Ayvens (AYV) Earnings Call Transcript & Summary

Good morning. This is the conference operator. Welcome, and thank you for joining the Ayvens Third Quarter 2023 Results Presentation. The speakers today will be Tim Albertsen, CEO; and Patrick Sommelet, Deputy CEO and CFO. [Operator Instructions]. At this time, I would like to turn the conference over to Mr. Albertsen. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen, and welcome to this Ayvens Q3 2023 Results Conference Call. First of all, thank you for joining us today. I'm hosting this call with Patrick Sommelet. First, I will present our highlights for the Q3. Then Patrick will comment on our financial results, which include LeasePlan since May 22. And to help you better understand our performance, he will provide some additional explanations on a comparable basis. After that, I'll say a few words on our outlook for the full year 2023. We'll then take your questions. Let's go to Slide 5 on the key takeaways. In the third quarter, we accelerated the pace of integration of LeasePlan. A number of key initiatives, of which global and local RFPs are well underway, and we have already reached our first procurement and our objectives in terms of bonus with several OEMs. On top of that, we have taken 2 important steps towards becoming one. First, we presented our PowerUP 2026 strategic plan last September. With this plan, we draw up our industry leadership to shape the future of mobility and achieve excellence. We have set clear, ambitious, while realistic objectives around our 4 priorities: clients, operational efficiency, responsibility and profitability. Second, we launched our global mobility brand, Ayvens, which unites the 2 companies together on one single identity and highlights our new brand promise, make life flow better by delivering mobility that is simpler, smarter and sustainable. The new name and brand launch has been extremely well received by our clients, partners and employees. I'd also like to confirm that we expect to finalize our Purchase Price Allocation exercise by end of this year, and that we'll communicate on the outcome as soon as we can. In the context of challenging macroeconomic conditions and normalization, yet still favorable used car markets, we achieved a solid commercial performance and mixed financial results compared to a historical high on the 2022 base. Our commercial activity was particularly strong in Q3. Ayvens continued to lead the way to a sustainable mobility and to the electrification in particular. We own the largest global multi-brand EV fleet with more than 500,000 BEVs and PHEVs. This accounted for 19% of our funded fleet at the end of September. Thanks to the continued growth of our funded fleet and with the acceleration of the EV penetration in Q3, our earning assets increased by 14% on a like-for-like basis compared to a year ago. We posted a EUR 226 million net income group share and a return on tangible equity of 12.5% in Q3. Our capital position was strong while core Tier 1 capital at 12.3% end of September. And finally, we confirmed our strong funding capabilities as we issued EUR 2 billion bonds in September, our largest issuance ever. This brings the amount of our bonds issued year-to-date at EUR 3.85 billion. Let's move to Page 6 on our strong business growth. As just mentioned, our earning assets increased by 14.1% year-on-year to more than EUR 50 billion. This is a strong pace, which was taken into account in the financial trajectory to 2026, which we presented at our Capital Markets Day last September. In terms of volumes, the positive trends of the previous quarter continued. Our total fleet stood at 3.4 million vehicles, up by 3.8% compared to a year ago, reflecting our dynamic commercial activity. Our funded fleet reached 2.7 million units, up 3.4% year-on-year while our fleet under management increased by 5.3%. We achieved an outstanding performance in electrification with EV penetration at 37% of new registrations in Q3 2023. We're clearly leading the transition to Net 0 with full EV penetration at 23% and plug-in hybrid penetration at 14%. Over the first 9 months, our EV penetration was 34%, much ahead of the European market, which is at 20% -- 22% only. Let me hand over to Patrick, who will comment on our financial results in more details from Page 8.

