Hello, and welcome to the ALD Q2 and first half 2021 results conference call. My name is Val, and I will be your coordinator for today's event. Please note, this conference is being recorded, and for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your question at any time. If at any point you require assistance, please press star zero and you'll be connected to an operator. I will now hand you over to your host, Tim Albertsen, Chief Executive Officer of ALD, to begin today's conference. Thank you. Good morning, ladies and gentlemen, and welcome to this ALD H1 2021 results call. First of all, thank you for your attendance, and I hope you're all in good shape. Before we go to slide three of our presentation, as the pandemic is still creating disturbance, let me give you a few inputs on the environment our industry has been navigating in here in the second quarter of 2021. Despite the pandemic, we feel encouraged to see the economic recovery. We still experienced lockdowns and confinements across most countries in the 1st half of 2021, but I feel comfortable in stating that ALD has learned to live with and operate in this environment, and so far, we have been able to offset the negative effects. The shortage of semiconductors has continued causing delays in delivery of new cars in practically all our markets, a situation that probably will remain a challenge for our new car deliveries at least until the end of 2021. Let's get back to slide three, which is actually full of positive news. Total number of contracts stood at 1.76 million contracts, stable versus June 2020 and end of March 2021. This does not necessarily sound impressive. The commercial dynamics are actually strong. We have the highest order bank ever and a very strong pipeline. Our remarketing activities achieved great results as the used car market were particular dynamic this quarter. Gilles will cover the numbers in more details later, of course. We sold 169,000 vehicles, which is a record for an H1. We gained EUR 740 per car sold on average. These good results are driven by several factors, a strong performance and activity on our digital ALD Carmarket platforms, and a structural shortage of used cars due to missing trade-ins and less returned rental cars in the markets. We expect this situation to continue into Q3, and we're actually very positive for the year-end in general. We have continued to deliver strong margin growth, resulting in an improvement of our cost income, which decreased to just 49.1%. We are keeping a strong traction on the electrification, with 26% of the deliveries in Europe being electric vehicles, which is a strong achievement and strong steps towards our Move 2025 electrification targets. I can proudly announce that H1 2021 is our ever best results in terms of net income. We have been able to book a net income of EUR 352 million. Let's move to slide four and talk a bit about our progress on the Move 2025 strategic plan. As you might recall, Move 2025 is built on four strategic pillars. You see them in the bottom of this slide. H1 saw several strong achievements in line with the plan, and we confirm that we are fully on track with our anticipated progress on the plan. First of all, Skipr acquisition, a strategic investment into a Belgian startup, marking an acceleration of our strategy in the Mobility-as-a-Service area. This company's ecosystem allows for the management of mobility needs. It is a great tool for companies and employees to manage their monthly mobility budget. This functionality will be integrated into our existing ALD Move offering. It will also enable us to combine consultancy services for mobility transformations with digital access to multi-modal, flexible, and responsible mobility solutions. A very interesting acquisition from our side. On the partnership side, we are keeping developing interesting new partnerships and enhancing our existing ones, getting closer to our existing partners. Another excellent achievement this quarter we can announce is the entire new electric vehicle digital partnership with Smart in 17 countries in Europe to be launched in 2022. We have signed another white label partnership with Volvo in Ireland and a very interesting commercial offering in Holland on the third-party used car lease via the Stern network in Netherlands, a first of its kind, but surely not the last one, and it can be quite a boost to our growth in the Netherlands. One of the new segments we have been targeting in the strategic plan is the B2B2E segment. I'm therefore happy to announce that we have entered a cooperation with Corporate Benefits, who are headquartered in Berlin, to provide an international B2B2E mobility solution. It's live in five countries, and we are targeting more openings through that channel as well. The opportunity is sizable, targeting a market of 8,000 companies and more than 7 million employees. Last but not least, we have been rated Prime by ISS ESG. ISS ESG is a global recognized provider of sustainable and responsible investment research. ALD holds the top-ranked performance on the eco efficiency criteria. Let's move