Ayvens Stock

Welcome, and good afternoon to all. We are pleased to host you for this Capital Market Day. And I will present our new strategic plan with Patrick and Bernard. This presentation will be divided into 3 sections. A reminder of our track record in the last few years and of our environment, the presentation of the 3 pillars of our plan, our financial trajectory and a brief conclusion. Our clients at the heart of everything we do. They run from very large international corporations to local businesses and private consumers. While their needs can vary, they share a common expectation, their trusted fleet partner, Ayvens, provide them with a hassle-free mobility. It allowed them to focus on developing their businesses.

Let me now give the floor to 3 of them. The first testimony is from Siemens. Ayvens operates for Siemens fleet across 29 countries. It highlights the breadth of services and value we provide to large international companies.

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The second video is from Janssen van Kouwen, a dealer group and a long-time partner of Ayvens.

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And now our last testimony from DRIVO, illustrating our service offering to retail customers.

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First, many thanks to them for their testimonies. They provide a powerful reflection of the value we deliver to our clients. They also demonstrate the long-lasting relationship we build with them, which spend an average over 12 years with our large international corporate clients.

Our strategic journey over the last 3 years was built around the simple ambition to create the leading leasing company and fully capture the scale benefits of merging ALD and LeasePlan. The integration involved the execution of IT migrations across 21 countries in a regulated environment. Against that backdrop, we successfully delivered the promised EUR 440 million gross synergies, annual run rate. It contributed to the decrease of our OpEx base by EUR 320 million and the continued improvement in our margins, which are now at around 590 bps. As a result, we're on track to deliver on '26 targets, in particular, an underlying cost-to-income ratio at around 52% and RoTE in the range of 13% to 15%.

Our strategic execution has led to strong value creation for our shareholders. The total shareholder return reached 98% since January 1, 2024. Liquidity of the stock is also up by 120%. It led to Ayvens' inclusion in major equity indices.

We are now entering our next phase of development with strategic plan Ayvens 2029. While maintaining a strong focus on profitability, our strategy will be driven by balanced approach, optimizing both growth and returns. Over the next 3 years, we expect to deliver a funded fleet growth of at least 3%. Earning assets will grow by around 10%. Leveraging our superior scale and tech, notably AI, we'll continue to enhance the intrinsic profitability of our business through further cost efficiencies, simplification and standardization initiatives across the group.

If we look beyond 2029, we positioned today the group to capture the opportunities arising from evolving customer needs and technological innovation. The 2029 financial targets mark a clear upgrade versus PowerUP '26. In 2029, we target to deliver a cost-to-income ratio, excluding inflation in Turkey, at 49% and an RoTE in the range of 14% to 16%. We increased our cash dividend payout target between 50% and 60%. And we will also be distributing excess capital back to shareholders. Finally, we raised our CET1 ratio target to circa 12.5%, which is aligned with how we've steered the company over the last 2 years.

Let's now deep dive in the environment in which we operate. In Europe, registrations of new vehicles declined and remain structurally below the pre-COVID level. At around 13.3 million vehicles in 2025, they remain 16% below 2019 and expected at 12.5 million vehicles in 2030. In this context, the operating lease market has proved very resilient with a slight growth, hence, it has clearly outperformed the auto market. Going forward, the operating lease market is expected to grow by 0.4% per annum, pushed by the transition from ownership to usership. On top of that, the good news is there are sweet spots within the overall leasing industry with higher growth prospects where we plan to gain market share. As a result, for the next 3 years, our funded fleet will grow by more than 1% per annum.

Let's now comment on electrification, a key change in our industry. In its early phase of development, BEVs didn't fully answer customer needs in terms of range and charging time, besides new BEV prices stood much higher than those of ICE cars. Last, charging infrastructure was underdeveloped. The BEV market is still in a transition phase in which electric vehicle specification and infrastructure are progressively bridging the gap with current needs. This will lead to a further reduction in resale value uncertainty.

New car prices and EV residual values will progressively converge towards those of ICE vehicles as electric vehicles become the new norm. At the same time, used cars customers' adoption of BEV is increasing, thanks to a clear advantage in terms of cost of ownership versus traditional ICE cars. For Ayvens, it means that we will progressively be in a position to seize more growth opportunities.

Now turning to the competitive landscape. Banks, leasing captives of car manufacturers and car dealers were traditionally active on financial lease and small fleets. These actors are developing operating lease activities. Why? Mainly because of the operating lease market has not decreased in a declining auto industry. On our side, at Ayvens, we have developed strong commercial franchise with international and large corporates. We're already strong in retail, which, in our definition, includes SMEs and private consumers, but we can clearly continue to develop. We are uniquely positioned to leverage the continuous shift to usership from retail customers.

Let me go into more details on the next slide. First, with the largest fleet and the broadest geographic footprint, our scale is driving a key operative advantage impacting many aspects of our activities. Procurement is quite obvious. As an example, each year, we purchased around 600,000 vehicles and 3 million tires for a yearly investment of around EUR 20 billion. The economies of scale translate into a lower cost to serve our clients.

Second, we gather considerable amount of data on our running fleet across 40 countries. This allows us to monitor proactively our clients' fleet and provide them the right services. Finally, we have developed a skilled and unique expertise in managing residual value risk across all powertrain for all major models. Next slide, please.

Going forward, the overall operating environment will create growth opportunities for Ayvens, which we will fully leverage now that we are done with our intensive integration phase and that uncertainty on BEV's residual values has started to reduce. As the leader in the industry, we are uniquely positioned to leverage our scale, capabilities and customer reach to capture incremental share. We will grow organically and also potentially through small bolt-on acquisitions.

New OEMs, particularly from China, have emerged. The Chinese OEMs already gained a 6% market share in Europe in 2025 and 9% in H1 '26. For the new entrants, without a financing captive, Ayvens is a preferred partner with the broadest client reach. This is reflected in the partnerships we have established with companies like Tesla, BYD and Chery. The transition towards electric mobility gives us the opportunity to develop and scale new products and services, supporting both our growth and profitability objectives.

Let's now get into the action plan and its projected financial impacts.

The acquisition of LeasePlan has created a strong positive scale effect and allowed to build a resilient group in the context of electrification, but it also brought some complexity and disruption. This next strategic phase is about growing on selected sweet spots and develop new revenue streams. This is a third part -- the first pillar of our Ayvens Strategic Plan 2029: grow selectively and upsell.

Second, putting our clients first means providing them with best-in-class service. Indeed, we strive for operational excellence every day at every layer of the organization. So excel is the second pillar of our strategy to make Ayvens simpler more efficient and easier to work with, leveraging our talented people, data, tech and AI.

Third, our responsibility is not only to manage today's mobility, but it is about preparing the future. As technology is accelerating, transform is the third and last pillar of our strategic plan. Our strategy will rely on solid foundations, our people, a robust risk management framework and a business model, which is increasingly sustainable. Let me elaborate on value creation for each stakeholder.

We provide our customers cost efficient and hassle-free mobility services. Our clients, notably large corporates, are also increasingly looking to reduce their fleet emissions. Ayvens' impact on this aspect is measurable. In 2025, battery electric vehicles accounted for 32% of Ayvens' deliveries in Europe. The successful execution of our strategic plan will first and foremost depend on our people. Now that integration is behind us, we'll focus on developing our people by creating an engaging and empowering work environment where they can develop and thrive.

Finally, we create value for our shareholders. Over the past 3 years, this meant prioritizing value over volumes and maintaining a disciplined focus on returns. As we enter the next chapter, we will leverage our competitive strengths to optimize both growth and profitability, translating into superior returns for our shareholders.

To achieve our ambition, we're aligning the culture across Ayvens with our strategic priorities, fostering accountability, performance and embedding client centricity across the organization. As a first step, I streamlined the Executive Committee in February, establishing clearer and more actionable areas of responsibility to accelerate decision-making and execution. This principle is now being cascaded through the organization with delayering and increase of span of control. These simplified structures are designed to increase execution speed. AI represents a major opportunity to further improve our operating excellence and efficiency. Together with our data capabilities, it will enable smarter decision-making, greater automation.

Beyond technology deployment, success will require a cultural shift. We are training employees on new technologies, leveraging data more effectively and integrating AI into the daily work. Finally, in a moving environment, agility remains essential to anticipate change, adapt quickly and capture emerging opportunities while proactively managing our risks.

Next slide. Following the acquisition of LeasePlan, Ayvens became a financial holding company regulated by the ECB. It led to a substantial enhancement of our risk management framework, governance and control environment. Our robust risk management is essential to protect our balance sheet and deliver sustainable returns. It covers all of our risks. Residual value risk remains our most significant exposure and a key area of expertise. The effectiveness of our setup has helped the group navigate the material disruption in the current leasing industry. Indeed, the most structuring change has been the electrification of vehicles, which have emerged as a distinct asset class with their residual value drivers and risk dynamics.

Among leasing players, we are the first to adapt our BEV pricing. The divergence in used car sales results across the sector illustrates the benefits of acting early. We'll continue to closely monitor residual value developments and maintain a disciplined approach to risk management.

Turning now to sustainability. We take an end-to-end approach from responsible sourcing, sustainable mobility solutions to life cycle management, a particularly compelling opportunity is circularity in repair and maintenance. There is significant untapped potential to extend vehicle leasing life, increase the use of refurbished spare parts, reduce waste and improve economics at the same time. This integrated approach is supported by a robust ESG risk management and transparent disclosures that meets the expectations of regulators, investors and other stakeholders.

This approach delivers measurable results. Our objective is to reduce the CO2 intensity of our lease fleet to between 75 and 85 grams per kilometer by '29 compared to 101 grams in 2025. This supports our SBTi validated decarbonization pathway that remains unique in our industry and reflects the credibility and ambition of our transition plan. These actions create value across our business, helping customers transform their fleet, optimizing our costs, strengthening employee engagement and enhancing our brand.

And I will now ask Berno to present our first pillar, Grow.

Thank you very much, Philippe. Our ambition is clear. We want to gain market share while optimizing returns. And we expect our funded fleet to grow by more than 3% between 2026 and 2029. This will increase our earning assets by approximately 10%. We will target profitability growing geographies. We will also focus on attractive segments. We plan to grow our retail fleet by 15%, and we plan to grow our LCV fleet by around 10%. At the same time, we will increase service penetration across our client base. This will support service margins.

We will start with our established insurance and damage cover offer. Here, we plan to raise penetration by at least 3 percentage points. Evolving mobility needs and technologies also create new service opportunities. And by 2029, we plan to roll out Ayvens Power, our EV charging solution. In 15 countries is where we plan to roll it out. We will also scale our LCV programs across markets. These include vehicle on road optimization, proactive service planning and preventative maintenance.

Let us now look at our growth and upsell plans in more detail. We expect modest growth in the operating lease market. As Ayvens, we will focus on some segments that have more growth and profitability potential. To achieve this, we screened the market through several lenses. We looked at geographies, customer segments and products. We then selected the most compelling growth opportunities. Our ambition is to grow our funded fleet, by more than 3% between 2026 and 2029. Let us take a close look at the selective approach, starting with geographies.

Western Europe accounts for 80% of our funded fleet. And within this region, we have identified 2 groups of countries. The largest group consists of mature markets. These already have high leasing penetration especially among corporate clients. In those markets, we aim to maintain and reinforce our leadership.

And the second group consists of medium growth markets, mainly in Southern Europe. Here, we will expand selectively through the most profitable channels. The U.K. is a distinct market. And as you know, we are already reshaping our commercial footprint here towards segments with stronger profitability profiles and the net effect will be a reduction of the U.K. fleet. By contrast, Eastern Europe, Asia and Latin America offer strong structural growth prospects. Their markets and leasing penetration are less mature. Their fleets are also predominantly ICE. These regions account for only 8% of our funded fleet today. But they offer another avenue for growth. We do not plan to enter new countries, instead we will accelerate development in our existing markets and outgrow the market.

Let us now turn to our strategy by client segment. The corporate segment is already mature in Europe. So we expect growth to come mainly from retail clients, private consumers and SMEs. This segment should grow by around 7% between 2025 and 2029. Our ambition is to grow at roughly twice that pace. Retail clients are also attractive in terms of profitability. On average, margins are about 50 basis points higher than for our corporate clients. We already have a well-established retail footprint. These clients account for close to 1/3 of our funded fleet today. We serve them directly through our online showrooms and indirectly through our partners' networks and platforms. And to increase our retail coverage, we will industrialize our distribution capabilities.

Digitalization will be a key enabler to improve the client experience and operational efficiency. It will also support scalable growth. We will use AI and digital capabilities to create a simple and seamless journey. It will be fully integrated through the contract life cycle. We will return to the specific initiatives and road map later.

Light commercial vehicles are another compelling opportunity. The market should grow by 7% between 2026 and 2029, and demand remains largely focused on ICE vehicles. This offers an attractive mix of growth, profitability and limited residual value risk. And to capture this opportunity, we will sharpen our commercial focus on SMEs and underpenetrated markets. At the same time, we will come strengthening our LCV proposition through differentiated services and operational expertise.

One example is our turnkey offer, proprietary turnkey offer. It is an in-house best-in-class solution. Clients get access to pre-configured vehicles that are available immediately. We use our scale in vehicle procurement and conversion. This lets us offer competitive pricing and a faster, simpler customer experience. The solution is already deployed in the Netherlands, and we will roll this out in more markets.

Beyond vehicle supply, we help clients maximize vehicle availability and productivity. We do this through vehicle on-road optimization, proactive service planning and preventative maintenance. These services include downtime and improved utilization. To keep our clients' businesses running efficiently, this is especially valuable for LCV clients. Every day off the road directly affects business performance.

Our uptime management capabilities are most advanced in the U.K., and they are considered to be best-in-class, and we now plan to expand them across our entities. Electric LCVs are another growth driver. OEMs are improving their lineups, ranges are longer and operating performance is stronger. Electric vehicles can therefore, meet our commercial fleet needs. And electrification, also offers favorable economics in a high fuel cost environment. Together, these factors should accelerate adoption, and we aim to lead this transition and support clients throughout the electrification journey. Together, these initiatives position us to gain market share in LCVs. And we aim to grow our funded fleet in LCV from around 530,000 vehicles today to approximately 580,000 in 2029.

The second part of our growth plan is upsell. We will increase service penetration and develop new value-added offers. This will support revenue growth. It will also help offset the expected decline in maintenance margins as electrification reduces servicing needs. Service penetration varies across markets, service categories and client segments. This creates a significant opportunity to increase our share of wallet. The opportunity is especially strong in insurance and damage cover. As technology mobility patterns and client expectations evolve, new service opportunities are emerging. We plan to expand Ayvens Power, our EV charging solution and to scale our LCV fleet downtime management services across markets.

Let us look at 2 concrete examples, starting with insurance and damage cover. Insurance is an attractive growth area with a compelling risk and return profile. Motor insurance is typically high frequency, low severity business and Ayvens is well positioned to serve corporate and SME clients. We can provide timely, best-in-class service on competitive terms. We control repair costs. And we monitor our clients' fleets in close collaboration with them. Ayvens has well-established expertise and strong footprint with its dedicated fully fledged insurance subsidiary. We plan to build on this position and increase penetration by 3 percentage points from the current 53%.

In short, this business has 4 attractive characteristics, low operational volatility, strong client retention among those who choose our offer, no funding requirement and an accretive contribution to the group's RoTE.

Let's move to the second example of upsell opportunities. Our ambitions in electric vehicle charging provide a concrete example of how we intend to turn market challenges into growth opportunities. For many clients, charging remains complex. They must find an available charge point, navigate different networks and manage different payment methods. Ayvens Power simplified this. A single card gives access to more than 1 million charge points across Europe. This creates real value for clients, and it strengthens our relationship and generates recurring margins. The Ayvens Power card and app are already available in the Netherlands and Norway, and we plan to roll them out progressively to 15 countries by 2029.

The financial contribution will grow over time and more than compensate the decrease of fuel card revenues.

Having covered our growth ambitions, I will now give back the floor to Philippe for a second pillar of our plan, Excel.

Thank you, Berno. As you can see on screen, our costs include EUR 1.7 billion of annual OpEx and EUR 2.6 billion of vehicle operations annual spend in 2025. There remains significant potential to further enhance productivity and efficiency across the organization by simplifying and standardizing our processes. With AI capabilities, we intend to enhance productivity by 30% on selected key processes through the automation of labor-intensive process.

On IT, specifically, we spend around EUR 450 million per year. Our ambition is to build a more harmonized, efficient and scalable technology landscape. It will reduce costs while progressively shifting resources from run activities to projects that enhance our capabilities and support future growth. AI will be instrumental in accelerating this transformation.

Overall, these initiatives will be driving a steady decrease of our OpEx throughout the Ayvens' 2029 Strategic Plan. We also address the operating cost embedded within our service margins. We have identified further opportunities to leverage this group scale, optimize supply spending and improve efficiency. As a result, we are targeting a 2% reduction in lease costs by the end of 2029. Let's see that in detail.

We are determined to leverage AI as a key enabler of our ambitions, driving greater operational efficiency, low cost and client satisfaction. We see a significant potential to be more efficient in our business processes. We are targeting 30% efficiency on 8 core processes across finance, commerce and service and operation functions. We will also simplify the customer journey and fulfill our ambition towards our clients make mobility easier.

On IT, we're equipping our developers with AI-powered tools and capabilities to accelerate delivery and improve productivity, targeting a 30% efficiency gains across the software development life cycle. Realizing this potential is as much about people as it is about technology. We have launched dedicated training to all our staff with more than 3,200 employees already trained to date, and we'll complete the training across all our projects in the coming months.

Let's now look at 2 concrete examples of how we are leveraging AI to optimize the customer journey starting with customer request handling. Customer interactions are a critical part of our service model with more than 15 million contacts managed every year. To address growing customer expectations, while improving efficiency, we are developing an AI-powered customer interaction model. We have done first deployment in Belgium and France before scaling to other large countries. To illustrate how this will work, imagine a customer looking for information about vehicle delivery, a contract amendment or an invoice. Instead of contacting an employee in customer service directly, the customer can first use a chat bot through MyAyvens. The chat bot will instantly answer questions using customer-specific information and our knowledge base. If the inquiry requires additional support, the conversation can seamlessly move to live chat or another preferred digital channel. The customer doesn't need to repeat information.

For more complex cases that require human intervention, AI supports our service agents by gathering relevant information and preparing draft responses. Our staff remains fully in control of the customer interaction but benefit from faster processing, reduced administrative work and more consistent responses. It allows our teams to focus on the interactions where human expertise creates the greatest value. This improves customer satisfaction, increased productivity and lowers our cost to serve.

Let's now move to the second use case as the second use case on onboarding. Client onboarding is a critical step in the customer journey. Today, our KYC and credit onboarding processes are fragmented, differ across countries and still rely too heavily on manual activities. We onboard every year around 100,000 clients. Streamlining and automating those processes represent another significant opportunity. Our strategy is to build an efficient and risk-resilient onboarding model by harmonizing and optimizing practices across countries. We will accelerate digitalization, strengthen data quality and deploy core onboarding capabilities across the organization. We'll build a scalable operating model with faster onboarding, lower cost per client and better quality of control and KYC. It will also help us accelerate retail expansion while maintaining a low cost of risk.

Let's move to IT strategy. Following the integration of ALD and LeasePlan, we operate a fragmented IT landscape. Our vision is to progressively harmonize our technology landscape and implement a Global Mobility Platform across the group, together with the simplification and standardization of our processes, the GMP will drive automation projects on a more consistent customer experience. It is built as a set of independent modules that can be deployed separately from one another. This means we do not need to implement the full platform everywhere at once. Instead, we'll prioritize deployments where business needs and value creation opportunities are the greatest.

Our investment priority is the front end, where customer interactions are a key differentiator and where tailored solutions can create the most value. For back-office activities, our objective is to leverage standard solutions with a proven track record. This plan will allow us to reduce our IT intensity ratio by 3 points to reach 12% in 2029, while improving the allocation of our technology investments. This will be done with an increase of 50% of our build costs while reducing the run cost of our application.

On next slide, vehicle operations represent a cost base of more than EUR 2.6 billion of annual spend. Across the group, some countries are already delivering best-in-class performance, demonstrates that the practices, tools and capabilities required already exist within Ayvens today. Our focus is to deploy its best practice across our entities.

One area where scale creates tangible value is procurement. We are further strengthening purchasing discipline and leveraging our size to secure better commercial terms. This includes increasing preferred network steering in repair and maintenance as well as expanding preferred brands and supply agreements in tires.

The second area is about improving the way we manage our spending. Key initiatives include spare parts optimization, more disciplined repair processes and [indiscernible] management. We also ensure repair versus replace decisions in line with best-in-class standards.

Finally, beyond these examples. We see significant potential in systematic cost control. The combination of AI, a 50 million event data lake, country benchmarking and control towers will further enable us to detect inefficiency faster, to challenge performance more effectively and continually improve cost to serve management across the group. By 2029, we target to cut our net spending in service margins, so represent net savings of about EUR 60 million per annum.