Thank you, Tim. Good morning, ladies and gentlemen. I'm now going to present the financial results and the contribution of LeasePlan into Ayven's results for the third quarter of 2023. I will start by presenting our reported figures, meaning with LeasePlan, as I said, from May 22. And then I will present our like-for-like performance so that you can have a better understanding of Q3 2023 compared to Q3 2022 and underlying business trends. Note that, as Tim mentioned, in the reported figures, pending the finalization of the PPA, which we expect by the end of the year, no reduction in depreciation costs nor UCS results was recorded on LeasePlan fleet. The reported performance, which we're presenting is before the impact of the PPA. So on Page 9, you see that gross operating income is going up 25% from EUR 650 million in Q3 '22 to EUR 814 million in Q3 '23. This is a combination of several factors. The most important one is obviously the contribution of LeasePlan in the quarter, which comes after the consolidation adjustment I just mentioned. Prior to PPA, we consolidate -- we do not include consolidate in our results related to reduction in depreciation costs and UCS results. Taking no UCS profit for LeasePlan is certainly a conservative assumption for future quarters, depending on the evolution of the market prices, they could resume at a low level in the next quarter for LeasePlan fleet. We'll come back later to the underlying factors, which are impacting our Q3 results and on the many exceptional items impacting the top line. One important factor is the mark-to-market of the swap book, hedging net interest margin on LeasePlan side, which is negative this quarter for minus EUR 82 million. We detail it laster, as I was saying, the exceptional revenues and costs will understand the underlying performance. The gross of 25% is mostly the impact of the perimeter effect comparing Q3 ALD stand-alone to Q3 '23 Ayvens, that is ALD plus LeasePlan. Total margins are going up 62% from EUR 459 million to EUR 741 million for the same perimeter effect reasons. You see that profits are going down significantly. As you can see, UCS profit per vehicle are going down from EUR 3,014 in Q3 '22 to EUR 1,033 in Q3 '23. This is the effect of, firstly, market prices, and we'll see the next slide, the gross UCS per vehicle, if I may say, that is before the effect of previously accounted for reduction in depreciation. And second factor is a UCS profit for LeasePlan, which is removed from the results and hence not contributing to the top line. Overall, the UCS profit are EUR 74 million in Q3 '23 and they were EUR 191 million in Q3 '22. Operating expenses are going from EUR 219 million in Q3 '22 to EUR 449 million in Q3 '23 with the cost income, excluding nonrecurring items at 61.1% from 55.9% (sic) [ 51.2% ] 1 year ago. This cost income is without exceptional revenues and costs. The relatively elevated level is due to the fact that as we entered in our CMD, we see pressure on margin. We'll come back to that in a minute. And second, we do not have yet the effect of synergies in both revenues and costs. Cost of risk is very benign and decreasing in basis points, reflecting a still excellent environment for corporate customers. Net income group share is coming down from EUR 318 million to EUR 226 million under the effect mostly of lower prospective depreciation on the ALD side and the very strong reversal of swap book mark-to-market from Q3 to Q3 at LeasePlan also. If we switch to the next slide, No. #10, you see there the progressive normalization of the used car market that we're seeing today. So we comment on this slide, as you can understand, only ALD information as for LeasePlan before PPA, all related revenue are eliminated from the income statement. You see the EUR 74 million we have this quarter, but also the impact of previously accounted for reduction in depreciation. Net profit that is after those reduction in depreciation, the profit is going down. The fact that it is going down is the reflection of market prices beginning to normalize, while staying still at an elevated level. So UCS profit before reduction in depreciation stands at EUR 2,346 per car in Q3 '23 to be compared with a very high level in Q3 '22, which was EUR 3,607 million and the number of cars sold in Q3 amounted to 71,500. For 9 months, we have a net UCS profit per unit standing at EUR 1,654, which is in line with our full year guidance that we'll come back to at the end of the presentation for the full year '23, and this guidance was expressed cost reduction in depreciation costs. Now we're going to switch to like-for-like performance. So before I comment on the details of figures, I'd like to spend some time on how to analyze information which follows. We provide you here with an illustration of what would be a like-for-like performance, meaning stripping out of the consolidation scope effect, the consolidation adjustment and their impact on UCS results and also the nonrecurring items. We have built Q3 '22 and Q3 '23 on the same scope as the one we have at the end of September, that is including LeasePlan, but excluding LeasePlan USA, which was sold in December '22, and excluding the 6 remedy countries, which were sold on August 1. Also, ALD Russia, which was disposed of earlier this year is excluded. This P&L are before consolidation adjustment linked to the fleet of LeasePlan, which I explained just now. So let's now move to Slide 12. You see on this slide, the development of margin on a like-for-like basis. Overall, and before exceptional items, total margin revenues are stable at minus 0.6%. This is plus 2.3% on the ALD side and minus 3.3% on LeasePlan side. This comes on the back of earning assets increasing by 14%, which means that our margin in percentage are currently under pressure. We believe this comes mostly for 2 reasons. First, the impact of inflation and services margin on contracts, which have most of them been negotiated more than 1 year ago; and second, contract extension in the context of delayed car deliveries. You see that we still have a reduction in depreciation cost on both sides under the effect of market prices, decreasing while still at an elevated level. And then looking at the many nonrecurring items for which we give the full detail, you see that the most significant one is the mark-to-market of derivatives. Let us spend a few minutes on this. As a stand-alone company, LeasePlan was relying on a very diversified source of financing. To adjust our interest rate risk by maturity bucket, LeasePlan was using swaps held to maturity. It is important to state and to have in mind that the book is economically hedged. That is the asset, the leading assets on the asset side, under funding and the swaps on the liability side. However, from an accounting standpoint under IFRS rules, operating leases do not qualify as financial assets, and therefore, are not eligible to hedge accounting. As a result, we have on the asset side operating leases, which are in accrued interest income. And on the liability side, book of swaps, which is mark-to-market, thus creating some accounting noise. In '22 and beginning of '23, the mark-to-market of the swap book was positive. In Q3 '23, rates in euro are mostly stable, while rates in British pounds are slightly decreasing. In addition, we have the converging to par effect. This creates a minus EUR 81.8 million impact on our revenues to be compared with the plus EUR 97.5 million, which was registered in the third quarter of '22. In appendices, we give more details on the swap book as well as its current mark-to-market, stock of mark-to-market, which is a positive EUR 216 million at the end of September '23. And also it's point in time sensitivity to interest rates, not considering the converging to par impact, which is at around EUR 17 million for each 10 basis points of variation. It is important to have in mind that should interest remain unchanged from today and the book also unchanged, we would have by the maturity of the swap book, which is mid-'25, a negative minus EUR 216 million coming in our P&L progressively, and this is what we have taken in our accounts in our business plan presented at the Capital Market Day. Amongst other nonrecurring items, you see that we still have a reduction in depreciation costs on both sides under the effect of market prices decreasing, but still at an elevated level. At last, you also see the consolidation adjustment to get from underlying to be reported. If we now switch to Slide 13, which is the like-for-like gross operating income, you see that we find our margin number, which are stable, minus 0.6%. And then you have used car sales results before and after the impact of reduction in depreciation cost previously accounted in our results. And before those results, it's a decrease of 17.3% under the effect of lower market prices. As a result, GOI, gross operating income, underlying and like-for-like is coming down 6.7%. Let us turn now to Slide 14 to comment on like-for-like operating expenses. Overall, there are exceptionals as well in operating expenses, which have a combined impact, which is displayed on this slide. Excluding exceptional, expenses would be up by 6.5% on a like-for-like basis under the effect of inflation and head count increases, reflecting the new regulated status of Ayvens and the integration of both companies before synergies. As a result, the cost income, excluding exceptional items, goes up from 57% in Q3 '22 to 61% in Q3 '23, as was anticipated in our business plan. If we switch to Slide 16, we see that our core equity Tier 1 ratio today stands -- at the end of September stands at 12.3% versus 12.5% at the end of June '23. You see that the RWA risk weighted assets are increasing from EUR 54.3 billion to EUR 56 billion under a number of effects, first of which and the most significant one being the floor on LeasePlan credit model, which is accounted for at EUR 4.2 billion. We have a minus EUR 1.2 billion, which is related to the sale of remedy countries, which I mentioned. We have been able to optimize the capital treatment by EUR 1.3 billion in the quarter. This is mostly related to the credit connection factors, which is applied to LeasePlan order book. Organic growth on the quarter comes out at plus EUR 0.5 billion of RWA. So this is the combined effect of credit RWA growth and a slight decrease in the order book. The overall impact of minus EUR 0.5 billion mostly comes from the reduction in cash deposits. So I will now hand over to Tim, who will comment on our full year '23 guidances.

