Earnings call transcript: Leggett & Platt Q4 2024 misses EPS, stock rises 7.4%

Leggett & Platt Incorporated reported its Q4 2024 earnings, revealing an EPS of $0.21, falling short of the forecasted $0.25. Despite the earnings miss, the company’s revenue of $1.1 billion surpassed expectations of $1.04 billion, contributing to a 7.4% rise in after-hours stock trading. The stock climbed from $9.73 to $10.45, reflecting investor optimism fueled by robust revenue performance and strategic initiatives.

Key Takeaways

• Revenue exceeded forecasts by $60 million, reaching $1.1 billion.
• Stock price surged 7.4% in after-hours trading despite an EPS miss.
• Strategic focus on green ventures aligns with long-term growth plans.
• AFFO guidance for 2025 suggests a potential 7% increase.
• The company is targeting a reduction in vacancy rates and LTV.

Company Performance

Leggett & Platt demonstrated resilience in Q4 2024 with a revenue beat, despite missing EPS forecasts. The company’s focus on diversifying its offerings and optimizing its portfolio has positioned it well within the affordable housing market, despite broader challenges in the German residential sector. The integration of the BCP portfolio further strengthens its competitive stance.

Financial Highlights

• Revenue: $1.1 billion, up from the forecasted $1.04 billion.
• Earnings per share: $0.21, below the forecasted $0.25.
• AFFO increased by 10.6% to €204 million.
• Net core rent grew by 3% to €859.4 million.

Earnings vs. Forecast

The company reported an EPS of $0.21, missing the forecast of $0.25 by 16%. However, revenue exceeded expectations by approximately 5.8%, highlighting strong operational execution.

Market Reaction

Following the earnings announcement, Leggett & Platt’s stock rose 7.4% in after-hours trading. The stock’s movement suggests investor confidence in the company’s revenue performance and strategic direction, despite the EPS miss. The current trading price remains near its 52-week low, indicating potential for a rebound.

Outlook & Guidance

For 2025, Leggett & Platt projects AFFO to increase by 7%, with expected net core rent growth of 3.4% to 3.6%. The company continues to focus on portfolio optimization and aims to reduce its loan-to-value ratio to 45% in the mid-term.

Executive Commentary

CEO Lars von Lachombe emphasized a conservative approach to financial management, stating, "Cash is king. We will stick to our AFFO steering and our conservative setup." He also highlighted the strategic importance of steering based on cash, reinforcing the company’s commitment to financial stability.

Risks and Challenges

• Potential macroeconomic pressures impacting future earnings.
• Continued undersupply in the housing market could constrain growth.
• High vacancy rates in the property sector may pose risks.
• Integration challenges with the BCP portfolio.
• Regulatory changes in the housing market could affect operations.

Q&A

During the earnings call, analysts inquired about the potential partial sales of green ventures and the impact of the new government on the housing market. The company addressed these concerns by emphasizing its strategic focus on cash management and portfolio optimization.

Full transcript - Leggett & Platt (LEG) Q4 2024:

Maurits, Call Operator: Ladies and gentlemen, welcome to the LEE Mobility full year twenty twenty four conference call and live webcast. I’m Maurits, the co host call operator. I would like to remind you that all participants will be in a listen only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing and 1 on your telephone.

For operator assistance, please press and 0. The conference must not be recorded for publication or broadcast. At this time, it’s my pleasure to hand over to Mr. Frank Kopfinger, Head of Investor Relations. Please go ahead, sir.

Frank Kopfinger, Head of Investor Relations, LEG Mobility: Thank you, Moritz, and good morning, everyone, from Dusseldorf. Welcome to our call for our full year results 2024, and thank you for your participation. We have in the call our entire management team with our CEO, Lars von Lachombe our CFO, Katrin Koehling as well as our COO, Volker Wiegle. You’ll find the presentation document as well as the annual report and documents within the IR section of our homepage. Please note that there is also a disclaimer which you’ll find on Page three of our presentation.

And without further ado, I hand it over to you Lars.

Lars von Lachombe, CEO, LEG Mobility: Thank you, Frank. A very good morning also from my side. It is with great pleasure to present to you our twenty twenty four highlights before Forker and Katharine provide you with more detail on operations as well as financing. The top level headline of this year’s annual report reads Simple, Smart, Efficient. While the title perfectly matches the picture showing the installation of an air to air heat pump as one of our key tools to decarbonize the portfolio, the title also holds true for our entire results.

Our results for 2024 are simple because these strictly follow the well known promised and delivered principle. We promised and delivered in a challenging environment as the real estate industry was still somewhat absorbed in doing its homework, but on the back of a very solid and stable business model. It holds true for all our ambitious operational as well as financial targets and regarding the only non achievement, the LTV, we made some further progress towards our midterm targets. Our results for 2024 are smart because we strictly executed our cash oriented steering along our core KPI AFFO. We introduced that steering approach more than two years ago.

The cash is king focus continues to pay off. We are going to stick to it also in 2025, so cash remains king for LEG. Focusing on cash generation and steering the business accordingly avoids an engagement in complex financing structures, sales of core assets or capital intensive project development. We simply, or I have to say smartly, steer based on cash and it allows you to easily benchmark our progress. We were able to deliver a very strong almost 11% growth of the AFFO to EUR 200,400,000.0.

Please keep in mind that we achieved that by offsetting the positive one off contribution of over EUR25 million from the green energy sale last year and at the same time by increasing the investment in our assets by more than EUR20 million. While AFFO remains our core KPI for 2025, we expect another growth of more than 7%, taking the midpoint of our guidance range into consideration. Our results for 2024 are efficient as well because the proposed dividend is directly linked to the generated AFFO. We earned per share of AFFO from our core business and living up to our dividend policy, we will propose to pass exactly that amount forward to our shareholders. Our dividend proposal does not include any net proceeds from disposals as due to the current volatility in the market, we still prefer to strengthen our balance sheet and work on our LTV to bring that closer to our midterm target.

The strong financial results come on the back of some strong progress in optimizing our portfolio. In 2024, we transferred 2,500 non core units. We signed another 1,800 non core units, and those will be transferred in 2025. Overall, we dispose of around 4,300 non core units and realized total proceeds of EUR400 million. Due to the timing difference between signing and transfer of ownership, EUR255 million of gross proceeds and EUR180 million of net proceeds are reflected in our 2024 accounts.

The remaining volume is expected to reach our accounts in 2025. So we continue to be able to dispose volumes, which are significant to us, in total above book value. Therefore, we will continuously strive to execute our sales program also in 2025, but be as disciplined on price as in the past years. The strong financial results come on the back of likewise strong operational numbers. We increased the net core rent on a like for like basis by 3.4% for the entire portfolio and for the free finance part by 4%.