to slide five and talk a bit about the portfolio development. As mentioned earlier, total contracts are stable versus H1 2020 and Q1 2021 at 1.76 million contracts. We have a record high order bank at the quarter end, which is explained by several factors. With large corporates activity sustained, with a certain number of important tenders wins recently. This activity is not reflected into the numbers yet, as delivery time for new cars remains long. We have continued to sign new partnerships, which are currently ramping up. Finally, some of our OEM partners are suffering from the microchip shortage, which slows the number of new deliveries, but actually the activity is very good. On ALD Flex, we can tell that it's very successful and now fully deployed in 31 countries. Our utilization rates are high, and the number of new contracts are growing at good pace. Overall, we are confident that this will allow our funded fleet to grow in 2021. On top of this, the Banco Sabadell deal will come into our fleet with around 20,000 vehicles during H2. We anticipate to have a few more M&A opportunities to come through during this year. We anticipate our funded fleet to grow between 1% to 3% versus 2020. Let's go to slide six. The pandemic has clearly accelerated the transformation to EV mobility. We see a sound and strong demand from our clients, and we are ready to assist them in this quite complicated transition with both consulting, products, and services. With this breakthrough on the electrification, we are racing towards our 2025 targets. As you can see, the share of EV passenger cars reached 26% of deliveries in Europe in H1 2021, and 23% globally. More than doubling from a year before. Let me remind you that our 2025 target is actually 30%. Average CO2 emissions of the delivery stands at below 100 g for the first time at 99 g, versus 116 g in 2019, representing a nice decrease of 15%. The new partnership with Smart is adding another reference EV player to the ALD offering. The combined ALD Electric offer now, including charging, is available now in eight countries. Last but not least, it is worth mentioning that our Move 2025 targets are already in line with the EU Commission Fit for 55 climate package. Let me hand over to Gilles now, who will guide you through the financials. Thanks, Tim, and good morning, ladies and gentlemen. Let's start with the used car sales activity results for the first semester on slide eight. The strong used car market dynamic that we have enjoyed in Q1 has continued, reaching exceptional and expected levels in Q2. Very strong demand observed on our platforms, resulting in a record high volume of vehicles sold over the semester at 169,000 vehicles. This strong sales volume has obviously had also a positive impact on the used car stock, which stands at a low level as disclosed in our balance sheet, and we have released EUR 7 million of used car stock depreciation in H1, reflecting the positive price evolution. The new car delivery delay and the low supply of used cars from rental companies, car rental companies are continuing to weigh positively on prices, with a strong rebound on the margins up to EUR 1,050 in Q2 per vehicle. Our H1 used car sale results stand at a record high level at EUR 125.3 million, with the margin per unit at EUR 740 for the first semester. We anticipate the dynamic to continue in Q3, which enables to provide a guidance for the full year of between EUR 600 and EUR 900 of margin per used car sold. The full year results will depend on the Q4 dynamics. In an optimistic scenario, the top of the range being based on the continuation of the current trend. The less optimistic scenario, the lower bounds, on an improvement of delivery delays of new cars, which could have a negative impact on supply of used cars and hence on prices and margins. Overall, an outstanding performance, and I guess a very positive guidance on the used car sales. On slide nine, this slide explains the underlying dynamic of the business as 2020 and 2021's operating performance has been impacted by a few one-off items. I will start to comment the exceptional items which have impacted both years. In 2020, on the left of the slide, you remember that we booked a significant amount of exceptionals, so EUR 30 million of excess depreciation from our fleet evaluation exercise in H1 2020. On top of the EUR 30 million, EUR 19 million of used car stock depreciation and EUR 13 million of forward-looking provision in the frame of IFRS 9 for the first time. For a total provisioning of EUR 62 million last year. In 2021, on the right, we are now benefiting from a partial reversal of these exceptional provisions. As anticipated during our Q1 results call, we have performed a new fleet revaluation exercise, which has led us to release EUR 13 million of excess depreciation in H1. As explained just earlier, we've also released EUR 7 million of used car stock depreciation. On the negative side, we have booked an exceptional tax provision. Together with the whole leasing industry, is disputing the case with the local tax authorities in the country concerned. When