourselves in 2015. And you will today see me very confident that we will be able to achieve that. And with that, I hand over to Torsten.

Torsten Jeworrek: Okay. Thank you very much, Markus, and good afternoon, ladies and gentlemen. In my short presentation, I will try to cover three parts. I come back to the 2019 results, give some insights. In my second part, I will discuss the January 1 renewal and in my third part, the strategic particular innovation initiatives. I'm on Slide 32. That is the property and casualty business in 2019. Don't want to repeat all the figures. Overall, result was very satisfactory with more than €1.5 billion. However, technical performance was a combined ratio of 101% for the full-year was behind expectation. Christoph mentioned that was only driven by a very high nat cat loss experience, but also large single losses were above expectation. Overall, the large loss in cat ratio was 15.2%, 3.2% above our 12% average expectation. To some extent you could ask why was Hagibis, the Japanese loss was €780 million higher than the Jebi before. That has to do to some extent with the region, but even more so with our risk appetite. After 2018, after Jebi and Trami, the terms in Japan improved and we increased our risk appetite in 2019. In the hindsight, you can say it's a wrong time, right? But on the basis of much better terms than in the years before. Reserves, Christoph mentioned that already. Overall, reserve level is in line with, I would say the last 10 years before very satisfactory, despite we have to take action and took action in some of the U.S segments. And I will come later to the United States casualty business and will give some more insight about that. When I compare, let's say, the volatility from cat and large single man-made losses on one hand and then compared with a very satisfactory reserve level in the overall book in 2019. My judgment would be volatility is at the end our business. You can say, of course, we don't like it, but it's our business that we are therefore. We write this and should justify this business as long as it stays in our risk appetite and as long as our models are right. For all the large loss events and the cat events in 2019, we have no reason to believe that any of our assumptions is violated or not met. So these cat losses and large single risk losses do occur. And of course, we have to make sure that we get the right premium for that and gets improvements. Reserve problems are more problematic and we are very happy that we have a very conservative policy in place and take immediate action, which helps us to speak to manage our overall portfolio immediately. Christoph also mentioned the underlying combined ratio underlying between 98%, 99%. That is slightly above our 97%, which we expected to achieve. And you can say why is it still above? Yes, there's some noise in the underlying figures, but where there's one major reason, and that is also because of the adverse developments in the U.S business, we decided basically to have more conservative loss picks in the current underwriting year. So that means what we saw and see from the past has an immediate impact on our assumption also into current underwriting year, which of course moves the combined ratio, the underlying combined ratio slightly up. Considering the changes in the allocation of the admin cost ratio, but also considering the rate change, the positive rate change we report later from the renewal. These two factors will change our assumptions and we think in 2020 we are confident to achieve the 97%. Next slide, that is the Life business -- €450 million. Christoph mentioned that almost achieved our €500 million target. All continents or regions in the world deliver very well. The only regions where we still struggling and took a reserve of €200 million was Australia. So that means if you take the assumption, that is my assumption that Australia for the time being is well reserved, then I think there's a realistic chance to meet the target, and that is also the reason why we decided to increase it. I skipped the next Slide, Slide 34, where you see our three major pillars in our strategy

Christian Becker-Hussong: Thank you, gentlemen. We will now start with a Q&A. So may I please remind you to limit the number of your questions to a maximum of two questions per person in order to give all of you a fair chance to participate in the Q&A. So thank you. And back to Tracy. Please go ahead.

Operator: Thank you, sir. [Operator Instructions] We will now take our first question from Vikram Gandhi from Societe Generale. Please go ahead.

Operator: We will now take our next question from Kamran Hossain from RBC. Please go ahead.

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Operator: We will now take a follow-up question from Vikram Gandhi from Societe Generale. Please go ahead.

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Operator: We will now take our next question from Paris Hadjiantonis from Exane BNP Paribas. Please go ahead.

Operator: There appears to be no …

Christian Becker-Hussong: Okay. That there don't seem to be any further questions. So I guess we will close this call now. Thank you very much for joining us this afternoon and for your questions. The IR team is, of course, happy to answer further questions you might have. So bye for now. Thank you again for joining us.

Operator: This concludes today's call. Thank you for your participation, ladies and gentlemen. You may now disconnect.