Both numbers come in at the top end of our guidance ranges, reflecting the strong underlying dynamics in the affordable housing market. We expect the market dynamics to remain intact for quite some time as the number of new building permissions is at the lowest level since 2010. Consequently, the number of completions will continue to drop, probably this year even below 200,000 units. The undersupply in the market will grow further. The strong financial results come on the back of some significant progress on the financing side.

We were able to bring down again our already low cash financing costs to very competitive 1.49%. We reached that result by issuing low coupon bonds as well as by paying back debt with higher financing costs. Certainly, we’ll need to refinancing upcoming maturities in the current higher interest rate environment, but our low starting base provides us with a substantial spread. The high cash level of more than EUR900 million at the end of twenty twenty four covers all 20 20 five maturities as well as the planned refinancing of BCP’s debt. Therefore, we will continue to optimize our financing costs by using opportunistically the different financing tools at hand to address twenty twenty six maturities.

Regarding valuation of our real estate assets, we guided towards a revaluation in the range of 0% to 0.5% in November. For H2 twenty twenty four, we recognized a positive revaluation of 0.4% in our accounts, I. E. At the upper end of the given range. That is the first positive number after the value started to decline from mid-twenty twenty two onwards.

Despite the current times of high volatility, increasing uncertainty and growing complexity, we are happy to confirm our 2025 guidance. We expect to reach an AFFO between million and million. Taking the 2025 midpoint of the guided range into account, this translates into an increase of more than 7%. After an increase of 11% this year, we continue to deliver improving cash results driven by further rising rents, slightly higher investments in our asset base and the clean balance sheet. I move now to Slide seven to provide you with an update on BCP.

As of today, we are proud are the proud owner of 88.2% of BCP after increasing our shareholding by 52.7% at the beginning of the year. In our integration work, we currently focus on the setup of the tech structures. As soon as that is in place, we will go ahead with a tender offer for the outstanding shares. The operational integration not being dependent on the tender offer, we started the handover of all operational activities from day one, I. E, early January.

By now, the BCP portfolio is fully integrated into our systems. The management follows LNG’s market leading standards and processes. We were able to benefit from our experience of onboarding bigger portfolios to our platform, so we are happy to report a seamless integration into our operating platform. At the same time, we made excellent progress in refinancing BCP’s financial liabilities. As you might have seen, we were able to pay back the shekel denominated bonds, which BCP had issued in the Israeli market.

Additionally, we were able to repay expensive secured financings totaling more than million. According to IFS III, we were obliged to do a preliminary purchase price allocation. You can find the respective information on Page two sixty five of our annual report. On that preliminary basis, a bed will of almost million will be recognized in our accounts, confirming the extractiveness of the acquisition. Please take note that the purchase price allocation is is based on our standard valuation approach for unbilled land, I.

E. The plots of land in Dusseldorf, the one in Geraheim and the one in Garfinburg are included at land value. As shared with you in November, BCP will not yet be a contributor to our AFFO in 2025. We continue to expect a neutral effect to AFFO as a higher CapEx requirement will offset the underlying FFO1 contribution. Let me give you a brief update on LNG’s revised ESG strategy on the following slide.

In volatile times, focus, rightly so, is on financials, purely financials. Nevertheless, ESG has been and remains an integral part of our strategy. Still, we considered it to be necessary to revise our ESG strategy in some important points. Firstly, we need to live up to the German legal obligation to reach climate neutrality by 02/1945, not more, not less. Certainly, all of LNG’s ESG activities need to reduce CO2 emissions as efficiently as possible to reach that legal target.

Therefore, we consequently do not strive for energy efficiency, but for emission efficiency. Sounds similar, but it could not be more different. While the earlier is all about the improvement of arbitrary EPCs, the letter is about reducing CO2 emissions at the lowest cost possible. The latter is LNG’s sole short term target, which we will measure in the reduction of tons of CO2 emissions. Secondly, our green ventures, I.

E. Renovate for serial modernization, Decabo for air to air heat pumps and Termuz for AI driven thermostats need to contribute to our earnings base. As all three ventures gain track in the market and were able to win substantial third market contracts, it is now time to set ambitious financial targets for all of them. We strive for an earnings contribution from those activities on a cumulative basis of million until 2028. As always, we will give you full transparency on our progress by adding a new line item in our AFFO calculation.

That is the only long term ESG target, which we will strive for. Thirdly, we have and will live up to the European legal obligation to publish a full scale CRSRD report. This report has been audited by Deloitte and is part of our annual report published today. Rest assured that we will not steer the company according to the information included in this report. Most of the data points provided are completely meaningless.

Take the gender pay gap for example, which shows that women are paid better than men at LNG. The reason for that is easily explained. We employ more male blue collar workers and more female white collar workers, I. E, a completely meaningless KPI. Over the coming weeks, we will provide you with additional information on our ESC strategy.

The documents will include all data necessary for you and your ESG teams in a comprehensive presentation and a detailed compendium called Factbook. And with this, I hand it over to Volker for his presentation on our operational successes.

Volker Wiegle, COO, LEG Mobility: Thank you, Lars, and good morning, everyone. I’m now on Slide 10. The investment market in Germany has regained momentum. We have a slide on the investment market on Page 31 in the presentation. Investment volume increased by 78% to more than EUR 9,000,000,000.

This is, however, still significantly below the long term average volume of the market. The market recovery certainly also benefited our disposal program. In 2024, we disposed of roughly 2,500 non core units, half of which in Q4 twenty twenty four, translating into annual gross proceeds of EUR $250,000,000, EUR 1 hundred and 50 million or net proceeds of EUR 180,000,000. On top of this, there are roughly 1,800 more non core units already signed as of today without being transferred until the end of twenty twenty four. Most of those units, I.

E. Around 1,000 will be transferred already in Q1 twenty twenty five. With this, we will make a strong start into 2025 with EUR150 million of proceeds to be accounted for. You can find an overview of our yet to be transferred disposals on the right hand side of the diagram. In total, all sales have been executed above our current book value.

And there’s more to come. Now that important buyer groups like institutional investors and family office are back on the market, we expect to see increasing demand for an attractive asset class like German resi. We will continue our disposal program and currently around 3,000 non core units are up for disposal. There is no official disposal target from our side. We will continue our portfolio management actions.

We simply stay focused on maximizing shareholder value by never compromising on sales price. The next slide reflects the changes in the size of our portfolio since the end of twenty twenty two. The line divestments only includes the units for which the transfer of ownership has already taken place. The few additions are solely attributable to conversions of assets. Our small pipeline of newbuilds will be completed in 2025.

Those units are not yet included in this graph. The remaining cash outflow for these projects amounts to as little as EUR 24,000,000. You can find some more information on this topic in the back on Page 37. Moving on to slide 12 and our rent growth guidance. As of year 2024, our like for like rent growth amounted to 3.4%, thus reaching the upper end of our guidance range.