Remarketing is another critical part of our business. We expect to sell more than 500,000 vehicles per annum. There are 2 main drivers of the remarketing performance. The first is a price at which we sell vehicles. So we will direct vehicles to the best sales channels, carefully manage resell timing to avoid stock accumulation and measure our performance versus market benchmarks.

The second is the cost of selling vehicles, which is largely logistics related. We focus on reducing the time vehicles remain in our remarketing chain and challenge the cost of each logistic provider. Looking further ahead, we aim to embed remarketing much more deeply into our value chain. By leveraging its expertise and market intelligence, remarketing will play a greater role in vehicle purchase decisions. It will help determine the right vehicles, specifications and acquisition prices to optimize residual values and maximize life cycle returns. Overall, these initiatives will improve our remarketing performance with a target to improve by 1% to 2% the average used car selling price.

Let's now turn to the third pillar of our strategic plan, transform. Creating long-term value also requires to anticipate how the mobility ecosystem will evolve and to position Ayvens to capture the future opportunities. Customers are increasingly looking for affordable solutions, creating an opportunity in used car leasing. Used car lease that we name Re-lease, is a natural extension of our retail growth engine. We think our customer value proposition addresses the issue of affordability. It combines lower cost, 15% to 25% cheaper than a new vehicle lease, and high quality of the assets with no residual value risk for the customer. It will become more and more attractive with used BEVs when the market matures as BEV have a lower maintenance cost.

We are confident we can grow this product to a 100,000-plus fleet in 2029 with a higher potential in 2030 decade as electric becomes the new norm. The model delivers accretive profitability versus traditional new vehicle leasing.

Next slide. Software-defined and AI-enabled vehicles are one of the most important long-term developments in the auto industry. Connected vehicles continuously generate information on usage, battery health, maintenance requirements and operating performance. Thanks to improving accessibility to OEM data on advances in AI, that information is becoming easier to aggregate and translate into actionable use cases.

Connected vehicle data can support predictive maintenance, proactive roadside assistance, accident management, battery health monitoring, emissions reporting and a range of other new data-enabled fleet services. These capabilities can help customers reduce downtime, lower costs and improve fleet performance.

Next slide. Autonomous mobility is one of the most widely discussed trends in the auto industry, and we think the long-term potential is significant. The path to adoption is likely to be gradual, uneven across markets depending on local regulation, and volume forecasts vary widely. Beyond these uncertainties, we know it will be a sizable opportunity for Ayvens. We believe Ayvens is a natural partner thanks to its expertise in fleet management. We are actively monitoring technology, regulatory and market developments and engages with key players across the ecosystem.

And I'll now give the floor to Patrick for the financial trajectory.

Thank you, Philippe. So let's start with the macroeconomic outlook. We have a scenario of progressive stabilization of the current uncertainties and a low growth, low inflation for Western Europe. GDP growth in the Eurozone should come up to circa 1.5%, while the ECB deposit facility rate does not go higher than 2.75%. Inflation should cool down to stabilize at a level around 2%. The price scenario for cars is a very moderate increase for ICE and hybrids and the continuation of downward scenario for BEV and PHEV. We have been applying these as early as H1 2024.

In this backdrop, our indicative outlook is an earning assets growth of circa 10% with an acceleration across the period '26, '29. Margins in million euro will grow. However, margins expressed in basis points of earning assets will slightly soften under the effect of new car production and a higher share of electric vehicles. The contribution of used car sales results should be very limited. Operating expenses will decrease in absolute value from '26 to '29. So let us now spend a couple of minutes on our funding strategy.

As you know, since September 2023, we have put in place a diversified funding strategy which has successfully enabled us to lower our cost of funding and grow our leasing margin. As of today, we have a stock of funding on our balance sheet of around EUR 45 billion, which is split between Societe Generale and external sources of funds, including retail deposits, bank loans and funding from the market through bonds and securitization.

We benefit from high rating levels as displayed on the bottom left box on the slide. The reduction in the overall funding cost that we have had over the past 3 years is reflected in the narrowing of our credit spread on the chart. This has been supported by 3 pillars. First, the successful execution of the merger and the increase of profitability secured notably through the synergies. This has become very apparent to bond market investors since H2 '24, as you can see from the evolution of the credit spread.

Second, the lower interest cost and the bond issuance as these have come in strong demand with high oversubscription rate.

Last but not least, an increasing proportion of retail deposits, which now represents close to 1/3 of our total funding higher than what -- higher than that we had targeted at the beginning back in '23, which was ranging between 25% and 30%. And as you are aware, retail deposits are our cheapest funding source.

Going forward, we will keep on diversifying our funding sources. Deposits that we collect via Ayvens' Bank should represent an increasingly important source of funds from 33% today to a range of 35% to 40%. We will grow our deposit base in the Netherlands and Germany in which significant development potential lies ahead. Besides, it is likely that we will also test and tap in other European market to achieve and potentially exceed this ambition. With between EUR 1 billion to EUR 2 billion of annual issuance, securitization will represent an increasing share of our funding mix, targeting a contribution slightly above 10%. As for bonds, we plan to issue EUR 2 billion to EUR 3 billion per annum. The share of bonds is expected to decrease slightly from 24% to around 20% in 2029. So overall, the continuation of diversification and a lower cost of funds for the group going forward.

So let me say a few words on how we are going to improve the readability of our performance. From 2027, we will stop reporting underlying margins and underlying cost-to-income. Back in '23, we had several items making the performance of Ayvens difficult to read. First, a significant amount of cost to achieve. Second, the unexpected volatility of the mark-to-market of swaps inherited from LeasePlan hedging strategy; and third, the impact of PPA. We will not highlight these items anymore for the following reasons. Cost to achieve will not be mentioned as the integration period is over. This is not to say that we will not invest in our business, but this will be part of our BAU costs. We have fully unwound the swap book of LeasePlan. Today, we only use swap in a regular manner. There is no reason to anticipate that this will have a meaningful impact on our P&L and therefore, no reason to highlight it.

Lastly, amortization of the PPA has now been almost entirely done. So the only piece of volatility we will keep is hyperinflation in Turkey as it is purely exogenous. Today, it represents an annual impact of around EUR 100 million. This impact is due to the fact that our running fleet in Turkey, around 25,000 cars, does not see their price increasing as fast as inflation. Therefore, every quarter, we have to impair the fleet corresponding to the gap between car prices and CPI evolutions. This impact should reduce as inflation is progressively contained. However, we still anticipate some volatility on at least the 2 next years.

So the current cost-to-income guidance for '26 at 52% on an underlying basis, excluding all nonrecurring items is strictly equivalent to 53%, excluding hyperinflation alone. Going forward, we will base our disclosure and guidance and cost income, excluding hyperinflation.

So as a result of the strategy and course of actions that we have described, we will decrease cost-to-income by 4 points. This improvement will be led by increasing revenues, but also by a steady decrease of our operating expenses.

Looking at the chart and going through the various items. We estimate that operating expenses inflation will represent close to 3 percentage points of cost-to-income. BEV embed a slightly lower service margin than ICE vehicles hence a higher proportion of BEV in our fleet will lead to a slight softening of margin expressed in basis points. Also, resuming growth will lead to new assets entering our earning assets with high book value. This will also contribute to slightly soften the margin expressed in basis point. Altogether, these 2 items should represent 2 percentage points of adverse cost-to-income evolution.

Now coming to the benefits of our strategic plan. We will grow our earning assets and we will grow our margins in euro. This should represent an improvement of circa 3 percentage points of our cost-to-income. We will also improve the group's productivity, in particular, through the extensive use of AI and also the optimization of our operating model. Altogether, this should represent an improvement of 6 percentage points in the cost-to-income coming from both the reduction in our operating expenses and a reduction in the costs included in our service margin. In total, cost-to-income at 52%, excluding nonrecurring items in '26, equivalent to 53%, excluding hyperinflation, will be decreasing by 4 percentage points by '29 to reach 49%, excluding hyperinflation.

As mentioned by Philippe, we are upgrading our financial targets. So we will reach a return on tangible equity ranging between 14% and 16% to be compared with the previous range of 13% to 15%. Here, I would like to stress that between '23 and '26, the improvement in the ratio has actually been stronger than anticipated on margins, costs and capital management. Indeed, in the 13% to 15% range that we gave in September 2023, there was an assumption of more than EUR 250 million in annual UCS results embedded into the revenues. As you know, from our H1 '26 results and from the indication we gave today, the actual number of UCS will be much lower in '26, rendering the rest of the performance even more remarkable.

CET1 ratio will be at around 12.5%. And as we explained in detail, cost-to-income, excluding hyperinflation will decrease 4 percentage points from 53% to 49%.

Lastly, we plan a regular dividend payout ratio increased from 50% to a range between 50% and 60%. If everything goes according to plan, a payout ratio of 60% does not absorb the significant cash generation of the firm. Therefore, there might be small to medium-sized bolt-on acquisition and the rest will be swiftly returned to shareholders through exceptional cash dividends or share buyback, as we have been doing in a disciplined manner in '25 and '26.

With this, I hand it over to Philippe for the conclusion of our presentation. Thank you very much.

Thank you, Patrick. Let me now conclude our presentation. First, in a difficult car market environment, the operating lease market has been and will be resilient, notably supported by the ongoing shift to usership. We'll leverage our scale, our customer-centric DNA to grow in selected profitable segments, in particular, the smaller fleet. After a period of integration following the merger, we can now be fully focused on operational excellence to combine superior customer service and lower costs. We'll leverage new tech across the board. I want to thank all our employees that are the foundation of our success.

Our plan will contribute to create sustainable value for our shareholders with an RoTE between 14% and 16% on a dividend payout ratio between 50% and 60% plus a return of excess capital. If we take a step back, we can see 3 periods in Ayvens journey. The first one was the creation of Ayvens with a challenge of becoming regulated, executing the merger in the context of the biggest transformation of the auto market in the last decade.

The second phase that we now open will see more stability within Ayvens as IT migration is now behind us. This is the opportunity to grow our profitability, leveraging a continuous improvement of our platforms and processes. In the 2030 decade, electrified cars will become the new norm. Residual value risk will become comparable to what it was historically with ICEs before the transition. This will open a new phase of sustained growth and higher profitability.

Thank you for your attention. We look forward to answering your questions after a 15-minute break.

[break]

Thank you. Going now into our Q&A session. So we please ask you to limit yourself to 2 questions at a time so that everybody has the opportunity to ask questions. And obviously, if time permits, then you can come back with new questions. Number one, please. towards the front, yes?

Jacques-Henri Gaulard, Kepler Cheuvreux. I have two, and I may sneak a subsidiary one. The first 1 is, if I were to tell you that used car sales result will be 0 from now on to the end of the plan, can you still deliver 14%, 16% RoTE.

The second question is on the fleet. And on the country, in particular, I remember that previously before the old plan, you are not sure about Turkey and keeping Turkey as a market. And it seems that since you assume that hyperinflation is going to continue, you will stay in Turkey. More generally, within your book, considering what happened in the U.K., are there any potential weakness you're seeing there? Or are you still happy about the residual value and its sensitivity to the different shocks?

And the last question, if I may, hearing Berno, in particular, why don't you change your headquarters to the Netherlands.

Okay. Thank you for those 3 questions. I may start by the third one. I think one of the strengths of Ayvens is the diversity of our people. We are in the 40 markets. And I think it's important to keep this cultural diversity in headquarters. So we are happy with the 2 headquarters for the moment. I think we will have some evolution in the sense that probably we'll get to more specialized teams in each place in order to improve efficiency. But I think it's -- we don't aim to build a French company. We are a super international diverse company, and I think it's a strength. And you can see that in the management, and that remains the case.

The last person that I recruited for the ExCo is Emma Furniss, our Chief People Officer, which is a British citizen located in Amsterdam. So it gives you an indication that we want to maintain this diversity.

On the second question that was about, are we happy with our book on residual values? I would say if we look at what has been done in the last years, since the -- at the end of 2023, was taken a decision to review the perspective of the market, in particular, for the BEV, and I think it was a very sound and right decision, it took a while to decrease the residual values. It took 2024, 2025. We've continued in 2025, but we think that the level that we've reached is pretty reasonable on the BEV and the more the years go, in fact, the more we have visibility on the BEVs because customer acceptance in used cars is starting to grow. And probably the last month with the Middle East events have helped to educate the customer about the benefits of the BEV in terms of cost of ownership and it's quite visible.

For the first question, I think I will ask Patrick to take the answer, please.

So indeed, if I remember right, it was a question around UCS, considering what we had the results of H1. So we have given a guidance that we stick to for UCS in the full year, which was, I remind you, a range of evolution of EUR 200 to EUR 600 for gross UCS per car. So we will be in this range, albeit that the low -- on the low side of this range. And also, we believe we will maintain a slightly positive net UCS in 2026 considering most recent development.

Number one, please.

Sharath Kumar from Deutsche Bank. I have 2 questions. Firstly, on margins. Related to your second quarter level of greater than 600 basis points, I want to understand how much margin compression is embedded within your guidance? At least my assumption that it is more likely to be closer to 600 basis points rather than 550. I can see tailwinds through higher retail penetration, LCV, whereas there is one notable headwind in the form of BEV penetration. So if you could just help us with the moving parts and also quantify what the margins for BEVs versus ICE vehicles as well as for LCVs? That's my first one.

The second one is on bond yields in an environment of bond yields, higher bond yields, in an environment of structurally higher bond yields, how exposed is your business to higher funding costs? Is it fair to say that it's broadly neutral given that you have ability to pass on higher funding costs? And given where your fleet growth assumptions are, it shouldn't be punitive. So any thoughts there would be appreciated.

Okay. I think Patrick will answer the second question, and I will answer the first one. So on the margins development, in -- as we've seen in the presentation, we forecast for a slight decrease in margins in bps, which are evolving with 2 contradictory factors. You got one positive factor, which is all the action plan that we make to develop the margin, especially working on the service margin costs, and there is a strong focus to look in the company not at margins, but at cost individually. Because if you just realize the volume of costs that we have, costs are not equal to OpEx that are EUR 1.6 billion, EUR 1.7 billion, as you can simply know. Costs are the OpEx, plus the cost in the service margin, which are more than EUR 2.6 billion plus the cost in remarketing, EUR 100 million in logistics, plus cost of purchasing cars, which are around EUR 20 billion. So there is a lot to be done there, and we're absolutely determined to attack that in like the OEM attack the cost, which is not exactly the culture of a service company maybe. But I think it's the culture that we want to have. So that is very helpful on the margins.

And there are 2 things that are not helpful on the margin expressed in bps. The first one is, for the moment, as on for the moment, the BEV has less margin than an ICE car because the residual value expressed in percentage of a BEV is lower compared to an ICE. But this is linked to the fact that technology is improving very fast in BEV. But over time, the used car BEV becomes more obsolete to the new vehicle compared to what was an ICE compared to a new vehicle. But over time, this is fading away. And one day, I was saying in my presentation, BEV will become the new norm, which means that directionally, in the future, the percentage of decrease of the used car compared to a new vehicle will be similar for BEV as what it's always been for an ICE, which means that, today, we've got the difference between the margin between the BEV and ICE, but this is going to decrease over time. But for the moment, there is a difference. And as we sell more BEV every year, this has a dilutive impact for the moment on the margin. So this is a negative impact.

And the second negative one is, when you restart growth, due to the way accounting is done in this business, you got a bit less margin at the beginning of the contract than at the end. So mechanically, when we restart growth, it's slightly dilutive. So these 2 effects are compensating the positive effects of all our actions, which leads to a margin in bps that's slightly decreased compared to the level where we are.

But our plan is a plan based on margins, on OpEx. And these are the 2 topics that we are focusing on. We don't base the plan on used car sales.

Patrick, do you want to take the...

Yes. Thank you. I think the second question was pertaining to the exposure on interest rates and our ability to pass it to customers. So yes, we are able to, and we do it to pass to our customer on a very regular basis increased interest rates. However, we are a stock business, so it can take a bit of time. And we have a rough estimation, depending on the countries that for an increase of 100 basis points of interest rate, we have the first year, a negative impact of around EUR 20 million on our margins.

And that's after the first year. If it stops there, the effect stops.

Peter Basten out from California. I have 2 questions. So this sounds very loud. Is this okay?

Yes. The sound is okay, yes.

Okay. So scale is the overwhelming competitive advantage in leasing over the years or over the decades. And so the ALD plus LeasePlan could have been -- should have been maybe is 1 plus 1 equals 3. Yet we see the target today of a 15% RoTE yet ALD ran 15% to 20%. And when we double in scale, why do we not see 20% RoTE? What's the gap between the theory of a much bigger company in the practice?

Second question is on FTE on employees. When the deal was announced, the combined company FTE was maybe 15,000. I think we're down to 14,000. However, primary diligence suggests that given the overlap in sales, technology, et cetera, the chance for natural attrition could drive FTE down pretty substantially. What do you assume in your plan for 2029 to 2030 FTE?

Okay. Two questions. If Patrick will correct me, but what have in mind is -- I was not there at that time, but the terms of the merger, the headcounts were around 15,000, as you say. And now we 12,500 people, and we've continued to decrease -- we have continuously decrease the headcounts in the last months and quarters. And obviously, we'll continue to work on this. As you've seen, we've got clear targets on the cost side. So from 15,000 to 12,500 is what has been done, and it's not the end of the story knowing that we work on all the parameters of costs. And in fact, as was explaining, you've got much more cost on procurement than in headcounts, which doesn't mean that we don't work on headcounts, you need to work on all parameters, but we've got more than EUR 20 billion that are not headcount cost.

On the second question, well, in -- when we look in the past at what was the RoTE, and there were some periods with extremely high RoTE, there were 2 different things. One, there were period with extremely high UCS result, used car sale result, and especially after the shortage of cars at the beginning of the decade, shortage of new vehicle cars, suddenly, there was a fantastic windfall in the used car market. So there was a shortage of car first because of COVID. After that, there was a shortage of car because of chips. And then there was a shortage of cars because of logistic issues, and that led to a level of production of new vehicles that was below demand. So it's led the consumers to go to used car vehicles. And the used car sales result per car in '22 and '23 was about EUR 3,000 to EUR 4,000 per car, when historically, it's a few hundred. So obviously, this impacted very positively the RoTE at that time, but that was like it happens once in every 50 years, maybe. And in my 30 years of auto life, I have never seen that.

The second part is, if you go a bit earlier in the history of these companies, margins expressed in bps in leasing and service margins tend to be higher. But with cost-to-income ratio that was not -- that compared to 49% that were not better, but with much higher margins. And now working very hard on our processes and our cost, we can get to this efficient cost-to-income ratio with margins expressed in bps that are a bit lower. And I was explaining BEV that's now are less profitable than ICE, but I think this is something that will disappear in the future when the acceptance for used -- of used cars BEV will become similar to what was traditionally the ICE acceptance. And this is gradually coming in.

Can you please go in the middle here?

It's Owen Paterson from Jefferies here. Just 2 questions. The first one, so you've outlined a market that's effectively flat growth terms, just above. At the moment, at least, it seems like some key peers are willing to grow a bit faster than that. So I guess, how are you balancing the risk to your own market share or your own margins if you want to protect market share or vice versa? How are you thinking about that?

And then my second question is on Chinese residual values. You seem fairly happy with the exposure and development to Chinese vehicles. I guess, do you see residual value risk there at all? They're new brands, their aftermarket networks aren't as large. Is there a scenario where you hold back your exposure to Chinese vehicles?

Okay. Thank you for the 2 questions. I will start by the second one. We don't make reasoning on the residual values based on the nationality. There is no reasoning about Chinese versus legacy carmakers. It's an individual approach, and we work with what we call a scorecard of OEMs. And we've got a list of KPI that we track for them in order to set them in 3 categories.

The OEMs that are in the red part, we don't want to work with them, and they can be Chinese, but they can be of any nationality. The preferred one because their management of residual value is sound historically. Typically, people that do not go to what we call the toxic channels, so namely, rent a car and demo cars, well, everybody goes to it, but it's a question of proportion.

And you've got the in between. So this influence the way we set RVs, and we're permanently reassessing each carmaker if the behavior evolves. That's -- so there is a list of components. In the other one that I was mentioning, behavior in toxic channels that we could also mention, for example, availability of spare parts because your question was about the Chinese.

If I take a Chinese carmaker that has, for example, an agreement with an existing carmaker to distribute spare parts and is able to deliver parts as fast as a player that has been in the industry for the last 30 years, we will not have the same judgment on the RV as a carmaker that sends parts from China and which provide parts in an erratic way. So this is this kind of a very granular approach, very systematic, so not linked to the nationality.

