Patrizia Immobilien Aktie

Good day, and a warm welcome to today's earnings call of the PATRIZIA SE, following the publication of the H1 figures of 2026. [Operator Instructions] Having said this, I hand over to PATRIZIA's Director of Investor Relations, Janina Rochell.

Thank you, Mara. Welcome everyone to our analyst and investor call for the first half of 2026. This is Janina speaking. I am pleased to have our CFO, Martin Praum, with us today. Martin will provide an update on current business developments. If you have any questions, the IR team is more than happy to assist. As usual, this call will be recorded and be made available on our website. We will also provide a call transcript for further reference. With that, I'd like to hand over to Martin. Martin, the floor is yours.

Thank you, Janina. A warm welcome also from my side, and thank you for joining us today. I'm happy to be hosting today's call and taking you through our performance in the first half of '26 and providing you with some background on the market environment and our outlook.

Over the last few months, the Investor Relations team and management have thought about how to further optimize the format of our quarterly analyst and investor calls. Rather than walking you through the H1 financial results presentation slide by slide, today, I would like to focus on 10 key messages that, in my view, best capture our performance, the progress we've made and the key developments across our business. And directly after that, I will open the floor to your questions.

So let me start with the first key message. In the first half of '26, our strategy further translated into results. Our EBITDA grew by 47% to EUR 43 million. Our EBITDA margin expanded by more than 10 percentage points to almost 32%. And net profit more than tripled to nearly EUR 15 million in a challenging but slowly improving market environment. With these financials locked in after the first half of the year, we are confirming our guidance ranges for the full year. As usual, we do not recommend simply extrapolating our first half results, as certain performance fees booked in the first quarter and timing effects on the cost side supported EBITDA, as in previous years.

So before turning to our business performance in more detail, let me briefly touch on the market environment in which these results were delivered. So point number two, the market. You know that the Iran conflict temporarily weighed on inflation and interest rate expectations and briefly clouded the investment environment. But as tensions eased, sentiment recovered to pre-conflict levels by the end of the reporting period. So you could argue that market conditions have improved compared to the immediate aftermath of the conflict, but the investment environment remains selective and overall still challenging. Simply looking at the volatility of the 10-year Bund yield as a risk-free rate, this has increased again by 30 bps after the end of the reporting period, after dropping 30 bps before, showing the volatile market environment our clients and we are still faced with. Against that backdrop, it is encouraging to see that investor conviction in real assets remains strong in selected areas.

So let's go to the next point. What do our clients think? Our latest investor survey shows that demand for real assets in certain areas is structural, not cyclical, while the overall appetite is still impacted by market sentiment, yield developments and geopolitical risks. Selectively, we nevertheless have reasons for confidence. Nearly half of the investors surveyed plan to increase their infrastructure allocations, up from around 1/3 a year ago. More than 3/4 intend to expand their living exposure over the next 5 years. And a striking 85% tell us that geopolitics is affecting their real estate and real asset portfolios, which is precisely why local European expertise and operational capability are becoming more valuable, not less. At the same time, investors remain highly selective in how and where they deploy capital. In that environment, the breadth of our product offering is an important differentiator, allowing us to address demand across multiple asset classes, strategies and investment themes. So this provides the backdrop to the business performance that we delivered in the first half.

Let's come to point #4, our business volume. I mentioned the selective market environment, but we were able to deliver good fundraising momentum in the first half. Equity raised from clients climbed to EUR 0.8 billion from EUR 0.3 billion a year ago, with fundraising clearly accelerating in the second quarter with EUR 0.7 billion alone. The living sector was the main contributor, accounting for more than EUR 460 million of equity raised, primarily through market-led initiatives. Our multi-manager platform, AIP, contributed more than EUR 300 million, while infrastructure added around EUR 60 million. So the direct and indirect infrastructure investments account for around 40% of equity raised. Transaction activity and investment activity also continue to recover, with signed transactions rising by more than 15% to EUR 1.6 billion. Just as important, we enter the second half with EUR 1.5 billion of open equity commitments, which is up from EUR 0.9 billion a year ago. So this is capital that is ready to be deployed when the right opportunities arise, and it's the foundation for future assets under management growth.

With that, let's go to point number five, AUM. We ended the period at EUR 55.9 billion, virtually flat versus year-end, down only by around EUR 0.3 billion. Inflows and supportive currency effects largely offset disposals and net cash returns to clients, while valuation effects remained limited. The portfolio itself remains well diversified, more than EUR 45 billion in real estate and around EUR 10 billion in infrastructure, spread across risk sectors, styles and geographies. During the period, the portfolio composition continued to evolve in line with our strategic focus areas. Living further strengthened its position as our largest exposure, while office decreased by 1 percentage point to 23%, driven by completed disposals across the U.K., Germany and the Benelux region. Retail also declined by 1 percentage point to 7%, reflecting completed asset sales in Germany, Spain and the Netherlands. This ongoing shift towards higher conviction sectors, combined with broad diversification across asset classes and geographies, continues to support the resilience and the quality of our AUM base.

Let's go to point 6, our P&L. Let's look at our own performance. The story this first half of the year, I think, is operating efficiency. Total service fee income was broadly stable at EUR 127 million, with performance fees up almost 17%, partially offset by lower recurring management fees. Yet, EBITDA grew by nearly half because our cost base is structurally lower. Operating expenses fell by 11% to EUR 100 million, with staff costs and other operating expenses each down 13%. And these are not one-off savings. They result from platform optimization that is now embedded in the way we operate. While we expect expenses to trend higher in the second half, particularly in the fourth quarter, due to normal seasonality and investments in strategic projects, we continue to expect operating expenses for the full year to be below the '25 levels.

Let's have a look at the next point, the quality of our earnings. If there's one figure I would want to highlight, which I also did in the past, it is this. Our recurring management fees of EUR 110 million now more than cover our entire operating cost base, with coverage of EUR 10 million against less than EUR 1 million a year ago. That means our core business generates a further improving operating profit even at subdued investment and transaction volumes in the market. The key driver behind this improvement has been the significant reduction in our cost base. Over the past 2 years, operating expenses have been reduced by EUR 34 million, materially widening the gap between recurring revenues and costs. As a result, the surplus generated by recurring management fees has increased significantly, fundamentally improving the resilience and the quality of our earnings profile.

Let's go to the next point, number eight, our balance sheet, liquidity, and again, our earnings and value creation. We continue to use our balance sheet with discipline. In the first half of '26, we invested EUR 26 million in co-investments, which, going forward, will support our P&L with recurring participation and finance income. At the same time, we continue running a strong financial position with an equity ratio of 65%, a net equity ratio of 73% and available liquidity, which increased to EUR 122 million. The operating cash flow of EUR 17 million and the cash inflow from the partial realization of exit carry entitlements in the amount of EUR 49 million more than covered our dividend payments and the investments that we've done.

And here is a super important point to make when discussing our financial results. Value creation goes beyond simply looking at the P&L. Some effects, for example, value changes of our co-investments and participations, are directly shown in equity in the position other comprehensive income, or OCI. Here, we saw a positive impact of slightly more than EUR 5 million in the first half of the year. At the same time, we crystallized value that we built over the last decade, and that was so far only reflected in OCI and not in the P&L, with the exit carry payments of EUR 49 million showing up in the investing cash flow. So together with our EBITDA of EUR 43 million and looking at our net income after minorities of over EUR 17 million in the first half, you can see the 3 dimensions of value impact from a shareholder perspective.

Let's have a look at the outlook. We confirm our guidance for '26, which is assets under management between EUR 55 billion and EUR 60 billion, an EBITDA between EUR 60 million and EUR 75 million and an EBITDA margin between 22% and 26.5%. Within that, total service fee income is now expected to remain largely stable versus '25, with a stronger contribution from other income items and continued cost discipline expected. While we see some headwinds on AUM growth, but tailwinds for EBITDA and EBITDA margin based on the results that we've delivered in the first half, we recognize increased market opportunities in a selective way with client activity improving. Especially market-driven opportunities could impact the business activity in the second half, and as usual, this depends on timing of signing and closing, which do impact AUM and P&L lines in our business.

With that, let me close with the reason for some confidence that we have. In a half year that included a genuine geopolitical shock, our earnings grew, our margin expanded and our cost base came down further. That is a business model doing what it is designed to do. We, as management, will continue to focus on the things we can influence. And with client demand that is structural, a recurring fee base that now covers our costs and a balance sheet that's built for flexibility, we think we are well positioned for the second half and beyond. With that, thank you so much, and I look forward to your questions.

[Operator Instructions] We have already received a raised hand by Mr. Neuhold. Can you hear us, Mr. Neuhold?

Can you hear me? I can hear you.

Yes, perfect.

Perfect. Okay, great. I have 2 questions. Firstly, on the investment market environment and the survey you did, what do you think would be or could be key triggers that the intention of your clients to increase the exposure to infrastructure and property markets translate into real investments? And I was wondering if you have any idea which percentage of your clients still have some legacy issues to work off? And do you also see new clients who are interested in the infrastructure property markets who are talking to you for the first time? That's the first question.

Thomas, thank you for your questions. First of all, yes, we saw some existing clients, but also new clients doing business with us, so I can clearly answer that question with, yes, there are new clients that are interested in our products. Certainly, the -- I mean, given the breadth of our client base, there are here and there are some clients that have some things to digest from the last cycle. But again, we have the power, and we have the product and the breadth of product to attract new clients and new product and volumes on our platform. The investment market in general, I think I can reiterate a little bit what I said, and also looking at the feedback we got from our investor survey. It is selective, but it is very much focused on good cash flow, good IRR investment themes in the -- especially in the region of living. This still includes residential, student housing. This includes health care. But also on the infrastructure side, we see structurally a higher demand because many of our clients are still underallocated in this asset class and are still exploring ways to benefit from the growth expected in infrastructure.

Okay, great. And my second question would be on operating leverage. Obviously, you have done a great job in reducing costs over the last 2 years. So I was wondering if AUM growth comes back by, let's say, by 10% or 20%, by how much would your OpEx need to grow in order to capture the new business?

Sure. And Thomas, we didn't simply cut costs in this cycle, and that's why we always mentioned that we optimized the platform and the processes. We're also working a lot on introducing new technologies and, certainly, also AI solutions to make us even more efficient. So from here, if we look at the efficiency that we've built so far, with an increased operating leverage, we definitely see that AUM growth and revenue growth would be higher going forward than cost growth because we simply became more efficient through the measures we've taken in the last few quarters.

We have another raised hand by Mr. Philipp Kaiser.

Can you hear me?

Yes, perfectly.

Congrats to the strong performance in the first half of the year. Just a couple one from my side, probably starting with the most obvious, you already touched it. And during your presentation, you had a strong first half with regards to the EBITDA development and kind of only confirming the guidance. Could you walk us through the guidance bridge for the second half of the year? What's your scenario, also cost-wise?

Certainly. Philipp, thank you for your question. Just to reiterate for the benefit of all listeners, yes, in the second half, we are somewhat more cautious versus the first half. Simply, these are technical effects in the first quarter. We usually book the performance fee driven by one of our major investments, which is unlikely to reoccur in the second half of the year. And also, we had some cost items timing-wise that will rather occur in the second half versus the first half. So this is why we currently expect that the EBITDA in the second half will be a little bit lower than in the first half.

And I mentioned that also in my comments when I talked about the guidance, we left the guidance ranges as they are because there's still some uncertainties in the market. And although we have increased our, basically, operating income from recurring management fees, still some of our revenues do depend on market activity and also in the second half. And there's always a certain level of uncertainty when exactly we do signing and when exactly we do closing, which then impacts P&L or AUM. But taking your point, absolutely, I would agree. We started the year with a strong first half. And if I look at the guidance ranges we've given, obviously on AUM, we still think we can achieve the midpoint. Currently, we are slightly below that. On EBITDA, I would say we are -- starting with the midpoint, we have good opportunities to be above that at the moment. And definitely for EBITDA margin, we are more in the upper range of the range than in the lower end of the range.

So there's no real realistic scenario for the lower end of the EBITDA guidance, in your view?

As I said, we feel comfortable now with the midpoint. Currently, I would be surprised if we really had to hit the lower end given if we look at what we achieved so far and how our pipeline looks like.

My next one is on the total service fee income. You slightly kind of lowered the guidance. Is that management fee driven? Or what's the main driver behind this?

Absolutely. We basically now expect a little lower contribution from management fees for the full year. But on the other side, we have other contributing factors, for example, like participation income from investments that we did, which will offset that. So it's a smaller change in the mix of, call it, revenues or income items, but not a material change to what we expect.