This was equally driven by rent increases from rent table adjustments and modernization relating. The free finance units were the only segments to contribute to this, as there was no cost rent adjustment for the subsidized part in 2024. With an increase of 4% like for like rent growth, the free finance part also came out at the upper end of its respective guidance of 3.8% to 4%. This certainly reflects the strong ongoing market dynamics. Looking at our three market segments, we can identify the strongest performance in the stable markets with plus 4.6%.

The refinance rents in the high growth markets and higher yielding markets increased by 3.7% or 3.6% respectively. For the full year 2025, we expect the rental growth dynamics to persist. We assume a rent growth for the full residential portfolio between 3.4% to 3.6%. As there will be no increase on the 19% of subsidized units in our portfolio in this year, the rent growth is solely driven by a more than 4% rent increase in the free finance part. The increasing market momentum is reflected in the latest rent table publication.

Dortmund, our biggest location with more than 13,000 units, we saw a rent table increase by around 6% based on our portfolio. While market dynamics continue, regulation became even more restrictive. From the 03/01/2025, a new tenant protection regulation in North Hemisphere took effect. Instead of 18 markets, now 57 municipalities qualify as tight markets. That change increases the number of affected units from around 25,000 to around 39,000 units in our portfolio.

Percentage wise, it applies to roughly 23% including the BCP portfolio. That means that the rent for sitting tenants can only be increased by 15% within three years and new tenants are protected by the rental break regulation. Nevertheless, we can confirm our growth guidance for this year of 3.4% to 3.6% for the portfolio on a like for like basis. I’m now on the next slide for some details on our investments. In line with our planning, adjusted investments in 2024 slightly declined by 2.9% to per square meter.

This meets perfectly our full year investment guidance of per square meter. As you might remember, we originally guided for EUR32 per square meter and increased it to EUR34. We used the additional money to increase our spending and churn costs investments, which helped to further bring down our vacancy rates to an excellent level of 2.3. The other part of the increase in investment was driven by a commercial complex, a hotel complex in Rariting. There, an already signed sale of that complex failed in 2024 as the buyer could not secure the financing.

Therefore, we decided to do the investments ourselves and secure a new tenant. We are happy that we quickly found a well known international hotel operator, which will reopen the hotel in the second half of the year. We plan to put the asset back in the market for disposal in the coming months. Furthermore, with our focus on cash rather than on accounting, maintenance expenses continue to increase disproportionately to CapEx. Hence, the adjusted capitalization ratio of 58% was further down 180 basis points on the previous year.

New construction on land is not included in the adjusted figures. The investments for these activities shrank to just 14,000,000 in 2024. Finally, on Slide 14, we present a new overview of our service operations. This part of our business has been significantly built up in recent years. On the left hand side of the slide, you can find the value add services that we provide as part of our rental business.

Leidwerk, the specialized craftsman organization for electrical work is the latest addition to that sector. Below, we show you to the our B2B2C platform connecting service providers to landlords and to tenants. On the left hand side, we present our green ventures, serial refurbishment, smart thermostats and green heating via air to air heat pumps. With the latter ones, we are going to open the next growth chapter for LED. Given the wide range of services, we consider FFO one to be the far better KPI to measure the economic profits of those services.

The decision was mainly driven by the substantial investments done by those service entities so that the value contribution would have not been visible while presenting AFFO. In 2024, we stabilized the FFO1 contribution from our service activities on an excellent level of EUR 50,000,000. We saw stronger contributions from our energy services ESP as well as our reletting services LWS, while the multimedia business contributed less as the number of contracts shrunk after a change of the legal frame. And now, I hand it over to Katharine for a detailed view on the financial.

Katrin Koehling, CFO, LEG Mobility: Thank you, Volker, and good morning to everyone from my side as well. On Slide 16, I will focus on our operating KPIs for the financial year 2024. In 2024, our net core rent grew by 3% to 859,400,000 in comparison to a like for like increase of our in place rent of 3.4%. Disposals certainly acted as a small headwind to our top line development. However, as Lars said at the beginning, we believe we have a very reasonable portfolio management approach by selling at the low end of the quality spectrum, which typically should not only be measured by gross yields, but also by the life cycle CapEx and with its cash flow requirements.

Our recurring net operating income saw a rise of 5.1, reaching million. The margin improved from 82% to 83.6%. It goes without saying that the increase is predominantly driven by the increase in net core trend, but also due in part to improved results of our energy service subsidiary, ESP. EBITDA stayed roughly the same for million. The EBITDA margin declined by two seventy basis points to 77.9%, but exceeded our guidance of roughly 77%.

The decline was driven on an AFFO basis by EUR25.8 million of windfall profits last year in connection with the forward sale of green electricity produced by our biomass plant at outstanding prices. AFFO, again, increased meaningfully by 10.6% to $2.00 €4,000,000 Higher cash interest of €6,700,000 were more than offset by lower investments of 20,000,000, the latter also driven by higher subsidies. Now please turn to Slide 17, where we effectively visualize the key drivers which I just described. I would therefore move straight on to Slide 18 and the valuation. As we expected, we saw a stabilization of the prices.

This is what we saw from the market, but certainly as well as from our own transactions. With this, valuation seems to have bottomed out and moved slightly into positive territory with the result of plus 0.4% for the second half. This turned into a negative minus 1.2% overall result for the full year after a decline of minus 1.6% for the first half of twenty twenty four. We saw a stronger development in the stable and high growth market. And with this, let me now continue on to Page 19.

On Slide 19, we provide an overview of our current portfolio valuation. On a portfolio level, the gross yield of our residential portfolio remained unchanged against Q3 twenty twenty four with 4.9%, still offering a nice spread compared to wound yields. We saw some slight uptick on multiples to 20.4 times. The net initial yield based on the EPRA definition is 3.8%. The average gross asset value per square meter for residential properties is now at ranging from per square meter in high growth markets to in higher yielding markets.

Let me now come to Slide 20 and our financial profile. I believe we are well positioned in a volatile interest rate environment and the last recent days on the capital markets proved us to be right to lock in low yields and cover upcoming maturities in advance. This is why we decided last year to issue our convertible bond and also given the strong demand for it post the issue, decided to tap the volume by another million to a total of million. Additionally, we tapped two other outstanding bonds and increased the outstanding volumes by another million. The new issuance of last year as well as the repayment of around million of more expensive outstanding debt at the end of last year had to bring down our existing average cash interest cost down to below 1.5%, I.

E, to 1.49%, while our average maturity remained almost stable against the Q3 twenty twenty four level with five point seven years. Thus, we have a strong basis of very solid average interest costs to start this new period of potential volatility in the market. This provides us with sufficient flexibility to continue on our opportunistic refinancing path also in the future. At the beginning of this year, we additionally issued a million sub benchmark bond with an attractive coupon of 3.875%. This bond is certainly not yet reflected in our year end numbers, but you will see it with our Q1 reporting.