you exclude these exceptional elements, you can see the robustness of the business on the used car sales activity, obviously, but also on the margins. The operating expenses have grown by EUR 16 million from a low base in 2020, which was the start of the pandemic. Other factors to be taken into account are, of course, costs related to the strong M&A activities, of which Sabadell and Skipr, which have been announced so far. Also staff bonus payment provisions for 2021, as we are widely exceeding our budget. Our cost of risk stands at a particularly low level, reflecting the low rate of company defaults. When we move to page 10, when we look at the P&L. Leasing contract and services margins are up EUR 55.6 million. Excluding specific provisioning, leasing contract and services margins taken together grew by EUR 25.7 million, which shows a positive geo effect compared to the fleet growth in volume. Leasing contract margins obviously benefit from the increase in rental asset value, driven by the evolution of our fleet mix towards more EV. The services margin are being negatively impacted this quarter by the exceptional tax provisioning we already mentioned, still lower excess mileage billing than we used to, volume rebates provisioning from suppliers. I want also to comment that the low loss ratio on accidents is not yet fully reflected in the services margin in H1. cost-income ratio, excluding the used car sales result, has improved at 49.1% on the back of these sound margins positively impacted by the excess depreciation release in the leasing contract margin. An exceptionally low cost of risk, down from previous quarter. It's worth reminding that all our assumptions on our forward-looking provision remained unchanged. Our effective tax rate stands at 21.2%. We see the impacts of the Italian Stability Law, which is progressively fading. This results in the highest H1 net income ever at EUR 352 million. Quickly on page 11 on the balance sheet. You can see that the earning assets increased by 3.6%, reflecting the increased share of higher value vehicles, full EV, PHEV in the new deliveries and some FX impact. These trends on the asset value also explain the increase in other assets and other liabilities. Overall, a very strong total equity assets ratio at 16.7% at the end of June 2021, up from 15.6% in June 2020. Strong earnings generations compensating for dividend payment in Q2 for EUR 254 million. Now let me hand over to Tim, who will present to you the new guidance we have formulated for 2021. Thank you, Gilles. Yeah, I guess in the course of 2021, we have stayed with an outlook due to the visibility. Actually today, we now feel that we have enough visibility to provide you with a real guidance for the rest of 2021. As already mentioned, despite the microchip shortage, but thanks to a very strong order bank and based on a good pipeline of M&A deals, we are confident that our funded fleet will grow by 1% to 3% this year. As Gilles explained, we estimate that the dynamics of the used car market should continue until year-end, meaning that we should land between EUR 600-EUR 900 per car sold in 2021. As for our cost-income, it should continue to improve versus last year. This concludes our presentation. Thank you for listening. We are now ready for any questions you may have. And as a reminder, if you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. You'll be advised when to ask your question. So again, it is star one on your keypad. And the first question comes from the line of Enrico Bolzoni from Credit Suisse. Please go ahead. Hi, good morning. Congratulations on a very strong set of results. Just a couple of questions, three questions from my end. One, clearly, very strong. You partially mentioned that it is mainly due to the change in the mix within the fleet. With regards to electric vehicle, which clearly its penetration is increasing, should we expect a bit of an offset component in the service component? Electric vehicle, in theory, if I remember well, you said in the past, might require less servicing. The margin might come a bit soft there. Just wanted to clarify that. The second question I had was on specifically the timing of your agreement with Corporate Benefits. Is it something you expect will start to contribute from this year? Maybe we really need to wait next year when hopefully the deliveries of new vehicles are going to start. I know that, for example, corporate scheme, you can join them at any specific time horizon in months. My last question, clearly over the past six months, there's been a lot of rumors on potential M&A. I just wanted to ask you, one, your standard bolt-on acquisition, how does the pipeline look there? Is this something substantial we should expect? Second, in terms of much larger consolidation in the industry, if you can give us any update. Related to that, I wanted to ask you how easy it would be for you to possibly pick up a bank [audio distortion] Thank you, Enrico. I hope we got it. Your line was a bit blurred, but I think we got your question. I think, if we start with the first one on the EV service