But it's also true that we need to pay attention because in China, well, I don't have the latest statistic, but a few years ago, we had 150 brands. And if you pay attention to what the Chinese government said a few days ago, but that is a repetition of what is said already in the past, is preaching consolidation in China. So you need to check well what are the bets that you make. Everybody is not BYD in terms of volume and capacity to gain market share. So we need to pay attention to that when you make your choices on residual value. Sorry, a bit long answer, but I think it's an important topic.

On behavior on competition, well, if we look at what has happened in the last years, I think we had historically 3 leading companies with more or less the same size, 2 merged, becoming immediately much bigger than the third one, which kind of been understood as a stress for some players. So the other players and a number of them were feeling that their lack of scale compared to Ayvens was an issue, though that tended for a number of them to be more aggressive, especially on BEV.

If you look at the numbers that are published by some competitors, we see that both in 2025 and H1 2026, now this gives a difference in terms of margins and it gives a difference in terms of used car sales results. So we can -- so our view is in a context that was a big disruption of the industry due to electrification, significant uncertainty in the residual value. Our view is it was not the moment to push the accelerator very strong on growth.

But as I was explaining, the more the years go, the more this uncertainty decrease, so the more it will make sense to accelerate growth. So in our view, that's the reason why we mentioned in the plan that the growth that we indicate, there will be less in '27 and more in 2029 because we think uncertainty will decrease. So we should, like, look at what competition does with these eyes. That was a question of scale. We have the scale.

And even with the recent merger of one of our competitors, if you look at total fleet, total fleet, not only funded fleet, we remain well above. And total fleet remains important in terms of procurement, not from -- for the procurement of cars, but for the rest of procurement. So we are not pushed to growth for growth because we don't need it. What we do is permanent arbitration between growth and value.

In the middle, please.

Matt Clark from Mediobanca. A couple of questions, please. Firstly, on the residual value, which I guess is EUR 20-something billion. I can't remember the exact number. Could you give us a sensitivity of it to the oil price? Presumably, oil price going up a lot is bad for the residual value of ICE vehicles. What exactly is the sensitivity? How do you think about that risk to your residual values?

And then second question is more on the capital side. You've given pretty conservative guidance in terms of fleet growth for the next few years. The corollary of that should be that there's higher scope for distributions. Could you give us your risk-weighted asset growth outlook? Should we just expect it to scale with the earning assets and so very little first couple of years and then some backloaded growth into 2029 because that will help us understand the capital return prospects for you?

I'll start with the second one on RWA growth. So we have mentioned earning asset growth of around 10%. As you are well aware, we have done some RWA optimization in the past for significant amounts. There will still be a bit of RWA optimization, but not to the same -- for the same scale, not for the same magnitude, making it that RWA growth should be slightly lower than earning growth. So with this, I think you can have a good estimate already.

Your first question was about sensitivity of ICE residual values to the oil price, if I'm correct. Okay. What we've been seeing in the last 6 months with the Middle East events, it's more focus of the customers on BEV or used cars, obviously, because they look in terms of a total cost of ownership and they just realize that with an oil price that grows, it may become interesting to have a BEV versus an ICE.

So it's true that it has impacted the evolution of prices, but not that significantly today. So there is an erosion of the ICE prices, but it's also true that at least a vast majority of what we sell in used car sales, this has impacted, and that's the reason why we've got gross UCS that is declining, as mentioned.

At that, on the ICE, so there is this oil parameter that you mentioned. But I think there will be also other parameters that can impact in the coming months. I will take one that we don't see yet, but I think we will see, which is the impact of the input cost of the OEM. You've got a number of input costs that are increasing, for example, the cost of chips.

And that, given the magnitude of these increase in costs, it's difficult to think that in Europe, carmakers that in ICE are not making a lot of money. And we see that if you take the 3 main players of the industry in Europe that account for more than 50% of market share, they don't have a profitability that allow them not to pass part of their input cost into prices. So if this happens, and I think it will happen in the coming months, probably beginning of next year, that should have indirectly a positive impact on used car sales, ICE or BEV, but ICE in particular.

So we can see the negative impact of oil on the ICE, but I think there are other impacts that are also inflation impact that can be positive in the coming months. So we'll follow that regularly. And as we've been doing at the beginning of each year, we give you an indication about where we see the gross UCS result for the year -- the coming year.

In terms of that inflationary impact from higher chip prices, et cetera, do you see that as a comparable magnitude to the oil price impact, the negative oil price impact that we've seen so far?

We've not seen the impact today in the new vehicle prices, but I think we'll come to see it because it first hits the suppliers of the OEM. After that, it goes to the OEM. After that, the OEM pass it to the new orders. So there is always a lag between the moment where it happens and the moment where you see it in the new vehicles. For us, historically, when you got inflation on new vehicle, it's a positive on the used car because as we all know, the used car market and the new vehicle markets are highly correlated.

Sure. But in terms of the oil factor and the chip factor, do you think they're roughly balanced over time?

Should be balanced -- sorry?

Over time in terms of impact on UCS. We've had a negative impact from oil already. There will be a positive impact from chips in the future, perhaps. Do the magnitudes broadly offset?

In my answer was -- you were mentioning oil price, I was saying there are also parameters that impact the used car market. We all know that it's a market that is difficult to predict in terms of prices, and that's the reason why we fundamentally base our plan on what is in our hands, margins, OpEx. But my answer was to say, well, some people at the moment, just looking at the very recent months, take very negative view on this.

And they are not only bad news. And these things can evolve quite fast. In the coming years, the share of BEV used car is increasing. So when you've got oil prices that increased, that is helpful for BEV. So we'll be less unbalanced between ICE and BEV in terms of sales mix, which in scenario of oil price continuing to go up is helpful.

To the very left of the room, please.

Geoffroy from ODDO. I was doing a quick calculation on your targets for LCVs and retail, your 10% and 15% increase. It leads to a 7% decrease in the total fleet growth. It means that you will probably decrease by 4% on other areas. You mentioned indeed the U.K. Are there other countries or I would say, channels or things you would like to grow negatively?

And a second question is on the attachment rate of insurance that you mentioned. We can see from one of your competitor presentation that he has a much higher attachment rate. Is there any explanation for that in your view or maybe it's not completely comparable to what you described as attachment rate?

Do you want to take the second one, Berno?

Yes.

I will answer the first one first. Okay. On the numbers on the LCV and retail, we cannot addition them because part of the retail growth is with LCV. But to your point, it's true that we want to focus where we've got profitable growth. So in each country, we look at all the channels, we look at all the products, and we make choices, and we do not hesitate to decrease if there is an issue of profitability, to decrease the volume if there is an issue of profitability.

So the main geography where we think we're going to decrease in volumes is the U.K. There is no doubt with that. It's been the case in the last months and to say years. We've stopped one channel completely, and we are now looking at customers which have high complexity, high customization when we serve them, and low margins. And we get to them with either we modify the price or we stop that. So that's the only place where we've got a clear view to decrease because we think that at the moment, some customers are not worth in terms of profitability.

But these things can evolve. At one point in time in the U.K. market, I think a number of actors will be fed up to lose money. We've got one company, a leasing company, quite significant, that has been for sale for now quite a while. I don't remember how long, but I was proposed a deal in my previous life. So it's now -- I say it was maybe 2 years ago.

And while it's not the only player that has issues. So for the moment, we take actions, but we are committed to the U.K. because we think that long term, probably one point in time, the market will be taking into account that with the BEVs mandate in the U.K., you have to set the residual values at the right place.

So -- but to your question is, U.K. is the only geography where we plan to decrease for the moment, remaining super focused on how the market evolves and to be able to change our mind if needed. At that, it's more a question of granularity in each channel and to focus on channels that have a good perspective. That's the point. And Berno, if you can answer the...

Repeating your second question?

The question was the attachment rate in insurance compared to competition, but maybe if I -- okay, I will...

Okay. Yes.

I will answer and you will complement if it's not okay. First, when you talk about the ratio attachment rate, there are different ways to compute the calculation. We take the total fleet. We don't exclude things, and we calculate an attachment rate. So simple numerator, simple denominator. I think the competitor you're alluding to is not exactly doing that because what many competitors are doing, they take what they call the eligible fleet.

And the eligible fleet is, you say, well, there are a number of customers that have agreements, for example, for their insurance globally. So it's not a target. It's not a [ customer type thing ] addressed. So if you reduce the denominator removing the non-eligible fleet, well, your ratio is better. But from what we see, we are in good position, and we want to continue to grow by 3 points.

Yes. In addition to that, as part of the upsell, we also see opportunities where we insure vehicles that are not part of our fleet yet. So for instance, if we share a customer with a competitor, we have opportunities to expand even the insurance that we offer beyond the cars that are simply in our books.

And we're also considering offering that, for instance, to customers that are not customers to our either our fleet management product or funded fleet because it's sort of like a reverse upsell. You start with insurance. And after that, there's also an opportunity to sell additional services that we can provide. And that distorts maybe a little bit that percentage as well.

So in the middle, please. And then...

Mourad Lahmidi from BNP. So I have 2 questions. The first one is on the market consolidation and the impact that it could have had on pricing. Do you feel that the pricing environment has been more conducive, less conducive or neutral compared to the last 5 years? First question.

Second question, if you look at the very long history of your company, there was a time when UCS was negative, even your competitor has negative UCS. So I just want to, if you may, stress test this scenario, what would it take for Ayvens to post a negative UCS?

Okay. So about market consolidation. Well, the move has started because if you just look at the last 3 years, 4 years, finally, we combined ALD and LeasePlan. You've got Arval and Athlon that have combined recently, and you've got Free2move and Leasys that have combined in Leasys. So you already had 3 combinations.

What we've seen, and there will probably be more with some small players that have hard time to follow the pace in terms of investments and to be able, especially on IT to serve properly the customers. So I think we're going to have a continuous move on the consolidation. As we were commenting a bit earlier, compared to the scale that we got with our merger, some players felt they were lagging behind and that it was an issue for them. And so I've been much more obsessed by growth at what we've been.

Logically, when they get to a scale that is closer to us, I think the motivation to take significant risk to grow market share very fast will probably decline. But we don't count on that in our plan for the moment, but it could be something that could be an upside versus our scenario, but it's not embedded in our trajectory. We take the plan saying, well, competition will remain the same. And if there is a move in the pricing trajectory of some competitors, it would be a plus to our trajectory.

On the -- sorry, on the UCS, the question was in the history, negative UCS on a full year basis, it happened. But if you look on a 30, 40 years basis, it's really not common. And so the 2 characteristics, I would say, first, it's really not common. It happened in a crisis like the big financial crisis 20 years ago.

And the second characteristic is finally, it recovers fast. And that's something that is encouraging. Not to say a crisis on the UCS can happen, but history has shown that it recovers fast, which is something that we should have in mind.

After that, well, for us, at the moment, we are guiding on a net sales this year that is slightly positive, and we've not put any significant number for the coming 2 years because it corresponds to the fact that 2023 and 2024, our residual values were relatively high. And I was explaining, we decreased from the peak that was reached end of the 2023, we decreased our residual value steadily.

So these 2 years are a bit tense, I would say, on this respect on the BEV cars, even if the latest 6 months are helpful for BEVs. Prices on BEV used cars have increased by around 10% in the last 6 months in Europe.

So please. And then...

Harald Hendrikse from Citi. We'll try and stay away from residuals. I think we've done a lot of that already. Slightly different questions. Firstly, one of the slides you talk about transformation and looking at the growth opportunities. You've already talked obviously a little bit about reallocating capital to the best areas. But that line reads to me very much along lines of M&A. So maybe you can talk a little bit about that. How much would you be willing to spend? What you're looking at? What are those opportunities? Is it South America or -- right? It's clear you're looking at different markets potentially to grow and given that the core market is quite mature.

And then the second question is, I mean, something huge in autos, maybe less so in auto finance, but the EU is going to make, hopefully, some intelligent decisions one of these days regarding protecting the European automotive industry. Do you see any opportunities or threats to your business from that? Or is it largely irrelevant to you?

Well, I will start by the second question. So I suppose on the second question, you alluded to the discussions about the PHEV because European Union took action on BEV and we've seen an impact. And if we look at the numbers in H1 2026, penetration of Chinese in the BEV is around 15%. On the PHEV, it's 28%, which is a massive increase compared to the prior -- the same period of the prior year, which was, if my memory is correct, around 10%. So they moved, like, from 10% to 28% in 1 year.

And obviously, some voices in Europe say, well, we need to do something on PHEV as we did on the BEV. For us, I would say it can only be upside. I don't see any negative in that because if this happens, there will be a reduced pressure on the used car market because very aggressive PHEV from China today competes with some recent used cars, maybe not our 4 years cars, 4 years old car, but with some 2 years old car, but that drags all the market down on PHEV. So I only see an upside possible if this happened. And if nothing happened, well, it's like today.

On the M&A, I would say that at this stage, what makes sense for us is to use some bolt-on opportunities in the existing geographies. So I can see 2 kinds of M&A, countries in which margins are challenged. So I could give examples like Netherlands, which is a highly competitive market, one of the most competitive market. I think the sense of an acquisition would be to dilute more cost. Well, to dilute our cost, the same cost on more volumes.

And we could say in some countries in which there is a higher growth, it could be emerging markets or it could be in Europe, Eastern countries, for example, it could be to push more growth. So depending on the situation of the market that's there. But the U.S. in which both ALD and LeasePlan have been in the past, I don't think that's something open in the time frame of the plan.

It's a very different market. It's mostly fleet management, no residual value risk. And the market has consolidated quite a lot in the last years. So I don't see really the opportunity to go there successfully in the current conditions. So M&A will not be on that front.

Sorry, we have Delphine, and then you'll be next.

Delphine Lee from JPMorgan. Just 2 very quick questions to follow up on what we have discussed. The first one is just going back to used car prices, sorry. So you're assuming stable for ICE cars. And that assumption, I mean, you've talked -- you mentioned a few items that inflation from chips that you mentioned a bit before? Or I mean, if you could just explain a little bit because that's still 80% of the mix.

And then my second question is on your initiatives for retail for the retail segment, where margins are higher. Are you -- I seem to recall historically, you were a little bit more cautious about that. So I mean, because of competition and pricing, I mean, is it better now? And is that becoming a bit more attractive in terms of profitability?

Okay. Maybe I will start by the second question and come back to the first afterwards. What we call retail is any customers with a fleet between 1 and 25. So it covers SMEs and it can go to individual. But B2C customers on car typically are only 10% of our fleet globally. And I don't think we've got a lot of perspective globally to increase there in B2C.

I think we've got much more perspective to grow profitably in the SMEs business, including the craftsmen. I'm saying that because the B2C is typically owned by the captive through their network and the possibility, and they typically subsidize the rates and offer financial lease plus maintenance products. So if we were to push hard on this, I think profitability will be challenging.

On the SMEs, it's quite different, especially when you talk about the LCV. Because here, we are talking about fleets in which the discounts are much lower compared to discounts that you've got on individual key accounts. So profitability can be good. And they are a nice part of the business in terms of priority. I was -- we're pushing on LCV, because in LCV, what is important for the craftsman is uptime, because well, it's a tool to work. And if we're able, as Berno was giving the example in the U.K., to make sure that downtime is limited, you're giving a real service to the customer that is okay to pay for it because for him, each day of downtime is a loss of sales and revenue.

So to say that in the retail business, we can have accretive returns, and that's the case for the moment. Our retail business is accretive in terms of margin compared to the rest of the business, which is logical because in the big international key accounts, you're talking about companies that have professional buyers, make big tenders and our scale help us to be competitive and make money, but there is more possibility of profitability with the SMEs and the 1 to 25 retail business.

The first question was about the used car again, so on our price scenario, if I remember well. Just a reminder, so we sell today, 2026, around 12%, 13% BEV in used car sales. We sell around 10% of PHEV, and the rest is divided between diesel, gasoline and HEV, hybrid vehicle, hybrid, but not PHEV. So that's the 3 components of what you have. So it's around a bit less than 70% for ICE.

Our price scenario has been, and remains maybe with a nuance due to the Middle East war, that in the coming years, the price of ICE cars, be it in new vehicles and the used cars, should slightly go up. And we have an assumption that on the BEV, the prices, be it on the new vehicles and used cars, will be declining relatively fast. That's the assumptions that we've taken, which are linked on the BEV to the fact that there is harsh competition coming from the Chinese, that come with a technological advantage and put a lot of pressure on the price in the market. That's the reason why we have taken this assumption, and we think it's correct for the coming years.

On the ICE, there was one question just previously about measures of European Union on BEV and PHEV. But on the ICE, it's not where the Chinese are traditionally performing. Their technology is excellent on BEV and PHEV, but not traditionally on ICE, and they don't invest a lot. So it means that's where the legacy carmakers can still make money, and that's where they've got more opportunity to push the price up. And they need to do it because they are super challenged on the BEV.

So if they want to be profitable, they need to keep some profitability somewhere. So that's the reason why we think that on the ICE, there will be more opportunity. On top of that, from a used car perspective, you've got the obsolescence between used car ICE and new vehicle is not that much. And as carmakers do not invest heavily now in gasoline and diesel, the pace of progress will not be that big. So we think this will be helpful for the ICE.

And last, on the ICEs, there are still export markets because here, we are most of us Europeans. But traditionally, some ICE cars are exported to emerging markets closer to Europe, which are not electrified at all, and that will continue to sustain the demand for used car ICE. I hope it helps you understand the dynamics.

So we had a question in the middle.

Philippe Houchois, Jefferies. You mentioned at some point in discussion, autonomous cars. And I was curious about the impact on the one hand, on ADAS, assisted driving, how is that affecting positively or negatively the cost of insurance? Arguably, cars are safer, they should be cheaper to insure, but I'm not sure. They're also more expensive to repair.

The other part is on robotaxis. I think that's going to be potentially a segment that grows maybe in the U.S. before Europe. But how do you see Ayvens' involvement in that? Now, would you fund the fleet of robotaxis? That's relatively simple. Would you see a role in maintaining or all the labor that exists around robotaxis, you may get rid of the driver, but you need to maintain fleets and it's hard to scale those fleets. I'm curious to have your thoughts on that.

Okay. I will start with the robotaxi. I think on the autonomous vehicle, the robotaxi will be the first to develop. And in fact, you were mentioning the U.S., but we've got in China, a number of cities in which the robotaxis are already implemented, and it seems to be providing a good service to customers. So this will -- is coming in Europe. In fact, there are some tests while here in London and in a few cities.

What is interesting is the companies that develop autonomous vehicle come to us. So we start to engage discussions because -- which means they see us as adding value or they will not come to us, basically for fleet management and also for the financing and both go together. What we see is every actor in the value chain tend to specialize on his part.

So you've got the OEM that design cars that are fit for autonomous vehicle. You've got the suppliers that develop the technology for autonomous vehicle. Some companies do both, but not a lot. You've got basically Tesla that is doing both. A few other ones, but among all the carmakers, it will be more an exception. So they divide that.

And after that, you've got the companies that get in touch with the customers to find the customers for robotaxi and they specialize to have the app that we all use to call a robotaxi in California or in other places. And of that, with people like us that have an expertise in maintaining the car in fleet management. So we think that this will continue that way.

So we don't see robotaxis and autonomous vehicle as a threat. We see that more of opportunities because robotaxis will be used at a high usage. Normally, when you got a robotaxi, you don't need 3 drivers. You just have a car that can run permanently except for maintenance, which means that if we finance them, the residual value should not be high because the asset will be used at max.

So that's the reason why we think that, first, we've got a clear role on fleet management there. And second, on the residual value topic, I don't think it's an issue. But to be developed, that's the reason why I've put that in the third pillar because for the moment, I don't think it will be '27, '28 significant volumes, but it's important to prepare for the future. The first question, sorry, Philippe, was?

Insurance.

ADAS and insurance. Yes. Well, if we look at the number of accidents in Europe or in the U.S. in the last decades, it's a permanent improvement, which I think is very good for our society. On the other hand, the cost of insurance has not evolved that favorably and maybe you also feel that pain personally, except if you lease your car with Ayvens, which you should do.

And the reason being that the cost of the technology embedded in the cars tend to increase. So the frequency of events has decreased, but the cost of events has tend to increase, which has maintained a business in insurance that is quite attractive to companies like us.

Peter, one more question.

Okay. One last question. So listening to the presentation today, it strikes me, Philippe, that you're arguing that scale is actually rising in importance in this industry. You highlighted technology spend as a rising fixed cost, but you also highlighted further procurement gains. And I would highlight also cost of capital coming down, which has been a fantastic competitive point.

You've also discussed, and the discussions referenced basically OEMs under a lot of pressure, much more pressure in Europe than probably they've ever seen. So I guess, could you talk about, do you expect further consolidation in the industry? And does the 14% to 16% target incorporate further consolidation? Is that upside? And if there isn't consolidation, why wouldn't there be consolidation going forward given the trends you've highlighted?

