Welcome to the Retail Opportunity Investments Second Quarter 2023 Conference Call. Participants are currently in a listen-only mode. Following the company's prepared remarks, the call will be opened up for questions. Now, I'd like to introduce Lauren Silveira, the company's Chief Accounting Officer.

Thank you. Before we begin, please note that certain matters which we will discuss on today's call are forward-looking statements within the meaning of federal securities laws. These forward-looking statements involve risks and other factors which can cause actual results to differ significantly from future results that are expressed or implied by such forward-looking statements. Participants should refer to the company's filings with the SEC, including our most recent annual report on Form 10-K to learn more about these risks and other factors. In addition, we will be discussing certain non-GAAP financial results on today's call. Reconciliation of these non-GAAP financial results to GAAP results can be found in the company's quarterly supplemental, which is posted on our website. Now, I'll turn the call over to Stuart Tanz, the company's Chief Executive Officer. Stuart?

Thank you, Lauren, and good day, everyone. Here with Lauren and me today is Michael Haines, our Chief Financial Officer’ and Rich Schoebel, our Chief Operating Officer. We are pleased to report that our grocery-anchored portfolio continues to perform well. Demand for space continues to be strong, coming from a growing broad range of necessity, service, and destination tenants, all of which continue to seek out our grocery-anchored shopping centers. Capitalizing on the demand and building on our record leasing activity in the first quarter, during the second quarter, we again posted a record amount of leasing. In fact, in just the first six months alone, we've already leased approximately 1 million square feet of space, which is a new record for the company. For reference, at the start of the year, we had 859,000 square feet scheduled to mature during all of 2023. The fact that we've already surpassed that amount at mid-year speaks to the success of our longstanding, hands-on approach and the fundamental appeal of our grocery-anchored shopping centers. Additionally, not only are we capitalizing on the demand to lease a record amount of space, we are also capitalizing on the demand to drive rents higher and to enhance the tenant mix at each of our centers. Importantly, our overriding objective is to continue enhancing the long-term competitive position of our portfolio and the long-term strength and stability of our portfolio's income stream and bottom line cash flow. With respect to dispositions, we are currently on track to close in the third quarter the property sale that we discussed on our last call. We are also currently planning to bring to market for sale in the second half of 2023 are two infill undeveloped land parcels in the San Francisco Bay area that are slated for multi-family development. Altogether, we expect that the three dispositions could generate between $30 million and $40 million of proceeds in total. In terms of acquisitions, during the first half of 2023, the broader market on the West Coast was relatively quiet, as the market digested the impact from the increase in interest rates over the past year and the recent banking turmoil. For the few transactions that did close involving sought-after stable grocery-anchored properties, pricing was in the high-fives, low 6% range, driven in part by being all cash, no leveraged transactions, typically with buyers that are passive institutional investors focused on long-term stability. We're starting to see signs of the market potentially picking back up, as there's been a bit of an increase here recently in the number of properties being brought to market, which will hopefully bring greater clarity in terms of pricing shifts. As it relates to off-market opportunities, we continue to be proactively engaged in seeking out transactions. We currently have several interesting opportunities in the pipeline that we believe have significant long-term embedded growth. However, we're not there yet with the private owners in terms of initial yield pricing, so it's a bit too early to discuss specifics. Additionally, we continue to get a number of inquiries regarding potential OP unit transactions, which we are exploring as well. Now, I'll turn the call over to Michael Haines to take you through our financial results. Mike?