margin, and Gilles can complement. Overall what we anticipate is that the margins will be shifting around a bit. It's true that we talk about investments that is clearly higher than what we're used to with ICE cars. On the financial part, there is normally a benefit from that. On the service part, it's true that anticipation is that there will be less service to an EV going forward. We also know there's other areas, especially like tires and other areas that is actually will be increased in terms of cost and margin overall. There is a lot of new services to be developed around the EV, which we are in the midst of. The whole charging infrastructure, where we're also taking an active part of that, is also creating opportunities for new margins. I would say, what we see in the short run, we do not necessarily see a big shift on things. In, let's say, medium long term, we probably will see that the specific service margin element in terms of maintenance and repairs might be smaller, but we definitely anticipate to offset that with new services that will be provided. I don't know, Gilles, if you want to add to that. Yeah, I just want to precise that this semester service margin is mainly based on lower ex- mileage billing. Also, on the fact that we are basing our provisioning of volume rebates from suppliers on a conservative base because we have not a clear view on the delivery delays of cars, which puts all these volume rebates potentially at risk. We want to be on the safe side. That's also the explanation of the services margin this semester. We can say that the share of EV on the entire fleet currently has not a significant impact on the service margin. No. I think, Enrico, if you look, of course, when we talk about electric vehicles today, we talk about 100% BEVs and plug-in hybrids. Actually, the number of plug-in hybrids are still the majority of these cars, even though that full electric is coming very fast as well. Of course, a plug-in hybrid has at least the same service cost and margins as a normal ICE car. It's true that on the portfolio today, that's not the impact as such. Going forward, again, the different elements of the service margin might be changing a bit the structure, but we do not necessarily see that we will miss out on service margin overall going forward. Your question to Corporate Benefits. It's an agreement that is actually in place in one country and been rolled out to five countries now. It takes time to ramp up like anything else, also in terms of delivery times of new cars. I don't think we will see a lot from that deal this year as such, but it will be a strong contribution definitely from the start of 2022. It's a very interesting, let's say, partnership because it gives access to all the employees who typically are not eligible for a company car and therefore, we increase our presence in the corporate sector quite substantially with this deal. On your last questions on the acquisitions, on the M&A, on the last part first, we have an established practice not to comment on the rumors and we haven't changed that as such, Enrico. We don't comment on the rumors that has been in the market for a more structural deal. As you've seen, we have taken this stake in Skipr, which is clearly different from our bolt-on acquisition. It's a real acquisition based on our Move 2025 strategy. We have a few others in the pipe of that kind to accelerate our Move 2025 and ensure that we are taking real steps ahead to transform our business and remain a real leader in the mobility space when we get to 2025. At the same time, the bolt-on acquisition are as crucial to us as they have always been, and we are looking everywhere and again, we are quite active in this space. You might see the typical bolt-on acquisitions like you saw with Sabadell, and you will see potentially a few more like Skipr that will enable us to execute our Move 2025 strategy, perhaps even a bit faster than anticipated. I hope that answers your questions, Enrico. Sorry. Yes, it does. If I might, the last one was just in terms of banking license, unrelated to M&A and other problems. Is it something you could potentially pick up if you need it just to also maybe diversify funding, or it would be complicated to do so? It's quite a complicated process to become a regulated entity today. Unless there's a very good reason to do it, we don't see a need for a banking license today. We have a very strong position in terms of the funding. SocGen is still providing the majority of the funding. We have 30% of the balance sheet funded through bonds and securitization programs. Unless there is an event that would mean we would need a banking license, there's no real need for us to get one. Very helpful. Thank you very much. Okay. All right. The next question comes from the line of Kiri Vijayarajah from HSBC. Please go ahead. Yes, good morning, everyone. Just a couple of questions. Firstly, on your balance sheet, I just wondered how do you think about your current leverage? If your leverage ratio you show on slide 11, that's been steadily creeping up now up to 16.7%, so that's up more than 