Well, so consolidation has started, as you were saying, it's compared to 5 years ago, it's now a reality. And I think it will continue because a number of players have burnt themselves with the residual values. A few years ago, when I was in the auto industry, I was running financial services and there were dealer groups that were saying, I'm going to develop my own financial services. Some have tried doing leasing. And they have discovered the hard way that not being a pure player is not easy because it's not a business that is that easy to operate.

There is -- and to be a pure player managing that for long with people totally dedicated has value. On top of that, diversity of geographies, diversifying our risk between a big number of brands, a big number of models, a big number of geographies is helping. And that we can see that if we look only at 2026, we've got places where our BEVs, used car are profitable now, which was not the case 6 months ago, places where it's still not profitable. ICE evolution have been different.

So this diversification that I've mentioned, and that is linked to scale has value. So being a pure player and diversification of risk are 2 key components. And I think that will lead progressively to more consolidation, which doesn't mean that you cannot have some small niche player on a very specialized item, and there are some niche players. But very often, they've got a ceiling in terms of growth because they've got issues with funding and they've got issues with this concentration of risk. And we have not seen this very niche player growing very fast.

Regularly, you see some actors. And I can think about one actor in Italy that grew very fast. And apparently, there are rumors that they are for sale because well, they had a hard time with the residual values. So that's the reason why I think there will be a consolidation and consolidation should be helpful for pricing, but we don't base the price or the plan on that. There was a question over there. That gentleman in the...

Reg Watson from ING. I think one of the messages I've taken away from the presentation today is that the next 3 years are going to represent a period of navigating significant change in the industry. And I think part of the disappointment that was evident in the share price this morning was that perhaps the growth wasn't coming through in a way shareholders would expect. Do you believe that once you've navigated this change and the industry moves to 100% BEV, that we'll be sitting here having this discussion in 3 years' time and you'll be perhaps targeting higher levels of growth? That's the first question.

Second question is, having used the morning between your press release and the discussion now, plugging your targets into the model, it suggests you're going to generate about EUR 1.5 billion in excess capital over and above the 12.5% core equity Tier 1 requirement. Is that a number you recognize and will return to shareholders? It seems reasonable given that you've done a EUR 450 million buyback this year. So EUR 500 million a year for the next 3 years, why not?

Okay. On the excess capital, I will leave Patrick answer which -- and I will answer the first question. For me, it makes absolute sense to think that growth will be superior at the end of the plan. And afterwards, when we talk again within 2 or 3 years, we'll talk about more growth. It makes absolute sense because I'm convinced, I was saying that gradually, we'll talk about a residual value risk on BEV that is similar to what we had during decades with ICE.

There is no reason that it changes when the acceptance of the used car of the customers becomes similar because people understand that, well, see that charging time has improved, that range has improved, that they can find that the infrastructure in Europe has increased. Why would they go -- why wouldn't they go for a BEV? And that's exactly what we've seen in the last 6 months with the oil price raising. So this is a sense of history. So the answer to your question is a definite yes. And I will let Patrick answer to the second question that was -- or the first one that was about cash.

Capital. You mentioned, if I understood well, an amount of EUR 1.5 billion. So we said we would be returning excess capital to shareholders as we've been doing for the past 2 years. Probably a bit south of the amount you mentioned because you need also to take into account that we mentioned a regular payout dividend ratio of 50% to 60%, which is an increase to the 50% we had before, but it's mostly fine-tuning.

We're close to 5:00. Maybe a few last more questions from Sharath.

Sorry to keep you longer. Just one last one on SRTs. I understand that your stance hasn't changed, while some of your competitors are more open. So I wanted to understand your thoughts on this particular topic.

Thank you. So on SRTs, indeed, the stance has not really changed. We look at potential market transaction on that. For the time being, the amount of margin we are supposed to give away to generate the transaction is superior to the minimum level we are ready to do.

And don't forget also to have in mind that when we look at SRT, we want to have transaction which translate the risk not only on the leasing, but also on the residual values because otherwise at some point, would be a balance sheet with only residual value, so much more -- much riskier in effect. So all this together makes it that there can be opportunity in the future. We are not at this point yet.

But this is something we track regularly to check opportunities.

Well, thank you very much. It's 5:00. So we are right on time. We have some drinks upstairs, if you want to join for our last few words. Thank you very much.

Ladies and gentlemen, welcome to the Ayvens Q2 2026 Results Conference Call. Today's speakers will be Philippe de Rovira, CEO; and Patrick Sommelet, Deputy CEO and CFO.

I now hand over to Mr. Philippe de Rovira. Sir, please go ahead.

Well, thank you. Good morning, ladies and gentlemen. Welcome to Ayvens Q2 2026 Results Conference Call. So as I said, I'm hosting this call with Patrick Sommelet, our CFO. And first, I will present the highlights of Q2, then Patrick will comment on our detailed financial results. We'll then take your questions.

So let's go directly to Slide 5 on the highlights of the financial performance. Q2 2026 has been a solid quarter for Ayvens with the continuation of prior quarter trends, notably concerning the normalization of the gross UCS result. We remain disciplined in executing our roadmap. We generated over the quarter EUR 112 million of synergies, in line with the full year guidance of EUR 440 million. In parallel, our focus on basing our profitability on robust margins and cost efficiency has helped us navigate this moving environment.

First, margins stood at a strong level at 609 basis points of earning assets, the highest level since the creation of Ayvens. This increase in margins has helped compensate for the normalization of the gross used car sales result, which has been on a similar trend since Q3 2025.

In Q2 2026, the gross UCS stood at EUR 326 per unit compared to EUR 1,234 in Q2 2025 and EUR 470 in Q1 2026. In net UCS, the decrease was exacerbated by higher depreciation adjustments at minus EUR 50 million versus minus EUR 38 million in Q2 2025. This has translated into net UCS at minus EUR 62 per unit compared to EUR 970 in Q2 2025. Higher margins and lower costs resulted in reducing the underlying cost/income ratio to 50.3%, 7.4 percentage points below its Q2 2025 level.

Bottom line, net income group share stood at EUR 248 million, a decrease of 8.7% compared to Q2 last year. On the back of these solid results, coupled with the capital buildup over prior quarters, I'm pleased to announce the distribution of EUR 700 million to our shareholders, which comes in addition to our distribution policy of a 50% payout ratio. This new exceptional distribution brings our CET1 ratio to 12.6%, in line with our cruising level and illustrates our strong commitment towards value creation. RoTE stood at 13.4% in Q2 '26. So it was broadly stable year-on-year, supported by the exceptional distributions operating in Q3 2025 and Q2 2026. Overall, this financial performance confirms that Ayvens is well positioned to reach its PowerUp 2026 financial targets.

And let's now turn to the next slide on our H1 2026 results. Let me just highlight the key points for the first -- this first half of the year. First, in the backdrop of ongoing UCS result normalization and an uncertain geopolitical environment with the war in the Middle East, our profit before tax has been stable in H1 '26 compared to H1 2025. Most of the decrease in the net UCS result was offset by the EUR 100 million increase in margin and the EUR 88 million decrease in total operating expenses. RoTE for H1 '26 stood at 14.1%, supported by the decrease in the tangible equity at the end of the semester due to the new distribution to shareholders. Earnings per share grew 8.9% compared to H1 2025. The increase was further enhanced by the cancellation of the shares bought back last year.

Let's now turn to Slide 7 on fleet and earning assets. Fleet numbers continue to trend lower during the quarter. Funded fleet decreased by 82,000 units compared to Q2 '25, 19,000 units, versus Q1 2026. We have continued to reduce our fleet in the nonprofitable channels, notably in the U.K. Nevertheless, order intake is showing good momentum, which is expected to materialize in the fleet in the coming quarters. Earning assets stood at EUR 52.6 billion, broadly flat compared to same quarter last year and Q1 '26. On the right-hand side, deliveries by powertrain for passenger cars and light commercial vehicles showed notably continued increase in BEV penetration at 31% compared to 27% 1 year earlier and 29% in Q1 '26, in line with market evolution. Conversely, ICE penetration was down 8 points at 26% versus 34% 1 year ago.

And I'll now hand over to Patrick to present you the details of the Q2 '26 financial results.

Thank you, Philippe, and good morning, ladies and gentlemen. So let me start with the evolution of our gross operating income on the left-hand side. At EUR 754 million, it is down 11.8% compared to Q2 '25 with higher margins partially compensating for lower net used car sales results. Margins grew by 7% from EUR 712 million in Q2 '25 to EUR 762 million this quarter. This reflects a continued improvement in the leasing margin and in the service margin to a lesser extent. Net UCS results decreased to minus EUR 8 million compared to plus EUR 143 million in Q2 '25, on which I will comment in a few minutes.

Moving to the next slide, strong margins. Total margin stood at EUR 762 million, which is up EUR 15 million versus Q2 '25. This includes minus EUR 38 million of nonrecurring items consisting of hyperinflation in Turkey as the gap between CPI and the auto price index in the country has remained elevated.

Turning to underlying margin. They stood at EUR 800 million versus EUR 731 million last year. This is the highest level since the creation of Ayvens. In basis points, they were at 609 basis points this quarter versus 550 in Q2 '25, continuing the increasing trend seen throughout '25. This improvement is driven by our continued strategic action to focus on profitability and asset risk management. Underlying margin in euro increased by EUR 69 -- or EUR 69 million or 9.5% versus Q2 '25 despite the slight decrease in earning assets.

Looking at the margin breakdown, leasing margin continues to be strong, reflecting higher leasing revenues and lower interest charge across all funding sources. Services margin also increased through albeit to a lower extent compared to Q2 '25. The increase in service margin results is the result of the ramp-up in synergies and higher margins on repair, maintenance and tires across the group.

If I move to the next slide on UCS, we see that net UCS results are driven by negative prospective depreciation. So I will start with the total UCS results whose evolution is represented on the right-hand side, as you can see, the normalization trend of our gross UCS results continued in Q2 '26. The net UCS result shown as the full line on the graph decreased to minus EUR 8 million compared to positive EUR 143 million in Q2 '25. This is the result of a significant decrease in the gross UCS results from EUR 181 million in Q2 '25 to EUR 42 million this quarter.

Since the start of the conflict in the Middle East and the related surge in oil prices, we observed diverging trends across powertrains. Total cost of ownership advantage of BEV versus ICE is strengthening, which is driving used car demand upward for BEV. As a result, our result on BEV is improving sharply month-over-month and is becoming less negative. At the same time, demand on ICE, which remains predominant in our mix of cars sold is softening and so is our gross UCS results. This mix effect is hence driving our gross results per unit downward at EUR 326 per unit compared -- to be compared with EUR 470 in Q1 and EUR 1,234 in Q2 '25.

Turning now to depreciation adjustment. They amounted to minus EUR 50 million versus minus EUR 38 million in Q2 '25. Last year, in H2 '25, we changed our price scenario to account for a deterioration in BEV prices, notably in the U.K. market. Since we have been booking each quarter new negative prospective depreciation accordingly, in Q2 '26, in light of the current moving environment, we have also slightly adjusted downward our forward-looking price scenario, resulting in minus EUR 41 million new prospective depreciation versus minus EUR 21 million recorded in Q1 '26. Other moving parts are detailed on Slide 17 in the appendix.

Let's turn to the next page, on operating expenses. Total operating expenses are trending down in continuation of prior quarters, showing a decrease of EUR 37 million compared to Q2 '25. Costs to achieve amounted to EUR 7 million compared to EUR 26 million in Q2 '25. As indicated at the beginning of the year, we projected CTA to be below EUR 30 million for full year '26. Excluding CTA, underlying costs stood at EUR 403 million in Q2 '26, a decrease of 4.3% or EUR 18 million year-on-year. This improvement reflects our continued cost discipline and increased cost synergies.

Combined with higher margins, these lower operating expenses resulted in strong positive jaws with the underlying cost/income ratio at 50.3%, an improvement of 7.3 percentage points compared to Q2 '25. For H1 '26, our cost/income stood at 52.1%, on track with our cost/income target guidance for around 52% for the full year '26.

Let's move to the next page for the reminder of -- the rest of the income statement. First, with cost of risk, which stood at 12 basis points, a lower level compared to previous quarter. It was driven by the reversal of a provision on specific credit file and lower credit risk across countries. Profit before tax is down 12% versus Q2 '25 at EUR 340 million as a result of the decrease in the net UCS results, which was partially offset by higher margin and lower operating expenses. It also includes a EUR 11 million gain on the sale of our 49% equity interest in LeasePlan Emirates that was completed last June.

Net income group share stood at EUR 248 million, a decrease of 8.7% versus Q2 '25. Return on tangible equity stood at 13.4% for the quarter. H1 '26 return on tangible equity is higher at 14.1%, as it doesn't take into consideration the level of tangible equity at the end of March '26.

Please now turn to the next slide on RWA and capital. RWA stood at EUR 53.2 billion, an increase of EUR 0.6 billion compared to Q1 '26. The increase in credit RWA mainly reflects both higher volumes of delivered vehicles awaiting contract commencements and the aging of the running fleet resulting from lower fleet numbers, both of which have a heavier RWA weighting.

The graph on the right-hand side details the 86 basis points of CET1 capital that Ayvens has generated between -- on H1 '26. This capital buildup results from, first, a strong organic capital generation of 69 basis points on the first quarter -- on the first half of '26, reflecting our good level of profitability. Second, and as you can see, the credit risk RWA optimization communicated in Q1 '26 generated a 44 basis point increase. And finally, the credit risk RWA increase this quarter, which I just mentioned, is representing an impact of minus 37 basis points. On that basis, the Board of Directors authorized a total distribution of EUR 700 million, representing 137 basis points of CET1 ratio, bringing it down to 12.6%, closer to our target.

Now, Philippe will conclude on the presentation with the next slide.

Thank you, Patrick. So in summary, we're on track to achieve our financial targets for the year. We are now ready to move on to our next phase of development. As indicated last February, we will hold the Capital Market Day on the 21st of September. It will be held in London in Canary Wharf, and I look forward to meeting you there and presenting our strategic and financial roadmap for the years to come. This concludes our presentation. Thank you for listening. We are now ready to take your questions.

[Operator Instructions] The first question is from Geoffroy Michalet with ODDO.

Congratulations for the very good results. Two questions for me to start with. The first one on the margins above 600 basis. Is it something that we would call a new norm? And were there any kind of one-offs that were a bit boosting it? First question.

The second question is on the cost reduction. Could you give us a bit more information of where did you find, let's say, the pockets of reduction? You mentioned in the previous call that synergies were a bit over, now it's more the general cost that you needed to adjust. Do you see still headroom to improve there?

Thank you, Geoffroy, for your 2 questions. So on the margins, I think we should have in mind that what is important for the company is to base our profitability not on UCS, but to base the profitability of the company on margins and OpEx reduction. So margin can vary, as you can see, between quarters, but it's important to have robust margins, and there is continuous work in terms of selection of channels, customers for the leasing margin, but also continuous work on the service margin to work on the cost. And it's important because in the service margin, you need to have in mind that you've got many times more cost in the service margin than in the OpEx. So that's a real point of attention.

And it's all the more important that in the context of electrification, if we want to keep our margins at a good level, we need to work hard on these costs, including in the service margin. So can be some variations quarter-on-quarter. But to your question, there was no special one-off in Q2, and we continue with our policy to drive this margin to be robust.

On the cost reduction, I think it's -- so we still have significant synergies I was mentioning at the beginning of the call. On the quarter, the synergies are at EUR 112 million, which is absolutely consistent with the EUR 440 million that we are going to deliver for 2026. I think what is important for the company is to work on all components and to drive the culture that management in each country is delivering value when it brings solution to decrease costs, which is maybe a culture that is a bit different from the past. We're an industry in which in the 2010 decade, I would say what was important was to grow very fast the top line and to grow the OpEx a bit less than the top line. And we've moved in an industry in which there will be less growth, and that's what we see globally, in which the focus on cost is higher.

So to be more specific, we try to push harder on the support functions. So in the improvement, you've got a significant reduction of cost in IT, in HR, in finance, in the support functions more than in the operational functions. And that is something that we will come back on during the CMD in September.

The next question is from Mourad Lahmidi with BNP Paribas.

So I have 2. The first one is on the prospective depreciation that -- on the running fleet that you booked in the second quarter of 2026. My understanding is that most of that is related to the U.K. fleet. So my question is how prudent were you in the fleet reval exercise on that fleet? And should we see some carryover of that going forward?

And my second question is that -- so during 2022 and 2023, you had more contract extensions, which translates into less cars sold in '26 and likely 2027. Would you have any ballpark assumption in terms of how many cars are you going to sell in the next couple of years due to that?

Yes. Thank you for the questions. So on the first one, you're right to say that there is an impact of the U.K. on the PDs as part of the effect, and that's related to the PDs that we took last year and that have induced an impact this year.

The second part is we've maintained our global scenario of price for the coming years, but we've made it slightly more conservative on all energies on the back of the external macroeconomics and the very volatile environment. So the scenario is very consistent with what we had before, slightly more conservative. So these are the 2 reasons for the PDs that we see on Q2 2026.

On the new car sales volume, I think your comment is probably due to the fact that -- or the question that you've seen that in Q2, our sales volume on UCS are a bit lower compared to what it was in the previous quarters. And it's related to what you've mentioned. And I think this quarterly volume is quite representative of what we should have in the coming quarters because it's true that 4 years ago, the number of cars put on the road were lower than the years before.

[Operator Instructions] The next question is from Nicolas O Sullivan with UBS.

Actually, I would have a question on volumes and then on capital returns. I would like to ask on the volumes, if you could tell us a bit about the segments where you're actually seeing growth, perhaps by geography and by customer segmentation.

And then, on capital return, 2 things. Number one, are you still committed to 50% of full-year EPS paid in dividend in Q4 and -- announced in Q4 and then still on capital returns? So today, you're giving us exceptional capital returns to bring back your CET1 closer to 12%. But you were at 13.9% in the prior quarter. And in Q3 2025, you gave us also EUR 700 million after CET1 being at 13.5%. So I just wanted to know how long shareholders should wait or expect to wait in the future for you to build excess capital and then to distribute to shareholders.

Okay. So thank you, Nicolas, for the 2 questions. On the first one, the geographies in which we see commercial activity that is more favorable are mainly the south part of Europe, mainly Spain and Italy, in which order intake has rebounded more significantly compared to the other countries versus last year, which is both an effect of the market and both an effect that if you take Spain, for example, 1 year ago, we were in the migration phase and we had some internal issues that were not making the development of the business very favorable. So it's both a market-driven rebound on orders and a question related more specifically to Ayvens.

On your questions on segments or type of customers, the big IKA, International Key Accounts, are not a segment that is going to grow a lot in the coming years. It's more on the smaller size of fleet that we will find growth, but we will come back to that during the CMD in September. As to your question on capital return, the cruising level that we've indicated for CET1 is 12.5%. That's what we've indicated in the last quarters, and that's what we'll feel comfortable. Our payout ratio is 50%. And for the rest, I think -- please allow me to refer to the next CMD to explain what we're going to do in the future.

We have no more questions registered at this time. Mr. de Rovira, the floor is back to you for any closing remarks.

Okay. Well, thank you. Well, thank you for your attention and your questions. As always, our Investor Relations team is ready to answer any further questions you might have. So do not hesitate to contact them. And again, thank you. Goodbye.

Ladies and gentlemen, this concludes today's Ayvens conference call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, welcome to the Ayvens Q1 2026 Results Conference Call. Today's speaker will be Philippe de Rovira, CEO; and Patrick Sommelet, Deputy CEO and CFO.

I now hand over to Mr. Philippe de Rovira. Sir, please go ahead.

Thank you. Well, good morning, ladies and gentlemen. Welcome to Ayvens Q1 2026 Results Conference Call. I'm hosting this call with Patrick Sommelet. And first, I will present the highlights of Q1, then Patrick will comment on the detail of our financial results, and we will then take your questions.

So let's now go directly to Slide 5 on the highlights of the financial performance. Q1 2026 is a good start to the year for Ayvens as the group has once again delivered a strong set of financial results. First, margins stood at 587 bps of earning assets, an increase of 25 bps compared to Q1 2025. This reflects our focus on profitability with an adequate balance between growth, profitability and tight monitoring of asset risk.

This increase in margin compensated the normalization of the used car sales results, which has continued in Q1 2026 at a similar pace as in Q4 2025. In Q1 2026, the gross UCS stood at EUR 470 per unit compared to EUR 1,229 in Q1 '25 and EUR 702 in Q4 2025. The decrease was mitigated by lower depreciation adjustments. On a net basis, UCS stood at EUR 403 per unit compared to EUR 703 in Q1 2025.

Higher margins and lower costs resulted in strong positive jaws again. Ayvens' underlying cost/income ratio has continued on its decreasing trend at 54%, 4 percentage points below its Q1 2025 level.