All in all, over the last around six months, we have secured $1,200,000,000 in new unsecured financing at an average cash coupon of 1.7% and an attractive all in yield of 2.7%. For this year, we only have outstanding debt of €544,000,000 left. Thereof, our biggest majority is our €400,000,000 convertible due in September 2025 with a low interest coupon of 0.875%. Our strong cash position of over million at the end of twenty twenty four, combined with our sub benchmark issuance in January 2025, covers not only our remaining outstanding debt in 2025, but also puts us in a position to also pay for the BCP shares as well as help BCP pay back some more expensive debt in a liability management exercise. Until today, BCP has already paid back more than €350,000,000 of their debt, especially the shekel bonds in Israel.

LTV declined by 60 basis points compared to our Q3 reporting to 47.9%. The LTV benefited especially from a decline in net debt by 2.2 year on year. Our ICR still stands at a strong 4.3 times and all our bond covenants continue to be in dark green territory. And with this, I give back to Lars for his final remarks.

Lars von Lachombe, CEO, LEG Mobility: Thank you, Katharine. As you can see on Slide 22 of today’s deck, we achieved each and every of our ambitious twenty twenty four targets. Just let it sink in for a second. It’s just simple, smart, efficient. It is not less than an increase of 11% in AFFO per share.

We are very proud of our LAG team as it has achieved all this in a very demanding environment. Still, there is one open issue, the LTV, where we made some progress, but which will still sits above our midterm target of 45%. We will continuously work on this target and therefore propose to pay a dividend of 100% of the AFFO, but to use the net proceeds from our disposal program to stabilize our balance sheet further. This leads me to my last slide on Page 23, our outlook 2025. Despite the countdowns of high volatility, increasing uncertainty and growing complexity, we are convinced that we can deliver an AFFO in the range of EUR205 million to EUR225 million in 2025 and therefore reiterate that guidance today.

That translates into an increase of more than 7% taking the midpoint of that range into account. With our focus on affordable living in Germany, the main driver for the further improved results will be the growth of net core brands, which we expect in the range of 3.4% to 3.6%. At the same time, we will increase the investments into our asset base to more than per square meter, always following our simple, smart, efficient approach. Broadening the perspective, quite obviously, the world has changed dramatically since our last call on November. We have seen changes in geopolitics assumed to be impossible, especially in such a short timeframe.

For Germany, that culminated in an agreement of CDUCSU and SPD to increase deficit spending on a federal as well as state level amounting to up to EUR1.4 billion over the next ten years according to some analysts. Investments are planned to be twofold, military and infrastructure. Currently, not much more detail is known. Although the planned investment in military and infrastructure is the biggest since the reunification of Germany, it would see to its Barabas leave Germany still with a low debt ratio amongst the G7 countries. However, to pass the law, a two third majority of the Parliament, which requires consent by the Greens and a majority in the Federal Council, the Bundesrat needs to be found.

So it is not a done deal yet. Still, the announcement was driving the ten year bund by nearly 30 basis points on a single day, one of the biggest single day increases on record. Contrary, the ECB rate cut of 25 bps on the following day stayed without any impact on the rates. Therefore, a higher for longer interest rate scenario might gain a higher probability. While we can neither influence nor change any of these developments, our response stays unchanged.

Cash is king. We will stick to our AFFO steering and our conservative setup. It proves right to make use of different financing means to keep costs as low as possible. It proves right to stay away from capital intensive expansion and investment plans. It proves right to work as hard as possible on rent increases and make use of the underlying rent dynamic in the market.

This made us successful over the last two point five years and will do so for the current tumultuous time. And with this, I close our presentation. Katharine Volker and I are happy to take your questions and I hand it over to

Frank Kopfinger, Head of Investor Relations, LEG Mobility: Fred. Thanks, Lars. And with this, we begin the Q and A session, and I hand it over to you, Mauriz. Thank

Maurits, Call Operator: You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. And the first question comes from Marius Posteau from Bernstein. Please go ahead.

Marius Posteau, Analyst, Bernstein: Good morning. Thank you for taking my questions. I’ve got a couple of questions from my side. You mentioned about the increase in the number of locations across NRW, which are classified as tenants for the purposes of the rent controls. I think you mentioned you don’t foresee any major changes this year.

Do you foresee anything in the trajectory of your growth beyond 2025? And then on secondly, on your green ventures, I wanted to check the rationale for now considering a potential exit from one or more of these ventures rather than building up the potential earnings momentum here? And then just finally on that one as well, how much of the 20,000,000 will drop down into your AFFO? Thank you.

Volker Wiegle, COO, LEG Mobility: Mario, hi. Thanks for the question on the rent regulation. Yes, for this year, we are pretty confident that it doesn’t have an effect. For the next year, we need to see how it evolves. We have there always different factors in the market and we managed to go and to live very good with the existing rent regulation.

So I wouldn’t expect that major effect. Of course, it’s not a boost for rent growth.

Lars von Lachombe, CEO, LEG Mobility: And with regard to the second question, green ventures, so for this year, Marius, we are expecting a single digit, so EUR 1,000,000 of value and AFFO contribution, But you will find that now as a separate line item without our AFFO calculation. So you will be very transparently seeing of how that evolves going forward.

Marius Posteau, Analyst, Bernstein: Okay. Just on the also on the question regarding why some of this earnings is now considered to be a potential exit or disposal of a stake in one of these ventures?

Lars von Lachombe, CEO, LEG Mobility: Yes. So with regards to those ventures, certainly, we will need to scale them quite quickly. And it might make sense to also sell parts of it to private equities or other joint owners and therefore we will also show you the results which we can realize by perhaps partially selling off parts in those joint ventures that might also hold true if we are entering markets where we do not consider ourselves to be the experts, for example, for those AI driven terms that it might make sense to have in other jurisdictions where we normally do not operate to have partners helping us to scale up.

Marius Posteau, Analyst, Bernstein: Okay. Thank you very much.

Jonathan Kornator, Analyst, Goldman Sachs: Thank you, Maurice.

Maurits, Call Operator: The next question comes from Bart Geissens from Morgan Stanley. Please go ahead.

Bart Geissens, Analyst, Morgan Stanley: Yeah. Hi, good morning. Just want to follow-up on the leverage, right? I mean, your balance sheet remains very levered, 52% EPRA LTV, backed by a 3.8% yield on the portfolio on an EPRA net initial basis. That’s low.

The events from the last week have focused a little bit more attention on issues like that again. You say, look, we’re being very smart. You used that word many times today. But what are you actually going to do to bring that LTV down, right? Can you kind of be a little bit more explicit on and it’s not just the LTV, the net debt to EBITDA is 14 times.