Perfect. And is the management fee income driven by a lower than previously assumed AUM growth in the first half or limited expectation on the development in the second half or closing maybe towards more the last quarter?

No, it's certainly, again, timing does play a role here. If you want to generate management fees and grow management fees, you need to have AUM on board. And if equity raising takes a little bit longer than expected, then also deploying that capital takes a little longer, and then the positive effect on management fees also is delayed. And this is kind of the reasons for a change in view. Some things do take longer these days. We -- and as you've seen, you see equity raised going up. You see that our firepower is going up, but some of these things take a little longer than initially planned.

Understood. Then speaking of management fee, as far as I remember correctly, last year was positively impacted by some development fees. Could you give us a kind of a like-for-like management fee growth rate, excluding those development fees?

The delta is only EUR 1 million roundabout, from this effect delta compared to last year.

Okay, perfect. Then speaking of activity, so activity recovers also visible in your equity raise. I think the first inflection point since a couple of quarters. Signed transaction also rose by almost 16%, but it's heavily disposal-led, reversing last year's mix and should eventually weigh on your AUM and your management fee. And do you see any trend reversal towards more acquisition in the short term? What could be the trigger for that? And any major impacts on AUM? Sorry.

No, no. Sure, Philipp. And I think this is a typical pattern you see, I think I mentioned it before, in this part of the cycle where you see some portfolio rotation. And with the market now opening up and we have more transparency, more deals coming to the market, this also means that we advise some of our clients to do some portfolio rotation. As you've seen, that we've changed sectors as an active adviser. And this is why simply in the first half, you've seen more disposals than acquisitions, but also look at the equity raised and the open equity positions that we have, they will certainly translate into investments. They will be deployed, and that will then also have an impact in the future on the transaction volume in terms of acquisitions, and subsequently, upon closing, also on stabilizing AUM and growing AUM. So we still believe and are confident that also in 2026, we'll see AUM which are at a higher level than last year.

Perfect. And that brings me to my last one, fundraising. Any specific areas or countries, investor types returning to the table? Or is it just a general, yes, start of a recovery we'll see in the market?

Not a general comment I can make here, Philipp, because as I mentioned, it really depends on the investor. It's very selective. But we are in the very good position that we have more than -- way more than 500 institutional investors globally. And if you look at the fundraising that we've done, it was really well diversified, not only German investors, a lot of international investors, different in terms of investment style, et cetera. So it's really broadly diversified. That's what I can say.

We have another raised hand actually by someone who dialed in by phone this time. Can you hear us?

Yes. Can you hear me? It's Kai Klose from Berenberg.

Perfect. Yes.

I've got 3 quick questions, if I may. The first one is in the income statement, the impairment for trade receivables and contract assets. If I see that correctly, increased quite strongly in the first half compared to last year. Could you elaborate a bit more what was the reason for that? Second question is on the salary expenses or salary costs or staff costs. And all items went down, except one item for share-based payment. Maybe elaborate a bit more if this was really only because of, let's say, share performance or other reasons. And third question would be on the AUMs. Could you indicate if in the full year, the withdrawals -- or sorry, the inflows could compensate for withdrawals or payments to tenants -- to clients?

Thank you, Kai. Let me start with the first question. The impairment you've seen in the P&L, absolutely correct. This was a precautionary impairment that we did on fees that we generated. But in this specific case, for this specific mandate where we currently do not expect that we can actually harvest the fees over the year. So that's why, again, as a precautionary measure, we booked that impairment. We are still working on unlocking that problem so we can actually harvest these fees in the second half or shortly thereafter.

Then on the last question, -- on the last question, it was, I think, on AUM and whether inflows should outweigh outflows. This is our assumption, yes, and this is the basis for AUM growth that we expect for the year. And then on the cost side, you mentioned the share-based payments. This is a reflection of, you could say, more granular planning and booking because based on the improved EBITDA margin and performance, we've also assumed a higher variable pay and share-based pay for certain programs that we have.

May I -- can I ask one last follow-up regarding the valuation of the assets you have on the balance sheet? Could you indicate how the values have changed or have gone down compared to December '25?

Yes. Absolutely, and thanks for the question, Kai. There are 2 elements you have to bear in mind here. One, you will see in the P&L that we had a smaller negative valuation effect on the consolidated assets that we hold of around EUR 4 million. At the same time, we had a positive effect in our equity in OCI of over EUR 5 million on participations that we hold. And I think this is also a good reflection of the market environment. There are some items where you see an upward valuation and some selected items also in our exposure, where we have some remaining valuation to digest. But overall, I would say, stable development.

And sorry, last one, when do you expect at least some of the assets on the balance...

Sorry, Kai. One follow-up, and also important, and this perhaps explains another question you might have, why do we have minorities, or why is the net income after minorities higher than the net income? In some of these exposures, we are not the sole or 100% investor, and especially on the assets where we had a negative valuation in the first half, the EUR 4 million. This actually not only hits us with the full amount, but also part of this valuation impact goes to external investors, and that's why they are reflected in the minorities, and that's why the net income after minorities is actually higher than net income. So these valuations only hit us partially.

Okay. And could you indicate how many and when of the assets you currently have on the balance sheet will be transferred into a third-party product or into a fund, if any?

That depends on the strategy. And we have a number of consolidated assets and co-investments. For some of them, we are currently looking at the market environment and whether it makes sense to sell them directly in the market. For others, we check whether there is a structure that might make it interesting for our fund investors. So these are ongoing strategic reviews we are, as management, doing at the time. So there are several exit options for these positions, which we are actively checking at the moment.

We have one last raised hand by Mr. Vom-Cleff.

Three questions from my side as well. I mean, Martin, we all know one swallow doesn't make a summer, and I understood that you expect client activity to gain further momentum during the remainder of the year. But would you be able or at least willing to already provide some concrete figures for the transaction volume or equity raised that you are targeting for this year?

Lars, thank you for your question. I mean, first of all, yes, we saw a significant increase in equity raising momentum in the second quarter versus the first quarter. What gives us a certain confidence is the equity raising pipeline that we see and the equity raising discussions that we're having with clients. And also looking at the July figures, I think we are on a good track for 2026 to deliver what we have planned, and that kind of confirms that we are on a good track to show growth in '26. That's what I can say to your question.

Okay. And with activity gaining momentum, shall we then expect transaction and performance fees to also materially be up year-on-year? Or is that rather something that would react positively rather in 2027?

I would say, yes, that we would expect investment and transaction fees to be up versus '25. Also, for performance fees, we do expect an uptick compared to the '25 numbers. So yes, we should see the impact from that also on the revenue side.

Perfect. And then you already elaborated on your EBITDA guidance range and that you rather regard it as likely to end up in the upper half. I mean looking at your AUM guidance range and considering that AUM have even declined so far year-to-date, how confident are you that you can reach the upper end of your guidance range, i.e., the EUR 60 billion?

I would say from where we stand today, and I think I made these comments before on the 3 KPIs that we guide the market on that -- on EBITDA and EBITDA margin, I think we are more optimistic than on AUM. And if we wanted to reach AUM, the upper end of the guidance range, yes, for that, we would need to find some market-led opportunities, some larger portfolios in the market in the second half that would also close the deal before 31st of December. So we're looking at several investment opportunities. But again, as I said before, on our AUM guidance range, I'm a little bit more conservative versus profitability and efficiency.

Okay. Understood. And then maybe lastly, thinking about your medium-term strategy, that implies a 16% AUM CAGR. Are you considering revisiting or updating this target at some point in the near future? Or will you continuously work with your EUR 100 billion AUM North Star for the time being?

Lars, you correctly mentioned that the EUR 100 billion that we mentioned before is a North Star and not one of our key financial KPIs that we guide on. And we, certainly, we want to grow, also for the benefit of our clients and for the benefit of the platform. But certainly, management focus is more on bottom line profitability and delivering good growth and running a stable platform for our clients and all our stakeholders. So we will certainly, on a regular basis, revisit what the market environment is, what the targets are that we can achieve. But again, very important, the EUR 100 billion is a North Star. Whether at the end of the day, it's EUR 80 billion, EUR 90 billion or EUR 110 billion is less important to me than having a solid profitability and a solid balance sheet and platform.

In the meantime, we have not received any further questions, so everything seems to be answered by now. Should further questions arise later, please feel free to get in contact with Janina and her team at any time. Thank you very much. And I guess with this, I hand back to Martin for some final remarks, which concludes our call for today.

Thank you so much, everyone, for listening in. Thank you for your very good questions. Thank you for looking and investing at and in PATRIZIA. If there are any follow-up questions, the IR team and I, we are very happy to answer them, and we very much look forward to meeting many of you in the next conferences in autumn of this year. Have a good rest of the summer. Stay healthy, and talk to you soon. Bye-bye.

Good day, and a warm welcome to today's conference call of PATRIZIA SE following the publication of the first 3 months results of 2026. [Operator Instructions]

Having said this, I hand over to PATRIZIA's Director, Investor Relations, Janina Rochell.

Thank you, Sarah. Welcome, everyone, to our analyst and investor call for the first 3 months of 2026. This is Janina speaking. I'm pleased to have our CEO, Asoka Wohrmann; and our CFO, Martin Praum, with us today. Asoka will start by providing insights into the current market environment, recent transaction activity, fundraising trends and our strategic positioning for the next phase of the cycle. Afterwards, Martin will guide you through the first 3 months of 2026 financial results and provide an outlook for the remainder of the year.

As mentioned by Sarah, the call will be followed by a Q&A session. During today's call, we will refer to the results presentation, which you can find on our website. If you have any questions, the Investor Relations team is more than happy to assist. As usual, this call will be recorded and be made available on our website. We will also provide a call transcript for further reference.

With that, I'd like to hand over to Asoka to start the presentation. Asoka, the floor is yours.

Thank you, Janina. Dear ladies and gentlemen, a warm welcome from my side as well. Let's start on the Page 3 on the presentation. Since the second half of the last year, we have seen a gradual market recovery and a pickup in activity. We are entering a new cycle with investors actively reassessing portfolio construction and allocation strategies. However, the market momentum slowed in February following the outbreak of the war in Iran and the resulting increase in uncertainty. This once again highlights how sensitive markets remain to geopolitical developments. And -- but it is time to learn to live with this level of macro volatility.

As I have said before, this recovery will be longer, slower and bumpier than in previous cycles. That said, the recent geopolitical volatility represents short-term noise rather than a shift in the underlying recovery trajectory. The mid- to long-term recovery remains intact, supported by structural megatrends and ongoing capital reallocation. Real assets are increasingly in focus, offering resilient income, visibility and diversification in a transforming environment.

We continue to see compelling investment opportunities across the dual megatrends for our clients. These megatrends, Digital, Urban, Energy and Living transitions continue to shape our economies and societies. The current environment also reinforces the strategic importance of energy resilience, infrastructure, modernization and greater energy independence. We need greater energy independence and more efficient energy management going forward. At the same time, we are seeing growing international investor interest in European real asset strategies. In the current environment, Europe is increasingly being viewed as an attractive, relatively stable destination for long-term capital supported by a strong and stable currency.

With that, let's move to the next slide. Let me now turn to transaction activity. Transaction activity in the first 3 months of 2026 was selective. In the short-term activity continues to reflect macro uncertainty. At the same time, structural demand for real assets remains firmly in place and continues to underpin the emerging investment cycle. Clients remains disciplined and selective and particularly given ongoing uncertainty around interest rates and valuations. As a result, transaction volumes reflect a more cautious investment alignment in response to geopolitical developments rather than a lack of underlying demand.

A similar pattern can be seen in fundraising. Equity raised reflects more cautious and delayed allocation decisions in the current environment, totaling EUR 0.1 billion compared to EUR 0.2 billion last year. Importantly, investor interest remains intact. This is dominated by the cornerstone commitment from the European Investment Bank and supporting our global energy strategy. As the visibility improves and relative value becomes clearer, we expect client allocation activity to pick up again. This should drive renewed momentum into the second half of 2026.

Let's move on to the next slide, please. Let me now turn to our product offering. Over the past years, we have sharpened our strategic focus around the smaller number of high-conviction strategies and flagship products. In particular, living with a clear value-add angle, sustainable and affordable housing, energy transition, infrastructure and what we define as a RE-Infra at the intersection of real assets. All of this is fully aligned with our key structural dual mega trends, Digital, Urban Energy and Living transitions. Importantly, we cover the full risk-return spectrum across real asset sectors. In sum, we have the right product set up to capture growth in the next phase of the market for our clients.