Thanks Stuart. For the three months ended June 30, 2023, the company had $82 million in total revenues and $28 million in operating income. For the first six months of 2023, the company had $161 million in total revenues and approximately $54 million in operating income. On a same-center cash basis, net operating income for the second quarter of 2023 increased 3.2% and increased 1.3% for the first six months. We continue to be on track to achieve same-center NOI growth for the full year that's within our guidance range. GAAP net income attributable to common shareholders totaled $9.9 million for the second quarter of 2023, equating to $0.08 per diluted share. For the first six months of 2023, GAAP net income was $18.1 million or $0.14 per diluted share. Funds for operations for the second quarter of 2023 totaled $35.6 million, equating to $0.27 per diluted share. For the first six months of 2023, FFO totaled $69.4 million or $0.52 per diluted share. Turning to our balance sheet, as we reported on our last call, during the first half of 2023, we entered into swap agreements, fixing the interest rate on $150 million over a $300 million term loan, locking in the rate at 5.4% through August of 2024. Taking into account the swaps, at June 30th, approximately 85% of our debt outstanding was fixed rate. Additionally, today 96% of our total debt is unsecured and 97% of our total GLA is unencumbered. And in terms of net debt, we continue to focus on steadily lowering our ratio. The second quarter ratio was 6.5 times. With respect to the $250 million of senior notes that mature in December, our objective is to refinance the bonds through a long-term public bond offering potentially a $400 million offering to also refinance $150 million of our term loan. However, in light of current market conditions, to be prudent, we are also evaluating several other refinancing strategies, including possibly a combination of medium and long-term public bonds or possibly a private placement. We're also considering utilizing some secure debt along with disposition proceeds, possibly some equity, market conditions permitting, to further lower our net debt ratio down in connection with refinancing. Additionally, we're also considering utilizing pre-payable, shorter term unsecured debt in order to provide flexibility for the market conditions to become more settled. Now, I'll turn the call over to Rich Schoebel, our COO, to discuss property operations. Rich?

Thanks Mike. As Stuart highlighted, demand for space across our portfolio is strong, coming from a broad range of both existing and prospective tenants, leading the charge to destination tenants, most notably new health and wellness concepts that continue to expand on the West Coast, along with new children enrichment centers and a continuation of new quick-serve food concepts coming to market. Additionally, traditional full-service restaurants continue to open multiple standalone, smaller format to-go concepts, capitalizing on their established brand and following. These to-go concepts were born out of necessity during the pandemic, and since then have been steadily growing in popularity, so much so that they could become over time a mainstream inline tenant. We are also seeing neighborhood destination service tenants that were among the hardest hit during the pandemic and had been slow to rebound, now coming back strongly, again, seeking space in earnest across our portfolio. While these tenants typically have modest space requirements, they play an integral role as one of our core necessity and service based tenants that draw daily neighborhood consumers to our centers. Additionally, they are flexible in terms of their space needs and configuration, so they are ideal for leasing that last bit of available space. From our perspective, we view these service tenants becoming active again, specifically seeking out space at grocery-anchored centers as an important positive trend. Turning to our specific leasing results. As Stuart highlighted, we again posted a strong quarter. In terms of our overall portfolio lease rate, during the second quarter, we maintained our high lease rate of 98.3%, leading the way was our Portland portfolio, where 16 out of our 18 shopping centers in the Portland market stood at a full 100% leased at June 30th, with the remaining two properties both at 99% leased. And portfolio-wide, we also set a new record during the second quarter with 48 of our shopping centers being 100% leased. Additionally, our anchor space continues to be 100% leased and as of June 30th our shop space stood at 96% leased. With respect to our leasing activity during the second quarter, we leased 430,000 square feet of space, which is a new second quarter record for the company. Taking in our second quarter leasing activity together with our record leasing volume in the first quarter, for the first six months of 2023, we leased 989,000 square feet of space in total, again, setting a new record. And as Stuart highlighted, already surpassing what was originally scheduled to mature during the entire year. The bulk of our leasing activity continues to center around tenant renewals. In fact, during the second quarter, 79% of the square footage that we leased involved renewing valued tenants, which was split roughly equally between anchor and non-anchor renewals. In terms of anchor renewals, during the second quarter, one of our longstanding national supermarket anchors approached us about wanting to not only extend the lease of theirs that was maturing later this year, but also wanting to explore possibly extending all of their leases in our portfolio. We capitalized on the opportunity and successfully extended their leases out for another eight years on average, while also increasing the overall base rent, notwithstanding some of their leases previously having flat renewal options. And we were also successful in removing property leasing restrictions. In short, the transaction enhances the long-term stability of each of the centers and enhances our flexibility to maneuver and optimize the tenant mix going forward. Additionally, there were no TIs required on our part. With respect to non-anchor renewals, during the second quarter, we renewed 78 valued inline tenants, achieving a 7% increase in cash base rent, and again, with essentially no TIs required on our part. In terms of new leasing activity, during the second quarter we signed 45 new leases including 44 new inline tenants, achieving a 13% increase in same-space base rent on average, and we signed one 18,000 square foot anchor lease where we achieved a 127% increase in base rent. The new anchor tenant is an established national seasonal tenant that we signed on a short-term interim basis. We currently have a new long-term lease lined up with a national destination tenant to take the space following the seasonal interim tenant. And the new long-term lease has an initial base rent that also represents a substantial increase over the maturing lease. Lastly, we continue to have good success in getting new tenants open and operating. During the second quarter, new tenants representing $1.9 million of incremental base rent on a cash basis opened and commenced paying rent. Together with the new tenants that opened during the first quarter, year-to-date, new tenants representing $4.1 million of incremental rent have opened and commenced paying rent. In terms of new tenants that haven't yet opened, including those that we signed during the second quarter, as of June 30th, the incremental amount stood at $7.2 million, the bulk of which we expect to commence as we move through the second half of the year. Now, I'll turn the call back over to Stuart.