What are you actually going to do over the next couple of years? And by when do you think you’re going to be at a level that is more palatable to the market? Thank you.

Lars von Lachombe, CEO, LEG Mobility: Yes. Good morning, Bart and thanks for your question. So certainly, you’re making reference to EPRA, while we are making reference to our calculation with regards to LTV. And obviously, there are differences how you calculate it, especially where you are including the short term deposits, whether you are deducting it from the debt or whether you are adding it to the value part. So therefore, that is I think part of the explanation.

EPRA initially it certainly stands at 3.8, you are right. With regards to LTV, hopefully we got it across today that we definitely want to live up to our 45% mid term target. You know that we try to strive for that by living up to our sales program. Currently, we are in the market with around 3,000 units. We are marketing those.

We will do so especially during NEPM which is going which has started today, which we are going to join tomorrow and we are quite confident that we will bring about additional sales and that certainly will help to bring down leverage. How quickly we will be able to do that, Vaz certainly depends also on the valuation of our assets. You’ve seen that as we’ve indicated, we’ve seen the turning point in valuations last year and so valuation now increased by 0.4% and if we are looking into what we are currently doing as transactions, so since November we’ve sold another more than 800 units, All of that overall came in above book value. That’s from our perspective a good indication. Let’s wait and see if how the current interest rate movement will impact market, but that’s certainly something which we can gather after our meetings at NIIPING going to take place as of tomorrow.

Bart Geissens, Analyst, Morgan Stanley: Thank you. And then as a follow-up on that, on the dividend, you’ve reiterated your intention to pay 100% of these adjusted FFO. Maybe I missed it, but are you offering a scrip alternative to the dividend? Or are you planning to pay this out in cash?

Katrin Koehling, CFO, LEG Mobility: Of course, we will offer again a scrip dividend most likely and also a cash dividend for those who would like to prefer that.

Bart Geissens, Analyst, Morgan Stanley: And how are you going to because when you offer a scrip alternative, you can of course influence the level of take up depending on what kind of where you set the pricing of that script dividend, right? Are you going to try to push for quite a high take up on the script or how should we think about that?

Katrin Koehling, CFO, LEG Mobility: So there has no final decision on that one yet, but we plan to do something in the normal ranges as we have done in all the previous years.

Bart Geissens, Analyst, Morgan Stanley: All right. Thank you very much.

Lars von Lachombe, CEO, LEG Mobility: Thank you, Bart.

Maurits, Call Operator: And the next question comes from Thomas Roth Heusler from Deutsche Bank. Please go ahead.

Thomas Roth Heusler, Analyst, Deutsche Bank: Hi, good morning. Two questions. The first one is on the new potential CDU SPT government and expectations regarding your business? For example, here that I mean, there’s the fear in the market that the CDU might leave the housing topic again to the SPT. I mean, would you agree on that?

And maybe some more color on what you expect from the new potential government?

Lars von Lachombe, CEO, LEG Mobility: Good morning, Thomas. I try to address it, but you might have nearly the same knowledge as I do have. So looking at the preliminary negotiations and what came out of it, the paper being published, it has 11 pages. And if you look closely at what has been disclosed with regards to the housing market, it is definitely not much. So the first one is the prolongation of the rental break.

I think we gave you the indication that was bang in line with our expectation. So there will be an extension of the rental break. It will be less than our expectation. So our expectation was as much as ’28, ’20 ’9, but now decision is a prolongation for two years. How that prolongation exactly will look like, whether it will be in line with the latest Bundestrad proposal, which says municipality can only make use of it if they can prove that they have taken enough action to otherwise influence the market positively, I.

E. By enabling more new developments, let’s wait and see. However, if that is not been included, I think it’s also quite obvious and there have been some of the associations of landlords being transparent on that it will be legally challenged. Secondly, if you look at what’s been included with regards to newbuilds. With regards to newbuilds, I think it’s just more of the same which you are already aware of.

So it’s about more talk about digitalization, it’s more talk about that new building type E, which stands for Eifrag or simple in German, which should from our perspective definitely not be a big game changer because you will not be able to decrease costs by more than 10% per square meter. And finally, it also reads that they want to strengthen and that’s no surprise if you have this SPD in government and the subsidized units newbuilds. And how they want to do that? Certainly, they want to do that by subsidized loans via KFW. So let’s wait and see of how attractive those interest rates will be because those programs are already in place and how much money will definitely then finally be earmarked to have those programs being funded.

Finally, it’s all about the infrastructure question and certainly how do we reach climate neutrality by 02/1945. I think that was something which took us a bit by surprise because our expectation we heard in Berlin was that the agreement was and they wanted to prolong the climate neutrality target from 02/1945 to 02/1950, but that was unfortunately being now held back because certainly the Greens need to be convinced to agree to that new infrastructure and military fund and they certainly will not agree if you are just do a prolongation of those targets. So therefore, let’s wait and see of how much money really finally ends up in the housing industry to enable that climate utility target And from our perspective, it’s just too early to give any indication because we hear very different things, especially currently now in the discussion with the Green Party.

Claude Pierre, Analyst, Jefferies: Okay.

Thomas Roth Heusler, Analyst, Deutsche Bank: Another question is on your non rental business. I’m not sure I missed the number, but what has been the momentum most recently? And what could we expect for this year? And to what portion of total revenues can we expect it to increase if you add the planned contributions from the Queen ventures? And maybe it would be helpful also if you could provide a bit more color on these ventures.

Volker Wiegle, COO, LEG Mobility: Sure, Thomas. I can guide you to slide 14 where we disclosed and showed the contributions from these additional services over the last years. You can see that we are now for three years almost flat there at $50,000,000 contribution on an FFO1 basis. For this year, we expect to increase it slightly, so in line or not slightly so, decently in line with the AFFO increase we guided for the 2025 fiscal year. The contribution from the several pillars of our additional services changes sometimes.

So we see for the multimedia part to decrease and it’s offset by the contribution from the energy service company and also from the project management services, which we provide, therefore, the churn and the renovation of empty flats. On the three green ventures, we provide there some more information. So it’s one on the serial refurbishment, one on the smart thermostats and one on the heat pumps. They are all set up together with partners who are active in this industry because we are of the opinion that we don’t have the knowledge only in our house, so we need to partner up there with renowned partners and to build new businesses. In total, we expect a contribution of 20,000,000 by 2028.

When it comes and in which business provides or contributes what part of the FFO contribution that needs to be seen. So we have, of course, business plans. They are as it’s a scale up business, it’s a bit flexible there when it comes and how it comes. That’s why we gave this more broad guidance until 2028.

Jonathan Kornator, Analyst, Goldman Sachs: Okay. Thank you.

Maurits, Call Operator: Then the next question comes from Claude Pierre from Jefferies. Please go ahead.