Thank you, Patrick. Let's move to Page 18 on our guidance for the full year. In the current macroeconomic context, the demand for our services remains strong. New car registrations continue to progress compared to last year. However, they remain significantly below the pre-COVID levels. This, together with the inflation on car prices leads us to maintain our expectation that the used car markets will continue to norm us gradually while staying at a high level. For 2023, we continue to guide on funded fleet. We expect growth between 2% to 4% this year, and the guidance is unchanged. From '24, we will guide on earning assets as we disclosed at our Capital Markets Day. Car sales results per unit between EUR 1,200 and EUR 1,600 on average, including the negative impact of reduction in depreciation cost in previous quarters. This is on ALD only for which we forecast 290,000 vehicles sold over the full year. As previously indicated, no used car sales results is assumed on LeasePlan used car sales, pending the finalization of the PPA exercise. This guidance is also unchanged. Cost to achieve at EUR 170 million, which is also unchanged to the past. I confirm that the Q3 2023 results published today are fully factored in, in the financial trajectory to 2026, which we presented at our Capital Markets Day in September. And we also confirmed the guidance, which was given at our Capital Markets Day, including the 50% dividend payout policy. We expect to finalize the Purchase Price Allocation exercise by the end of 2023, in which case, we will share the outcome with you as soon as possible and practical. This concludes our presentation. Thank you for listening, and we're now ready to take any questions you may have.