With that, let's move to the next page. We have used the past 3 years in a very focused way. We have fundamentally repositioned and strengthened our platform with a clear focus on efficiency, scalability and integration. Today, we operate a fully integrated global investment platform, enabling faster and more efficient execution across the value chain. At the same time, we have built a more scalable and cost-efficient operating model. This is already translating into productivity gains and, importantly, operating leverage. We are also making good progress in integrating data, digital tools across the platform, including across portfolio management and investment decision-making, further improving efficiency and transparency.

Overall, we have strengthened profitability with management fees more than covering our operating expenses. We created a stronger, more scalable and better integrated platform, and we maintain a strong balance sheet with a very healthy equity ratio. We are well-positioned to capture accelerating market activity and generate meaningful operating leverage as growth returns.

Thank you for your attention, and I would like to hand over now to our CFO, Martin Praum. He will guide you through our results of the first 3 months in 2026 and the full year outlook. Martin, please.

Thank you, Asoka. Hi, everyone. It's Martin speaking. Let's continue on page 8, where you can see the results of our management activities that Asoka just mentioned to you. We fundamentally repositioned and strengthened our platform with a focus on efficiency, scalability and integration. This resulted in the significant 41% growth in EBITDA, but also in net income more than doubling, so the strongest quarter of the last 5.

The improvement in efficiency is best seen in the development of our EBITDA margin, which improved materially to slightly over 32%. This was certainly helped by the higher annual performance fees, which we booked in the first quarter and other income items, and this explains why we are above our full-year guidance in the first quarter. Even if we stripped out these effects, we would see a good improvement in efficiency compared to last year.

We managed to keep total service fee income stable despite record low transaction activity in the first quarter, which is a reflection of the short-term noise in the market impacting both equity raising and investment volumes. Overall, if you look at revenues, a robust development given the current market environment. Our diversified assets under management base continues to show resilience also in volatile times, which benefits our recurring management fees. The reduction operating costs by 8% is a major driver for the improved profitability. I will come back to that later.

Let's move to page 9, where we show our AUM with a virtually stable development over the quarter. Some selective outflows we've seen are typical of this point in the cycle, as we see clients more actively reallocating their portfolios. As mentioned by Asoka, new investment activity for clients was limited during the quarter, but we continued good dialog with our clients on new investment opportunities. Don't forget, we also have around EUR 1.3 billion of client equity commitments we can deploy once opportunities arise.

As a reminder of our AUM diversification, resilience, and quality, let's go to page 10. We continue to manage a highly diversified AUM base for our clients with around 80% in real estate and close to 20% in infrastructure investments. The debt levels on these investments continue to be low at around 30% only. The broad variety of products and the expertise we have on the ground will prove as a competitive advantage in this new cycle, as investor focus has clearly shifted from pure asset allocation to real assets to being closer to the asset and its business plans. We again talk more about active asset management, for which our combination of big data-driven in-house research together with our local experts on the ground is a great plus for convincing investment strategies.

Let's go back to the P&L and have a look at our operating efficiency. We continued to deliver on improving the platform's efficiency with operating expenses down 8%, with staff costs being the major driver here. But do not forget, we also continued to invest in both people and our operations, namely IT and data projects, to enable future efficiencies from process optimization and AI. This is the driver for our increased operating leverage. It enables us to show even higher profitability and margins once certain revenue items will come back.

A ratio to reflect this, which we've shown you also in the past, is the comparison of recurring management fees to operating expenses on the next slide. Although some of our performance fees are recurring in nature and could be included in this view, looking at the pure management fees alone, we can now show positive coverage. This makes us much more independent from market activity and also more resilient.

Let's go to page 13, and let's look at the two engines we run, our asset-light investment management business and our balance sheet investments. We've seen a significant improvement in EBITDA from our investment management business based on the actions that we've taken. The balance sheet investments contribution remained virtually unchanged. However, it is important to remind you here that part of our balance sheet, especially what you will find in the position participations is not generating annual income that you will find in the P&L.

Take the exit carry profit entitlements of over EUR 300 million, which we have capitalized on our balance sheet as an example. They reflect a value creation for our clients and for our shareholders over the last 13 years. As they are reflected in the balance sheet in participations and equity at fair value already, they have not and will not support the P&L lines. As we start to crystallize part of these profit entitlements, starting from this year, you will see it rather in increased cash flow from investments, but it remains a material value creation.

Let's move to the next page. Page 14 shows you more details of our balance sheet investments. We also actively used our balance sheet for selective co-investments, providing PATRIZIA and our shareholders with future income from fund participations. We will continue to screen the market for both investment opportunities, but also to exit certain positions when the time is right.

Let's look at our balance sheet on page 15. We continue to run a very robust balance sheet with an equity ratio of 73% on a net basis. Available liquidity decreased to around EUR 86 million compared to last quarter, but will jump back to well over EUR 100 million in the second quarter based on expected cash flows from fees and exit carry payments. We will continue to monitor the overall market development, debt maturities, and refinancing markets, as well as investment opportunities with regards to our capital allocation strategy.

Regarding the guidance on page 16, we can confirm guidance ranges for the full year. We are very well on track for EBITDA and EBITDA margin, and we also confirm our AUM guidance range despite the lack of net AUM growth in the first quarter. We remain cautiously optimistic on the market development, with equity raised numbers in April showing higher momentum again to what we've seen during the first quarter, which showed subdued equity raising numbers, not only for us, but for many other players in the market. And as Asoka mentioned, we believe the recent geopolitical volatility represents short-term noise rather than a shift in the underlying recovery. The mid to long term recovery in our view remains intact. We are supported by structural mega trends and ongoing capital reallocation. Real assets are increasingly in focus, especially in Europe.

Lastly, and now coming to the last page, with our AGM on 10th of June approaching, our shareholders will benefit from the eighth increase in dividends to now EUR 0.36 per share, reflecting a dividend yield of close to 5% at the moment, while we believe our earnings quality and cash flows will continue to improve based on our more efficient platform and a generally intact long-term recovery story for real assets.

With that, I'd like to hand back to our operator, Sarah, to start the Q&A.

Thank you so much, Asoka and Martin, for your presentation. Ladies and gentlemen, we are now happy to take your questions. [Operator Instructions] With this, we will start with the first person, and this is Philipp Kaiser.

Congrats on the good start to the year and for taking my question. I would start with one question on your guidance. For the lower end of the guidance, could you shed some light on your assumptions? I think, or I guess my question is in which magnitude do you need to see a re-recovery on the market, if any? And when this pickup in transaction activity is needed to reach the lower end?

Hi, Philipp. More than happy to take the question. I think the easiest to approach this is if you look at our Q1 results, and if you strip out the annual performance fee that we have booked in the first quarter, we do believe there will be some performance fees over the remainder of the year. And if you then take kind of the stripped out number and extrapolate it, this should kind of lead you to the lower end of the guidance range. The decision on whether we will come at the lower or at the upper end of the guidance range, in our view, is driven by certainly some equity raising and AUM growth, but more importantly by transaction fees, and also, the development of the cost side, where we still believe we have some flexibility depending on how the market develops.

Perfect. Thanks a lot. Speaking of the cost side, your overall operating expenses further declined. Congrats on this development. That said, this was driven by further decline in staff costs, while other operating expenses ticked up slightly. You mentioned it also during your presentation and the timing effects. Could you quantify those or give a broad range?

In terms of timing effects, I would say we talk about a lower single digit number, say EUR 1 million or a little bit more, that impacted the Q1 negatively for other operating expenses. Generally, if we look at kind of what we expect for the full year compared to 2025, we do expect again, a decline in staff costs year-on-year, and other operating expenses are rather flattish. But again, it really depends on the remainder of the year. If we see some better than expected revenues, that could have an impact on the cost side. Also on the other way, if the market doesn't return to a certain level, we also have some flexibility to adjust the cost base to react.

Okay. Perfect. Thanks a lot. With the roughly 800 FTEs, is that a solid base, or it all depends on the market, I guess?

I would say that with around 800 for your modeling, we feel comfortable, yes.

Thanks a lot. My next question with regards your available liquidity. You mentioned in the presentation that it decreased given the acquisition of shares in the Dawonia Fund. Could you shed some more light on the rationale behind that? What's your current share in this fund after the acquisition?

Certainly. More than happy. First of all, we used the first quarter not only to invest in further Dawonia shares, but also other co-investments and in certain funds. The idea behind the Dawonia acquisition is still related to the mandate prolongation, which we announced recently. As part of this prolongation, there was a certain window of share trading in the fund. Like other investors, we also used this opportunity to allocate more capital because, A, we know the asset very well, B, we are very convinced of the assets and the fund and its management, and also the upside potential that our investors and we have. To your last question, the economic interest in Dawonia from PATRIZIA at the moment is around 7%.

Perfect. Thanks a lot for the clarification. My last one, out of curiosity, everyone's talking about AI, and I would be interested in what's your vision for PATRIZIA and possible implementation, business-wise, operational-wise, efficiency-wise? Yeah, would be quite interesting to get around your thoughts.

Philip, thank you for question. I do think it's a very valid question. You know, as you know, we have onboarded last year one of the noticeable CTOs in Germany, and for one of the MDAX companies, Christoph Fuchs, who is now set the, let me say, IT and digital landscape at PATRIZIA, and he's also an AI expert. I do think also, as you know, Philip, my predecessor and also the founder has invested quite much in, you know, IT and digital ventures. What we are constantly took the improvements and we built for 15 years now, nearly, the data intelligence platform, what is also AI related, you know, or running by AI, the data intelligence what we are running. It's a unique approach. Additional to that, we are now in a rollout for all the, you know, all our stuff and an AI program, including you know, let me say, learning sessions and upgrading, but at the same time we are in our data strategy as well as in our, let me say, upgrading front office platforms. There's also middle and back office platforms we are going to apply AI. We -- and I do think I'm very confident that we can see efficiency wins, but also upgrading of quality, data, precision and all that will come. I do think, again, we don't forget our business is also data business. I do think therefore this disruption is not -- we are not protected by this disruption of the industry. We want to, also, let me say, fully in. That's what we're doing in our initiative. We have AI initiative precisely saying at PATRIZIA there's AI initiative. That is, to roll out to everyone, but also, learning how to deal with that, how to use it, and also very clear cases what we are using to upgrade and improve our processes and outcomes.

We will move on with the questions from Lars von Klaaff.

Three quick questions, if I may. We talked a lot about Dawonia, and maybe I missed the info, or at least I can't find it. Could you tell us what the Dawonia fee included in your Q1 profitability was?

Sure, Lars. Dawonia fee in Q1 was primarily the performance fee, which was around EUR 12 million in the first quarter.

Secondly, I mean, we're always talking about recurring and sticky management fees. They were down 6% quarter-on-quarter with AUM more or less remaining stable or only being down 0.7%. Is that due to a mix shift or more shift away from management fees to transaction performance fees? Or what's the explanation?

No, that's simply technical effects, Lars. In the fourth quarter, we had a higher share of service development fees and also catch-up fees in the fourth quarter, which did not reoccur in the first quarter. You typically in when you come towards year-end in certain mandates, you can calculate catch-up fees only then, which positively impacts the fourth quarter.

Then the last question. I mean, admittedly, I was surprised to see signed transaction volume of 0. I can't remember having seen that at all, or at least not since the beginning of 2019. What shall we read into that?

There's certainly rounding here as well. We had some signed transactions, but again, as Asoka and I mentioned, that was really the market environment and basically reflection of a certain hesitant to make decisions in the first quarter.

Okay. Adding to that, are you expecting that to change in Q2 already, or is it rather the hope for the second half of this year that we see signed transactions coming back?

No, no, absolutely. That's why it's important also to look at our pipeline, because what you see when we publish equity raised, you will only see the equity raised that's really done and dusted and has gone through all committees. We also have already client commitments that we have received, but where we haven't received the full committee approvals from the certain committees that are required. From that pipeline, as I mentioned in my speech as well, we have a certain optimism that towards the second quarter we'll see a higher momentum.

We move on with the questions from a person who's dialed in with a phone ending 888. [Operator Instructions] Unfortunately, I can see that you unmuted yourself, but we cannot hear you.

Yes, it's Klose. Can you hear me?

Yes.

I've got 2 quick questions. The first one, could you indicate what was the split of transactions by regions and/or by asset classes? Would you expect to see in 2026 more signed acquisitions or disposals? Second -- third question would be on the equity raising. You mentioned there was a notable increase in April. Could you quantify that to which magnitude you saw an uptick?