Claude Pierre, Analyst, Jefferies: Yes, thank you. Good morning and thank you for taking my questions. I have three quick follow-up questions. So the first one coming back on your EPRA LTV. I know it’s not your target, but I just wanted to understand the discrepancy between your LTV and the April LTV.

Actually your LTV calculation is down 50 bps year on year, but the April LTV is up 130 bps year on year again. So this difference, is it due to BCP entirely or is it something else explaining this difference? And also if you can give us the pro form a figure, plus BCP integration would be useful as well. Then also if you can give us the like for like fair value change for the BCP portfolio in H2, if you have it on top of your mind. And the final one, where do you see the average cost of debt lending in 2025?

Katrin Koehling, CFO, LEG Mobility: Yes. So happy to take your questions as far as I can, Gerard. So let’s start maybe with BCP just so that we are everybody is on the same page. BCP is not included in our year end numbers at the moment because it’s only been consolidated since we bought it. So it’s the beginning of the year and we will first see it in our numbers in Q1.

You only see some notes you see some information in our notes because according to IFRS three B66, we have to give those information, and that’s why we have a starting basis to discuss that. So then next on your EPRA LTV question, the difference and Lars already mentioned it or the biggest difference is that short term deposits go under receivables in the APRA LTV definition. So if we want to be smart and get some interest income on our cash at hand, which you know we have a lot currently, in this case, it’s more than $600,000,000 we are talking about, then it goes under receivables and not under cash within the EPRA LTV definition. Of course, that’s also one of the reasons why we prefer our LTV definition because we do believe that short term deposits is A, it is cash because we have it and B, to generate interest income. We find it weird that you are actually put in a worse position if you get interest income on it and it goes in the denominator.

So that’s why that’s the biggest thing. And if you calculate that number, you will come up with much better LTV than you see in the upper LTV currently. With regards to the BCP numbers, I would like to postpone you to the official results meeting of BCP. I think it’s March 20. So there they will have all their results for the last year, which we only have the balance sheet information in our PPA.

And I think you had a last question on our net debt. At the end of the year, we are not we are not and our cost of debt, we are not guiding on that one towards the end of the year. But you can be assured that we will try to be as smart as we have in the past and try to end up with the best result possible. So that’s why we are also happy that we are starting with quite a low basis here.

Maurits, Call Operator: Then the next question comes from Rob Jones from BNP Paribas. Please go ahead.

Frank Kopfinger, Head of Investor Relations, LEG Mobility0: Good morning, team. Just three questions. Hopefully, they’re simple, smart, efficient. Just firstly on disposals, Bart obviously touched on this at the start of the Q and A. Based on the 3,000 units that you’re obviously looking to sell at the moment, let’s say we end up with high $200,000,000 s maybe $300,000,000 disposals.

And if that was a run rate going forwards, am I right in thinking that it roughly equates to about three years to get back to a 45% LTV assuming capital value is flat? The second one was just around biomass. Obviously, a couple of years ago, it was a big contributor to AFFO. I think it was about 25,000,000 plus this year. I think it was kind of closer to zero for my model going forward.

Should I assume a kind of low single digit earnings contribution? And then there’s four questions, not three. Third question was around script take up last year, what percentage that was? And the fourth one was, you’ve got the BCP balance sheet information, as you said. What’s the BCP LTV?

Lars von Lachombe, CEO, LEG Mobility: Thanks a lot, Rob. So happily, we have four questions and we will certainly share that. I would try to do the first one with regards to disposals. And you’re right. So if you’re doing a setter risk variables calculation and you keep the value stable, then you would need most probably something in the range of more than €700,000,000 So it will take you two point five years to bring it down the LTV to our 45% target.

And therefore it’s a midterm. Yes, so it’s definitely not something which we will be able to reach this year if we are really disposing those 3,000 units. Once again to reiterate that the 3,000 units it’s not the disposal target, but this is what we are currently marketing and we would definitely be price disciplined as in the past we would definitely not sell below our book value.

Volker Wiegle, COO, LEG Mobility: Then I take the one on the biomass plant To make it simple, smart, efficient, I answer it with a yes. So the single digit low single digit will be coming.

Frank Kopfinger, Head of Investor Relations, LEG Mobility1: Perfect.

Katrin Koehling, CFO, LEG Mobility: And on your last two questions, Rob, the script take up for this year was 15.6%. And on your BCP LTV question, I again refer you to March 20 because we know what we have in our PPA, those are not exactly the BCP numbers because obviously, we have on our purchase price allocation, we have to come up with the fair value of liabilities and assets and stuff like that. And as you know, that is never exactly the same as the company itself has. So that would be the assumption for me.

Frank Kopfinger, Head of Investor Relations, LEG Mobility0: Lovely. Thanks very much and look forward to seeing you soon.

Lars von Lachombe, CEO, LEG Mobility: Thanks a lot, Rob.

Maurits, Call Operator: And the next question comes from Mark Mozzi from Bank of America. Please go ahead.

Frank Kopfinger, Head of Investor Relations, LEG Mobility2: Thank you very much. Just starting with your differences between the entire LTV and the reported LTV. Just wondering why your accountants are allocating the cash you have in hand to receivables and not cash that would have made the two numbers consistent?

Katrin Koehling, CFO, LEG Mobility: Sorry, Mark. But I think I said everything around that. So we obviously have cash at hand. And then if we have a lot of cash, like we have at the end of the year, we also put cash in short term deposits. And depending on the LTV definition, it is either being reported as receivables or it is being reported as a cash equivalent like we do.

Because obviously, it was our decision to put it in short term deposits for, let’s say, a couple of months or something. And it’s our decision and we could have made the decision differently to optimize the EPRA LTV obviously, but we are acting in the best interest of our shareholder and maximizing interest income.

Frank Kopfinger, Head of Investor Relations, LEG Mobility2: Okay. So it was wrong. It was your earlier one. Okay. On your LTV target, I’m fully aware that and agree with you that you need $700,000,000 to lower your RTV to a 45% target.

But if we do basic math, you have a discovery program that’s as Rob said $300,000,000 you have a cash saving from your credit dividend three years one hundred and fifty million. So we’re still short of something like €350,000,000 4 hundred million euros to get back to that LTV target. And I was wondering, number one, have you already identified any asset to be disposed from BCP portfolio? And then where the rest will come from, if you have any ideas already from how you’re going to bridge your numbers? Thank you.

Lars von Lachombe, CEO, LEG Mobility: Yes. Thanks a lot for the question, Mark. And yes, so certainly we are now in the midst of doing a portfolio review with regards to the portfolio of BCP. Certainly, it might be worthwhile looking into some of those assets, some are being in Northland Estrella where we are of the opinion that it might be better to resell them, but also we would be willing to look into portfolios which we have newly won like the ones in the Eastern Part Of Germany. Certainly a footprint of 1,000 is the mere minimum for us.