[Operator Instructions] The first question is from Sanjay Bhagwani with Citi.

I've got 3 questions. My first one is a bigger picture on the dividend policy. So given that now we're seeing a lot of, let's say, one-offs in the reported income and then, say, for example, we also have these mark-to-market derivative losses already in the reported income. So are you considering to, let's say, change your dividend policy where the payout could be dependent on the underlying net income instead of the reported net income? The reason why I'm asking this question is because, let's say, for an investor looking for a dividend yield in ALD. A lot of the dividend is now dependent on, let's say, what happens to the interest rates in the next 2 years. So could you please maybe provide some color on that?

Yes. So that was your first question, Sanjay. I guess you'll come back to the other 2, I guess. But -- so I think what we communicated at the Capital Markets Day is that we have a 50% dividend payout policy based on reported results. And that has not changed, Sanjay, at this point. And, of course, it's up to the Board to decide at the end of the day. But that remains the policy as we speak.

And my second one is on the LeasePlan UCS profits. I mean we see that there is -- actually this profit has happened of EUR 33 million and UCS LeasePlan reduction at depreciation cost of EUR 117 million. So the reason why these are not in the accounts is because you are still doing the fair value adjustments. So can we know when can we expect this to be in the account? Or let's say, of this EUR 150 million, how should we expect this to be in the accounts by end of this year? And I'll follow up with the last one after this.

Okay. Patrick, do you want to take that?

Yes, right. We're not considering these items because they are part of the PPA adjustment, the PPA adjustment is not only about the operating lease assets. We're valuing kind of mark-to-market all the items, which are composing -- which are building the balance sheet, the assets and liabilities of LeasePlan, although this is a very long comprehensive exercise. We expect to communicate on the results by the end of the year or at the very beginning of '24. And the message we gave in our Capital Markets Day is unchanged. It should be around neutral overall as we see it when we mark-to-market everything. But the very details -- I'm not in a position to detail because the computation are still ongoing. And then after, it needs to be reviewed by our external auditors and also approved by our Board. So to be followed on this point.