100 basis points or so in the last 12 months. How much scope do you think there is to leverage up your balance sheet take on more debt? Secondly, changing gears, actually talking about one of your competitors, I just wondered what your thoughts were on the EUR 400 million equity fundraising that CarNext did back in July. Do you think your equivalent digital used car platform might need that same kind of injection of growth capital, to stay in the game? Or would you rather not get into an arms race on the digital marketplace side? There's obviously some proper evaluations there. You're better off leading that chase for third party volumes on the digital marketplace to other players. Just your thoughts on what your competitors are doing there, please. Thank you. Yeah. I take the first one, and then you- Yeah. Okay. On the current leverage, very good questions. As we commented earlier, we have quite a strong pipeline of bolt-on acquisitions, which also explains the reason why our OpEx have increased in H1. We have more cost than really we have announced deals. That may worsen this ratio when deals are announced and goodwill are booked. Hopefully we will come in H2 with new announcements. As we always commented, it's always longer than anticipated. That's how you should see it on the payout ratio. I guess we'll stick to what we said in our 2025 plan. A dividend payout at least of 50%. Based on these current results, you should expect a good return on the share price. Good. Yeah, on the let's say digital used car sales platforms, I guess we have touched upon it several times before, and it's an interesting development. The way we look at our Carmarket is a natural extension of taking a lot of residual value risk. For us, it's about mitigating that risk basically to be able to sell our cars that comes back. What we have seen with CarNext is really embarking on a completely different business model because they basically will be selling third-party vehicles, I guess, and become a completely independent, let's say company to LeasePlan, if we have understood correctly. If you take A1, Cazoo and the others, it's simply you're basically creating a used car sales company, which is different to what we see with Carmarket. We could potentially do the same, in terms of the digital assets and in terms of the infrastructure that you need to do it. All is there to do it, but it's really embarking on a new business model. That's not where we are today with Carmarket. We actually see these platforms as quite interesting supplement to the market because all these platforms are now competing for used cars. It means that the used car prices are being even better, I would say, based on the fact that there is more competition. We have actually A1 and others buying cars on Carmarket, and we see them as an interesting part of ensuring the best prices on Carmarket for us, for our used cars. It's really around a completely different business model, which we have not decided, at least for now, to do the same as LeasePlan. It's very interesting to see the development, and clearly there is a market for these digital platforms. For us, it's an add-on to the competition in the market, which is healthy for our used car sales prices. Great. That's very clear. Thanks, guys. Thank you. Thank you. The next question comes from the line of Sanjay Bhagwani from Bank of America. Please go ahead. Hi. Thank you very much for taking my question as well. My first one is on the provision. If we just talk about the excess depreciation provisions and the credit risk provisions. Last year, you provided for something around EUR 55 million, and so far, of that, you have just released around EUR 15 million. How should we think about the release of the rest of the EUR 14 million, given that the uncertainty around the residual value risk and the credit risk is also fading. How should we think of that? Yeah. Thanks, Sanjay, for the questions. Good question. As indeed, we'll perform a new fleet evaluation exercise in the second half of the year, which may, depending on the score, of course, these exercises are based on historical performance also. I can't clearly give you a precise answer to your question, but my gut feeling would be that we would still have some more reversal of this excess depreciation to be taken into H2. Is it to the extent of the full provision of last year? I don't know. It's true to say that with a used car sales result of EUR 1,000 of margin in Q2, as I commented in my speech, it's way above our expectations. It should have a positive impact also in H2. Regarding the credit risk, for the time being, as I commented earlier also, we haven't changed the forward-looking assumptions. It stays as it is. In fact, there's a slight benefit on the fact that the aging of our receivables have improved. It's a technical benefit, so to speak. For the time being, we are keen to keep these forward-looking provisions. We'll see if credit risk is worsening in the next quarter. Timing, it remains very low, Q2 being even lower than Q1. We are trying to provision as conservatively as we can, but we don't