Certainly, if we are not able to make additional acquisitions in order to size that to something which is a bit bigger than the current footprint, then it might be also worthwhile reconsidering whether a new footprint in Eastern Germany makes sense going forward.

Frank Kopfinger, Head of Investor Relations, LEG Mobility2: Okay. And how are you going to bridge the remaining are you going to make everything consistent with $700,000,000 because we are still short of something like $300,000,000 How do you see that?

Lars von Lachombe, CEO, LEG Mobility: Yes. So with regards to those missing parts, it’s not we will now want to rush into the market with thousands of units, especially after we’ve seen the turning point. From our perspective, it still makes sense to sell non core units to do a portfolio exercise management exercise on a yearly basis, but still take advantage of a situation where we are not going to see more units newly produced and then certainly from our perspective see a stabilization of values also going forward.

Maurits, Call Operator: The next question comes from John Wong from Mannlundschaft, Kempen. Please go ahead.

Frank Kopfinger, Head of Investor Relations, LEG Mobility1: Hi, good morning. Just a follow-up on the disposal program. Just to confirm the 3,000 units that’s on top of the 1,800 units that you signed year to date to be still transferred. And also in line with your comments on the yearly portfolio management, I suppose that these 3,000 units, you expect them to be sold over the next twelve months or to be signed over the next twelve months?

Lars von Lachombe, CEO, LEG Mobility: Yes. So I tried to do it like Volker did it. So the first one is a straight yes. So, yes, we are trying to sell 3,000 units on top of what’s going to or has been sold already. With regards to the next 3,000 units and the target of that, it’s a clear no.

So it’s not a disposal target. We will maximize the price and that certainly sometimes takes a bit longer. So if we are not going to do that within twelve months, then it just takes eighteen or twenty four months, but we will not put ourselves under pressure now as the market has turned to now sell 3,000 units, whatever it brings, because certainly we want to at least reach book value.

Frank Kopfinger, Head of Investor Relations, LEG Mobility1: Okay, that’s clear. And how are these 3,000 units split over the different market segments that you

Lars von Lachombe, CEO, LEG Mobility: have? That’s a good point. And John, with regards to that disposal target, normally you market 3,000 units according to the split which we have on our books, including high growth, stable and higher yielding markets, but it is fairly even distributed over those three markets.

Frank Kopfinger, Head of Investor Relations, LEG Mobility1: Okay. That’s clear. Thank you.

Maurits, Call Operator: And the next question comes from Jonathan Kornator from Goldman Sachs. Please go ahead.

Jonathan Kornator, Analyst, Goldman Sachs: Good morning. Thank you for taking my question. So one on development and then a couple of others on subsidies and maintenance CapEx. But first one on development, obviously, new government seems to be focused on encouraging new development of units. Obviously, that’s a business that you would rather more or less shut down essentially.

Is the new agreement pushing you to think about the development exposure again or is that not something that you’re going to reopen again? So that’s the first question. And if I look at the second question, so on subsidies, obviously, at the end of the day, million contribution, perhaps higher than we expected lately. And how should we think about that, knowing obviously all the previous caveats you’ve given, but how should we think about that for 2025? And then last question, perhaps a bit more on the technical side.

You’re increasing a bit your CapEx to over EUR 35, CapEx and maintenance. So how should we think about the evolution of the capitalization ratio given latest evolution and also the portion of externally matured maintenance? Thank you.

Lars von Lachombe, CEO, LEG Mobility: Yes. Good morning, Jonathan, and thanks for your questions. So we will once again split that amongst the three of us. First one with regards to development. So we haven’t found too much which makes us believe that development really will be able to pick up quickly.

So I tried to share it while I was answering Thomas’ questions. And if you are looking into what’s being disclosed in newbuilds, it’s more of the same like always being disclosed. So more digitalization and enabling better and more easy building permission processes. I think we heard that sentence a million times over the last twenty years, nothing has really changed. Secondly, I think they want to once again revisit that building Type E, Einfach Simple and from our perspective that certainly will help a bit, but it will not dramatically change the mathematics because if you look at it, it will most probably will not bring about more than a decrease of the per square meter construction cost of 10%.

And finally, making reference to KSW programs with subsidized interest rates, honestly, that’s already been in place. So let’s wait and see of how much funding really will be earmarked to enable more buildings new builds. And then certainly, if that is so attractive that you can really make a decent risk adequate return on new developments, I think we would be fools to not revisit our decisions. But as of today and looking at the preliminary negotiations and its results, I think it is just premature to talk about whether it’s really sensible to ramp up new development once again.

Jonathan Kornator, Analyst, Goldman Sachs: Just one quick one on that, if I may. Just I mean, obviously, as you’ve been highlighting, we’ve had these comments for quite a while now and KWs and all that. But presumably, the new government should know about that. So they have to make a difference if they really mean it, No? I mean have you heard anything on that specifically?

Lars von Lachombe, CEO, LEG Mobility: Unfortunately, Jonathan, I haven’t heard anything. So I think everyone on that negotiation board and you’ve seen it’s 12 people. They’ve been very silent, so there was nothing really being disclosed to media while they were negotiating. They are very disciplined at the moment. What you can hear is that they are mostly into getting quick approval on the infrastructure and military part of that negotiation results.

And that certainly takes into consideration that you need to convince the Green Party of that. The Green Party’s focus was never on newbuilds, so their focus is always on climate neutrality, which mostly is being bound to get the modernization of buildings and green heating right, but not to enable more new builds. So let’s wait and see. That’s our current status of knowledge with regards to the negotiation results.

Katrin Koehling, CFO, LEG Mobility: And with regards to your second question on subsidies, yes, we had the subsidies of $21,000,000 last year for $2,024,000,000 dollars and for this year, we feel comfortable to say that we expect something between $20,000,000 and 25,000,000

Volker Wiegle, COO, LEG Mobility: And your third question on the cap ratio for outlook for 2025, as you know, we focus on the spending and on best making best use of the euro we spend. So we don’t really focus on the cap ratio, but we you can assume that it’s more or less in line with what we saw in 2024. And on the externally sourcing of maintenance work, internally make or buy decisions, We will not dramatically change this approach. We did in the past. We’re very happy not to have armies of workers on our balance sheet and being flexible to make use of developments in the market.

And that’s the approach we are taking for the future. You saw also when we are convinced that there are opportunities that we go and in source across, for example, in the light work business where we have put up a small unit of dedicated

Jonathan Kornator, Analyst, Goldman Sachs: So essentially, ratio of excess and the procure should be in line or do you intend on increasing it actually?

Volker Wiegle, COO, LEG Mobility: Not increasing. It should be in

Frank Kopfinger, Head of Investor Relations, LEG Mobility1: line.