And one final one just on the earnings asset growth guidance. So the midterm guidance is 6% earnings asset growth. That is from 24% to 26%. And right now, we saw the 9-month earning asset growth is somewhere around 14%. So again, will it -- is it going to be normalizing gradually? Or this can just go back to 6% next year itself?

So Sanjay, I think it's -- so what we -- when we did the 6% in PowerUP 26, that is taking into account the fact that actually what we're delivering now of cars is cars that were ordered actually 12 even 18 months ago. And obviously, at a time, where discounts were very rare actually on these cars plus probably the most expensive cars we have seen. So first of all, we anticipate we can already see that we're getting discounts back in the market, which will help. And it's also true that what we have seen in the past is that it's really premium cars in terms of the electrification that's going out. And in our PowerUP 2026 trajectory, we anticipate, of course, as you have seen that the manufacturers will start delivering EVs as well at the price mark around EUR 25,000 to EUR 30,000, which will also have an impact. So the 6% on -- as a CAGR is still valid, and it anticipates that obviously that the market normalizes and obviously, that we steer also our business towards that target.

The next question is from Matt Clark with Mediobanca.

So a couple of questions on balance sheet really. Firstly, on the goodwill and intangibles, that increased third quarter on the second quarter. I mean, is that the UCS -- realized UCS result at least reflected there? Or if not, what is it that drove that increase? Second question kind of similar on the IT intangibles at LeasePlan. Could you just confirm that those are fully deducted within the CET1 calculation. Therefore, if you did have to write down that IT intangible, it would not affect your regulatory capital. And any update you can give on assessing that IT project would be appreciated. And then finally, another similar question on the mark-to-market of the swaps. Can you just confirm that, that is a regulatory capital impacting. So we will see regulatory capital fall in line with the adverse impact that will have on reported profits over the next 18 months to 2 years.

Right. I think Patrick will answer your 3 questions, and I can give you a quick overview of the review we're doing of this IT program on the LeasePlan side after that. So perhaps, Patrick, you want to give it a go.

So yes, the mark-to -- thank you, Matt, for these questions. The mark-to-market of the swap is indeed accounted for in the shareholder equity. So at the end of the day, it ends up in the CET1 capital. So the mark-to-market is impacting the CET1 ratio. Your previous question was on the intangible assets. So this one is, yes, the very large maturity is deducted. It's still -- it's not yet in production, so it's deducted from CET1. So an impairment would have an almost neutral impact or close to neutrality and as for the goodwill, very slight evolution, it is a price, yes, some price complement on the acquisition, which have been registered in the quarter. But as you can see, it's a very limited amount.

Yes. And yes, does that answer your questions there, Matt?

Yes.

Okay. And then just on the [ NGDA ] program or the IT program that we also disclosed, I guess, at the Capital Markets Day, is still under review. So I think there's no particular news now. We're making a full review of the program. In the meanwhile, we have seen some of the modules going live in the U.K. with success, so that's good news. But it's too early to say and give more details on that matter. But again, when we -- I'm pretty sure when we do the -- when we can communicate on the PPA exercise, we can probably also give you a much more detailed review of the IT program on the LeasePlan side.

The next question is from Kiri Vijayarajah with HSBC.