Bottom line, net income group share stood at EUR 266 million, an increase of 21% compared to first quarter of last year. EPS increased by 29% versus Q1 '25, reaching EUR 0.31 per share and ROTE increased to 13.9% versus 11% in Q1 2025. This financial performance confirms that Ayvens is well positioned to reach its PowerUp 2026 targets. These strong results, coupled with some additional RWA optimization this quarter again have led to a CET1 ratio at 13.9%, which is above our target, same as last year. This is a topic that we will address as we progress into 2026.

Finally, we have successfully executed 2 new bond issues in euros since the beginning of the year of EUR 750 million each. These are green bonds that attracted a lot of interest from investors and the strong appetite has translated into historically low spreads for the group, including for the low second issue that was executed in capital markets disrupted by the war in the Middle East.

Let's now turn to next slide on the key developments for the quarter. During the period, we continue to deliver on key priorities. First, regarding integration. India and Germany were migrated, respectively, in March and April, and we are on track to deliver our target of EUR 440 million of gross synergies for the full year 2026.

Regarding our ESG commitments, the group has reached an important milestone as we obtained the validation of SBTi on our CO2 emissions reduction targets on all scopes. It makes Ayvens the first international leasing company to obtain such a validation for both near and long-term commitments and strengthens the credibility of our actions for a sustainable future.

Finally, as you know, Ayvens entered the MSCI Standard Index in Feb, thanks to the increase in the floating market capitalization over 2025. This has reinforced Ayvens' visibility on equity markets and has led to an additional increase in the daily liquidity of the stock.

Let's now turn to Slide 7 on fleet and earning assets. Fleet numbers trended lower during the quarter as a result of the continued strategic focus on profitability and asset risk management throughout 2025. Total fleet has decreased by 98,000 units compared to end of 2025, mostly on the back of fleet management contracts. We didn't renew one large contract, which was not in line with the group's expected profitability. Impact on services margin is very marginal.

Earning assets stood at EUR 52.5 billion, a 1% decrease versus end of 2025. Deliveries per powertrain for passenger cars and light commercial vehicles showed stability of BEV penetration at 29% compared to 28% 1 year earlier, while PHEVs and hybrid penetrations increased to 12% and 29%, respectively, in Q1 '26 compared to 9% and 26% in Q1 2025. Conversely, ICE penetration was down 8 points at 27% versus 35% 1 year ago.

I now hand over to Patrick to present you the details of the Q1 2026 financial results.

Thank you, Philippe, and good morning, ladies and gentlemen. So let me start with the evolution on Slide 9 of our gross operating income on the left-hand side of the slide. At EUR 816 million, it is stable compared to Q1 '25, but with a better quality mix as higher margins in euro offset the decrease in the net UCS results. This 7% margin increase from EUR 708 million in Q1 '25 to EUR 757 million this quarter has been achieved despite the decrease in the fleet, thanks to the revamped profitability of our portfolio and contracts.

Net UCS results decreased to EUR 59 million this quarter compared to EUR 111 million in Q1 '25, in line with our anticipation of normalization of used car sales results.

Let's now move on the next slide on margin. Total margins stood at EUR 757 million, which is up EUR 49 million versus Q1 in'25 on the back of better underlying margins and lower nonrecurring items. These items consisting mostly of hyperinflation in Turkey reduced by EUR 26 million versus Q1 '25.

Turning to underlying margin, they stood at 587 basis points versus 562 in Q1 '25, continuing the increased trend seen throughout 2025. This improvement is driven by our focus on profitability, supporting our strategy of value versus volumes.

Underlying margins in euro increased by EUR 23 million or 3% versus Q1 '25 despite the decrease in the earning assets. Looking at the margin breakdown, leasing margins continued to be strong, reflecting higher leasing revenues and lower interest charge across all funding sources.

On services margin, they decreased compared to Q1 '25, mainly due to a base effect indeed. They were positively impacted in Q1 '25 by accounting harmonization in the context of IT migration. In parallel, interest margin diminished slightly due to higher quantity of claims as a result of adverse weather conditions in the first quarter of this year.

Let's move to the next page on UCS. So starting with the total UCS results, whose evolution is represented on the right-hand side, as you can see, the normalization trend of our UCS results continued in Q1 '26. The net UCS results shown at the full line of the graph decreased to EUR 59 million compared to EUR 111 million in Q1 '25. This is the result of a significant decrease in the gross UCS result from EUR 193 million in Q1 down to EUR 69 million.

Across all powertrain, January was particularly weak with a gradual improvement seen throughout February and March. This effect was partially offset by lower negative depreciation adjustment, which stood at minus EUR 10 million. This minus EUR 10 million depreciation adjustments include notably minus EUR 21 million prospective depreciation, driven mostly by the evolution of the U.K. BEV market. Other moving parts are detailed on Slide 16 in the appendix.

Per vehicle, as shown on the left-hand side on the dotted line, gross UCS results per unit stood at EUR 470 versus EUR 1,229 in Q1 '25. And on a net basis, the decrease is less steep at EUR 403 versus EUR 703 last year.

Let's turn to the next page on operating expenses. Total expenses are trending down, showing a decrease of EUR 51 million compared to Q1 '25. Cost to achieve amounted to EUR 4 million compared to EUR 36 million in the same period last year. And as guided at the beginning of the year, full year CTA is estimated to be below EUR 30 million in '26.

Underlying costs are down EUR 18 million year-on-year, a decrease of 4.2%, thanks to our continued cost discipline and increased cost synergy. So this combined with higher margins, we have lower operating expense with higher margin, which generates strong positive jaws with an underlying cost-to-income ratio at 54%, down 4 percentage points compared to Q1 '25.

Let's now turn to the next page with the rest of these results. So you see that on cost of risk, we have a decrease of EUR 5 million in Q1 '25 at EUR 26 million or 19 basis points of average earning assets. Profit before tax is up 15% versus Q1 '25 at EUR 365 million. So this is a result of increasing margins and lower expense, which more than offset together the decrease in the net UCS results. And net income group share reached EUR 266 million, an increase of 21% versus Q1 '25.

So now we can turn to next slide on RWA and capital. So RWA at the end of Q1 '26 stood at EUR 52.6 billion, which is a decrease of EUR 1.2 billion compared to Q4 '25. This decrease mainly comes from our continuous effort to optimize our RWA with 2 actions this quarter. First, a decrease of EUR 1 billion, which was achieved as a result of the netting agreement with Societe Generale. This agreement allowed to net off loan liabilities and cash deposits to Societe Generale and thus exclude this deposits from RWA competition.

Second, a further reduction of EUR 700 million, which is linked to the methodology alignment between accounting value and risk exposure value for the computation of earning assets. These 2 actions were partially offset by the increase of EUR 600 million, mostly from off-balance sheet items relating to forward deposits and a slight increase in order book.

This reduction in RWA, together with a strong organic capital buildup led to an increase in Ayvens' CET1 ratio at 13.9% versus 13.2% in Q4 '25, a level which is above our target.

So this concludes our presentation. Thank you for listening, and we are now ready to take your questions.

[Operator Instructions] First question is from Jacques-Henri Gaulard, Kepler Cheuvreux.

I had 2 questions. The first one is there was press reports about your agreement with Renault about remarketing, I would say, warehouse and factory that's going to help you obviously increase the leasing life of some of your vehicles. If we could have a little bit more color on that, that would be great. That's the first question.

And the second one, obviously, the environment has totally changed with what has happened in the Middle East. And I was wondering if you were seeing a bit of change in demand and if you had any sense about the impact that would have potentially on your used car results going forward?

Well, the agreement of -- with Renault, I would say, is part of our focus to make our remarketing more professional and more efficient. So we've got a lot of work on this activity. And I would say it combines a number of actions that are to make it simple to control much better the pricing, to control much better the channels in which we sell in and to control the cost that we generate when we have to remarket the car.

So this agreement is helping us to answer these 3 -- well, not all the 3 on this one, but it's contributing to these actions. It's -- but the action plan that we are remarketing is much broader than this one-shot agreement and it's something that we are deploying in all countries to have an action plan on the 3 dimensions that are mentioned.

So it means that to be much more KPI-driven that we were at the level of detail on remarketing that is much higher compared to what we were doing, because I think that we've got opportunities in the remarketing area and that will be important to be able to address the challenges of the coming years.

On the Middle East, well, what we can see for the moment related to UCS is we've seen in the second part of March and in April that in the northern countries you've got -- when saying northern countries, I would have mentioned, for example, the Netherlands, but not limited to that, you've got some customers that are asking now for BEVs that were not asking for BEVs before. And it's true that in the last weeks, we've seen in these markets an increase in prices in BEV, which is obviously a positive. And then how long will it last? It's really difficult to say, because is it just a one-shot leak to the war in Middle East or is it a more structural trend because customers will say, well, finally, it makes sense. Frankly, it's difficult to say. But that's what we see.

So that's a positive. On the other hand, on the southern Europe countries the global situation tends to be a slowdown in the demand of cars, which are mainly ICE in southern part of Europe. So all in all, when I look at the UCS, what we've seen is Jan that was very low, Feb, which was better than Jan, March that was better than March -- sorry, March that was better than Feb. And we expect April to be more or less at the same level as March with a change in the mix, as I was mentioning.

Next question is from Sharath Kumar, Deutsche Bank.

Firstly, on the CET1 trajectory, I'd say is very encouraging. Again, thank you for the additional color on the moving parts. Is it fair to say that it would continue to grow in the coming quarters given the strong organic capital generation? And would Q2 be still the right time to expect this capital distribution? And similar to 2025, can we expect a broadly even split between dividends and buybacks? So that is the first one.

Second is on fleet growth. It was negative at minus 3% in the quarter. If you could elaborate on the drivers? And would you again stick to your full year guidance of flat fleet, which means -- which implies some growth in the remaining quarters? And if you could also give some color on the competitive positioning.

And finally, interested in hearing your thoughts in the autonomous vehicle, which has been developing at a rapid pace. How do you see your positioning? Do you see yourself as a net winner, again, given the light of recent developments. Give your updated thoughts.

Okay. Okay. So the first question was about the return of excess capital. So as mentioned in my introduction, it's clear that the level of CET1 is significantly higher compared to our target and the cruising level that we feel comfortable. So we will address that as we progress in 2026.

You've seen that we've done that in 2025, and we'll address that later on in 2026. We cannot give more details at that stage. But obviously, we are committed to returning excess capital.

On the second question, I think it was about the fleet NEA evolution. So what I can say is the evolution of NEA was exactly at the level expected in our internal budget, and our internal budget is consistent with what we told to the market a few months ago in which we were saying that the NEA will increase with a small 1-digit progression and that the fleet we wanted to stabilize it.

So for the moment, this is consistent with our planned trajectory. And what we can say is the order intake of Q1 2026 has been around 20% above 2025 -- Q1 2025, which was a low point. And we've done that maintaining the same rigor in terms of focus on the profitability of the orders.

But all in all, you remember that our priority is value more than growth. So we consider that Q1 is consistent in terms of NEA and fleet compared to our expectations. But anyway, it's not the top priority. The top priority remains the focus of value creation.

You had a third question, but I must admit that I'm not sure I have understood it because the line is really not good. So if you can repeat the third question. I thought it was about autonomous vehicle, no? Can you confirm?

Yes, indeed. Given the rapid pace at which autonomous vehicles have been developing updated. And I'm interested in your updated thoughts as well as your positioning. Do you see yourself as a net winner?

Do you see as a net what? Net winner?

Do you see yourself as a net winner from the ultimate development in which this space could evolve?

Well, okay. On the autonomous vehicle, what we see is the market starts to exist. We see that in China, we see that in the U.S. and we see that it starts in Europe. And for me, it's not a surprise that it works. And it starts by the collective usage, which means the robotaxi, which has good acceptance by the final customer and makes sense from a financial point of view because you just can amortize the cost of autonomous vehicle by the fact that you save the cost of the driver on intensive usage.

So I'm convinced that this will pick up and it will -- so first start with collective usage like a robotaxi. It will also will be with shuttles that are driving always the same journey in the day. And later on and probably on this second aspect, it will take significant more time. It will go to individual usage.

On individual usage, I think it will take more time because the other cost is much more difficult to absorb. And at the moment, for the customers, at least in Europe, what we -- what the industry -- auto industry is trying to do is already to pass on the cost of electrification to customers. So I don't think that on individual usage, they will be able to pass on both electrification and the -- over cost of autonomy.

So for us, Ayvens, I don't see autonomous vehicle as a threat. I don't see -- I see that more as an opportunity because each players in the value chain is specialized -- specializing on part of the value chain. And I think our focus is to continue to lease the car and provide the right services. We are a company that is supposed to make mobility easy and we'll help these companies that develop in the autonomous business to serve the -- maintain the cars. And that's the direction that we are taking.

Next question is from Geoffroy Michalet, ODDO BHF.

Congratulations for those good results. So 2 questions for me. The first one on synergies since I think you reached EUR 110 million, which if you multiply by 4 quarters is equal to your target of run rate synergies. Does it mean that you -- can you go even further on synergies than you initially planned? So that's the first question.

The second question is more related to your exiting fleet in '27 and '28. Can you give us your view on the pricing assumptions and the volume assumptions on those BEVs and PHEVs for the next year?

Okay. So on the synergies, as you just rightly said, we are on track to for the full year of EUR 440 million synergies. I think what is important is to say that we're going to maintain focus on cost. 2026 is not the end of the story for the cost-to-income ratio. Of course, this pace of improvement will not be the same as what we've experienced in the last 2 years, because we had the huge level of merging organizations that were similar size and making the same business. But we will continue to work on that.

I don't think for the future it makes sense to call it synergies, because by definition, synergies compared to what you would have done if you had not merged. And okay, for the forward plan in 3 years, it makes sense. But one day, you've just to say, well, now we are one company and we just address the cost question.

So directionally, my answer is we'll have to continue to work on the cost-to-income ratio and continue to progress on this with some opportunities, in particular, linked to AI that we need to implement, and we are working on that.

On your second question, if I understand, it was -- when you say existing fleet, so I suppose it's about the mix of used car sales, if I understood well. So you remember that we had a mix of 10% BEV in our used car sales in 2025. In Q1 2026, the mix was 12%. And this is supposed to grow in 2027, '28 to between 20% and 25%. You can never have a perfect forecast.

Of course, you've got the contracts that gives you the forecast. But after that, it depends on the behavior of the customer that want to extend some cars and not others. And you can have distortion on mix on that. It's a decision of the customer. And you can also have other factors like the availability of the different cars of the carmakers that impact that. But as an order of magnitude, for these 2 years, I would give you a range of between 20% and 25% for BEV compared to 10% in 2025 and 12% in Q1 2026.

That's very helpful. And any, let's say, differentiation of pricing in your estimates versus current pricing?

You mean for the U.S. over the coming years?

Yes.

Well, I would say -- compared to what we said 3 months ago, I would say there is no significant change. We continue to have a price scenario that is similar. And as you remember, our price scenario is in the coming years a slight increase of the ICE prices and a significant decrease of BEV prices. So that's what we've entailed in -- included in our scenarios. And we have not changed them so far. We consider that the last months were consistent.

It's obvious that what happened in the last, I would say, 4, 6 weeks in the Middle East doesn't make the exercise of forecasting easier. If it's -- I don't know if that's ever been easy. But for the moment, we consider that our price scenario remains valid with the direction that I've indicated.

And anyway, as I've already stated in our call 3 months ago, the normal UCS, when you've got the perfect crystal ball, is a UCS that is close to 0 because you project perfectly each RV on each and every car. So the message remains the same message as 3 months ago, to make it simple.

Next question is from Nicolas O Sullivan, UBS.

The first one will be on margins. We saw previously that margins can be volatile on a quarter-on-quarter basis. So do you think the margins right now are sufficiently strong that you can afford more rebates and be a bit more commercial in the second half and 2027?

And then finally, the other point is, is that kind of a sustainable run rate of margins going forward and no one-offs in this Q1 print? That will be on margins. That will be the first question.

And then the second question will be on costs. You reported underlying cost income of 54%. Expenses, yes, are down, but flat quarter-on-quarter. So are we actually seeing the benefits of the synergies yet? Or are you investing more in customer satisfaction and IT perhaps? That would be my question.

Okay. Well, on margins, what we can say is it's not our intention to modify our margin policy in order to gain market share of volumes. What we want is to stabilize the fleet this year and with an order intake that remains at a good level of margins, because that's the basis of our policy and we don't want to change the strategy on that.

So which means, for example, that in Q1, when we've seen '26, when we've seen the interest rate increasing due to the Middle East events, we've passed on the increase without waiting to our countries for them to include in their pricing. And I think it's something important to have in mind.

On the cost-income ratio, so we're at 54%. It's a 4-point improvement versus Q1 2025. And 4 points is exactly what we need to do on a full year basis as we -- our target is to move from 56% to 52%. So what we've done in Q1 is perfectly consistent with what we need to do on the full year. And that on a quarterly basis, you can have some volatility between quarters as we've seen last year.

But I would say that we are perfectly on track, consistent with our target. And as answered a bit to your question of -- I think it was Geoffroy before, it will not be the end of the story.

[Operator Instructions] Next question is a follow-up from Sharath Kumar, Deutsche Bank.

I have a follow-up on used car sales results. In light of the comments that you made regarding higher BEV mix in '27, '28, I appreciate this is a bit distant in the future, but do you think there is downside risk to consensus, which currently has gross UCS per car between EUR 300 to EUR 400? So is this consistent with your central scenario?

Well, I think we've repeatedly said that normalization of UCS will take place. And what we see is that is happening in 2026. Now that's -- generally speaking, our policy is not to comment on the consensus on top of that. That's a bit volatile if we do that.

What we have said and that we repeat is UCS is normally 0 or 0 positive, let's say. That's the normal thing that should happen. And that's the way we want to manage the company. It's fair to say that with the increase in volumes of BEV, that puts more pressure on the UCS. But that's the reason why we say that UCS will not be as high as it is, as it was in 2025, in the future. So no change of message on the used car sales.

We have no more questions registered at this time. Mr. de Rovira, the floor is back to you for any closing remarks.

Well, I just wanted to thank you for these questions and comments. I think you understood that this quarter is a quarter in which we consider that we are on track versus what we've announced to the market previously with no significant event or change compared to the messages given in -- a few months ago with the full year 2025 call.

So thanks a lot for your attention, and we'll be happy to meet you in the -- if necessary in the coming days or weeks. Thanks a lot. Goodbye.

Ladies and gentlemen, this concludes today's Ayvens conference call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, welcome to Ayven's Full Year and Fourth Quarter 2025 Results Conference Call. Today's speaker will be Philippe de Rovira, CEO; and Patrick Sommelet, Deputy CEO and CFO.

I now hand over to Mr. Philippe de Rovira. Sir, please go ahead.

Well, thank you. Well, good morning, ladies and gentlemen. That's a pleasure to be with you for the first time in my position of the CEO of Ayvens. And I will be very pleased to meet you in person in the coming days, weeks, months.

So I'm hosting this call with Patrick Sommelet, and I will first present the highlights of the year, then Patrick will comment on our full year and fourth quarter 2025 detailed financial results. And we will then be happy to take your questions before meeting with you during our road shows.

So let's go now directly to Slide 5 on the financial -- on the key financial performance indicators. Ayvens posted strong financial results in 2025, delivering on its commitments towards shareholders, thanks to the group's focus on profitability. Margins improved further in 2025 and stood at 565 basis points, up 32 basis points versus 2024.

On used car sales, the group navigated smoothly through the normalization of its UCS results. While the gross result per unit stood at EUR 1,075, down EUR 380 versus 2024. The sharp decrease in depreciation adjustments versus 2024 resulted in a higher net result per unit, which stood at EUR 703, up 38% compared to 2024.

The group made a significant progress on efficiency, reflecting increased synergies on both revenues and costs. As a result, our underlying cost-to-income ratio improved substantially down 7.1 points versus 2024 at 56.1%. Bottom line, net income group share stood at EUR 996 million, increasing 45% versus EUR 684 million in '24, corresponding to RoTE of 12.9%. This strong financial results, fuel capital generation, and together with reductions in RWA, thanks to changes in regulation and optimizations, we proposed a total distribution for the year amounting to EUR 1.15 billion.

This corresponds to a dividend per share of EUR 1.01 versus EUR 0.37 in 2024 and EUR 360 million share buyback already executed last December. In parallel, our capital position remains strong with a CET1 ratio at 13.2% at the end of 2025. So let's now turn to Slide 6 on 2025 key achievements. Overall, Ayvens delivered on its strategic and financial road map, paving the way towards our PowerUp 2026 planned objectives.

So let me start with the financial targets. As you just saw, the group delivered a strong set of financial results in 2025. On all aspects, they were in line or better than our guidance to the market. Cost-to-income ratio, 56.1% better than guidance. EUR 357 million of synergies in line with guidance, CTA spend in line with guidance and gross used car sales result per units stood at EUR 1,075 per unit at the high end of our guidance.

Second, on business activity. We have kept a steady focus on profitability and balance sheet protection throughout 2025, as reflected in the 33 bps year-on-year improvement in our margins. We have successfully reshaped our footprint towards more profitable customers. At the same time, we have kept a prudent stance on asset risk, notably on electric vehicles, for which we have closely monitored market dynamics and lowered our residual values accordingly.