Maurits, Call Operator: And the next question comes from Paul May from Barclays.

Frank Kopfinger, Head of Investor Relations, LEG Mobility3: First question was about bringing rent regulation and the recent move in bond yields and rates together. Just wondered if rent regulation is getting more strict or is new regulation being put in?

Jonathan Kornator, Analyst, Goldman Sachs: And the

Frank Kopfinger, Head of Investor Relations, LEG Mobility3: move in bond yields, just wondering if you see any impact on valuations? And if not, why not? Secondly, also valuation, again, reiterating on the BCP value uplift, Can you just explain the thought process there with regards to valuing that at a negative AFFO, given you’ve said that there’s no AFFO at the price you paid. So obviously, if you increase the value, there’s a negative AFFO on that, negative AFFO yield. And then finally, is the plan to just repay the $20.25 convertible?

Thank you.

Lars von Lachombe, CEO, LEG Mobility: Yes. So I will start once again with the first question, Paul, and thanks for that. So with regards to rent regulation, I think we already said that we’ve been positively surprised by a rent regulation, which does not seem to be as far reaching as you could have assumed with Social Democrats forming most probably the new coalition on a federal level. So yes, it will be prolonged by two years. Yes, certainly that will have an impact on our rent growth ambitions going forward, but it could have been much worse and with regards to the rental break, please don’t underestimate the requirement that the municipalities need to show that they have taken enough other actions to enable new builds over the last years in order to enable them to use it really in 2026, ’20 ’20 ’7.

So let’s wait and see if how many 10s markets we finally end up with where municipalities can really prove that they’ve taken all that. With regards to interest rates, so as that movement has taken place quite recently and certainly we are currently in the market with some portfolios, we have not seen in those negotiations any change with regards to the prices which we were discussing. Certainly, we cannot rule out that this is going to happen, but as of today, we haven’t seen that. So let’s wait and see and certainly we will try to give you a better indication for that in May. As always, we will come up with once again our valuation indication for H1 twenty twenty five, but it is still quite early now and we just came out with our full year numbers as of today.

Katrin Koehling, CFO, LEG Mobility: So with regards to your third question, Paul, around the purchase price allocation of BCP, I mean, we all know that this has to be done exactly like IFRS three says we have to do it, yes? So what we are doing here, and please keep in mind that this is preliminary because we have one year to finalize the purchase price allocation as usual. So all that we did was we said, okay, what did we pay for the company? And that’s the cash amount going out as well as the value of the shares that we already hold at the end of the year. And then we took on the other side, okay, what did we get for it, the fair values of the liabilities and assets of the company.

And then that’s an easy calculation. And then you end up in this case with a lucky buy, which we prefer to the goodwill naming. And that’s how we ended up like that. So it’s just following IFRS. On your last question around the 2025 convertible bond, yes, currently, I mean, we plan to pay it back.

That’s why we also got the money in the past. But as you have seen in the past from us and you will continue to see from us in the future, we will continue to opportunistically refinance with whatever measure we would like to do at whatever time that makes sense just to optimize our financing and to stay on all our legs that are quite conservative but also helpful for us in the future.

Frank Kopfinger, Head of Investor Relations, LEG Mobility3: Sorry, just on the IFRS count and treatment, you mentioned on the BCP. Does that mean you’ve not undertaken a valuation, you’ve just used the existing valuation of the assets? Because obviously it depends on what the valuation is that you apply. And I suppose the question was more how can one justify that valuation having just paid a much lower price for

Katrin Koehling, CFO, LEG Mobility: those assets? So on the valuation part, you have the existing assets and there you have a CBRE valuation of those assets. And you know we are very familiar with CBRE, so we took their valuation. Of course, we will do our own valuation over the year. That’s why it’s a preliminary valuation, but that’s on the existing stuff.

And on the new on the undeveloped land, Lars already said that here we took the land values as we always do an undeveloped land within our LNG valuation.

Frank Kopfinger, Head of Investor Relations, LEG Mobility3: Thank you. And one last one. I think you mentioned that you’ve refinanced some of the bonds on BCP. Just wondered if there was a cost of that given I think you had about two years remaining on those bonds? Thank you.

Katrin Koehling, CFO, LEG Mobility: Yes. Obviously, we paid a little bit for that, but this also helps us a lot because with that we can make the structures much easier not being in the end dependable on the Israeli market. And obviously, they had quite a huge yield on that. So that’s also helping us not having to pay that in the future.

Frank Kopfinger, Head of Investor Relations, LEG Mobility3: Sorry, can you let us know the cost of that? Sorry, it would be

Katrin Koehling, CFO, LEG Mobility: helpful. Sorry, but I can’t give you numbers from BCP on that before they haven’t published any on that.

Frank Kopfinger, Head of Investor Relations, LEG Mobility1: Okay. Thank you.

Frank Kopfinger, Head of Investor Relations, LEG Mobility: Thank you, Paul.

Maurits, Call Operator: Next question comes from Manuel Martin from ODDO

Frank Kopfinger, Head of Investor Relations, LEG Mobility4: BHF. Just one little follow-up question on Slide 14 of your presentation on the services. If I understood you correctly, so you don’t want to have an army of craftsmen on your balance sheet. But can you give us an idea or a flavor of how much or what’s the proportion of the craftsmen that you have on your balance sheet? Is it a quarter of the total craftsmen you employ?

Is that internally what you have?

Volker Wiegle, COO, LEG Mobility: A quarter of the craftsman we employ or the total employees?

Frank Kopfinger, Head of Investor Relations, LEG Mobility4: Sorry, I mean the total craftsman number that you use.

Volker Wiegle, COO, LEG Mobility: Total Craftsman number is about a quarter of the total employees.

Frank Kopfinger, Head of Investor Relations, LEG Mobility4: Okay. But that includes external and internal Craftsman that quarter? Or is that internal?

Volker Wiegle, COO, LEG Mobility: That’s internal. So that’s the TSP, so the technician craftsman services, they have roughly about 500 employees. There are 400 working as craftsmen and 100 then in the back office.

Frank Kopfinger, Head of Investor Relations, LEG Mobility5: Okay.

Frank Kopfinger, Head of Investor Relations, LEG Mobility4: And overall, no ambitions to increase that number or to increase the number of craftsmen overall on these services activities. Is that correct?

Volker Wiegle, COO, LEG Mobility: Well, we always strive therefore what makes most sense to us, yes? So the ambition is not to increase the number of people we employ, but the ambition is to maximize shareholder value. And we, for example, just launched the electricians’ lightwear company where we in source their electrician services. We perform because for decarbonizations we need more electricity in the buildings and thus there will be more work for electricians to do. But we always think where we where it makes sense to have own craftsmen on board and with all the problems of less flexibility, but of course on the cost side, with the advantages and that’s how we steer the company.

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