Yes. Just a couple of questions on my side. So quarter-on-quarter, it looks like there's been a dip in the fleet size. So could we just have a bit more color on what drove that? Was it from the legacy ALD side or LeasePlan where you saw shrinkage from quarter in the fleet? Would you attribute any of that to potentially arising from disruption from the business integration in any way? And linking to that, could you just talk quickly about how the forward order book is shaping up heading into next year? And when you look at the shape and the mix of that order book, does it feel like there's a bit of a slowdown in that rush towards EVs? Or is that -- would you say that's more just a retail phenomenon and less sort of visible on your side of the vehicle side? And then on the CET1 capital and the RWA optimization work that you've been doing. So firstly, are those debts being properly signed off by the regulator because I'm not sure if they sort of will be happy that you can just with a stroke of a pen reduce your RWAs like that. And do you expect -- is that all of it done? Or is there more about optimization lever still in the pipeline? And then just quickly on -- clarification on Matt's question about the derivatives and the impact on capital. So as those volatile derivatives roll off over the next couple of years, does that help your market risk RWA. I appreciate, obviously, the P&L goes through the CET1 capital. But in terms of the market risk RWAs, as those roll off, does it help your capital consumption there?

Thanks, Kiri. That was a lot of questions, actually. But we're happy to answer all of them. So on the fleet, I think -- so obviously, as you have seen, year-on-year, we're growing still the funded fleet by 3.4% and globally 3.8%. The dip in Q3 is the remedy countries. We were -- basically, the 6 remedy countries went out in August. So I think that's the one that you probably see there. Otherwise, there's definitely nothing that is slowing down growth that we have seen. And to your question on the order bank. So first of all, we're now starting seeing a reduction in the order bank, which is good news. So I would say we have been waiting for that for some while, but it's still at a very, very high level. I mean, so still good, I would say, dynamics in terms of the market. And to your question around the electrification, I mean, there's a big chunk of EVs in the order bank. Is it slowing down? Actually for the time being, not. But we also have to say and we can see that, I mean, electric vehicles, we're still, as I said just before, to Sanjay -- sorry, to Matt, the EVs that is at sale today is simply too expensive for a lot of the car policies that is around in the companies. We have to wait for the manufacturers to come in with products that is between the EUR 20,000 and EUR 30,000 mark. So we could potentially anticipate a bit of a slowdown until that happens. But for the time being, it's not the case, actually. But we would anticipate over the next 12, 24 months that unless we start seeing products, cheaper products, it could slow down to some extent. So -- and I think with that, I'll hand over to Patrick for the last...

Yes. Thank you, Kiri, for the question. On CET1 and RWA optimization, we're reaping the low-hanging fruit currently on that, but it's a work that will go on and continue for the next 1 or 2 years. Clearly, we need to optimize the way the RWA, the earning assets are being treated because it's one of the rare financial business where you have actually RWA higher than earnings assets. So there is potentially room for optimization because it's always potential, and it requires also discussion with the various regulators, which are setting the tone on this side. For that one, we have this quarter -- it's mostly related to the improvement of the credit conversion factor of the order book of LeasePlan. We have gathered sufficient data to apply a better factor. We were already doing that for an ALD side before. So it's something which was -- it was mostly a question of data collection. And if I now answer your question on the effect of the mark-to-market and RWA market risk, no, there is no obvious relation. The RWA market risk that we have is mostly related and only related to the exposure we have in non-euro countries due to our subsidiaries in those countries. And that is, to some extent, unoptimized as well because we have -- we need to be working on it. But it's not something that can be delivered in a quarter that requires some intense data analysis and exchanges with the various regulating bodies. So probably more to come in terms of RW optimization. Very difficult to give a target and very difficult to say to what driven because it depends on a number of factors, which we do not have in our hands fully.

The next question is from Lahmidi Mourad with BNP.

So I have 2. The first one is on the mark-to-market swap hedging that you reported today. Just wondering, was there any similar types of hedging at -- on ALD side? And if so, why haven't we seen similar impact on ALD? So maybe you can dig into the mechanics. And the second question is on the LeasePlan IT costs, the extra EUR 200 million that you referred to during the CMD. Maybe can you single out that line on Q3 2023 expenses?

Patrick?