see any credit risk really materializing these days. I can't see credit risk having a negative trend in the immediate next quarters. That's the answer I can give you. Of course, this has a positive impact on the cost-income ratio, which we need to take into account, especially on the excess depreciation. Short answer to your question, yes, we should see some more reversal in H2. Thank you. That is very helpful. When we talk about the used car margins, what I'm trying to understand is how much of this is purely cyclical versus, in fact, you discussed some structural measures as well in your CMD where you are planning to shift the mix from lower profitable channels to high profitable channels. How much of this favorable used car margin is driven by those structural measures? How is it progressing? Yeah, I think it's quite a difficult question to answer, Sanjay. If you look at the market, it's very clear it's an exceptional situation, basically, where the shortage of used cars is evident, and it's driven by the fact that the new car sales or the new cars being sold is very long to be delivered. It means that typically when you sell a new car, there is a trade-in coming in there, which is not coming now because of the new cars are delayed. We saw that, I think, the first half of this year, there's a miss of 4 million cars not being sold for the time being, which of course, is quite substantial. That has an immediate impact. These trade-ins are typically cars that competes with our cars. At the same time, the rental business is not at the level it has been in the past before the pandemic. They also actually would be offloading quite a number of cars throughout the year, which is not happening at the same speed either. It's quite exceptional what's going on. I think there's no doubt that our capacity to actually steer our cars into the right channel, we have retail sales, we have wholesale. We are using all the channels also in terms of cross-border sales. We are starting to use some interesting AI on our platforms to ensure that we are measuring, let's say, the markets much more focused than we were in the past. That potentially also have clearly an impact on the prices we achieve for our cars, but I cannot tell you whether that's accounting for 10% of the additional margins we're getting today or not. It's very difficult. It's too volatile, to be frank, on that part. We are doing and having a lot of activities on the remarketing side to constantly improve the channels and ensure that we put the right car to the right channel, and that we find the right customers for the cars, and that we are constantly pushing also for retail sales to the largest possible extent. The good results is clearly a very strong market for the time being, but it is also the fact that we are, I think, handling this particular area very professional. Thank you. That is super helpful. I have one more question, if I may. Of course. My final question is on the residual values. First, to understand, how do you think of at this moment when you model your residual values, what sort of assumptions are you taking for EVs versus ICE vehicles? Also, do you think these residual value assumptions are likely to change in the near future given this Fit for 55, which also kind of recommends that sale of new ICE cars to be banned from 2035? Do you see this to drive any change in your residual value assumption policy? That's also a very good question, Sanjay, I would say. Let me start, and then I think Gilles can complement. It's true, we are sitting in a situation where we normally had a lot of historical data on used car sales. As we have seen with EVs, that experience is not exactly what we need today. We are reorganizing all our teams around electrification, and we are basically highlighting the different areas that will have an impact on the price of EVs going forward. There is a production price that is anticipated to come down. There is subsidies that you would anticipate would disappear over time. There is basically a supply-demand situation that typically would look very much like what you actually see today with a very little supply of used EVs when also, let's say, the consumers start looking for used EVs, which would be positive on the EV side. Of course, there is the technical obsolescence that goes very fast or that it's moving. We need to have a handle on all these specific trends. We have put together basically a squad pricing team on EVs that works on a much more frequent basis than what we have been doing in the past with ICE cars, and trying to make sure that we take the right decisions on this. Overall, we have a very different approach to what we have had with the ICE cars. It's true that the uncertainty in this particular area is of course, much bigger than what we have been used to. We feel quite comfortable with where we are today with the pricing. On top of that, as we have said many times, we are developing the used car leasing. It has actually been always with the aim to have the electric vehicles potentially having three or four turns in our portfolio. Because it could