Let me start with the second question. As we've shown, the equity raised in the first quarter, we talked about around EUR 100 million. If you look at the April numbers, we have a similar amount in April only. That basically underpins our cautious optimism for more activity coming over the next month and quarters. In terms of transaction or investment volumes, I mean, we talk about on absolute levels, relatively low numbers. I would say that the majority was in the DACH region, and especially in the living sector. This is where we've seen activity. Also we've seen activity on the infrastructure side, and something in Southern Europe.

Well, is it likely to be true for acquisitions and disposals in 2026?

That was primarily for acquisitions. On the disposal side, we've seen more activity on the commercial side also with a focus on Germany and Europe.

Ladies and gentlemen, please be reminded that it's still possible to ask questions as we by now have 1 participant left in the queue, and that's Miro Zuzak. Please ask your questions.

Congratulations also from my side. I have one clarification question regarding the operative net [ Aufwendungen ], which has come down a lot in the last quarter. Did you mention that for the year, the operating net Aufwendungen will go down? Or just at the run rate will still further go down from the EUR 52 million further down?

My comment which I made, Miro, was I compared the last year's number that we showed in operating expenses with what we expect for the full year. There we would expect a further decline in our model. If you now take the operating expenses that we've shown in the first quarter, which is the EUR 51 million, if you would extrapolate that, that would probably be a little bit too optimistic based on our current assumptions because we have certain cost items that we expect to come in over the year. Quick answer is, extrapolating Q1 in terms of cost base, in my view, would at this stage be too optimistic because we do expect some more business activity, some more revenue activity, and part of that has costs attached. That's why we expect a little higher run rate for the remainder of the year. As I said before, if the revenue side doesn't come in, we also have some flexibility to react. Does that answer the question?

Absolutely. Thank you. The next one would be again on the Dawonia news flow, which you announced basically in December. I have one clarification question. Basically, you agreed that you would get around EUR 49 million every year from 2026 to 2029. And then you said that under certain circumstances, there is the possibility that you would get another EUR 49 million in the year 2031. That's what I read from the press release. My question is, what happened to the year 2030?

Yeah. No, I think numbers, no -- is in line. I do think, again, don't forget, as we also announced with the whole investor community and the Dawonia, we agreed a 5-year contract. That is the reason, I do think, the payouts of that, not only also independent of that, but because of also reasonable liquidity we want to keep in the Dawonia fund itself. I do think that is one of the reasons for the pause of the year. Nevertheless, your statement I know, completely valid. That's a little bit the explanation.

I think I didn't really get the answer. Sorry. The question was what will happen in the year 2030 after you have received 4 times EUR 49 million?

That's right. Then, you know, we get, again, 31, but that due to the no negotiations and agreement, because that is a manifestation of all the, you know, discussion what we had in the early, you know, early years. I do think this is exactly the realization as, that's, you know, what we agreed and negotiated, end of the day.

And Miro, just take this as the year in which we will sit together with the investors again in the fund and then decide on a further prolongation or strategy for the fund.

Okay. Basically there's just no payment in 2030. If you have disclosed that, the entitlement is EUR 308.8 million in total. Correct? If I take the 5 times EUR 49 million, I get to EUR 245.

That's correct.

What happens to the remainder?

We are still exposed like our clients to the Dawonia development, Miro. That's the -- then the remainder will be discussed once either the mandate will be prolonged or exited.

Okay. It is still there as a crystallized performance fee and an entitlement. It's not that you had to lower the amount as a basically way to speed up the payout. It's the entire amount which eventually will be paid out, the EUR 308 million. It's not going to be less.

No. I do think, let us -- I do think all these payments what you mentioned earlier is something, looks certain. All other outcome is due to the outcome of the real exit of Dawonia, what is completely, in my opinion, aligned with the all investor, with the all investor interests. I think we want to have the skin in the game, not only through our direct investments, what, you know, Martin alluded to, also in the agreement, we have an open position, what will be then, you know, will be all, you know, let me say, recalibrated, then end of the exit. That is the theory behind. But again, your thoughts are completely right. We have with the 5 payments, quite certainty, not quite -- we have a certainty. The rest is due to the market up or down. But I do think because you can see we have a skin in the game, we have increased it. We have a very high confidence and confidence that PATRIZIA will be a great investment and we want to be, you know, committed to our investors because we want to partnering up. That's also our really important clients in Germany and elsewhere.

To add to that, Miro, I think that is, I think a well-balanced structure, which combines a certain security on cash flows for PATRIZIA and its shareholders, and at the same time, a very good alignment of interest with our clients in the fund because we're also still exposed and motivated to increase the value of Dawonia going forward.

Okay. The last one -- sorry if I have missed that in the last couple of months, but you have this, you have now the nice problem to get EUR 200 million in payouts and let's say fresh liquidity. You have this slide in your presentation where you basically show that your balance sheet is worth more than your market capitalization, so your net asset value is worth more than the market capitalization. Now you have different options. You can buy more Dawonia, you can buy your own shares, or you can pay out a dividend, or you can do other stuff. What's your strategy and what have you communicated regarding this strategy? What you're going to do with this excess capital?

Sure, Miro. Indeed, I mentioned that before. First of all, the rule how we run the company is that we want to continue to have an investment grade rating style balance sheet that we want to run. This limits a certain debt level we want to have on group balance sheet. Then we will check whether we can or have investments that have an expected return above our cost of capital. Then we'll make the decision, also taking into account how the debt maturities look like for us as a group. Then also as a further element, discuss the dividend policy or potential cash return. It's kind of a staggered approach that we have here for our capital allocation. We are continuously discussing this. Also taking into account the changes in the market environment. Also, I'm, as a CFO, certainly looking at the debt maturities of PATRIZIA. You might know we have a bonded loan that matures in 2027 with around EUR 70 million. I have that also on my list that we want to redeem that.

In the meantime, we have received no further virtual hands. Everything seems to be answered by now. Should further questions arise later, please feel invited to get in touch with Janina and her team at any time. Thank you very much.

With this, I hand back to Martin for some final remarks, which concludes our call for today.

Thank you so much. Thank you, Sarah, and thank you everyone for dialing in. Again, the investor relations team is more than happy to take any follow-up question, and Janina is available for that. We very much look forward meeting many of you on our upcoming road shows and conferences. Stay healthy and speak soon. Bye-bye. Thanks.

Good day and a warm welcome to today's conference call of the PATRIZIA SE following the publication of the preliminary financial results of 2025. [Operator Instructions] Having said this, I hand over to PATRIZIA's Director of Investor Relations, Janina Rochell.

Thank you, Sarah. Welcome everyone to our analyst and investor call for the full year 2025. This is Janina speaking, and I'm pleased to have our CEO, Asoka Wohrmann; and our CFO, Martin Praum, with us today. Asoka will start by presenting the highlights of the year 2025. Afterwards, Martin will guide you through our preliminary financial results for 2025 and provide an outlook for 2026. As mentioned by Sarah, the call will be followed by a Q&A session.

During today's call, we will refer to our results presentation, which you can find on our website. If you have any questions, the IR team is more than happy to assist. As usual, this call will be recorded and made available on our website afterwards. We will also provide a call transcript for further reference. With that, I'd like to hand over to Asoka to start the presentation. Asoka, the floor is yours.

Thank you, Janina. Dear ladies and gentlemen, a warm welcome from my side as well. Let's start on Page 3 of the presentation. Our world is changing rapidly, and uncertainty, volatility is the new geopolitical normal. The old world order based on the rule of law, open societies and free trade, are facing existential threat. The new emerging world order is dominated by 3 major powers. The use of political and economic power to pursue national interests on a global scale is part of the new norm, and military conflict is back also on the agenda. In the light of the current global turbulences, investors are looking for safe havens of stability to protect their investments for the long term. We believe this is the right moment in the new cycle to invest in real assets in the right geographies.

Why is that? Real asset investments offer strong long-term returns. And they are also an inflation hedge, provides stable cash flows while other asset classes are impacted by increased uncertainty. In this environment, the attractiveness of Europe as an investment destination becomes even more apparent. In addition, the stability of the euro supports investment performance for international capital. We believe this is the moment for Europe's awakening. Europe is a beacon of stability, offers unique investment opportunities. We, PATRIZIA, are well positioned to capture this shift, with deep expertise, strong local presence and proven track record and proven execution across resilient European real asset markets.

That said, let's move to the next slide and take a look back at 2025. The first -- let's talk about the market in 2025. After weaker-than-expected 2025, we see that a new cycle has started. We believe this cycle is different to previous cycles. It will be a longer, slower and bumpier. Despite the current geopolitical turbulences, we are more optimistic than in previous years about the real asset industry. Market sentiment is already improving. Investors are becoming more optimistic. We see signs of stabilization with slightly improving valuations. Thus, we expect this recovery to gain stronger momentum in 2026.

PATRIZIA remains well positioned for long-term growth driven by the DUEL megatrends. These megatrends, digitalization, urbanization, energy transition and living transition, continue to shape our economies and societies, and we will continue to invest along the DUEL megatrends in 2026 and in the future. The creation of PATRIZIA's integrated investment platform, combined with strict cost discipline, has made our business more resilient and less dependent on market-driven revenue streams. And you can see this very well in our earnings performance. Our profitability has significantly improved compared to last year. Importantly, this reflects a structural set up or step up in our earnings profile.

In 2025, our management fees fully covered by operating expenses for the first time. This means we can turn the market momentum into even stronger profitability in the new cycle. And this is an important step to strengthen our long-term profitability beyond 2026. We are seeing a clear upward trend in fundraising, with higher equity raised in 2025 than in the prior 2 years. This demonstrates the growing investor appetite, renewed confidence in PATRIZIA's product offering and market position. Market -- the investment volumes gained momentum, reflecting a clear acceleration in transaction activity. This was fueled by our international business activities, underlining PATRIZIA's global footprint across real estate and infrastructure.

With that, let's move on to the next slide. Let me briefly comment on our results for the financial year 2025, which we already published yesterday evening after markets closed. We significantly improved our EBITDA by 35%, up to EUR 63 million. We are improved or we also improved our EBITDA margin to close to 23%, well above last year's margin. Our earnings performance is a result of efficient operations, strict cost discipline and a stable portfolio. Our AUM remained almost stable at EUR 56 billion despite a slower and weaker market recovery and currency headwinds. On the positive side, we saw valuations improving gradually during the year.

Let me now turn to our investment activity on the next slide. We already saw a small but encouraging increase in transaction activity in the second half of 2025. We signed more transactions and we also closed more transactions compared to last year. And PATRIZIA continued to be a clear net buyer in the market. We expect this positive momentum to continue in 2026. Valuations continue to improve. Transaction volumes are increasing. More clients are taking advantage of market opportunities in the new cycle, especially in real estate. And we believe this is the right moment to start investing in real estate again.

That said, let me turn to our fundraising activity on the next slide. The increase of 22% in our equity raised compared to fiscal year 2024 shows the strong demand for real estate, especially in modern living, but also in infrastructure. And our multi-manager platform, AIP, contributed to this positive development. The progress we are seeing in fundraising clearly support our long-term growth ambition. We continue to see strong demand for our DUEL-aligned investment strategies, particularly across our flagship products.

Building on the progress we have seen in 2025, let me now turn to the market outlook for the coming year. Looking at the market sentiment for 2026, we see clear signs of improvement. Interest rates are expected to remain stable or trend lower. Inflation is also expected to stabilize. As we can see again, geopolitical uncertainty remains a factor and it will impact investment sentiment in different regions in a different way. Overall, this environment is expected to create structural tailwinds for us as PATRIZIA. The positive market development should lead to a higher equity raised and increased investment volumes. We continue to focus on targeted investment solutions across our key strategies: living, value-add and infrastructure.

Living has been a strategic growth pillar for PATRIZIA for more than 40 years. We have an exceptional track record in living, both in our home market Germany, but also across Europe and recently also in Japan. Living will be a key investment focus for PATRIZIA in the new cycle as valuations improve and offer attractive long-term returns for our clients. And as we all know, housing, especially affordable housing, is one of the most pressing challenges in our societies today. More than [ 23% ] households in Europe spent over 40% of their disposable income on housing and energy. But this challenge is also an opportunity, and PATRIZIA wants to become a leading impact investor in Europe.