Mourad. Thank you for the question. For the first one on the hedging of the interest rate exposure, ALD was previous to the acquisition in a different situation because it was benefiting from the funding from Societe Generale and therefore, the risk was kind of transferred to the corporate center of Societe Generale, meaning that when ALD wanted, for example, a term maturity loan, Societe Generale was quoting a market price and ALD was borrowing. So there was a lower need of adjusting those interest exposures with swaps. Not to say that there was no swap, there is no swap on the ALD side, but very -- much more limited than on LeasePlan side. And it's fair to say that going forward, I think we'll -- and I believe we can do some optimization here again because we will have to review the full various convention when it comes to asset and liability management. So we can probably implement lower volatility in the future, but there will be some volatility given to -- which is related to the fact that operating leases by accounting norms are not financial assets and are not most of the time eligible to cash regime. So something that will stay albeit probably at a lower level. In the IT cost, we do not disclose this specific line, but there is no change in the rhythm compared to the previous quarter in terms of expenses and amortization. And clearly, we're in the process of assessing in the PPA exercise, what is the, I would say, market value, we think we -- is appropriate for this investment.

The next question is from Julien Onillon with Stifel.

I got 4 questions. First, concerning the used car market, it's been a decline of the UCS pricing by about EUR 300 in the quarter. What's your prospect going in the fourth quarter, and I will say beyond the fourth quarter because you gave a guidance already. But at the beginning of next year on this pricing? Second question will be on the EVs and the residual value of the EVs. A year ago, with the price by just the levels for the EVs and you were making some depreciation and assumption. And then suddenly, like when Tesla cut its pricing for EV significantly, pricing has been very different in a very short period of time. Do you think that there is a risk of -- on the residual value of these old cars than when you will resell them in 4 years' time, so I would say now in 3 years' time, it was a year ago, the pricing of those EVs as they were starting to the high levels pricing when you buy it new, will be that effectively the depreciation rate you have put there is not enough to -- considering that the price decline we have seen. And is there a risk on those specific cars? My third question, I would like to come back a bit on the remedies because you made the disposal on the 1st of August. It appears about EUR 1.2 billion, but I think one of your slide, but it was not necessarily disclosed very precisely. Could you give more details on the pricing on those remedies? Remind us also the number of cars which were involved. Just to have a -- and the idea behind that is to have a value of, let's say, the remedies per car because it's always a very interesting indicators. Is there -- I have not seen any capital gains either in these disposals where we were knowing that a lot of people were buying, trying to buy those remedies, they're interested. And I see also some profit still from the remedies in Q3 when I would have expected that to go to 0 because of the disposals. And my final question, I just come back on the dividend. You have now effectively give a guidance, which is quite precise in a way for the fourth quarter. We have a very strong view of what could happen, why didn't you disclose a dividend where you -- I mean, to support your share price, the share price has been suffering, as you know, very strongly. And the dividend could have been a good way to make a support, if you were communicating that this today, which is not the case. So what did you have in mind or maybe the Board have in mind because the Board makes a decision of that not to disclose the dividend?

Yes. Thanks, Julien. No. So let me take the first 2 questions, and Patrick will answer your third and fourth one. So on the used car markets, I mean, our anticipation for the fourth quarter is pretty much at the level of Q3. But what, of course, you have to take into consideration is that the respective depreciation is substantially more heavy in Q4. But in terms of trading, we anticipate that Q4 will remain fairly stable to Q3. That's what we're seeing right now at least and then I think for the future years, '24, we still anticipate to be a good, strong year for used car sales. And as we said at the Capital Markets Day, a normalization up till '26 will then happen probably like a kind of a linear line, but at a higher level than what we had before the COVID crisis. And that is basically supported by lack of used cars that remains because of new car sales has been very much down in the last 4 years now, plus a very high inflation on new cars that obviously supports this as well. So that's the anticipation for the used car market. So Q4, pretty much at the level of -- in terms of trading of Q3. On the EVs, it's true that, obviously, some of the manufacturers have had, and in particular, Tesla, you're right, have had kind of volatility in terms of their pricing. We have some protection in terms of that pricing, first of all. And secondly, if you look at Tesla in terms of their pricing, it without -- it went up, I think, EUR 11,000, EUR 12,000 before it actually started dropping down again. So for the time being, when we -- I mean -- as always, there is particular models that is not selling well, but Teslas are still selling very well. And obviously, we're not seeing a particular risk on that and not the cars that we have taken on different times. But it's clearly something that is monitored very closely with us as it is a market that is obviously moving quite fast. But for the time being, we don't see any risk on the EVs we're having. Maybe on the remedies and the dividend?

