Ayvens (AYV) Q4 FY2025 Earnings Call Transcript & Summary

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.