We are currently building affordable homes for 7,500 people in Ireland, in the U.K., Spain and Belgium. Our ambition is to provide affordable housing for 40,000 people in the next couple of years across Europe. Likewise, infrastructure remains a key investment focus for PATRIZIA in Europe and in Asia Pacific. Overall, we are well positioned to capture the opportunities in the new cycle. Thank you for your attention. I would now like to hand over to our CFO, Martin Praum. He will guide you through the fiscal year 2025 results and our outlook for 2026. Martin, please.

Thank you, Asoka, and welcome also from my side. Let's continue on Page 10 of the presentation. Let's have a look at the AUM development in 2025. As Asoka mentioned, virtually stable development. We've seen some good inflows in 2025, both in real estate and in infrastructure. But as Asoka mentioned, we've seen an increased transaction volume in the market and at PATRIZIA with inflows, but also portfolio rotations and realizations. And this is a typical pattern for a market that recovers. It's time for asset allocation updates of our clients in the new cycle as the markets open up. We've seen valuation effects now turning slightly positive. This is also a sign for a market stabilization and improvement. And the real drag for our AUM this year were currency effects with minus EUR 0.7 billion, leading to the AUM of around about EUR 56 billion. Looking forward, at the same time, we still have open equity commitments that are available for investments of around EUR 1.3 billion waiting to be deployed in the market.

Let's continue on Page 11 with the EBITDA composition. Key message here is, we've seen a strong increase in EBITDA to EUR 63 million, up 35%. And we've seen growth in management fees, but market-driven revenues like transaction fees and performance fees were still down year-on-year, having bottomed out in this market cycle. So overall, total service fee income down 2% year-on-year. At the same time, our balance sheet investments had a higher return and had a higher contribution to our results. If you look at other income, then this has materially decreased to last year and is a reflection of a better earnings quality that we are delivering. Now if we look at total service fee income, around 90% of total service fee income and from fees -- are coming from recurring management fees.

Let's move on to Page 12 with a little more details. I already talked about the management fee development. Transaction fees are still down because if you look at the transaction volume that we delivered, only a slight percentage of these transactions had a transaction fee arrangement attached. So this is why the higher transaction volume did not have an impact on the transaction fees. And performance fees are also slightly down year-on-year, but this was in line with management's expectations.

Let's have a look at the cost side on Page 13. You know that we actively adapted to the changed market environment over the last 3 years, and we intensified our cost efficiency measures, which led to a significant improvement of the cost side. We see total costs down 10% year-on-year to around EUR 225 million, both driven by staff costs and other operating expenses. Now what have we achieved? We've made the platform more resilient to market cycles, and we've increased the operating leverage once revenues come back in a more pronounced way.

As an example of what this leads to, let's go to the next page on Page 14. Here you'll see the split of management fees versus operating expenses. Key message here is that management fees alone, for the first time, more than cover operating expenses. We've shown growth in EBITDA despite being at the bottom of the market in transaction and performance fees. Coming back, management fees as the most recurring item more than fully covering expenses. And this is a very good starting point for the next cycle, and we think we're well positioned for growth in the new cycle, given we have a better resilience and we have a better scalability of the platform, increasing the operational leverage once revenues come back.

Let's have a look at our segment reporting on the next page, on Page 15. You might remember we described PATRIZIA as a 2-engine model. On the one hand, the asset-light investment management business and our balance sheet investments that we have deployed in strategic co-investments and seed investments. The asset-light part is up 29% in terms of EBITDA, again, driven by better efficiency of the platform. Balance sheet investments are slightly down year-on-year. But last year, we had an extraordinary positive effect. So underlying the -- also balance sheet investments have improved their contribution to our results. Consolidation and other effects are down materially year-on-year, so the negative effect has become smaller, and this drives the overall 35% increase in EBITDA for PATRIZIA Group.

Let's have a closer look at the balance sheet investments on Page 16. I think you are familiar with that graph showing our invested capital at cost and at fair value and the value that we have created over time with our balance sheet investments. We have used the market opportunity to also invest more in the real estate living sector and also in infrastructure in 2025. The positive long-term returns that are primarily driving the invested capital are certainly driven by living exposure that we have. And at the same time, we've seen foreign exchange positive valuation effects also on our balance sheet investments in 2025, again, a confirmation that the market is stabilizing and changing.

If we now focus on the right pillar and the fair value capital of our real estate of around EUR 783 million, around 40% of that pillar are profit entitlements or you could call them exit carry entitlements, which we will harvest step by step in the next years. This will support our cash inflow by around EUR 50 million per annum, and it's a sign that we actually crystallize the value that was created over the last 2 years to the benefit also of shareholders of the company.

Let's have a look at the operating cash flow on Page 17. Also here, we've seen a significant improvement to last year. The operating cash flow is more than 4 times the level we've seen in 2024. This was driven, a, by a better general profitability. Secondly, more active working capital management. And thirdly, the quality of our income, which had a lower level of noncash items attached. The EUR 57.6 million more than cover our dividend payout for last year, which is around EUR 31 million. Also, if you look at the dividend payout in terms of net income, we have a net income after minorities of EUR 18 million this year. So on that basis, the dividend is not yet fully covered, but we're on a clear path to have full coverage also on net income going forward.

Let's move on to Page 18 of the presentation. Our own liquidity, our balance sheet liquidity, has improved year-on-year to now EUR 175 million in total and EUR 115 million as available liquidity. The equity ratio was further strengthened to close to 74%. So we continue to run a solid and strong balance sheet and this will also be the backbone for our future activities.

Let's go to Page 19 to look at the guidance for 2026. Asoka mentioned that the new cycle has started, and it will be slower and bumpier but we see lots of signs for improvement and also lots of opportunities in the market. So while our people will work on growing equity raising investments and AUM, we will continue to work on the further improvement of processes, of efficiencies and also the quality of EBITDA. And so basically, we expect a moderate improvement in the operating environment in terms of revenues and continued cost efficiency driving our EBITDA up to a range of EUR 60 million to EUR 75 million. This would also have a positive impact subsequently on the EBITDA margin. In terms of AUM, we expect an increase to a range of EUR 55 billion to EUR 60 billion. Again, it is a relatively broad range, depending on valuations of assets, organic growth, but also, as we've experienced on foreign exchange impact.

Let's have a look at the dividend side of things on Page 20. We are proposing the eighth consecutive increase in dividends since we initiated payments in 2018. As I mentioned before, the dividend last year was covered 40% by net income. That has increased now to 53% coverage and we have a clear plan for full coverage going forward with. As a next step, based on our plans and guidance for this year, we would talk about, depending on tax rate, coverage of over 70%. Don't forget, our operating cash flow is very, very strong. We have a very solid balance sheet to cover the dividend. And as a last statement, don't forget that this equals a dividend yield of around 4.6% at the moment, and we will continue to deliver on the dividend policy that we've set in the past. With that, thank you for your attention. And now both Asoka and I are happy to take your questions.

[Operator Instructions] And having said this, we will first start with Philipp Kaiser.

I have a couple of questions and I would like to go through them one by one, if I may, starting with the AUM. As far as I understood, you updated your AUM policy and now include also fee-generating commitments. Firstly, could you elaborate a bit more on this idea? And secondly, do you also adjust the 2024 numbers accordingly?

Thank you, Philipp. Yes, what we did is, we had a look at our AUM policy overall, and you might remember that our AUM policy should always be aligned to market standards and the INREV standard. And as part of that, we updated the policy and included, as many other players, the commitments where we already generate a fee. And this had a positive EUR 0.3 billion impact and we have highlighted that here and will make that very transparent also in the annual report. And we have not adjusted the previous year number. But again, given we mentioned the EUR 0.3 billion impact, you could adjust yourself in your model, if you like.

Perfect. With regards to the AUM guidance, you mentioned earlier during the presentation that the investment market is, yes, slightly increasing and the market dynamics are improving. That said, your AUM guidance includes a downside scenario. What's the scenario for this case? Is it the macroeconomic upheaval we currently see or any other implications?

Yes. Thank you for the question, Philipp. It's actually just to cover for potential timing effects. I mentioned before, we are in a market phase where you also see portfolio rotation, where also investors might realize some performance. At the same time, we also want to cover for foreign exchange impacts. As you have seen, this had a relatively high impact on our AUM in 2025. And depending on AUM fluctuations, we just want to have a certain downside protection here in terms of the guidance range we're giving. But if we would say you should focus on the midpoint, we expect further increase in equity raised in '26. We expect a modest increase in transaction activity. So organically, we are planning for growth in AUM.

Okay. Perfect. Does the 2026 outlook exclude or include potential currency impacts?

The current outlook excludes -- I mean excludes currency impact. So we didn't make any specific currency assumptions in the planning.

Okay. Perfect. Very, very helpful. And then let's move on to the operating cash flow. Cash flow improved significantly, so congrats to this development. And just for my understanding, the crystallization of the roughly EUR 50 million per annum Dawonia entitlement will further stabilize your operating cash flow in the coming years. Is that correct?

It is partially correct, Philipp, because it will come into the cash flow in the investing part of the cash flow, not the operating cash flow.

Okay. Perfect. And then my last one with regards to net sales revenue and they were driven by rental income from warehouse assets. Will those assets stay on your balance sheet throughout the current fiscal year? Or do you have already concrete plans to transfer the entire assets or part of the assets into funds during the year?

No. If we look at the exposure we have here, we have assumed for the time being that they'll stay on the balance sheet for the year. If we see a market opening up in certain areas, there might be an exit earlier, but assume in your model that they'll stay until the end of '26. And again, we'll see how the market develops.

Perfect. Very helpful. Just one follow-up on the operating cash flow then. You already mentioned the 3 pillars, improved net profit, working capital management and other positive effects. Of the 2 -- last 2, how much could also [ recur ] in 2026 of those positive effects?

Good question, Philipp. I think we've advanced already in our working capital management, but there are still some fruits to be harvested. So I would expect at least a positive effect in the single-digit million euro area also in 2023 -- sorry, 2026, from more active working capital management.

And then we will move on with the questions from Lars Vom-Cleff.

I would be interested in your growth aspirations. I mean thank you for sharing the split of your '25 fundraising with us. Which asset classes do you expect to be strongest contributors to your growth this year? Will it be real estate or infrastructure again or maybe AIP?

Look, thank you, Lars, for the question. Definitely, I can tell you without any doubt real estate will be the -- the majority of assets will be generated this year along our expectations because, as I outlined, affordable housing topic as well as value-add, living is the right macro moment for the long-term investors to harvest great returns. So therefore, I do think definitely we are expecting this year living strategies to kick off where we have the best, in my opinion, track records, not because we have track records, but I do think that's the right moment for the investors, and that's what we have been advising also and have the conversations.

But also, I think, I can see, by the way, in logistic, in real estate area, the last mile logistic, this strategy will be -- will change. There is -- logistic become a very like Re-Infra, what we are calling convergence of real estate infrastructure because energy, how you building on logistics, the rooftop solar, battery techniques, charging stations, all that is, in my opinion, very much upcoming now in the demand of clients. And I do think this is an area what I'm really expecting to grow. But also, in my opinion, early signs that some value-add investors are on the street, are looking for, let me say that, value-add opportunities in offices is not excludable. This year is the first time after 3.5 years, I would say, we can first time think, is there interest?

And then your question regarding infrastructure, I think, look, all the investment bills of these government bills, what they are now all announced, that will come down mostly for infrastructure first, except affordable housing or let me say the bottleneck in housing in our societies, but I do think what we are seeing is all that we are today in the modern infrastructure, let me say, energy storage techniques or investments, roof sustainable energy, waste to -- energy to waste, all these strategies will be -- will come up now beside the very heated topic of data center. As you know, we entered last year into this consortium deal in the U.S., Aligned Data Centers. By the way, we already capitalized and has been sold to big asset manager and developer in the Middle East, very well get profited from that. I do think, we are expecting also, especially last -- in Asia, infrastructure to kick off. And I do think, especially last year, we can see we invested more than EUR 300 million in Philippines with partners, co-investment partners. I do think I am very, very positive on infrastructure in Asia.

Also our new fund strategy, emerging markets sustainable infrastructure strategy, what we are looking to place in Asia, what we are raising in a -- capital raising in a first round. We have a promising not only deal pipeline but also promising clients are coming in and have interest. So therefore, let me say, if you ask me, Asoka, what is exactly the portions, 50% to 70% in real estate, 30% in infrastructure, might be 10% between a little bit out of the infrastructure, I would say we can phrase that as a Re-Infra area. So this is a little bit the storyline what we are seeing in Europe as well as in Asia.

Crystal clear. And then I can't withstand to ask the question, and I think on the Q3 call, you said that illiquid assets would also look very attractive and that would -- you would be happy to elaborate on that in one of the following calls. Is today one of the following calls?