Julien, for the remedies, I'm not sure I did exactly understand your point because it has been sold in the first quarter. So in the like-for-like, we take -- we stip out the contribution. On the dividend, so we have set a dividend policy, which was confirmed by the Board 1 month ago. The dividend are taken -- is a decision which is taken by the Board in the light of full year results so it's a decision from the Board early '24. There's no -- I think it's -- we wouldn't change the dividends on the back of every quarter's performance or this performance.

Yes. Just on the remedies because the remedies has been disposed technically on the 1st of August. So basically, normally, it's in Q3 when you get the cash in a way and the disclosure of the remedies pricing was not been disclosed from this time. So I just wanted to know what was in the pricing of the remedies because hopefully, I was hoping that we'll get some informations effectively in Q3? So that's why I'm coming on the remedies. I know the decision has been taken before. And of course, it was approved before, but technically was made in the third quarter, that's why I asked you this question. And on the dividend, it's very clear about the dividend policy. Clear about the 50%. It just that you could have -- say we have -- we know what will be our profit for the full year because we have given the guidance. Therefore, we know what could be the dividend, and therefore, we make a bit of communication on that. But anyway I understand.....

No. But Julien, clearly, we have -- I think we have published a press release on the sales of the remedies. We have not disclosed indeed the price of sales and the capital gains, but it was nothing significant on the CET1 ratio, if you want to know.

Okay. That answered your question, Julien?

Yes. That was perfect.

The next question is from Geoffroy Michalet with ODDO BHF.

I have one regarding the consensus level on 2024. I think it has never been so wide when it comes to the net income. I think it ranges from EUR 1 billion to EUR 1.5 billion with an average of EUR 1.2 billion. Could you maybe comment a bit on the wideness you see in that consensus? And maybe give us some indication on what you think should be reasonable assumptions, maybe perhaps also in terms of cost income, I know that there are a lot of moving parts, including the derivative one, which is strong? But yes......

Geoffroy. Thank you for the question. But it's true that the consensus level is wide, and it's the fact that it's also the result -- the consequence of having such a large transaction where you are putting 2 companies, the effect of PPA, which are not yet public. So -- and also the effect that we're coming out of a very exceptional period, which was taking place in '21, '22. So I fully acknowledge that the readability of our results, if I may say, is not perfect and that may lead to wide consensus. And we're trying to give those technical items, which are needed to appreciate what is underlying performance. That said, we'll not give any further additional guidance to what we have been given in the Capital Markets Day, especially given that we're currently doing the budget process for the new group events, and we're confirming the business trend that we have been seeing for the past year and confirming in the process of confirming our financial trajectory. So it's difficult to tell you more about that today. All that we can say is that we stick to the guidance we have communicated during our Capital Markets Day.

Okay. One last question on that front. Are you considering potentially for next year when you will release the full year 2023 results to communicate the cost/income target unlike 2023, but like you did for the previous years before the merger?

That to be seen when we have done the budget, same answer. You're asking of things -- questions, which are interesting, but depending on many moving parts at this stage. Sorry.

[Operator Instructions] There are no more questions registered at this time.

Okay. Well, I guess that concludes the call. So thank you all for your attention and for your questions. And as always, our IR team is ready to answer any further questions you might have. So really don't hesitate to contact them. We know there's lots of moving parts, so they can help you understand things a bit better. So thanks a lot for your time today, and see you soon. Goodbye.

Ladies and gentlemen, the conference is now over. You may disconnect your telephones.