In parallel, Ayvens remain actively developing this franchise in particular, onboarding new partners such as Chery and extending the partnership with BYD. Finally, the group achieved key milestone on the integration of lease plan, IT and legal mergers were completed in 17 countries out of the 21 overlapping ones where the group operates. 90% of allocations to single fleet has been completed across the group. 90% of the fleet is operating on the targeted IT platform of each country.

And in parallel to the strong delivery on the 2026 road map, Ayvens' shareholding structure has been reshaped through the sell-down and exit of the ex-LeasePlan shareholders. Free-float increased to 45%, driving trading volumes upwards. So let's now turn to Slide 7 on fleet on earning assets. Earning assets stood at EUR 53 billion, decreasing by 1% compared to Q4 2024, but up EUR 400 million versus Q3 in 2024. Funded fleet totaling 2.5 million vehicles at end 2025, decreased by 84,000 units versus December 2024 with Q4 2025 showing a slowdown in defleeting versus Q3 2025 with a limited reduction of 14,000 units.

This is the result of our strategy as we have primarily focused on profitability on tight asset risk monitoring rather than growing volumes. This is notably the case in the U.K. where we're structuring our brokered business. In Germany and in Turkey, which still operates in a hyperinflationary economy. Besides these three, Ayven's earning assets increased by 1.1% versus December 2024. In terms of deliveries by powertrain, BEV penetration stood at 32% and PHV at 12%, supporting earning asset growth, thanks to the price effect.

Let's now move to the next slide to conclude on the highlights for 2025. So we recorded in 2025 strong and improving financial results across all lines of the P&L. Revenues grew by 11.3% and reached EUR 3.4 billion. They were supported by a strong increase in both margins on net UCS results. Operating expenses were down 3.9%. Thanks to the ramp-up in the synergies extracted from the lease plan acquisition.

Our net income group share was up 45.7% and diluted earnings per share stood at EUR 1.11, up 52% as it also benefits from the reduction in shares outstanding following the EUR 360 million share buyback executed in December.

And I now hand over to Patrick to take you through the details of the full year and Q4 2025 results.

Thank you, Philippe, and good morning, ladies and gentlemen. Let's turn on Slide 10 with a detailed view on the full year strong financial performance.

Starting first with the top line. Margins stood at EUR 2.9 billion, up 9.1% on a reported basis versus '24. This increase is mainly explained by the improvement in the underlying margin, which stood at EUR 3 billion versus EUR 2.8 billion in 2024 despite the slight decrease in earning assets over the year.

In 2025, margin represented 565 basis points of our average earning assets, up 33 versus '24. They were further supported by a reduction in nonrecurring items at minus EUR 70 million compared to minus EUR 115 million in 2024. On used car sales, the net UCS results reached EUR 411 million, up 29.6% versus '24. As you can see from the top right-hand graph, the gross UCS results stood at EUR 628 million, a decrease of EUR 280 million versus '24, which was more than offset by the reduction in the negative impact of depreciation adjustments, which were down EUR 374 million versus '24.

In parallel, operating expenses were down 3.9% and reached EUR 1.83 billion on a reported basis. The decrease is supported by a reduction of 4.9% in the underlying cost base, thanks to the growing synergies and the continued strict monitoring of costs across the organization.

Nonrecurring items increased by EUR 14 million. This increase results from a one-off IT impairment of EUR 23 million, on which I will comment further in a few minutes. Bottom line net income group share grew 45.6% and reached EUR 996 million, leading to a return on tangible equity of 12.9% versus 8.6% in '24.

Let's now turn to Slide 11 on our quarterly results, starting with revenues. So on our revenues, our quarterly results shows the same trend as for the full year. Gross operating income, total revenues reached EUR 830 million, marking a strong increase of 16.5% compared to Q4 '24 reported. This is supported by both higher margins and higher net used car sales results. Total margin stood at EUR 747 million, up 10.7% versus Q4 '24 on a reported basis. This increase is driven by higher underlying margin at EUR 749 million compared to EUR 721 million and lower nonrecurring items totaling minus EUR 2 million versus minus EUR 46 million in Q4 '24.

As we communicated last quarter at the end of October, Ayvens reached an agreement with the Lincoln consortium on the contingent consideration and related matters. The outcome of this agreement had a positive impact in total of EUR 40 million on Ayvens profit before tax in Q4 '25. EUR 47 million, we are booked in leasing and services margin, which we flagged as a nonrecurring item. The remaining minus EUR 7 million is booked in over expense line on the income statements.

Net UCS stood at EUR 83 million, showing a significant increase versus EUR 38 million at the same time last year on which I will elaborate shortly.

Let's now turn to the next page on margin. So our action to improve profitability have resulted in higher margins in euro in '25, despite the deflating generating by the reshaping of our footprint and the resulting reduction in earning assets. In Q4 '25, underlying margin reached EUR 749 million, representing 567 basis points, up 26 versus Q4 '24. This was driven by an increase in leasing margin due to lower interest costs, thanks to both lower funding costs outstanding and lower interest costs across all funding sources.

Underlying service margin was stable versus Q4 '24, the ramp-up in synergies being offset notably by the reduction in the peak. Compared to Q3 '25, total margins were down 26 basis points. As we indicated last quarter, Q3 '25 was a very high point. Supported by lower than usual maintenance and tire costs as well as a few positives linked to ongoing integration and accounting amortization.

Negative impact of nonrecurring items totaled minus EUR 2 million. This was mainly helped by the exceptional revenues of EUR 47 million from Lincoln Consortium, as we already mentioned. On the other hand, negative hyperinflation impact amounted to minus EUR 27 million, and we incurred one-off loan breakage costs of minus EUR 16 million. These brokerage costs are related to qualitive termination of loans, the remaining impact from mark-to-market observative benign at minus EUR 1 million.

Let's now move to the next page on UCS and depreciation adjustments results. Net UCS results reached EUR 83 million, up 120% versus Q4 '24, which stood at EUR 38 million. This increase results from a significant lower level of depreciation adjustment at minus EUR 16 million compared to minus EUR 162 million in Q4 '24. Excluding these, gross UCS stood at EUR 99 million, which is EUR 100 million lower than Q4 '24, continuing the trend of previous quarters. The normalization of the gross UCS results was very gradual over the first 9 months of 2025, but accelerated in the fourth quarter with growth UCS results per unit at 702 versus 1,110 in Q3 '25 and 1,267 in Q4 '24.

Q4 '25 gross UCS results was impacted by the increase of the volume of Battery Electric Vehicles sold whose results per unit remain negative on the old vintages that are being sold. These results per unit are stable compared to Q3 '25. In addition, in the back of end of year seasonality, result per unit on ICE car declined for some brands and models. This price and volume position by powertrain remain consistent with our scenario and overall financial trajectory.

Conversely, thanks to the lower depreciation adjustment, net UCS per unit stood at EUR 589 up versus Q3 '25 at EUR 536 and also Q4 '24 at EUR 239. Total volume of cars sold were stable versus Q3 '25 at 141,000 units and down versus Q4 '24, which was at 158, 000. This reflects the lower number of new vehicles, which were delivered in '21 and '22 in the context of supply chain disruptions at the time.

Let's move to slide on operating expenses. Total operating expenses stood at EUR 477 million, broadly stable compared to Q4 '24. Cost to achieve amounted to EUR 34 million compared to EUR 41 million in Q4 '24. Besides an impairment charge of EUR 23 million was booked this quarter. It relates to the review of our IT portfolio of assets, which led to the write-off of those assets, which have become obsolete in the context of IT migrations and the rationalization of IT applications across the group.

Excluding CTA and this one-off impairment, underlying operating expenses amounts to EUR 420 million, a decrease of minus EUR 3.1 million versus Q4 '24. This decrease is reflecting the ramp-up in cost synergies, which stood at EUR 41 million versus EUR 13 million in Q4 '24 and also continued strict cost monitoring across the organization. Compared to Q3 '25, the underlying cost base increased by EUR 8 million, which is explained by client investment in information initiatives and service quality. Combined with growing margins, the decrease in underlying operating expenses resulted in an underlying cost income at 56.2%, decreasing by 4 percentage points compared to Q4 '24.

So let's now turn to the next page with the rest of the income statement, starting with the cost of risk, which stood at EUR 28 million representing 21 basis points of average earning assets versus 27 in Q4 '24. This is very stable compared to prior quarters in '25. Profit before tax stood at EUR 318 million, which is up 56.2% versus Q4 '24 as a result of higher margin and also net UCS results.

The Q4 '25 effective tax rate stood at close to 27%. For the full year, it land at 29.1%, which is very close to our previous estimate. Ayvens' net income group share reached EUR 232 million in Q4 '25 compared to EUR 160 million in Q4 '24. As a result, return on tangible equity on this quarter came at -- came in at 12.3%, which is 4.5 percentage points higher than last quarter Q4 '24.

So if we now turn to the next slide on RWA and capital. So total RWA at the end of Q4 '25 stood at EUR 53.7 billion, which is a decrease of about EUR 600 million compared to Q3. So the decrease mainly comes from -- the decrease of EUR 400 million, which is resulting from our continuous efforts to optimize ad value was. And this quarter, the improvement comes from credit RWA with the alignment of methodologies on potential client segments as well as data quality corrections.

It also comes from a reduction in the group's deposits due to our funding optimization. This leads to a reduction of EUR 500 million in RWA. And this is partially offset by an increase of EUR 500 million linked to the growth in earning assets. This reduction in RWA, together with the capital generation led to a strong and steady capital buildout throughout '25, resulting in an increase in Ayvens CET1 ratio at 13.2% at the end of the year versus 12.8% at the end of Q3.

I now give the floor back to Philippe to present our outlook for 2026.

Okay. Thank you, Patrick. So our strong financial performance in '25 puts us in a good position for 2026. And I'm pleased to confirm and reiterate our core over 2026 financial targets. Cost-to-income ratio excluding UCS on nonrecurring items at circa 52%. Pretax gross annual synergies to be delivered at EUR 440 million. CET1 ratio circa 12%, AoT in the range of 13% to 15%, payout ratio to remain 50%, in line with the group's distribution policy.

On earning assets, the 6% CAGR over 2023, 2026 is not being targeted any longer in the context of a strategic shift towards profitability and strict residual value selling. For the rest, our scenario continues to be the normalization of used car market with an increasing share of electric vehicles in the volumes to be sold in 2026.

The gross UCS results is estimated to stand in the range between EUR 200 and EUR 600 per unit. Integration will continue with IT migrations to be executed in some of our core countries, namely: Germany; the Netherlands; and the U.K., and we estimate the associated cost to achieve to be below EUR 30 million in 2026.

Now a few words on our strategic priorities for next year -- or for this year 2026: First, the execution of IT migrations in the remaining countries will be a priority in order to fully extract synergies from the LeasePlan acquisition; second, we will aim at enhancing further our focus on customer satisfaction and operational excellence; third, we'll continue to prioritize profitability while preserving the value of our balance sheet by managing asset risk responsibly in an industry that still undergoes a transition to electrification.

Going forward, in a competitive and fast-changing environment, we will continue to push on cars to build a leaner and customer-centric mobility platform, reaffirm our commitments towards the value for all our stakeholders. I take this opportunity to announce that we will hold the Capital Markets Day on the 21st of September 2026 to elaborate on our strategic and financial road map beyond 2026.

Before that, will be on the road in the next few weeks together with Patrick, and I look forward to exchanging with you, shareholders and investors.

This concludes our presentation, and we are now ready to take your questions.

[Operator Instructions]. The first question is from Jacques-Henri Gaulard, Kepler Cheuvreux.

Yes. Good morning, Philippe, welcome. I wish you a long and fruitful tenure. And Patrick, congrats on the promotion, mate. Two questions. First, despite all the distribution, you end up with a quite spectacular CET1 ratio. So I guess the first question is, what are you going to do with all this money? If we consider that 12% is still adequate CET1 threshold for you.

And lastly, because there's been a lot of debate this morning already on the level of used car sales, and Philippe, good luck with that because you're not -- you had the first question on used car sales, probably the first of 2 million by the time you finish your tenure. But even with that level of used car sales per unit, can we consider that a 13%, 15% RoTE target in the very long term for the company? Would still be something you're comfortable with?

Okay. Well, thank you for the two questions. Well, on the first one, I think -- in the past year, we see that as a cruising level, 12.5% of around 12.5% of CET1 ratio is something we feel comfortable with. Of course, we can vary a bit up or down compared to this level. And I think we've shown in 2025 that we are ready and willing to return excess of capital to the shareholders. But obviously, we are only Feb the 6. So it's very early to talk about the '26 action on this respect.

Well, on the UCS, yes, obviously, this is not the easiest thing to predict. But I think while we expect a normalization of the UCS and we know that if we had a perfect crystal ball, the UCS should be closer to 0, which -- but we never have the perfect crystal ball. But long term, I think -- what is important is to drive the company focusing on what is fully in our hands. What is fully in our hands is working on the leasing margin, on the service margin, on the OpEx and on the remarketing efficiency.

And I think we have a lot to do on all these factors. After that, the UCS depends also on the valuation of the market. So the purpose is to work on these items that are in our hands. And that the variation of the market, we predict as much as we can with a stance that is an intent to be careful. That's what we want to do for the moment, especially as electrified accounts market is not yet mature.

So I do think that on the short term, it's much better to take this stance. And if we take a long-term view on the long-term view, the BEV will become the new normal, but it will take a while, which means that for the moment, we should be rather careful. And as years go one after the other, we should be -- we would be more and more aggressive. So the purpose of the CMP will, of course, to be -- to give a trajectory on our financial from the coming years, but these are already a few thoughts about this topic.

The next question is from Sharath Kumar, Deutsche Bank.

I have three, please. Firstly, I'm interested in I hear you when you say that you want to preserve profitability and manage asset risk responsibly. But is there a risk of you being overly conservative on fleet growth? How do you assess your competitors' positioning against R1, especially after the recent acquisition and significant growth that they have achieved in the last couple of years will be conservative 2026 fleet outgrowth -- growth be offset by margins being high around current levels? So that's my first question.

Second, a bit a longer-term perspective, interested in hearing your views on the potential risks and opportunities presented by autonomous vehicles to your business model? And if I can just sneak in a third on RoTE guidance, 2025 is already at the low end of your 2026 guidance and with most cost synergies to come, so what will prevent you from not being at the mid-high end of this range? Is it mainly UCS, that's the main risk?

Okay. So maybe let's start by the third question, and it's the quickest answer. I think your assumption is right. The UCS result is always very hard to predict, given the volatility of this market. So we give a range of UCS -- gross UCS result per car that is between 200 and 600. And obviously, there is some consistency with the range that we give in the AoT range of 13% to 15%.

On the first question, so the sense that we have on the profitability and the asset risk and the relation to competition. Let's summarize the thinking. The thinking is our scale put us in the first league. And it's clear that Arval combined with Aknom will be in the same league. So that's something that we need to acknowledge. And I don't think that it can be a mid- and long-term vision to say that we don't -- that we wouldn't have wanted to grow the fleet at the opposite -- it's to resume growth at a point in time is something that will be important. But I don't think that's a priority for 2026, the priority for 2026 is customer satisfaction and delivering on the financials and maintaining this stricter stance on the reserve value.

This is fundamentally because I believe that technological improvements on BEV remains very significant. As you may know, I'm coming from a carmaker, spent 27 years in the car industry. We are not yet a major industry in terms of BEV. And at the beginning, the steep of progress is very steep. The -- sorry, the pace of progress is very steep, quick, which means that the result values in percentage of listing price are much lower is BEV compared to ICE. But that is an effect that will decrease over time.

So it makes more sense for the moment to remain careful on the BEV to focus on fixing the customer satisfaction issues to prepare the company for next developments. And that as we see gradually the acceptance of the BEV by final customers growing, that will be the time to accelerate. So that's kind of a broad scenario that I gave.

As that we see that in the daily life that, for example, when we are in dual supply with some competitors and in which it's just a battle on RV because we're already selected and we are in dual supply, some orders go to the others on BEV. So it's not a problem of operational excellence of the company. In that case, it's a pure assumption that is different on the RV and BEV, but I prefer at that stage to be mistaken being too careful on BEV rather than losing potentially some share than the opposite.

But this is, I would say, a 2026 view and we'll continue to adapt in function of the evolution of the market and in -- and we'll tell you more in the CMD. But should not conclude that Ayvens still want to grow. There will be a second step with more growth, and I think it will make sense.

Your third question -- or your second question was about autonomous vehicles. Well, when you see what happens in both China and the U.S., you see that autonomous vehicle for me has a clear future for a number of usage. So it means that we should pay a lot of attention to work with these players and offer them our services because, well, these cars are autonomous, but they need also the same kind of services that we've been always able to provide in which is our core business.

So, for me, no doubt about the fact that autonomous vehicle will increase in volumes and will become significant because it answers well some customer needs. And we are seeing now that both American and Chinese players are entering in Europe. So that's what I could tell on your three questions, hoping that I answered your questions.

Just a follow-up on the first question on margins. So are you confident that given the fleet growth will be relatively lackluster in 2026 as well. So margins could it be maintained at current levels?

Well, as you know, we don't guide on margin, but if we are consistent with the policies that have indicated, we should have an evolution that is consistent with what we've seen between '24, -- I would say in the last months that in 2025, and so on.

The next question is from Geoffroy Michalet, ODDO BHF.

I have only one question. would you be able to share with us some hints on your underlying assumptions that brought you to give this UCS guidance in terms of volume, price, mix and maybe assumptions by materialization, qualitative assumptions, indeed?

Well let's have in mind that in '26, we've got cars that were put on the road, mainly in 2021 and 2022, and there are different factors that go in different directions. You've got on the ICE cars. It was a period in which production in the auto industry was very low, and that has a tendency to support the prices of the ICE cars, which remain the majority of the volumes. So this goes in a favorable direction. On the other hand, you've got an increasing number of BEV coming back. So to give you an idea, there should be around 20% more BEV coming back in '26 compared to what we had in 2025. And that's generating headwind in our UCS results as at that time, 2021, 2022, the forecast of reserve value or not let's say, carefully enough on not taking enough into account the future improvement of technologies.

So that's something that is going clearly in the opposite directions. After that, in terms of global volume between 2025 and 2026, we don't expect a huge variation of volume of sold cars. So that should not be the main driver. And in 2026. I don't think that -- and they can be after that impacts of the regulation because it's obvious that when some countries implement some incentives of a new vehicle, it can have an impact while it's more that it can have. It has an impact on the used car market.

So the crystal ball, you've got things that go in different directions. And so globally, we plan for the normalization of UCS maybe one important point is to have in mind what happened in 2025 at the end was consistent with the price scenario that we had even if it was not consistent quarter-to-quarter, there were differences with Q2, Q3 being more favorable than the price scenario in Q4, a bit less favorable.

But all in all, the ending point is consistent with the price scenario of the company, which is a very important point in 2026. So we confirm our pricing scenario and hence the normalization of the UCS results that we've indicated.

The next question is from Matthew Clark, Mediobanca.

Could you give us some guidance on the leasing and contract margin on leasing services and contract margin outlook. I mean, it's been very volatile quarter to quarter even stripping off the EUR 15 million gain you had last quarter, it's come a long way back. And I'm just struggling a bit understand quite why it's so volatile quarter-to-quarter when this is ultimately a 3- or 4-year business. So some help understanding those movements and what we can expect in 2026 would be helpful.

And then a second question, just coming back to the surplus capital. When do you envisage it will be the right stage to take a view on distribution of that surplus? Because obviously, if it continues to accrete, it starts to be very material and would imply a harder or more restrictions on distributing just because of the liquidity, et cetera.

Okay. Well, on the first point, well, again, we don't guide on margins, but we had anticipated in Q3 that the service margin will be lower in Q4 that was anticipated and announced to the market. But I will ask Patrick to give you more.

Yes, Matthew. So indeed, we said in Q3 that all the lights were green and margins in Q3. So it should be no surprise that it comes a bit down basis points in Q4 '25 and again, as we have discussed many times, we don't guide because there is volatility on a quarter per quarter basis. This is an annualized number. Again, it's not reflecting a stable year-end number. So specifically to answer a bit more in detail on your question between Q3 and Q4, we had higher than usual repair and maintenance and tire costs in Q4 which were driven mostly by harsher winter starting early in the season and leading to cost for tires in replacing those tires.

So this is playing a role on the decrease in service margin.

As to your second question, I would say there is no precise time line. I mean we are very early in February for the moment, I'm much more focused on a few topics. Well, that our change of organization that we announced this morning with the departure of John Saffrett and the change, and we'll elaborate on that if that's of interest to you with an idea with the organization to improve or to simplify the organization and have a faster decision and also a leaner organization. And that, we focus on both execution on 2026 and the different priorities that I've mentioned with a renewed focus on customer satisfaction after a period in which the company was more centered on itself, we really needed to be more centered on the customer, the market, the competitors.