be that we get a particular technology priced wrongly, and which could mean that it might not have an attractive price in the market to sell, but in terms of using the car, it's perfect because it still goes into the zero emission, let's say, zones in the cities, and you can easily drive the car. You might not want to buy it because it might not have the newest technology, but you are happy to lease it for one or two or three years. That gives us an opportunity to, of course, depreciate that asset down to something that works in a used car market at a bit later stage as well. I think we are definitely looking very detailed into the trends. We have consultants from the outside helping us also to model this in a different way than we have been used to with our ICE cars. Then, we try to find mitigants if we should be completely wrong with a particular model or particular car, that we can actually keep it inside ALD for maybe six or seven years and write off the assets to whatever is needed. Thank you. On the residual value policy on ICE cars in light of Fit for 55? I guess on that, Sanjay, we see that the market, as we see today, just to remind you that even today, the vast majority of the cars that we are selling are selling the used car. We are selling our diesel vehicles that have been put on the road in 2016, 2017. You can see that we have no issue to sell these cars, and there is no effective pure ban of these cars in a really short timeframe. It's not what is envisaged in the Fit 55 plans. Of course, we are adjusting the RV on combustion engines, but not to the extent that these cars will be banned in a short or medium-term. I guess I can only echo what Tim said on the EV. There will be a lack of supply of EV cars in the market, and I guess rental companies are not likely to be large buyers of EV, for instance. We are the one ahead of the leasing industry, and ALD in particular is ahead of the market in terms of EV, and there will be a strong demand. We are positioning our RV today. Thank you, gentlemen. This was very helpful. Thank you very much. Thank you. Before going to the next question, I would like to remind all participants that you may ask your question by pressing star one on your telephone keypad. Thank you. The next question comes from the line of Dominic Edridge from Deutsche Bank. Please go ahead. Hello. Thanks so much for taking questions. Just a couple of fairly quick ones. Apologies if I missed this earlier on. Could you just maybe discuss about what happens in the case of car pricing, assuming they go up, given all the supply chain and industry issues that are out there. Could you just discuss how you see the current environment in the car leasing industry? Do you feel able to pass on any additional costs there, or do you feel there could be the risk on margins there? The second question was just a little bit further on the car pricing. Just given, as I said, all the issues we've got at the moment, what is your working assumptions at the moment in terms of how long it will take, A, for the industry to maybe get back more to normal? Secondly, on the residual values and the second-hand values, how long it will take that market to get back to normal? Thanks so much. Right. Yeah. There is a very, let's say, high correlation between new car prices and residual values. If new car prices goes up through inflation or whatever it could be, or that the manufacturers decide to take better margins, typically, that's very positive for our business and especially for the existing portfolio of cars. Typically, we would pass on without problems any kind of increase in car prices to the customers. Having said that, we are in a very competitive market. Typically when there is, let's say, general price increases coming on tires or whatever, the industry typically aligns that and push that to the customers. Overall, if car prices comes up, we can push that increase to the customers, and it would typically have quite a positive effect on this residual values on the existing portfolio. To the second question on when we anticipate things coming a bit back to normal. The input we are getting from people who are close to the manufacturers and the manufacturers themselves is not very open about this, but we have a few people who are delivering through the manufacturers, and they give us some inputs. It looks like, actually now there is a bit of, let's say, disturbances again, because with this Delta variant in Asia, there is several of Southeast Asian countries that is closing down, not for long, but maybe for two or three or four weeks, who are typically producing microchips, and that can have another, let's say, prolongation of this microchip shortage. Overall, it is anticipated that it will slowly come back to normal up till end of 2021, perhaps having a bit of spill into the early part of 2022, but then the problem should be solved. At least that's the anticipation. It's not anticipated that there will be a catch-up for the 4 million-6 million cars that will not be produced in 2021. Overall, when we go into, let's say at least probably from late Q1, Q2 