Yes, you asked the illiquid or liquid.

Illiquid.

Illiquid.

Illiquid. Yes.

Illiquid. We are in the illiquid. I have to say that illiquid assets, I do think, to be honest, do not feel all -- we are all investors -- the gold is performing unbelievably well as fears of market participants are coming to a level decrease and also the world -- explosions in the market, that people are going to protect themselves with these strategies. I think, to be honest, nothing is, let me say, cash generating, no return generating. It is the time and also the correction from Bitcoins, all these digital currencies, this is a sign these areas are exhausted. I think gold will still get as an illiquid asset, by the way, illiquid asset for me, because you have not the illiquidity, you can trade it every day. But again, it's not interest rate bearing. It's not interest rate generating. I think, to be honest, if you have a stable grade in valuations, if you buy it today into real estate or infrastructure as a long-term investment, you have a fantastic returns in front of you. I would take this part as a diversifier.

So my conviction for illiquids, even now, not last time only I discussed, it is already I would say if you're not already looking into that, you should, and that's the way we are advising. And we can see, by the way, more and more clients are looking into that. And I do think the geographies are not unimportant. Europe people feel undervalued. And again, besides all the press releases talking down Europe, the unimportance of Europe compared to the 3 big players in the world with China, U.S., and in some way, Russia and some other ones, but I have to say, I feel Europe is the right place to invest. Asia is the right place to play growth.

And this is -- valuation-wise, it's a place to be, especially in the right sectors and right place of growth and overall returns is Asia. So in my opinion, we are in the right geographies and I do think -- I am very confident. And you know that I've been a long-time investor and CIO in my former career. I have a very strong conviction, Lars. Hopefully, it is now. If you know, it's the right time. It's a macro moment what I'm saying. This is a macro moment where you should -- it's -- most of our clients are shy sometimes to take risk. But I do think this is the right time to take risk in illiquids.

Perfect. And then you indicated increasing transaction activity. I guess also listening to my real estate colleagues, it's something where momentum will build up over this year, right? It's starting, but we should rather expect transactions to be a bit more back-end loaded this year.

You're right. I think the whole story of our industry is always back ended, back ended, back ended. I can't hear that anymore, and I'm not also giving any excuse to also offer to us. Yes, last year was a disappointment, as Martin has already shown. We are transparent. I think, as you know, PATRIZIA has a fantastic transaction team around Europe and also in Asia in both asset classes. We can be -- one point, if you want, was a disappointment, not because our people are bad. There was a really, the market has not played with us. You need to play -- you need a tango partner also in the market. Market were not the right tango partner for us. And I do think this year I can see sizes are increasing. And the great thing is I feel that clients are asking, do you see now interesting transactions? Can you show us? Is there any good risk, reward you can show us?

This is a good moment in my opinion. So it's still slow as we are saying. This cycle is slower, bumpier. It's very different from the last time. There is no, let me say, macroprudent policy supports in the sense of central banks are helping us, is more other way. But I do think this is what I'm seeing. I can see now the right time for all that to act and the transactions will -- we will see more transactions this year. And also more in, by the way, in real estate because people, family offices, they're smaller tickets what I'm seeing and then the big packets -- packages. But you need deep pockets and strong conviction and there's only very less players in the world can do these things, but I can see that it's coming. I'm confident.

Perfect. And then one last question, if I may. With business momentum picking up slightly and I love your picture of tango partners. What about new tango partners for you? We haven't seen some bolt-on M&A from you recently. So is there anything in the pipeline in order to speed up your assets under management growth?

Let me say that I've always said bold acquisitions are for lazy managers. We are not lazy.

I know you say that all the time.

You know I'm saying that always, Lars. But I do think, joke aside, I think PATRIZIA has grown fantastically before I came in. Unbelievable, they flew over the cycle, even with the great cycle what we have seen, we go -- grew so exceptionally well. But this consolidation was needed and consolidate our platforms, creating global platforms, creating efficiency, as Martin said, there was a hard working of reorganization, platform building, all that. And we feel we are ready. Our core is stable. If you think about our balance sheet position, if you think about our operating business, how that's improving, I am not shy to say that's a time to look around to partnerships, not only acquisition bolt-ons and all that. It is also partnerships. The world is going to build by partnerships. There's a big task there and big profit pools can be shared.

I do think from that I'm super confident with our resilience, what we have shown the last 3 years. We've done our homework. We are showing what we -- again, you guys can all -- if you go back, since what we are talking here, not promise too much, that we're doing our efficiency work, that we are doing the cost cutting, we are doing the reshaping, we are putting our product shelf in the right to win in this cycle. All that is coming. We have a stable core now, resilient platform, great balance sheet. We are ready for all things, not only to build partnerships, bolt-ons, all that. It is -- if that's fitting to us, it's great. But what I'm not going to agree to -- with no one, not inside, outside, we are not buying because something is cheap. And we are solving this problem, that they should solve themselves. If that fitting to our strategy is something what we are missing, we feel there's growth in, we are there and we are looking. It is -- and your question is absolutely right and relevant. Many, many transactions has been offered to us. But good managers have to also say no inside and outside, and that's what we do.

[Operator Instructions]

Hello? Can you hear me?

Yes.

We can hear.

Perfect. Manuel Martin from ODDO BHF. I have 2 questions from my side, if I may, please. Maybe one by one. The first question is, as far as I understand, real estate might be preferred -- one of the preferred asset classes this year, especially living strategies. When it comes to offices, maybe they are in value-add strategies, that could be something. When it comes to offices, have you heard anything from your clients when it comes to the topic artificial intelligence and demand for office space, which might influence this asset class? I don't know if you have some insights to share here.

Yes. I think, look, PATRIZIA has a really a great portfolio in, especially in Europe, not mostly. I can tell that in Europe, offices, we ourselves, I don't know if you have the chance ever to visit us physically. We are creating over 5 years since before COVID but also during the COVID and up to now the real showcases how to invest in offices. We spent quite much money. I want to invite you, for example, to visit also our London office in London, in our international hub in London that just won, by the way, PROPS Awards. And let me say that your AI question is a very valid one. I would not say AI, but I think today, there's 3 things in offices are relevant beside now risk classes. It is important that you make your offices attractive for your employees. This is relevant because the home office tendencies has killed the offices mostly if you think about U.S. and New York and the big cities.

Europe is also very much impacted. The second -- what has led -- that has led to reduce offices because people only reduce the place, let's say, space to reduce costs. What we've done, we upgrade our offices. We are showing that our employees have incentive to come over. There is a more, let me say, not only a brutal desk, there's areas to sit together, communicate, to build kind of community within the offices. I really invite you, our Frankfurt office, soon in Augsburg and also in London especially, but also other places like Hamburg, what we have in, especially in Europe. And again, that is one effect that has negatively impacted, but at the same time, and you have to give an answer to employer and give an incentive to come back to offices, that they like to work with -- and that's relevant in my opinion.

You can command like in the U.S., the CEOs, we have also 3-2 rule, 3 days in the office, 2 days home with agreement within your -- with your teams. But again, the same time, you can't command. You must give the incentive. So that's the first thing. And that means offices have to change in their conceptual setting. That's the one thing. The second thing is, in my view, is especially the digital sphere and what you are saying. Today, the tech part is absolutely relevant. We've shown our -- and that's -- that -- the London office won the PROPS Award in 2025 in the U.K. as the best office building, let me say, turning into office story that has really worked well. Tech played a key role there, key role. And I think this is relevant. AI is something different for me. AI is also now it's -- is coming to our big decision-making spaces, but also back and middle offices. We are in the full of the process to use AI to become efficient, become modern, become time to market, become -- make us better also in reporting and reporting standards for our clients.

And this is helping us and to enrich our people. And I think the efficiency win is something in front of us now, all that. So I would say that's not necessarily combined with the offices that you can -- this is -- but I think offices will play absolutely a new story, how they get structured, how important -- and I think, by the way, the real factor is also ESG, the means. The offices have to, in the refurbishment, have to follow special standards, all that. It's why the office market, you have to enter into a value-add area, not -- you can't -- I think, to be honest, as a core asset is at the moment difficult. And by the way, the last remark, you have to be in core, core -- centers of cities. And that's what we have. Mostly if you are in the C areas, I think then the mixed use is -- might be an option to come out of that, but that takes time, that takes resources, that reduces your returns at the beginning and might be you are avoiding a stranded asset.

And if I can add to that, Asoka. Manuel, on the second, what Asoka just said, I would say that AI will have the first real impact, especially on process-driven work and on back-office work. And these are typically in secondary locations due to cost optimization outsourcing, and these locations will be impacted first. The human intelligence and the decision-makers, the analytical part of our work, will want to continue to work in A locations in urban areas. And in our view, AI will actually intensify the flight to quality to A locations in the office sector.

Yes, sounds logical. Sounds really logical. My second question and last question would be on, again, on the clients and the macro environment. In your opinion, what is holding back the clients? They are still a bit shy, as some people say. Is it that the prices are not yet at the correct level? Or is it the interest rates, which is shaky? What would be the start button in the sports car to let you drive again at high speed?

Yes, yes, it's also a great question. I think there's 2 -- I think let me say also 3 factors. First, don't forget -- before we are forgetting and we are great market people, that's why we are always fascinated about markets. And -- but one thing we should not forget, before COVID or during the COVID, the first 1.5 years, we have seen extremely low or negative interest rates. And people have been exposed, overexposed into illiquid to hunt a return, to withstand the negative rates and have long-term returns. And they've done, by the way, in this context, some late-cycle investments. That is not playing out well for them.

And they have to take a long breath, breathe on that to solve out of -- they need solutions get out of their portfolio. But at the same time now, the sudden -- let me say that '22, '23 is a sudden death of illiquids. As Lars discussed earlier, I'm mentioning, I think there was a sudden death of illiquids. People don't want to invest and people want to go now all, more or less all their liquidity, the pension funds, the lifers, the -- also even sovereign wealth funds, they want to be in fixed income. They are the most favorite asset class, other fixed income and private credit. And now also with the inflation moderated, and I think to be honest, also I would not -- I would really -- if I look at the sovereign debt explosion in the world, all the AAA status, A and AAs, I'm questioning this ballooning of debt, if that's sustainable.

And that means, by the way, that's -- the only good thing is that will lead us to a longer expectation or long-term expectation that the rates have to be very low, not to overburden the fiscals -- fiscal budgets of states. So saying that, fixed income was the most favorite asset class, still the favorite asset class, corporates, private debt, government bonds and there are other institutional factors in Europe. I think, to be honest, the central banks and regulators with the solvencies and all that, also our -- we have mostly institutional clients. They have been in long-term bonds and that is underwater. So their risk limits to go into illiquids also low. So saying that all, at the moment, what is holding back, you're asking me, but what they can't hold anymore back is because I think they want to be at one day now real assets. They are seeing the attractive risk returns in the value-add and core plus because at the moment that is the easiest to say and that is nothing marketing you get for core plus risk, or let me say, core plus risk value-add returns.

This is exactly what asset managers like us have to deliver, asymmetric risk return profiles. That is, by the way, has not existed earlier. This is now. And also, I think if the office area also revalued stronger, I think U.S. happened and it's still not settled 100%. Europe are -- all devaluations are happening slower. If that the certainty there, people will go with both hands into these areas. And that's what I'm seeing that is upcoming, starting with living, starting with also, in my opinion, kind of logistic. There are some retail portfolios underway in the market, all that giving you opportunities. So in my view, let us -- we have -- I am impatient in general, but I do think I have the conviction the matrix for illiquids are going to change over the next 2 years. And that's where my hope is coming.

If I may add to that, Manuel, exactly what Asoka said, the market first had to digest the relative overallocation of real estate at the peak of the cycle. Then now the market has repriced. The expectations, I think, have changed and the market becomes more transparent with more transaction volume. The world seemed brighter in many other areas than Europe for quite a while, and now we have a reallocation and rotation back to Europe. And the refocus on generating cash flows, generating recurring income, is also one thing that we think will drive investors and will kind of break up this situation where investors were hesitant to invest in real assets.

100%.

Okay. And where are we more or less? The digestion might still hold on a little bit and then maybe people can move more freely. Or where do you think where we are right now?