And the second big priority is to build the strategic plan. So we've launched the work streams that will make the detailed work 2 weeks ago already. And that's our priorities. And so that -- well, as we said earlier, we've shown in 2025 that the excess of capital can be returned to shareholders, and it makes sense but we will see a month after month how the situation is evolving and in function of the evolution, we will give a communication to the market.

The next question is from Nicolas O'Sullivan, UBS.

This is Nicolas Sullivan from UBS. The first one would be on -- again, on a follow-up on the leasing and service margins. I just wanted to confirm if you still see that the range of 550 to 580 basis points leasing contract service margin is still correct.

And secondly, do you think that the print you delivered today in Q4, if we strip out the RMT effect, is it the right way to see the business in 2026 as you implement those synergies? That would be my first question.

And the second question would be on actually those synergies. Actually, you used to communicate or actually disclose in the slides in Q3 and previous quarters on the growth synergies you delivered each quarter, and that's not the case. I just wonder why that changed? And also what specifically led you to add EUR 30 million in CTAs for 2026.

Well, so on the first one, the range that you mentioned in terms of our margins make sense. I think it's consistent with the evolution of the business. And the second question to be front in terms of what was communicate before in detail, I am not sure to have understood exactly the question. What is clear is the accumulated CTA that we have on a 3-year basis of the plan are consistent with what we had announced. There is a slight timing effect in the sense that some CTA or the CTA this year is at the low part of the range and some is postponed to 2026 but we didn't accurate that the year of '26 that is fully consistent with what was previously announced.

Patrick, if you want to elaborate or...

Yes, I think you are looking for the disclosure on synergies, there on Page 6, footnote #3 where you can find the detail on the full year on a quarterly basis, and we will keep on updating the market with those detailed numbers, which are important, indeed, a bit less CTA spend so far. So some real CTA in 2026.

Okay. Understood. And I mean, basically, the timing effect. So I guess in terms of CTA the timing slight delay, is that related to what you said on customer satisfaction. And also, if I can follow up actually on cost. Underlying expenses quarter-on-quarter were up 2%. So is that also related to the whole discussion on client satisfaction efforts?

No, I would not link that directly to the customer satisfaction. I mean for me, the question of customer satisfaction is more about the rigor in execution about a number of processes that we need to improve and about the managerial focus that has to be increased at the whole level of the company as we are telling you well, I had various expenses of big mergers.

And I say it's not sure that in big mergers, it's pretty difficult to the same focus on the customers in the external world. Naturally, people have a more focus on what happens internally in the company because all the time is taken by legal mergers, process mergers, IT mergers, HR contracts, mergers, et cetera, et cetera. So no, I would not take this CTA to customer satisfaction more to the cadence of the migration of IT of the different countries.

The next question is from Delphine Lee, JPMorgan.

I just have one, actually. Because I know as you've given quite a bit of color. But I mean just going back to used car sales. I mean, what are you seeing right now in terms of dynamics? Because I guess -- it feels like there has been some stabilization. So I'm just wondering kind of like how we should think about the outlook.

Great. So when we think about the dynamics of the UCS, we have to split per energy because per powertrain, these are different dynamics. I would say the BEV prices continue to decline, but I would say, as expected, and it's logical, and I think it will continue that and that's what is embedded in our price scenarios when we set the reserve values. After that, on the ICE market, when we take what happened in Q4 versus Q3, we have not seen very significant price move except in Italy, in which there was a decrease in the ICE prices. But once again, it was something that we were expecting in terms of lower ICE.

On the PHEV, so the plug-in hybrids, we've got a decline that is relatively similar to our overall, if I take them in markets compared to what we got in BEV and that also is consistent with our pricing scenario. So well, forward-looking, I would say, ICE, I think, should continue to be quite robust. And BEV and PHEV should continue to decline.

As that when you think about Q4, there is always an element of seasonality between Q4 and Q3. One of the reason is the carmakers tend to push a lot on the end of the year on the destocking these cars with doing that in my former life, and that has an effect on the pricing on the market because they want to have the balance sheet that is the best possible in terms of stock. So we always see that every year. This year, it was maybe a bit more pronounced than summer of the year due also to the fact that in some markets like in the Netherlands, the modification of benefit in kind of regulation in the first of Jan 2026, pushed some defeats and some higher return and that puts some pressure on the local markets.

That's what I can tell you at that stage.

Great. And then the other thing is -- just on the earnings assets, I mean I understand your comment around fleet volumes, but just what should we expect sort of going forward, it looks like you -- I mean, you don't want to guide too much, but like any progression you should have like in '26, '27?

Well, I will answer for 2026 after that for 2027, I think we will answer later on. But for 2026, what we plan is a fleet in volume that would be flattish, flattish basically, which means given the per unit pricing evolution, in particular, due to the mix of BEV low single-digit growth for the NEA.

The next question is from Owen Paterson, Jefferies.

Just a couple kind of broader ones. The first one on fleet growth? I know you've kind of spoken about prioritizing profitability and risk in '26. That's well understood. But just kind of more broadly, what's the kind of opportunity in the kind of market backdrop there? If you did want to get a bit more aggressive. Would it be fairly receptive. And if you could give a bit of kind of color by geography as well and maybe inside outside of Europe? I mean, I know most of the business is focused on Europe. That's the first one.

And then the second one, again, just kind of a bit more long term. I'm just wondering if there's any trends that you want to flag in the services business. You've -- I guess you've been operating a fairly large portion of your fleet being electric vehicles for a few years. Do you see any kind of structural differences in the maintenance spend in general, is maintenance costs kind of higher inflation, are you still facing kind of you have a fairly costly maintenance spend there, just basically any changes, I suppose, into the way that the services business is run?

Well, thanks for the two questions. On the -- I will start with the second one. Well, electrification can mean different things between BEV and PHEV. On the PHEV, the car is more complex and the fact what the numbers show is the level of maintenance to be on. In fact, it's more than a traditional ICE. That's coming from my slide, I would say, on the BEV, it's obvious that some operations that exist on the ICE cars will not exist. And that -- we can see that as a challenge. But I think there are also opportunities to have other services more specifically to BEV car that we need to implement in the coming years. That's the point.

And the other part is efficiency of procurement of the components of the cost of service margins have to be improved. So that will be something we will also work in the strategic plan because this needs to be addressed. We cannot just stay there and say, well, the mix of BEV, ICE moves and it's unfavorable. So that's something that is a clear point of attention and that we need to do in the coming months.

On the fleet growth, opportunities. I think it's a question of geographies on one side. It's a question also of segments in which we want to operate. If we talk about geographies, at the moment, if we want to have a present stance, it makes more sense to push on Italy, Spain, for example, rather than in the U.K. And in that respect, the restructuring of the U.K. activity, I think, makes sense because the return on tangible equity that we can get in that country for the moment, is not as high as one would like.

And in Italy and Spain with a percentage of BEV that is quite low on margins that are quite good. It's a place where we think it would make sense to push more. And that, you can think about the segments and markets. And obviously, moving to a small fleet is something that is direction that makes sense for us. Our bigger strength is on the biggest fleets, and we are one of the very few not to say the two players to be able to address all kind of customers, but we've got our qualities and the smallest on smaller fleet segments.

And the next question is from Reginald Watson, ING. .

So the depreciation adjustment from gross to net UCS result quite a lot lower in Q4 versus Q3. I was just wondering if you could explain the reason for that, please? And also, given the EUR 83 million disclosed stock of unused depreciation adjustment, how you expect that to unfold over the course of '26?

And then my second question is just on the sort of '26 volume flattish. Is that flattish to the upside of 0 flattish to the downside of zero?

Okay. So on the first question, I'm going to ask Patrick to answer to give you the details.

Yes. As you may remember, in Q3, '25 we booked an additional prospective depreciation or depreciation adjustment of EUR 48 million in relation to the U.K. fleet given the price evolution we were contemplating towards 2025 in the country, especially on BEV car. As you know, U.K. is a difficult country well open to competition and external international competition when it comes to tariffs. It's not as protected, and we have, therefore, a very significant level of price pressure in this country.

So this is the main part, which impacts the level which is lower in Q4 than in Q3. Then as referring to the second part of your question, we give as at each quarter in -- this is the -- EUR 83 million of remaining adjustment in depreciation will take place and the account for actual results for '26 and '27 .

Okay. On your first or second question, I remember, while flattish is we're the best thing I can say now. And frankly, in terms of priorities, I don't think that for Ayvens, this is the key point to say flattish will be above zero or just below zero. I don't think it's what matters more for us in 2026. I think what matters more is execute well on the last IT migration that we got in Germany, the Netherlands and the U.K. side.

Second fix the processes and improve customer satisfaction in the countries that have been disturbed by the previous IT migrations to be able to have a solid basis for future growth because it does make sense to push more on growth if your processes are not fixed and if it's to make your customer unhappy. So I cannot give 10 priorities to the people. I prefer to give a limited number of priorities so that they can execute on them. But this is a short-term vision. And we will -- and it's not the intention to shrink the company, obviously, but that's for the short term.

Okay. I think that's clear. I mean just coming back to your point that it's not your intention to shrink the company. Obviously, this is a balance sheet business and shareholders would like to see the balance sheet growing profitably. But it feels like '26 then remains a transition year still based on the priorities you've outlined before. Is that a fair assessment?

Yes. In terms of '26 that growth is not the priority of 2026.

Okay. That's clear. I look forward to seeing the CMD at the end of the year and finding out what the priorities are for the following years.

Next question is from Mourad Lahmidi, BNP Paribas.

Yes. So three for me, please. The first one is on the cost income. So you are ahead of your target for 2025 but you maintain the 52% for 2026. So how comfortable are you with the 52% given that you are ahead of that target. The second point is on your funding costs. So if you look at your latest around the financing, they are much better compared to what prevailed 2 years ago. So is there a scenario where you would benefit from a windfall tailwinds from those lower cost of funding as you renew the contract.

And finally, I have a question on the general pricing environment. how do you feel the competition right now? Is pricing more conducive or the competition more fierce than, let's say, a year ago?

Okay. Well, on the cost-to-income ratio, that's fair to say that we're better than what we had guided for 2025, which is obviously good news. 52% is an important number. So we have confirmed that, and it will not be the end of the story because we are in an industry in which we cannot stop to improve. And it's important to this mindset of Kaizen, as the Japanese say, of a permanent improvement. So it's an important milestone. And that it's not the end of the story. So anyway, we ask all the teams to think about the next steps and not only in terms of number obviously, but in terms of concrete actions to be able to deliver the further improvements.

On the funding cost, well, that's -- you're policy right that the last news were good in terms of funding costs. And obviously, as you well know, it progressively goes into the margins, not overnight, but that's -- so when you talk about windfall, I don't think we can that you will have a big windfall in 2026 because this is something that is coming up progressively into the margin. And feel free to elaborate on that if you want.

On the pricing environment compared to 1 year ago. I wouldn't say that it has changed very significantly. We can see that a number of competitors are following us in terms of RV moves. So we tend to be the first to move. And a lot of people are looking at what we are doing.

So we've got a number of markets in which people for us, in particular, on decreasing the harvest on BEV to be consistent with the evolution that we project for the price of these cars in the future. So I would not talk about a very significant move compared to 1 year ago in terms of the pricing environment. Patrick, if you want to elaborate on this topic more?

Thank you. On the funding cost, it's true that we have had better price table. We have also been able to optimize the volumes during the year which translates into lower cost in Europe, obviously, after having merged the entities in some countries, we have been able, and it's part of the impact of some recurring items in Q4. As you have seen in the disclosure to lower some source of financing, which will help future years.

Okay. It's 11:03. I think we need to be respectful of time. So I will thank you all for your attention and for your questions. And as always, we -- our Investor Relations team is available to answer any further questions you might add. And once again, I repeat that I will reiterate that this will be a great pleasure to meet you in person in the coming days, weeks and months thanks all to all of you. Thank you.

Ladies and gentlemen, this concludes today's Ayvens conference call. Thank you for your participation. You may now disconnect.

Ladies and gentlemen, welcome to the Ayvens' Q3 2025 Results Conference Call. Today's speaker will be Tim Albertsen, CEO; and Patrick Sommelet, Deputy CEO and CFO. I now hand over to Mr. Tim Albertsen. Sir, please go ahead.

Thank you. Good morning, ladies and gentlemen, and welcome to this Ayvens' Q3 2025 Results Conference Call. I'm hosting this call, as always, with Patrick Sommelet. First, I'll present the highlights of our third quarter, then Patrick will comment on our financial results. We'll then take all the questions you may have.

Let's go directly to Slide 5. Continuing on the positive trend set in the first half of the year, Ayvens has posted strong financial results for the third quarter. Margin stood at a very high level at 593 bps of earning assets versus 521 bps in Q3 '24. Used car sales results after depreciation adjustments stood at EUR 536 per car, showing an increase of 9% compared to Q3 '24.

This result includes a EUR 48 million prospective depreciation charge on our U.K. fleet on which Patrick will come back in a few minutes. The underlying used car sales results, excluding accounting adjustments, stood at EUR 1,110 per car, continuing on its normalization trend. Cost-to-income ratio stood at a low 52.8% for Q3 '25, supported by both higher margins and lower underlying expenses.

Finally, net income group share stood at EUR 273 million, an increase of 86% compared to Q3 '24 and broadly stable compared to Q2 2025. For the first 9 months of '25, net income group share amounted to EUR 764 million, an increase of 46% versus the first 9 months of 2024. On the back of this strong financial performance, positive announcement of the U.K. Motor Finance Commissions by the FCA early October and a further reduction in RWA calculations, I'm pleased to announce the distribution of EUR 700 million to our shareholders, which comes in addition to the current distribution policy of a 50% dividend payout ratio.

This distribution will consist of a share buyback program of EUR 360 million starting tomorrow as authorized by the European Central Bank, combined with the payment of an exceptional cash dividend of EUR 0.42 per share for a total amount of around EUR 340 million.

As indicated previously, the objective of this exceptional distribution is to return the excess capital build up throughout 2025 and to bring Ayvens' core Tier 1 ratio closer to our target. This is in line with our commitment towards value creation for our shareholders.

Factoring in this EUR 700 million distribution, our RoTE for Q3 stood at 14.3% and our core Tier 1 stood at 12.8%. Let's now turn to next page on key strategic and business developments for this quarter.

First, Ayvens is continuously strengthening its asset management setup as the protection of our balance sheet has been and remains a strong focus. To that purpose, I'm happy to announce the appointment of Roderick Jorna as Chief Remarketing and Asset Management Officer. These missions include optimization of the usage of the group's funded fleet at contract end through the industrialization of our multi-cycle lease capacity, especially for electric vehicles.

To that purpose, it will also leverage and develop further Ayvens car markets, our leading remarketing platform. As an illustration of this strategy development, we recently opened the Ayvens factory in Veendam in the Netherlands. This is our largest car refurbishment facility in Europe with the capacity to manage the entire remarketing process from inspection and maintenance to damage repair and resale or re-lease in one single location for the whole Ayvens fleet in the Netherlands.

The capacity of this facility is about 1,000 vehicles per month. This initiative demonstrates our commitment to sustainable mobility and will contribute to the acceleration and growth of our used car leasing. Today, at group level, our used car leasing fleets amount to 71,000 cars, an increase of 5% compared to the end of 2024.

Second strategic highlight is the ongoing reshaping of the Ayvens shareholding. With the successful execution of the third ABB mid-September, where 48 million shares changed hands, representing close to 6% of Ayvens' capital with ex-LeasePlan shareholders now holding just below 12% of the group's capital. Post this transaction, daily volumes of Ayvens stock have significantly increased.

I'm also pleased to announce that Ayvens reached an agreement with the ex-LeasePlan shareholders on the contingent considerations and related matters. Finally, integration is on track with the migration of 2 additional countries, Slovakia and Brazil in Q3.

This brings the total number of migrated countries to 16 out of 21 overlapping countries. We delivered EUR 251 million of synergies in the first 9 months of 2025, of which EUR 104 million for Q3 2025 alone. This is in line with our target of EUR 350 million for the full year of '25.

Let me now take you to the next slide and the evolution of the fleet and earning assets. As you know, the portfolio review that we conducted in 2024 aimed at restoring profitability and protecting our balance sheet. This has weighed on our fleet and earning asset growth.

In parallel, we have also restructuring -- we have been restructuring 3 specific parts of our business, namely the broker channel in the U.K. and subscription business in Germany and our fleet in Turkey. Earning assets stood at EUR 52.6 billion, down 1% compared to September '24, but up 0.8% when excluding the 3 parts under restructuring. Total fleet stood at 3.2 million vehicles, a decrease of 3.7% versus September '24.

However, our restructuring efforts are now well advanced, and we start seeing encouraging results as the decrease of the total fleet is being limited to 0.3% versus Q2 '25. In terms of deliveries by powertrain, the EV penetration decreased to 37% versus 39% in Q3 '24 with BEV at 26% and plug-in hybrids at 11%.

Let me now hand over to Patrick on the latest development in the U.K.

Thank you, Tim, and good morning, ladies and gentlemen. As we have been indicating for several quarters, Ayvens has been reshaping its business footprint in the U.K. in the backdrop of the portfolio review, which has supported the uplift in the group's profitability since early '24. In the U.K., this review has consisted of the restructuring of our brokered business as large parts of this distribution channel were below our profitability threshold.

In that segment, fleet is going down 29% versus September '24, resulting overall in a decrease of 28,000 cars in the U.K. funded fleet. This restructuring is well advanced and is expected to be completed in the course of next year and will still weigh on the fleet evolution for the next few quarters, albeit to a lesser extent.

Nonetheless, the U.K. is and will remain a key market for Ayvens in which we continue to push for delivering sustainable and profitable growth. Our commercial franchise continues to develop with our fleet with large corporates increasing by 2% and our footprint with retail customers, excluding brokers, remaining unchanged.

Another key area of focus in this country is our asset risk. Price dynamics are quite specific in the U.K. in comparison with other European markets. While prices for both new and used cars are evolving in line with our expectation for ICE cars and PHEV, evolution for prices on BEVs is trending below our anticipation. This situation is very specific to the U.K. and driven by a mixture of adverse local conditions impacting BEV's new and used car prices. First, the absence of tariffs on Chinese imported cars.

Second, the recent introduction of subsidies on new battery electric vehicles. And finally, these used cars cannot be exported because of the right-hand wheel, which exporting is an effective mitigant usually to losses on used BEVs in other countries where export is doable.

This has led us to book a prospective depreciation charge of EUR 48 million on our U.K. fleet. We keep monitoring closely market dynamics. For new productions, we lowered the residual values on BEVs across the group early in the cycle to levels we are still comfortable with.

Finally, on the U.K. Motor Finance, following the FCA announcement on the 7th of October, we reiterate that our provision of EUR 93 million remains sufficient. Let me now turn on to the section on the financial results. So I will follow up with revenues on Slide 10.

This quarter, again, Ayvens posted high revenues with gross operating income reaching EUR 851 million, an increase of 17.6% compared to Q3 '24, thanks to higher margins. Total margins stood at EUR 776 million, up 20% versus Q3 '24. This increase was driven by a very high level of underlying margin at EUR 782 million versus EUR 693 million in Q3 '24.

It was also supported by a strong reduction in nonrecurring items totaling minus EUR 5 million in Q3 '25 versus minus EUR 47 million 1 year ago. UCS results and depreciation adjustments was overall stable at EUR 75 million compared to EUR 77 million in Q3 '24. Before depreciation adjustment, the underlying UCS results continued its normalization and stood at EUR 155 million versus EUR 222 million in Q3 '24.

This decrease was offset by a reduction in depreciation adjustment, which stood at minus EUR 80 million versus minus EUR 145 million in Q3 '24. To be noted, this minus EUR 80 million in Q3 '25 includes the prospective depreciation charge of minus EUR 48 million booked in relation to the weakness of U.K. BEV prices, as I mentioned earlier.

Let's now turn to the next page on margins. Total margin stood at EUR 776 million, up EUR 130 million versus Q3 '24. They were supported by very strong underlying margin at 593 basis points of net earning assets. Diving into margin subcomponents, the leasing margin stood at a very strong level in continuation of the trend seen in previous quarters. It was supported by lower interest costs across fundings -- all funding sources and was further helped by a few positive one-offs in countries post IT migration.

We do not expect these one-offs to reoccur over the next quarter. Services margin also increased, supported by lower maintenance costs further to underpinned by the ramp-up in program in procurement and insurance synergies, which are being delivered according to plan. Overall, 9 months 2025 underlying margin stood at 569 basis points versus 530 for the first 9 months of 2024.

To finish on margins, impact of nonrecurring items was very limited this quarter at minus EUR 5 million versus minus EUR 47 million in Q3 '24, thanks to much lower impact for both hyperinflation and mark-to-market of derivatives. We expect that hyperinflation should be higher in Q4 '25.