Thanks Rich. Based on all our results year-to-date and what we see on the horizon for the second half of the year, we continue to be on track in terms of our FFO guidance. Putting aside any acquisition activity just based on our current leasing pipeline alone should put us squarely within our guidance range. Underscoring the consistently strong property operations and leasing results quarter after quarter, year after year, is our proactive approach of constantly working to enhance our portfolio and tenant base. Additionally, while parts of the commercial real estate industry are facing mounting issues, in distinct contrast, the long-term drivers of the grocery-anchored shopping center sector are not only fundamentally sound today, but as more and more diverse tenants and emerging concepts steadily gravitate to grocery-anchored shopping centers, we believe the sector and our portfolio specifically is well-positioned to continue generating stable, risk adjusted returns long into the future. Lastly, we recently issued our fourth annual ESG report, which details our accomplishments over the past year. We are continuing to make steady, measurable progress at enhancing the long-term stability of our portfolio, along with continuing to implement longstanding employee advancement and community engagement programs. Now, we'll open up the call for your questions. Operator?

Thank you. [Operator Instructions] Our first question comes from the line of Craig Mailman of Citi. Your line is open.

Thanks. It’s…

Good morning.

Good morning. It's Nick Joseph here with Craig. Maybe just start on the transaction market. Obviously, it was quiet for you. Sounds like it was quiet pretty broadly. Are you starting to see it at all? I don't know if you can maybe touch on where you think bid-ask spreads are and what we would need to see to start to see some deals actually get done?

Well, I mean, a function, obviously, first of all, is supply. And again, the market continues to be very tight in terms of looking at new transactions. It's starting to pick up a bit, as I said in my comments, but the bid-ask spread continues to be pretty far in terms of other types of properties that come to the market, not grocery-anchored. And then the only other thing I could shed some light on, Nick, is that there was a transaction that is currently under escrow in San Diego that has traded in the low fives. So, that's been sort of the most recent call. But the big-ask spread has really continues to be wide, but there's just not enough supply.

Thanks. So, then, you touched on kind of the potential of public bonds or private placement. Where do you think you could issue today just kind of where are spreads and what's the fall in cost there?

Hey, this is Mike. On a new 10-year deal, I would expect the price to be probably be in the mid to high 6% range, and privates about that, probably in that same general neighborhood, maybe a touch higher, mid-six to high 6% range.

Thanks. And just finally, what drove the higher other income in the quarter?

There wasn't really anything unusual during the second quarter. If we look at other income for the first six months, we're pretty much on par with last year.

Thanks.

Thank you. One moment, please. Our next question comes from the line of Todd Thomas of KeyBanc. Your line is open.

Hi, Todd. Good morning, Todd.

Hi. Good morning. I just wanted to, I guess, stick with the transaction environment a little bit and ask about the dispositions. Stuart, you talked about the two undeveloped land parcels, but I think, Mike, you mentioned exploring additional dispositions as a source of capital to repay debt, or refinance the December maturity, and/or the balance of the term loan. Is there anything on the disposition front being contemplated beyond the $30 million, $40 million discussed? I know you have one or two larger format centers, including Fallbrook, which in the past you've sort of characterized as a little bit of a headache over time. It's one of the fewer boxier assets in the portfolio. With -- is that something that you contemplate selling in the current environment as larger format products have performed well a little bit more recently?