I mean it's been a process really for 3, 4 years, and you know that we haven't seen a V-shaped recovery in the market. It was all slower and as Asoka said, bumpier. And when we talk to our clients and simply, we derive that from the feedback we get from our clients. They are more open to talk about real estate investments again. They are more open to talk about infrastructure. For some of them, the regulatory environment has also eased and changed. They have more flexibility to invest in infrastructure. And all these, if you put all that together, are signs and are confirmed in the way we discuss with our clients that there's a regained interest in the sector.

If you need also a picture, again, we are not 5:00 in the investment clock, we are at 7. We passed the 6, trough is behind us. So that's important and that's what long-term investors are seeing and that's why we are -- they are earning money. And with these views are now coming more and more, and I do think Martin said a very important thing. The transaction makes the valuations visible for investors. That gives the confidence also. If you are doing in the [ frock ] transaction, you don't know if that's still 5:00 or 7:00. It's important.

Okay. Okay, I will try to put the clock in my office. Okay. That's a good example.

Thank you so much for your questions. So in the meantime, we did receive not any further questions or virtual hands, so everything seems to be answered by now. Should further questions arise later, please feel invited to get in touch with Janina and her team at any time. So thank you very much. And with this, I hand back to Martin for some final remarks, which concludes our call for today.

Yes, thanks so much for your attention. Thanks so much for your very good questions. And we are very happy to continue the discussion both on IR team level and also during the next conferences that we have planned, for example, one in London and then there will be other venues where we have the ability to discuss our financials and the strategy. Stay healthy and speak soon. Thank you, everyone.

Good day, and a warm welcome to today's conference call of the PATRIZIA SE, following the publication of the 9-month financial results of 2025. [Operator Instructions]

Having said this, I hand over to PATRIZIA's Director, Investor Relations, Janina Rochell.

Thank you, Sarah. Welcome, everyone, to our analyst and investor call for 9 months 2025. This is Janina speaking, and I'm happy to be back from parental leave and truly excited to reconnect with all of you.

I am pleased to have our CEO, Asoka Wohrmann; and our CFO, Martin Praum, with us today. Asoka will start by presenting the highlights of the first 9 months 2025. Afterwards, Martin will guide you through our 9 months financials and provide an outlook for the rest of the year. As mentioned by Sarah, the call will be followed by a Q&A session.

During today's call, we will refer to our results presentation, which you can find on our website. If you have any questions, the IR team is more than happy to assist. As usual, this call will be recorded and made available on our website. We will also provide a call transcript for further reference.

With that, I'd like to hand over to Asoka to start with the presentation. Asoka, the floor is yours.

Thank you, Janina. Great to have you back. Ladies and gentlemen, a warm welcome from my side as well. Let me comment on our 9 months 2025 results. Hopefully, you will have already seen our ad-hoc release and financial earnings statement that we published this Tuesday.

We have raised our guidance for EBITDA and EBITDA margin, and we also specified our guidance for assets under management for the full year 2025 financial year.

Our financial performance in the first 9 months of 2025 showed a strong EBITDA growth to EUR 44.6 million. We significantly improved our EBITDA margin to 22.1%, well above last year's EBITDA margin of 3.5%. This earnings performance is a clear result of our new organizational setup that enables us to scale our operations efficiently while maintaining strict cost discipline.

Last year, we established an integrated investment platform, including fund management and asset management. We strengthened our international client division, which is responsible for product management, development, fundraising and client relationships.

And we created a new operations platform that is leveraging our technology expertise to streamline processes and strengthen collaboration across all business divisions. This new operational strength enables us to drive efficiency across all platforms and profitable growth in the new cycle.

Our assets under management were slightly up quarter-on-quarter to EUR 56.3 billion. This improvement was driven by a small amount of net organic growth as well as reemerging positive valuation effects. And we use open client commitments for additional investments for our clients. Especially in real estate, transaction activity shows that more clients are taking advantage of market opportunities in the new cycle.

Let us move to Slide 4. In preparing for the new cycle, our clear aim was to drive cost down and effectively scale our integrated investment platform for smart real assets. Today, our integrated investment platform enables us to leverage our operational strengths in both real estate and infrastructure investment management. As a result, our management fees alone more than [Audio Gap] covered total operating expenses. This is a key step.

As already said in our last half year analyst call, we see the new cycle is starting to gain momentum. However, let me emphasize again that this cycle will be slower, tougher and bumpier than previous cycles.

As you can see from our results, transaction activities went in quarter 3 with more clients returning to the buy side. Our closed acquisitions surged by around 41% in the first 9 months of 2025, reaching EUR 1.8 billion, a continuation of the positive trend we have seen since beginning of 2024.

In the third quarter, we closed 3 major real estate acquisitions with triple-digit euro ticket sizes for international clients, both in Living and Commercial, as you can see on this slide. And let me reemphasize, our sector-specific investment strategies are led by the 4 dual megatrends, the digital, urban, energy and living transition. All dual megatrends are powered by technology as a key value driver.

The Living sector remains one of our key investment strategies, offering attractive long-term returns for our clients. Living has been a strategic growth pillar for PATRIZIA for more than 40 years and we have an exceptional track record in Living. Today, modern living goes beyond traditional residential real estate and includes fast-growing attractive subsegments like affordable housing, student housing, co-living, micro living and senior living. And all Living segments are poised for growth in the new cycle.

With valuation stabilizing, transaction volumes picking up, we believe this is the right moment to start investing in real estate again. In addition, we also see momentum building in our Infrastructure business. We have signed several transactions which will accelerate Europe's energy transition. We have created a Nordic district heating platform worth over EUR 300 million. This will support our AUM in the fourth quarter after the expected closing, and it demonstrates PATRIZIA's strong mid-market position as a leading investor in Europe's energy transition.

Let me continue to the next slide to show you what your clients -- what our clients expect for the future. Our Annual International 2025 Client Survey provides further proof that the new cycle is gaining momentum. This survey captured the views of 110 leading institutional investors of PATRIZIA, representing close to EUR 1 trillion in capital.

The main takeaway is that client sentiment has clearly improved in real estate across all major categories, and the survey anticipated that real estate valuations are improving again for the first time since 2022. Another result -- key result is the growing strategic importance of infrastructure investments for institutional clients.

Driven by the dual megatrends, the energy transition and digital infrastructure are top priorities for investors, and both areas clearly play to our strengths. Just to give you one example, our strategic investment in aligned data centers in the North America at the beginning of the year that has already performed very well. And with the expansion of our Nordics district heating investment platform, we continue to leverage attractive investment opportunities, the energy transition trend. So you can see our sector-specific investment strategies driven by dual megatrends are gaining traction.

Let us move to the next slide. Let me conclude by reemphasizing our 3 management priorities. First, clear client and product focus; second, further improving earnings quality; third, and scaling our smart real asset investment platform. Those 3 pillars are the crucial success factors to win in the new cycle. First, we will deliver outstanding products and services to our clients and step up fundraising.

One key investment area for PATRIZIA has always been and will be the living sector with all its attractive subsegments. Second, we want to grow management fees and improve our co-investment results while maintaining strict cost discipline to strengthen our long-term profitability. Third, we will strengthen synergies between real estate and infrastructure, what we call Re-Infra, and scale our integrated investment platform. And we will continue to focus on attractive sector-specific investment strategies driven by the dual megatrends.

Thank you for your attention. And now I would like to hand over to our CFO, Martin Praum. He will guide you through our quarter 3 financials and the updated 2025 outlook in detail. Thank you for your attention. Martin, please.

Thank you, Asoka, and hi, everyone. Welcome also from my side. Let's continue on Page 9 of the presentation. As some of you might remember from our last analyst and investor call at end of second quarter, we back then showed a decline in equity raising year-on-year. But at the same time, we were confident that momentum would come back throughout the year. And this is exactly what happened during the third quarter.

With equity raised, as you can see here, now at EUR 0.8 billion after 9 months, up 7.6% compared to last year. If you look at this on a quarterly level, we had EUR 0.5 billion in the third quarter, and this is the highest in the last 4 quarters. The subsequent investments for our clients from equity raised and existing equity commitments were the major drivers for continued net organic growth in AUM.

Valuation effects turned positive during the third quarter. Remember, at Q1, this chart showed a EUR 0.6 billion negative effect. This turned into a 0 impact at the second quarter. And now you can see a positive EUR 0.2 billion valuation support. However, currency effects still weigh on AUM. This is leading to a virtually stable overall AUM development if compared to the beginning of the year. But if we would exclude these valuation -- sorry, these currency effects, then AUM would be up 1% year-to-date.

In my view, it's also noteworthy that open equity commitments have also increased from EUR 0.9 billion last quarter to EUR 1.1 billion at the end of the third quarter. So the overall picture shows a stabilization. And as Asoka mentioned before, the cycle is slower and probably bumpier. That also means that the speed of market recovery is currently slower than what many market participants expected at the beginning of the year. This also drove our decision to move the AUM guidance range slightly down to now EUR 56 billion to EUR 60 billion for the year-end '25, also taking into account the currency effects.

Now let's move to the next page, Page 10, on profitability. Basically, what you see here is that we decoupled from the overall market environment. We showed a material increase in profitability with EBITDA up over 500% to EUR 44.6 million, and this is already within the previous full year guidance range of between EUR 40 million to EUR 60 million after only 9 months.

Management fees well exceeded operating expenses, and we saw a smaller contribution to revenues from transaction and performance fees compared to last year, driven primarily by a higher share of investment for clients with all-in management fee structures and also continuously slower realizations for clients, which has an impact on performance fees. The key message to me here is overall management fees contributed with 91% to total service fee income.

The material reduction in operating expenses and the improvement in net sales revenues and co-investment income, basically, this means rental income of consolidated assets and dividends from co-investments and funds, both significantly supported the strong year-on-year increase in EBITDA.

Now let's have a deeper look on the next 2 pages, 11 and 12. You can see that management fees showed resilience in line with AUM, with market-driven fees, like transaction and performance fees, still under pressure. If we look at it on a quarterly basis, on the next page, it shows that management fees had a breakout from the trend in the quarter, which was driven by catch-up fees we were able to invoice during the third quarter

So the overall picture is unchanged with resilient management fees and volatility on market-driven revenues, which is why it is so important that the reduced operating expenses are now well covering -- are well covered by management fees.

Let's go to the next page, Page 13, to look at the cost development. You will see that we further intensified cost efficiency measures. We've made the platform more efficient, adjusted to the market cycle and made significant progress, both on staff costs and on other operating expenses. We will continue working on platform efficiency. And the reduced cost base provides PATRIZIA and its shareholders with significant positive leverage once fundraising and investment volumes increase more markedly in absolute terms.

And as you might know, PATRIZIA runs, as we call it, a dual engine, a business model that is driven by our asset-light investment management combined with the use of our balance sheet capital to co-invest and seed strategic investments. And this is what you'll see on the next page, 14, of the presentation when we talk about the segment reporting.

The significant improvement of our EBITDA was driven by both investment management and our balance sheet investments. One driven by cost discipline, resilience in AUM and management fees, the other driven by a normalization of income from consolidated assets and higher rental revenues.

Let's look at how we've invested the balance sheet capital on Page 15. You'll see the value creation from using the group's balance sheet equity to invest both in real estate and infrastructure. And we will continue to take selective market opportunities to support new fund initiatives, and we will also crystallize value when the time is right also for our shareholders. We will always make sure that we have a decent financial flexibility, both in terms of balance sheet ratios and available liquidity.

Talking about liquidity, Page 16 shows the strong improvement in operating cash flow during the first 9 months. This is, on the one hand, driven by the general improvement of profitability, but also by the successful active management of working capital freeing up additional liquidity.

Let's move to Page 17. And this is a financial reporting you are probably well familiar with. You will see the balance sheet and liquidity overview on this page. Net equity ratio is still strong, now closer to 70% and up 1.3 percentage points compared to the last quarter.

If we look at available liquidity, this also increased by EUR 20 million compared to the last quarter, now slightly above EUR 100 million, with further financial flexibility shown on this slide.

Let me finish with the outlook for 2025. Our key messages here are: first, we expect the stabilization and slow recovery to continue, so the direction of travel is right, and to support the revenue side, while the positive effects from our cost efficiency measures should continue to support our P&L going forward. And this drives the guidance change and the increase of the EBITDA guidance from EUR 40 million to EUR 60 million to now EUR 50 million to EUR 65 million. Subsequently, the EBITDA margin is increased from around about 15% to 21% to now 19% to 24% for the year '25.

We will continue to raise equity and use existing equity commitments from our clients to invest along the dual megatrends. However, the overall level of equity raised, the expected timing of closing of investment transactions and currency effects led us to slightly move the midpoint of our AUM guidance from EUR 60 billion before to EUR 58 billion. Also, year-end valuations for real estate and infrastructure will play a role on where we will end the year with this KPI.