2022, it's anticipated to be back to normal. I guess at that point, we would eventually see the used car market also coming back to normal, because it would mean that the trade-ins from the new cars, that could be quite massive because there is a lot of, let's say, pent-up demand in the markets. We would then actually see that the used car market would normalize pretty much at the same time as you get back to normal with the new car sales coming back on track. Okay, thanks. Could I just ask one further question as well? In regard to looking across your portfolio of countries that you operate in, do you notice any sort of major changes in terms of momentum, in terms of new business or anything else in the markets between those that have reopened up maybe slightly earlier and those that are reopening later at all? Or do you feel it's a case that people have sort of got back to work as normal, as it were, in terms of looking for sorting out contracts, et cetera, and dealing with new business in that regard? John Saffrett is with us here as well. Maybe John, you want to- Yeah. Thank you for the question. I think as Tim said, countries that are still in lockdown, obviously there's a very slow commercial dynamic because of the uncertainty of when those countries will come out of lockdown and get back to normal. In most countries, what we're seeing is a return to normality is very quick actually, because people are keen to get their businesses back up and running as fast as possible. Governments are withdrawing furlough schemes as quickly as they can in order to get people back working and back to the office and back being active as well. What is clear is everyone's coming out of the crisis considering their mobility plans going forward, and that's why you see this dynamic around electrification in our new registrations. It's why we've moved to accelerate our Mobility-as-a-Service capability because more and more countries are introducing a mobility budget type incentive to replace the default of a company car in some cases or complement it alongside all of the other employees in the organization as well. It returns to normal quite quickly. In fact, probably quicker than we would anticipate. A lot of those customers are asking for help and advice and consulting on how they manage the electrification and the mobility journey, and that's why we're seeing a big demand for our business intelligence and consulting division. It's why we're very active on the commercial side and in the order bank that we're seeing. Great. Thank you very much. Thank you. There are currently no further questions in the queue, so I will hand the call back to our speakers. Apologies. We have now just another question, and it comes from the line of Geoffroy Michelet from Oddo BHF. Please go ahead. Hi, gentlemen. Thank you and congratulations for this good set of results. My question has to do with the car deliveries, in H1. Could you give us a sense on, what is the mix in term of sales of new cars for diesel? You gave us the number in full year 2020. Could we have the mix of diesel vehicles sold in H1 2021? Thank you very much. Yeah. As you know, our diesel have basically been coming down very quickly from 80% back in 2017, I guess. In H1, we are around 30% of deliveries of diesel cars. As Gilles said, actually what we see in Fit for 55, we think that the ICE cars will then eventually have a longer phase out time because they will not be banned for driving. They might be banned for getting into city centers and all that, but they will not be overall banned. It's true they will not be able to buy a new car, which is with an ICE engine, but the cars will be allowed to drive around. We will potentially still see that a portion of the cars for the next, let's say two, three, four years potentially would be diesel. We are down to 30% of our deliveries, which is basically in diesel. Okay. An additional one, is it fair to think that EV vehicles could overcome diesel vehicles by year-end? No, I think that's a bit I guess that's probably too ambitious. It's true that, as we said, initially in the introduction here, our target of BEVs and plug-in hybrids is 30% by 2025. Clearly that target will be overexceeded, and we will eventually look at that target in the coming months this year. You mean the 30% diesel taking over by the year-end? Yeah. Yeah. Okay. Still, I guess, we would not anticipate that. It's true that between diesel and EVs, we are probably quite on par within the next maybe 12 to 18 months. Thank you very much. That's all from me. Okay. Thank you. There are no further questions in the queue, so I'll hand the call back to our speakers to conclude today's call. Thank you. Okay. Well, thank you all for your attention and your questions. As always, our IR team stands ready to answer any further questions you might have. Do not hesitate to contact them. For those who already had your vacations, we hope you have had a great one and relaxing one. For those who are going soon, we wish you a great and healthy break. Thanks a lot. Thank you for joining today's call. You may now disconnect.