Let's move to the next page on UCS and depreciation adjustment results. The UCS results and depreciation adjustments reached EUR 75 million versus EUR 77 million in Q3 '24 and EUR 143 million in Q2 '25. The UCS results before depreciation adjustments per car has dwindled from EUR 1,420 in Q3 '24 to EUR 1,110 per car in Q3 '25.

While still remaining at a high level, the UCS results show significant disparities between powertrains with ICE car profit still being elevated and BEV losses per car remaining substantial, albeit stable compared to previous quarter.

In Continental Europe and other regions, the evolution of BEV has remained consistent with our anticipation. However, used BEV prices in the U.K. have decreased beyond our anticipation, leading us to book a prospective depreciation charge of minus EUR 48 million.

As a consequence, UCS results and depreciation adjustments stood at EUR 536 per car, down from EUR 972 per car in Q2 '25, but still slightly up versus Q3 '24. For the 9 months '25, UCS results and depreciation adjustments stood at EUR 740 per car, which is slightly above our full year guidance '25, which was EUR 300 to EUR 700 per car.

Volumes stood at 140,000 vehicles. Again, the decline in quarterly UCS volumes compared to last year is mostly explained by the lower number of cars that are being returned at the end of the contract due to 2020 to 2022 vintage shortages.

On the next page for operating expenses, so we can see that total operating expenses stood at EUR 429 million, showing a decrease of 6.7% compared to Q3 '24. Costs to achieve amounted to EUR 17 million versus EUR 20 million in Q3 '24. Our CTA over 9 months '25 amounted to EUR 79 million, in line with plan for the full year ranging between EUR 115 million and EUR 125 million.

Then looking at underlying costs, they stood at EUR 412 million and were down 6.1% versus Q3 '24, driven by the ramp-up in cost synergies as integration progress is well on track and strict cost monitoring continues across the organization.

This cost decrease, combined with a very high level of margins, led to a cost-income ratio at 52.8%, down by 10.6 percentage points compared to Q3 '24. cost-income ratio for the 9 months '25 stood at 56.1% versus 64.3% for the 9 months '24.

For the remainder of the year, we are expecting some increase in BAU cost compared to Q3, which is related to the year-end closing, and we keep our full year '25 cost income guidance unchanged at 57% to 59%. So for the rest of the income statement, we have starting with cost of risk, as shown on the left-hand side graph, the cost of risk, which is stable at EUR 27 million, representing 21 basis points of average earning assets versus 22 in Q3 '24, so still a benign environment there.

Profit before tax stood at EUR 390 million, up 70% versus Q3 '24 as a result of a very strong margin and well-controlled operating expenses. Effective tax rate is at 29.7% and continues to be in line with our indication for the year and net income group share is slightly higher than last quarter at EUR 273 million, but strongly up 86% versus Q3 '24.

As a result, return on tangible equity stood at a strong 14.3%, further supported by the EUR 700 million capital distribution. Now turning to our final slide on RWA and capital. RWA stood at EUR 54.3 billion at the end of Q3 '25, which is a decrease of EUR 1.5 billion compared to Q2 '25, very largely due to a significant decrease in market risk RWA.

As a reminder, the RWA, this market risk RWA results from the group's foreign exchange exposure, which is made up exclusively of equity position in non-euro countries. The RWA decrease in Q3 reflects the waiver approved by the ECB. This waiver allows us to exclude part of this equity exposure from RWA computation as their volatility is contained within certain boundaries.

The graph on the right-hand side of the slide details the 160 basis points of CET1 capital that Ayvens has generated between end '24 and Q3 '25, and it can be broken down as follows: First, the implementation of CRR3 in Q1 '25 led to a reduction of EUR 3.4 billion in operational RWA translating into a saving of 77 basis points of CET1.

Second, the authorization from the ECB to apply a foreign exchange waiver starting in Q3 '25 brings an additional saving of 33 basis points. At last and importantly, the increase in retained earnings since the end of last year, reflecting higher profitability of the group represents a total of 51 basis points.

On that basis, the Board of Directors authorized a total distribution of EUR 700 million, representing 133 basis points of CET1 ratio, bringing this ratio down to 12.8%, closer to our target.

I now leave the floor to Tim to conclude the presentation before our Q&A session. Thank you.

Thanks, Patrick. As this is my last call as Ayvens' CEO, I just wanted to share my appreciation for the discussion and exchanges we have had and the trust and support that you as investors and analysts have shown us over the years.

I recognize that the beginning of our ALD-LeasePlan merger was quite a challenge for all parties. But I think with today's results, the significant return of capital to shareholders and the prospect of the future of Ayvens is a good sign of appreciation to those of you who kept believing in our story.

The 1st of December, I hand over to Philippe, a great platform and a company that is in a good place to deliver the promises that has been set. I'm immensely proud of what my ex-group colleagues and the teams have achieved over the past years. Their determination, professionalism and shared ambition have enabled us to successfully bring together 2 great companies and establish Ayvens as a truly global leader in sustainable mobility.

Together, we have built a group with a unique scale, capabilities and a new momentum, one that is very well positioned for the future, I believe. With that, we are now ready to take any questions you may have.

[Operator Instructions] The first question is from Jacques-Henri Gaulard with Kepler Cheuvreux.

Tim, congratulations. I hope you enjoy the sun a lot during your retirement. And congrats for the results. I have so many questions, but I'll ask two, okay. The first one, if you can remind us maybe the agreement on the contingent liabilities with Lincoln would be great and what it's going to entail? And maybe because you've addressed the BEV situation in the U.K., if we could have maybe an outlook on the BEV situation for the whole perimeter of Ayvens would be great. And congrats again.

Thanks, Jacques-Henri. Let me start on your question on the BEVs in the U.K., and then I think Patrick can give you a bit of more details on the contingent payments for the consortium. So I think -- so first of all, what we are seeing in the U.K. is quite a specific situation. I think, first of all, I think Patrick mentioned that, first of all, when a car is in the U.K., it stays in the U.K. to some extent because obviously, the wheel is in a different side than what it is in Mainland Europe, which means we cannot use one of the mitigations we have in the rest of Europe to actually bring a car to a more attractive market.

So that's one thing. And then the second thing that is pretty important for the U.K. market is the fact that there are -- I mean, there's no tariffs on the Chinese manufacturers. So the Chinese manufacturers have actually through price mainly, gained, I think, 13% market share very, very quickly and brought down the prices of new cars. And last but not least, the U.K. introduced new subsidies, which also again have an impact on the new car prices and hence an impact on the used car price of BEVs in the U.K.

And then overall, there is typically shorter contracts in the U.K. than there is in the rest of Europe. So that is actually leading to significant losses on the BEVs in the U.K. It's been like that for quite some while, but obviously, it's pretty bad.

We don't see any contagion on Mainland Europe, mainly because of there is tariffs, first of all, on Chinese BEVs in -- within the EU. And we are capable of exporting -- we are exporting more than 50% of our returns on BEVs to other markets. And where there is actually several markets today where there is a real demand for used BEVs. It means that in areas where the demand is not that great, we can actually bring these cars to other markets.

So for the time being, we don't see in anywhere near the same -- actually, we see quite a stabilization in Mainland Europe in terms of the BEV prices that we have seen for the last couple of quarters. And these price scenarios that we are using that we're also back testing is fully in line with our anticipation. So that's on the BEVs, Jacques-Henri. Maybe Patrick, on the...

Yes, on the agreement for contingent consideration. So as you may recall, and it's disclosed in our annual report and the notes there was a remaining agreement with the former LeasePlan shareholders, whereby Ayvens, depending on certain conditions to be met, was supposed to pay a contingent consideration in time to LeasePlan shareholders -- former LeasePlan shareholders.

So it's been a long negotiation with them and many topics that we openly discussed with you in previous results publication and many things that we -- that came -- became apparent post closing. And all this topic have led to a very significant level of discussion with the former shareholders, which is now closed, signed and executed.

And as we put it in the press release, the outcome of this agreement is expected to have a positive impact on Ayvens' total revenue in Q4 '25 mostly in revenue, by the way, and we will record it in the Q4 results. So these specific items are a mix of reimbursement from TDR and release of provisions we had built over time in balance sheet. So I could name a couple of them, such as the list Russia loss reimbursement, contingent consideration on CSF order book, coverage of some tax risk and many other things.

It's a long list of items, which have led to an overall negotiation. So this result is actually showing a positive outcome of a long-lasting negotiation, as I mentioned. But in parallel, we continue to restructure our operations to continue reducing our cost-income ratio beyond the levels we are currently showing this quarter.

Albeit it is very low and it might be back in higher territories in Q4. As such, we are maintaining our full year guidance. So in relation to this exceptional booking related to the federal agreement, we will book additional transformation charge in the next Q4, and we will give full disclosure on that with Q4 disclosure.

Overall, it's the one offsetting the other, and it's not expected to impact significantly the profit before tax. But it's fair to say it will distort the readability of our accounts in Q4. But again, in due time, we will provide the full items helping you to see what is the level of underlying activity.

The next question is from Sharath Kumar with Deutsche Bank.

Congratulations, first of all, Tim, for a wonderful career and good luck for your future. I have 3 questions, please. Firstly, on the margins. Can you quantify the small one-off elements, which you said boosted the margin? And where do you see the outlook from here? Is it safe to assume margins well north of 550 basis points from here?

Also, you spoke about lower funding costs. Can you elaborate on the reasons? And should we be worried about potential higher borrowing costs for the French sovereign in 2026? So that's the first one. Second one is on fleet growth. You've been pretty cautious rightly so on fleet growth, but anything that you have seen to change the mood here? So when do you think is a reasonable time frame to expect a resumption? And what sort of quantum are we talking about?

And where are we in the de-fleeting efforts in the 3 markets that you cited? Lastly, on RWA, very encouraging to see the progress on market RWA. Can you give us more clarity on the ECB waiver, whether this is permanent or is there more to come? And sticking with the same topic, I see your operational and market RWA despite the improvements is still slightly higher than many European banks. So can you comment on this and further scope to reduce here?

Thanks, Sharath. So yes, let me take your second question. I think there was actually more than 3 because there was a few ones in. But I'll leave that to Patrick to talk about the margins and the risk-weighted assets.

On the fleet growth, so I think you saw a number on the U.K., it's around 30,000 units that we have been de-fleeting in the U.K. in 2025. And we are -- it's a very, let's say, targeted way of looking at the market. There is particular segments in the U.K. market that is just not at par with profitability, and that's where we are exiting.

We are still very committed to the U.K. market. As you have seen, we're actually growing a bit in the corporate market, and that's where the margins are correct. And I think in Turkey and on Fleetpool mainly, which is the subscription activity we had in Germany, I think we are talking around 15,000 units all in for '25.

And on those 2 markets, we are pretty much done, not completely done yet with the U.K. Then I think we have talked a lot in the last couple of quarters of all the activities that we have been putting in place to actually reactivate a more stronger commercial, let's say, effort.

And it's a big ship, and there is a long tail on our business, whether it's actually slowing down business or the other way around, it takes time. I think we are seeing the first signs, at least the last 4, 5 weeks, we have seen a trend where the new order intake is improving, which means we are starting to filling up our order bank probably by end of this year.

And hence, we do anticipate slight growth in 2026. But again, we are not anticipating 2%, 3% organic growth on the fleet in '26, at least where it is now, but the market has been quite adverse in '25 as well. I think we said there has been some changes on the benefit in kind taxation in several of our larger markets, in particular, France and Italy.

It's one of the reasons why we have seen quite a sluggish order intake in those 2 countries in the first 6 months. That is -- seems to be on a good track now. I think the new taxation have been absorbed and understood by the market, and we start seeing a bit of activity there as well.

So I think you'll see that from '26, the restructuring of the 3 areas I mentioned is pretty much done. There's still a bit more to be done in the U.K., but not necessarily in the same level as we see in '25. And we start seeing that some of the initiatives and probably important as well is that we have been or we are cautious on residual values on EVs.

And in the, let's say, the first 6 months of '25, we did not necessarily see competition following us. But in the last quarter, we have seen that the market is aligning more to our position, which again, should help us also regaining some growth in some of our more important segments. So that's on the fleet, Sharath, maybe over to you, Patrick, on margins and risk-weighted assets.

Yes. So starting with risk-weighted assets, indeed, we've been able to -- and so again, it's not something that comes all of a sudden. We've been working on that for the past 2 years probably. On the ECB waiver, the ForEx waiver, the ECB, the ForEx waiver approved by ECB. So it's basically, if you can demonstrate that your ForEx risk is contained within certain boundaries, you can get a waiver as per regulation and it's on regulation, which is applicable to any player, any bank in the market.

So we have been able to demonstrate that and it has been acknowledged as such, and it's an improvement that -- and I think we had mentioned previously that we are expecting to optimize our RWA. There was the operational risk improvement at the beginning of the year. There is no the market risk, which is optimized. We do not rule out additional optimization for the future as we remain a business, which has a relatively high level of consumption of RWA.

If you look at total RWA versus total NEA, it's about -- it's still more significant, which is not usual in the banking industry. But let's say, we have been able to partly address this issue and to make our usage of capital less intensive, which is good for the overall profitability and return of the firm.

Coming back to margin, indeed, we have a small one-off in the quarter in the leasing margin, which is around EUR 15 million. It's a release of provision in a number of countries which have been migrated and which were holding a couple of reserves back in case they would have had issues in migrating the clients from one IT system to the other.

So EUR 15 million represents 10 to 15 basis points when annualized. So you see how much this margin basis points when -- which is a quarterly number, which is then annualized, can be volatile. And that's why in consistency with our past practice, we don't give a guidance on this margin, but it should not remain at this elevated level in the next quarter also because we want to put a bit more emphasis on volume growth versus the defense of margin.

And also the lower funding costs we are seeing this quarter and which will probably last, indeed the rest of the end of the year is relating to the fact that the NEA are coming down and NEA are coming down because -- and that's a well-anticipated evolution.

The fleet is going down. And that's, again, something we are monitoring very closely because we want to restructure some parts of the business, which are not the right profitability. But also -- and that's an important evolution that we observed throughout the year, the NEA per car is coming down.

And this is reflecting actually the pressure on the prices on new cars, which are starting to decrease now from a year. That's the case on BEV cars less on ICE, but clearly, that's the case on BEV cars. That's also corresponding to the purchasing synergies we are able to generate further to the merger between LeasePlan and ALD.

So this lower NEA per car have led us to review our expected NEA our projection of NEA and review slightly downward our funding program, which is then leading to lower funding cost as it is -- as it can be anticipated.

The next question is from Matthew Clark with Mediobanca.

So a question from me is on proposed French tax changes, both for dividends and buybacks. How do you expect these to impact you, if at all, both for this program and programs going forward?

I think it's fair to say the French tax landscape is rather uncertain right now. It's difficult to comment as we don't have a finalized decision and budget law and we have a little visibility on that. We don't expect this change to have a meaningful impact as we speak on our French business.

And the evolution of the French tax on buyback. So we have a French tax on buyback, which is accounted for in our equity for the current buybacks. Again, we have limited visibility on the evolution of that. At this stage, we do not plan that it would have a significant -- it would impact significantly either our French business or our capital return policy to shareholders as we speak.

Okay. But just to clarify, is your understanding of the new buyback tax proposal that it applies to the nominal balance rather than the par balance as per the existing lower buyback tax. Is that the right read?

Yes. But again, it's difficult to comment on nonfinite tax of law.

The next question is from Geoffroy Michalet with ODDO BHF.

Congratulations for the strong results and strong underlying improvement as well. Two questions for me. First one has to do with the one-off contingent consideration that we should see in Q4 and on which you said it would be rather on revenue and its counterpart, let's say, the increased OpEx for transformation.

Can you give us a sense of the magnitude of those 2 elements that are set to offset one another? That was the first question. And the second question is that I noticed that the mix of EV delivery this quarter has slowed down to 37% versus 43% last quarter. Is it something deliberate? Or is it more a demand from your client? How can you -- how can we read this?

Thanks, Geoffroy. Let me take your second question first, and then Patrick will elaborate a bit more on the contingent considerations. So no, I think what -- I mean, as you know, we took very conscious decisions back in early '24 to reduce the numbers of the residual value on BEVs, and we have taken quite significant steps there. And as you know, we have typically an order bank that takes 6 to 9 months to deliver.

So we are starting to seeing the first sign of that. I think what we have said is part of as well, to some extent, the fact that we are not growing very fast is that we have priced ourselves for a period out of that market. So now you start seeing the results of that. I think there is still a big appetite from our clients to go electric if it's affordable.

And we still serve quite a number of our large clients with EVs. But this is really, I would say, a result of our pricing on the residuals on EVs and I would say, also our wish to decelerate a bit the electrification in our fleet to take a bit more time to do the transition to electric. So I think that's. But maybe on the one-offs...

Yes, on the one-off to be expected so far in Q4 '25, the order of magnitude you were asking for is somewhere between EUR 50 million and EUR 60 million.

The next question is from Nicolas O Sullivan with UBS.

Congratulations on the delivery today. My first question would be, what do you think is the right level of CET1 ratio to run the business going forward? And would you consider in the future to return any excess above roughly 12% CET1 ratio back to shareholders? That will be my first question.

And the second question would be whether you see more operating leverage going forward once you implement the synergies from this plan? If you grow in the retail segment, second life leasing and the current portfolio reshaping you are doing, if you could tell us about your potential there, please?

Yes. Thank you, Nicolas. So let me take your second question first in terms of operational leverage. I think it's fair to say that we have our 52% cost income guidance for '26. That's quite ambitious still even so we are trending quite well for the time being.

Coming -- I mean, past '26, we obviously still think there is more operational leverage to be done. I think we -- when you do a merger like this, you do not necessarily optimize your processes. We have put in place a new target operating model that is there, but probably can also be optimized. And I think with some of the new technologies around AI, there is obviously opportunities as well.

Some of it will come with investments as well. So the question is how much flows through the P&L in the first years. But obviously, there is another step to be taken. And I think that's actually on my successor list to get done. Philippe will be looking at that as he arrives as well and can work on operational excellence and obviously try to trim the cost base and the margins even further. And maybe on the CET1, Patrick?

Yes. On the CET1, I think for now, we are at 12.8%. I think we are happy where we are. I think the 12% target we have is probably -- actually, we've always trended slightly above this level. So we have no plans to go back exactly to this level in the short term because we believe the current level is more or less appropriate.

But I would like also to point out on the Slide 15, we have put in the results in the presentation that now we can see that this business post restructuring, post-merger, is generating significant capital surplus. So it will be on the upcoming quarters and years, it will be a Board decision of what is the right way to address this significant capital generation over the years if the environment remains as it stands and if the fundamentals of the business stays what they are. But indeed, it's an important point to take into account when looking at Ayvens today.

[Operator Instructions] The last question is from Owen Paterson with Jefferies.

It's Owen from Jefferies here. Just a couple of quick questions. First, technical clarification on the buyback. Will Societe Generale participate proportionately in the buyback to keep their shareholding at the same level? And then my second question is just the end of year increase in OpEx that you've signaled. You've spoken about a few moving parts in that already, the contingent liabilities, and it looks like some cost to achieve as well. Is there anything kind of underlying those? Is this kind of like a typical seasonal shift or not? Just a bit more color there would be good.

I think I'll leave both of these questions to Patrick to give on those.

So on the buyback, I cannot really speak for Societe Generale, but the buyback, the shares will be canceled. So if nothing is done, obviously, the shareholding of Societe Generale will increase, but the rest of the question needs to be asked to them actually to know exactly what they want to do.

And the contingent consideration, so yes, if I understood well your question, yes, there is a positive effect of the contingent consideration, which is -- which will give us additional transformation charges that we need to take for the improvement of the business and even making further productivity gains in the overall organization.

But it's also fair to say that the underlying cost of Q3 is rather low due to a number of accruals we need to make sure at the right level throughout the year. And also because post migration, we have a number of countries where there's a lot of operational improvement to be done, and we need to spend a bit of money in [indiscernible] to help them going through issues relating to customer satisfaction, which are coming from the merger and the fact that the habits of the customers have been changed through the merger of the organization in the various countries. That's why we say that there will be probably an increase in underlying OpEx in Q4. And that's why we are sticking to our full year guidance in terms of consumer.

There's a follow-up from Sharath Kumar with Deutsche Bank.

A quick follow-up on the CTA. Can you clarify that it will be still around the EUR 120 million levels that you guide to? Or are we talking about a higher CTA now in lieu of the one-off gains?

I think we remain with the EUR 120 million. There might be -- as Patrick just mentioned, there is a few things we might look at for Q4, but it will not be impacted significantly. That's all. We remain around the EUR 120 million for the year.

Gentlemen, there are no more questions registered.

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Ladies and gentlemen, this concludes today's Ayvens conference call. Thank you for your participation. You may now disconnect.