As a summary, the market is stabilizing and slowly going into growth mode again. And as we said in the past, it's not a V-shaped recovery, but rather a steady improvement. Second key message, we have decoupled PATRIZIA's P&L and profitability from the market and market-driven revenues, and we'll continue to work on efficiency, quality of earnings and overall profitability to the benefit for both our clients and our shareholders.

With that, I'm handing back to Sarah, and we're happy to take your questions.

[Operator Instructions] And having said that, let's take a look in the queue. And by now, we have one virtual hand from a person who has dialed in by phone with the phone ending 370.

It's Philipp from Warburg Research speaking. Congrats to the sound operating performance. I have a couple of questions. I would go through them one by one, starting with the EBITDA and the main driver of the EBITDA improvement, the cost-cutting measures.

You did a superb job on streamlining your platform. But I can imagine the greatest potential now is lifted. So looking ahead, do you expect that the operating expenses can further decline? Or are you expecting just a kind of a flat development for the next couple of months and the next year?

Philipp, it's Martin speaking. And thank you for your feedback on what we've achieved so far. We will -- as I said, we will certainly continue to work on the expenses side and do everything we can also as a reaction to the market environment to make this platform more efficient.

We still believe that there's some room for more efficiencies. And you will also see –- as you see in the number, this is basically an effect of measures we've not taken this week, but a few quarters before. So the full impact of the measures we've taken, take a while to show up in the P&L. So we expect also some further potential here in terms of P&L and cost efficiency going forward.

Okay. Perfect. Then the next one is on the management fees. You also stated in your presentation that they are partly positively, impacted by one-off catch-up fees. Could you provide us with the exact amount of those catch-up fees?

Yes, sure. If you look at the management fees on a quarterly basis, you would see that the third quarter was very strong with EUR 60.6 million of management fees versus an average of, say, EUR 55 million to EUR 57 million in the quarters before. The third quarter was positively impacted by around about EUR 2.5 million of catch-up fees. So if you basically would exclude that, we would talk about around about EUR 58 million run rate management fees in the third quarter.

Okay. Perfect. And my next one would be on the AUMs. You already stated during your presentation that you already have signed acquisition, but not closed yet, which will support AUM development. Could you give us a broad range which volume we can expect for the last quarter of the year?

Sure. I can give you a broad guidance, because what I said is we certainly have a pipeline of a few hundred millions that has been signed already and will close in the fourth quarter as acquisitions. So you have from a net organic growth prospects some upside in the fourth quarter. The somewhat unknown is timing effects of closing of certain transactions and valuations.

You might remember that slightly over 25% of our assets are valued in the fourth quarter. So this will have an impact. And then currency effects. But as you can see in the guidance range, which is now EUR 56 million to EUR 60 million. And where we stand today in terms of AUM, we currently expect that the AUM at the end of the year will come in higher than what we've reported for the first -- for the third quarter.

Okay. Perfect. My last question with regards to the EBITDA would be the rental income. So it has come from the balance sheet assets. Do you have any visibility when those assets might, yes, [ went ] out from your balance sheet and you kind of, yes, get rid of the positive impact of the rental income? I think it's roughly EUR 12 million. This year, we will earn those assets. So any visibility on that?

It is actually -- it really depends on the asset because we've got different assets and portfolios on our balance sheet, Philipp. So in terms of exit date, we will have a look at the market and then we'll have a look at the assets, because some of these assets are what you would call core assets with a very stable cash flow. These are the ones that could come to the market earlier.

Then we also have some value-add exposure, where we will spend some CapEx and invest to increase the value, and then find the right time to exit.

So for your modeling, I would, for the time being, assume that the rental income will stay with us for, say, the next 1, 2 quarters, and then we'll see where the market is and how we've developed the assets further.

Okay. Perfect. My last one would be on your mid-term guidance. I mean it's probably a bit too early to get very nervous, but does anything change with regards to your, yes, EUR 100 billion guidance in 2030?

Very valid questions. Again, the mid-term guidance is something we agreed that we are looking every year. We are running and looking what the market environment, client behavior, sector developments are. We are very strongly geared, as we mentioned, around our dual megatrends. We are very confident that trends are right, but it is -- we are seeing our clients are getting more confident to invest, but it's much slower, as Martin and I mentioned earlier. So I do think it is always for us to go to EUR 100 billion, is a North Star. And we will go in this direction. We will do everything.

We have now the operational leverage, what we are creating. And I do think it a little bit depends on the dynamic. Every year, we have to review how far and how reachable is this magic number. But even though, we are confident that the market will gain some momentum at some point. But I do think -- also '26, I do think it will be slower. It will be, again, not a stabilizing year like '24 and '25. It will see some growth, but not the same expectations as we have created in the plan.

So we will consult and go back to our NTP and we will check that, the EUR 100 billion number. But even though, our profitability numbers and expectations, we will keep on a clear eye, and we want to deliver strong profitability to our shareholders.

Okay. And maybe out of curiosity, just purely on operational-wise –- I'm just making up a number, say that by the end of next year, you reached EUR 60 billion in AUM. Then 4 years left for the EUR 1 billion (sic) [ EUR 100 billion ] in AUM, left. Roughly EUR 10 billion net organic growth per year. Just operational-wise, is it possible that your current streamlined platform can handle this transaction volume per year? I guess kind of the overall transaction volume would be a bit higher with like disposals, et cetera. So is it just purely from operational-wise possible to have over EUR 10 billion per year?

Yes. No, great arithmetic you open up. I think Martin will talk in some second. But let me give you a little bit the philosophy behind the EUR 100 billion number and the clear North Star of our organization. And it's important -- you are right, '26, in our expectation, that will be a growth year for the sector, will come back, as we said, but in a modest way. And that's really good. But it is the jump of base, EUR 60 billion. In my opinion, without guiding now, it's a probable one.

And you're arithmetic every year EUR 10 billion. First of all, in the past, PATRIZIA was able to manage, yes, sometimes EUR 9 billion to EUR 10 billion transaction volumes. So that's nothing new. We are experienced. Also, our transaction sizes are much bigger. And don't forget the projects we are involved also in the co-investment area, also in more and more in SMA, they are the big clients, they are coming like in the Nordic district heating platform. I'm not going to name the clients, but they are very big clients. They have sizes. They can come in. And we will -- we are expecting the transaction sizes will be bigger.

And again, important for you, we are expecting the infrastructure as well as the heating topics in living, affordable housing, they will get much more, let me say, public support for these themes, and we want to be involved. And I think even we have not definite programs for that, we are seeing, and I do think that all is possible.

I don't know if we are ending in EUR 90 million or EUR 1 billion or EUR 110 billion, but the direction is right and the desire. And this North Star is the right direction, as you can see. And that is, in my opinion, important.

It's a quite unknown market at the moment because I think as you not see the transaction, the willingness of clients to invest because the fixed income area is so booming and performing. That going a little bit the demand down, I do think the people will turn quite fast for long-term returns in real assets, and we are ready for that.

Martin, please.

Yes. I can only second what Asoka just said, and want to go into the same direction. If you compare PATRIZIA and what we've delivered in the past in terms of investment volumes, you shouldn't forget that PATRIZIA's platform has actually grown over the last few years. We've built the platform. And besides the efficiency programs we run, we continue to invest in the platform.

We have grown the number of institutional clients over time. We have now access to different pools of capital. And it is a question of ticket size. We are more international than we were in the past cycle. And we now have access to also larger funds like state funds that will give us opportunities to create new investment solutions for these clients.

Overall, certainly depends on the market environment. And sometimes in a cycle, there is a point where suddenly, you can say, the powers come to play. And we do expect that as well at some point to happen. But there's a good opportunity we'll reach these targets and we will go into that direction.

And now we will move on with the questions from Lars Vom-Cleff.

One question remaining, and that would also be regarding your EUR 100 billion North Star. I mean, on the current basis, that implies a CAGR of around about 12%. And if I understood you correctly, you feel that all of that is doable with organic growth. But seeing real estate markets somewhat stabilizing, revaluation -- or negative revaluation slowing down, if not having come to a halt, and taking into account your equity ratio and the available liquidity, would now not be a good time to think about potential bolt-on acquisitions again in order to reach your target faster?

I think also -- thank you for your view. And also, as Philipp asked the EUR 100 billion and mentioned the EUR 100 billion, don't forget in our thinking there was also revaluation of the market that was included. It's not only pure organic growth, capital raising. And we expect that infrastructure has much more momentum. And I do think you can read and [ smoke ] every day from the newswires how much people are geared to invest in infrastructure. So far not happening than anecdotical evidences like data centers and so on. I do think that will get momentum.

But your question -- and Lars, let me say that in -- since I joined now nearly 2.5 years now as PATRIZIA CEO, this question came up, do you don't want -- what's your opinion about inorganic growth? I always -- even though I was always active in my former thinking, I always said we have to press the pause button, because we have to consolidate our platforms, we have to create our efficiency, we have to do -- we are a very fast-growing organization over the last 15 years. We sprinted to EUR 60 billion. I think it's a remarkable growth. That means also remarkable growth of platforms. Different platforms, fragmented platforms have to be consolidated. I do think the effects are playing out for the now investors, as Martin very nicely played out.

But again, I am seeing opportunities. I do think as long as lasts the slow, sluggish growth of the sector, and clients demand are going to persist. I do think that small players will have a very -- much difficulties, and mid-sized players, to be in the market. I think there will be opportunities. But we will not do for AUM growth inorganic growth activities.

I've been all my career against that, and I will also not do to destroy shareholder value. If that enrich our expertise, open up new markets and client segments, then the right arguments are there -- and the pricing must work for us and for our shareholders, we will do that. This is the way of our organization. I'm thinking we are full of entrepreneurial spirit in this organization, and we are not going to blast our AUM. Even we phrase the $100 billion as a North Star, I do think we have to do the right things. But I do think it will be -- and I think your question is the right timing.

Now in my view, Lars, we have to open up our eyes for opportunities, also for strategic partnerships. I do think the market is just going to shape. I can see lot of partnerships are -- programs are coming. And there's a very interesting period, in my opinion, kicking in, in, let me say, illiquid sector space. And I do think, therefore, I am super keen to answer in the next quarterly earning meetings this question. And we will be active.

A very clear answer, yes, we will look into that, but various opportunities, not only pure M&A transactions.

And by now, we have one virtual hand left from Thomas Neuhold. [Operator Instructions]. So Mr. Neuhold, please go ahead.

I have 2 questions on your balance sheet investments. Firstly, I was wondering if you can please provide an update on your Dawonia investments. Have there been any new developments there?

And the second question is on the strategic seed investments. What is the status of the 3 strategic seed investments? And by when do you expect to be able to release at least some capital there? And I was wondering if you have any additional seed investments in the pipeline? And if yes, if you can talk a little bit about potential size, sector and timing of those?

Sure. Can you hear me, Thomas?

Yes, I can.

Okay. So first of all, on Dawonia, probably a repetition of last quarter's call, but we are still in very constructive negotiations with the investors in that fund. All on track. And we will update the market once we have news on that.

The portfolio continues to perform very well. I think this is also in line with what you heard from other listed residential players in the market, and we can also confirm that these developments are also reflected in the Dawonia portfolio.

In terms of seed investments, I made a statement on that before. Some of them are on the list for an exit and others will keep for a little while to work on the asset. So there's no detailed time frame for disposal at this stage. We are still happy with the rental income we are generating and the development of these assets.

In terms of additional seed investments, you might have noticed we've increased our exposure to Dawonia in this year because we saw good opportunities. And also, we continued to invest in co-investments like in the infrastructure space, where we spent another single-digit million amount in the third quarter to facilitate further investment and product growth.

Thank you so much. And in the meantime, we have received no further virtual hands. So everything appears to be answered by now. Therefore, we come to the end of today's conference call. Thank you, everyone, for joining and your shown interest. And also a big thank you to you, Asoka and Martin, for the presentation. And it was a pleasure to be your host today. And now I hand back to Martin for some final remarks, which concludes our call.

Thank you so much, Sarah, and thank you everyone who attended this call and thank you for your great questions. We are happy to meet as many of you during our next conference attendance. We'll be in London next week and we'll also be at Deutsche Borse's Equity Forum from 24th to 22nd (sic) [ 26th] November in Frankfurt. We'll be there for the full 3 days, and we'll be happy to meet and discuss.

And with that, thank you, everyone, and speak soon. Bye-bye.

Thank you.