Yeah. We really don't have outside of the Crossroads and Fallbrook, but we really don't have what I would call large format centers. But it really depends on whether or not the market activity picks up again in the second half, which we're starting to see signs of, but it's just too early at this point to know for certain. At this point, you're more likely sort of to see potentially more dispositions, but it's again going to be -- sort of the towards the fourth quarter of the year. But yes, we are looking at bringing more to the market, Todd, as we get through the balance in the year. But again, it's all relative to help the transaction market and how active that gets.

Okay. And regarding those two assets, I guess, you've spoken a little bit more favorably about Crossroads and the value creation opportunity there over time. But are either of those assets, assets that you would potentially look to sell and as a source of capital in the future?

Well, I mean, outside of the two assets around the Bay area, which we are gearing up to put on the market, we're thinking about different things regarding the multi-family at Crossroads. Right now, the capital outlay for the balance of the year is not that much. It's very little left. So, we're still contemplating long-term what we do with the multi-family, whether we joint venture it or whether we build it ourselves or potentially selling it. So, that's still on the table, but we haven't made any decisions yet, because we're still getting through the permitting process.

Okay. All right. And then, if I -- just last question, I guess, you haven't had discussed much around watchlist tenants really over the years, or recently just given the composition of your portfolio, But Rite Aid has been in the news recently. They are your third largest tenant, a little under 2% of ABR. Can you just discuss that space within the portfolio, where you feel Rite Aid rents are versus market? How you feel about backfilling that space to the extent that you do get some back, and maybe provide just a little bit of color around that exposure in general?

Sure. It's Rich. Yeah. As you noted, Rite Aid only accounts for about 1.7% of our total base rent, which comes from 15 leases we have, and that number will drop to 14 with the property we currently have under contract. And the majority of the Rite Aids we have are their newer prototypes. We meet with Rite Aid on an ongoing basis. They are generating solid sales and their rents are below market. And this big spread we had on the anchored lease is coming from a Rite Aid lease that we've replaced. So, we see a lot of upside in these leases.

Okay. All right. Thank you.

Thank you. One moment, please. Our next question comes from the line of Lizzy Doykan of Bank of America. Your line is open.

Good morning, Lizzy.

Good morning. I wanted to ask about -- I know on the last call you all mentioned a one-time expense that was incurred from a net seller in the amount of about $300,000. Is there anything one-time in nature to mention this quarter with respect to bad debt? I'm just wondering if you're still on track with that guidance range put out of $3 million to $5 million for the year. Does that mean 2Q bad debt came in a bit higher than expected because of that one-time cost last quarter?

We did. You're right, Lizzy. We did have a one-time loss in the first quarter, but bad debt continues to be well below our budgeted amount of 1.5% of total revenue, and bad debt continues to be in line with our guidance for the year. The bulk of our bad debt continues to center on various tenant account adjustments. In other words, the bulk of our bad debt is not related to tenant vacancies. And historically, the first six months of each year tends to track a little bit higher, and it drops off in the second half of the year. And so, on a run rate basis, even though we budget 1.5%, we typically wind up the year about 1% of total revenue or slightly there under.

Okay. Got it. Thanks. And I wanted to ask, because this kind of seems it's become more topical lately with just the lack of overall growth we're seeing within [indiscernible], but what annual contractual rent bumps are you achieving on tenants now? Is this increasing? And where are you seeing, both on the anchor and the non-anchor side. And how important do you think that is to overall same-store growth for the year in terms of -- how that would affect being the lower to -- seeing the low end to the higher end of that range?

So for shops, tenants, we typically are still achieving the 3% annual increases on those leases, sometimes a touch higher. Then on anchor leases, it's typically 10% to 12% every five years. But that's obviously also offset by tenant who may have an option that's fixed or things like that. But those annual increases are fairly consistent with the historic.

Okay. Great. Thanks. And if I could ask one more, just on the level of leasing activity, you said what led the way really with the Portland portfolio, is -- could you speak more to the absorption you're seeing there? Like, is it really a function of such limited supply, or different dynamics and demand that you're seeing?

Yeah. I think as you're touching on, it's really the limited supply. The Pacific Northwest is very difficult to develop new properties virtually nothing's come online. Portland has always led the way in terms of that, but we're seeing those sort of same trends in the other markets as well.

So, certainly, supply is having an impact along with the overall demand from the tenant side. It's a combination of both that is really pushing the velocity of leasing more than anything else.

Great. Thank you.

Thank you.

Thank you. One moment please. Our next question comes from the line of Wesley Golladay of Baird. Your line is open.

Hey, good morning, Wes.

Hey, good morning, everyone. Hey, Stuart. I just want to maybe go back to the debt questions. You have some debt maturities 2023 and 2024, you kind of outlined last call about addressing over the next two years with two offerings. What is your appetite to do maybe a little bit more this year and remove the potential overhang for shares as we look into the last year?

Hey, Wes. It's Mike. So, as I mentioned in my prepared remarks, we're looking to potentially do a deal upwards of $400 million or up to $400 million, that would take care of the 2023s and half of the term loan. It's a little bit too early to take up 2024s from a cost perspective. So, what we're trying to communicate is doing a nice size deal this year. And then the other half of the term loan, which has been swapped through August of next year, becomes freely pre-payable at that point, along with the 2024. So, it kind of a back-to-back kind of strategy there. But if we go-to-market and the appetite's there for our paper, then we could do maybe a potentially large deal and payoff a little bit more of the term loan or take whatever balance we have in the revolver and pay that off as well. So, there's some flexibility there.

Got it. And then you have mentioned you have a lot of options to payoff the debt. You did mention one of them being secured debt. You made a point over the last few years to remove a lot of secured debt. So, is there A, I guess, a pricing differential that you would need to see in order to take a more a secure debt?

Well, secured debt, assuming it's about a 50% property or leverage level and [indiscernible], the rate would be probably in the low 6% range or the mid 6%. So, it's not that much different from where we think we could do a public deal. So, I think there would have to be really a wider gap for it makes sense, because as you know we like to keep our properties unencumbered for maximum flexibility of the assets.

Got it. Thanks for the time everyone.

Thank you.

Thank you. One moment, please. Our next question comes from line of Juan Sanabria of BMO capital Markets. Your line is open.

Good morning, Juan.

Hi. Good morning. Just a question on guidance and how comfortable are you guys with same-store NOI. And I guess, FFO on the high end, given the year-to-date results. And I guess, with regards to specific to same-store NOI, what has to happen, I guess, to hit the mid to high end of that range there in terms of occupancy, given the [indiscernible] and occupied pipeline?

Well, our internal budget has same-center NOI growth ramping up as we move through the year, because we track them on a quarterly basis. And at this point, we're on track to be within that guidance range of 2% to 5%, but where we end up in the range will largely be a function of how many new tenants open their stores and commence paying rent between now and year-end. As Rich discussed, as of June 30, we had just over $7 million of incremental rent from new tenants that are currently working towards opening. So that's going to drive that up based on occupancy largely.

And tenant retention is high, very high. And so that will continue to help as well. It's just -- the fundamentals continue to be as strong as they are then we feel pretty comfortable getting into that range.

And is that 5% still in place for this same-store NOI, or more comfort at the midpoint?

It's hard to say there's a lot of moving parts that work their way into the same-store NOI, but we're sticking to that guidance range for now. We'll see how the second half of the year plays out.

Okay. And then one other question. You guys had a couple of Buy Buy Baby locations. What's the latest in terms of what's going to happen with those? And if there's any risk of rent falls out there with some of the proceedings that have happened?

Yeah. We have two Buy Buy Babys in the portfolio. One of the leases was acquired by a private investor. That lease actually expires next year, but it does have several renewal options remaining. So, on that one, we should be made whole. On the other Buy Buy Baby lease, half the space is leased to world markets. And so, we're in discussion with Walmart [ph] is about putting a new long-term lease in directly with them. And then for the remainder of that space, we've been out marketing it for quite some time now and we have good preliminary interest from a number of perspectives tenants. So, we feel pretty confident we'll have that filled.

Thank you.

Yeah.

Thank you. One moment, please. Our next question comes from the line of Michael Mueller of JPMorgan. Your line is open.

Hey, I apologize if I missed this, but did you say with the volume of the potential acquisitions that you're working on adds up to?

Well, we've guided the street $200 million. We -- as we look through the balance of the year, given where the market is today, we're probably expecting to maybe lower that guidance a bit as we move towards -- depending on how the market changes, of course. But right now, we're certainly comfortable with about $75 million as we sit here today, and then, we'll see how the rest of the year shapes up in terms of what we would call deal flow and access to capital in terms of growing the company.

Got it. Okay. That was it. Thank you.

Thank you.

Thank you. One moment, please. Our next question comes from the line of Dori Kesten of Wells Fargo. Your line is open.

Good morning, Dori.

Hi. When you think through potential acquisitions, CapEx projects or share repurchases, where do you think your greatest return lies today?

Well, the CapEx side is certainly continuing to fall because of how highly leased we are. And I think, as Rich touched on, not much is being given to these tenants both in terms of renewals and new leases. As it relates to buying stock back, we, at the present time, want to continue to monitor the market and make that decision as we move -- continue to move through the year. But more importantly, acquisitions is where we're focused in terms of growing the company. So, if you were to prioritize those three, I would tell you, acquisitions is at the top and buying stock back is probably the third choice, as you would say.

Okay. Thank you.

Yeah.

Thank you. One moment, please. One moment. Our next question comes from the line of Linda Tsai of Jefferies. Your line is open.

Good morning, Linda.

Good morning. Just a clarification. You said you normally have more bad debt in the first half of the year and less in second half. Is this year consistent with prior years?

Yeah. I would say so. Yeah. It seems to be kind of the trend. First and second quarter is usually higher and the back half is lower, but you get to that blended -- actual bad debt above 1% or less on an annual basis.

Got it. And then you have $7 million in incremental rent coming in line this year. Do you have a sense of how much is coming in line next year?

[Technical Difficulty] perspective, of the $7.2 million, I believe, about 60% is supposed to start paying by the end of this year, another 25% or so by March and the balance in the rest of 2024.

Got it. And then just one last one. In terms of your ESG report, are there any highlights to consider in terms of the progress you've made this year versus last year?

Yeah. I mean, we've made some very good progress, but I don't have the report sitting right in front of me, but it certainly gives you the details in terms of the great progress this company has made. The good news is that we are certainly trending above the goals that we had set initially. In fact, we're -- and so from that perspective, things are going better than what we had anticipated. And I think you'll continue to see that progress as we move through 2023 right now as it relates to ESG. It's been a big focus of management's time. And again, the progress is -- if you pick up the report and read it, I think you will see that the progress has been quite strong.

Thank you.

Thank you. One moment, please. Our next question comes from the line of RJ Milligan of Raymond James. Your line is open.

Good morning, RJ.

Good morning. Good afternoon. Stuart, you mentioned that CapEx is coming down for ROIC, but we are still seeing elevated TI CapEx spend for your peers. I'm curious, is that just a function of your high occupancy? Is it -- because it's more grocery focused versus power centers? I guess maybe if you could just give some comments on where you see the negotiating power in terms of -- between landlords and retailers as they are looking for new stores?

Yeah. I think that it is a function of the high occupancy. I mean, it makes -- we have multiple offers on these spaces. So, we're able to go with the ones that were the strongest operators and the best overall terms. So that is I think what's the primary driver of that.

And then maybe -- I don't know if you could just expand on sort of where the pricing power is sort of in the market, maybe not necessarily for ROIC given your high occupancy. But for the retailers, the key retailers that are looking to open new stores, how much pricing power do they have, maybe not necessarily for rents, but from a TI CapEx spend perspective?

Well, costs have gone up. So, I mean, the other thing you've really got to look at here as it relates to CapEx is two things. Number one, as Rich articulated, the overall demand supply aspects as it relates to being grocery-anchored or other types of retail. But the other thing are costs. I mean, to retrofit a space today compared to pre-COVID, you're spending at least a good, let's call it, 30%, 40% higher. So that had some impact in terms of CapEx. But the good news is that -- and I think, again, Rich touched on it is that, when you're this highly occupied the pendulum, RJ, certainly swings to the landlord as it relates to spending those dollars. And that's what we're continuing to see as we move through 2023. The AFFO as you might say, aspect of our cash flow is continuing to get stronger.

I appreciate that. Thanks guys. That's it for me.

Thank you. I'm showing no further questions at this time. I'd like to turn the call back over to Stuart Tanz for any closing remarks. End of Q&A:

In closing, thanks to all of you for joining us today. As always, we appreciate your interest in ROIC. If you have any additional questions, please contact Lauren, Mike, Rich or me directly. Also, you can find additional information in the company's quarterly supplemental package and 10-Q, which are posted on our website as well as our latest ESG annual report. Thanks again, and have a great day everyone.

Thank you. Ladies and gentlemen, this does conclude today's conference. You may now disconnect. Have a great day.