Good morning. This is the conference operator. Welcome, and thank you for joining the ALD fourth quarter and full year 2022 results presentation. The speakers today will be Tim Albertsen, CEO, and Gilles Momper, CFO. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions by pressing star one at any time. Should anyone need assistance during the conference call, they may signal an operator by pressing star zero on their telephone. At this time, I would like to turn the conference over to Mr. Tim Albertsen. Please go ahead, sir. Good morning, ladies and gentlemen, welcome to this ALD full year 2022 results call. First of all, thank you all for joining us today. I will start with some of the highlights on 2022, which has been an outstanding year in many aspects. You're seeing that ALD generated a record net results well above EUR 1 billion for the first time in our history. Gilles will comment on these record results in more detail. Finally, I will say a few words on our outlook for 2023 before we take your questions. Let's start with the highlights, go directly to slide four. In a fast changing environment, where monetary policies were focused on fighting inflation, economies proved resilient in 2022. Supply chains have not returned to normal, we expect only a gradual normalization of the car markets towards the end of this year. In this context, we benefited from the favorable supply demand situation in the used car markets, and we expect that the situation will remain in place for 2023. ALD delivered a landmark performance in 2022. We generated a record net results of EUR 1.2 billion. This performance reflects our strong business development and the highly favorable used car markets, as well as the commitment of our employees to achieve the highest standards of service quality while maintaining a strong focus on operational excellence. In 2022, again, we have re-reinforced our relationship with our customers, and this translated into strong commercial performances. On top of all this, we also reached key milestones towards the acquisition of LeasePlan. Let's go to page five, where I'll provide a few highlights on our record performance. Our funded fleet increased by a strong 3.1% versus a year ago, excluding our asset sales for sale in Russia and Belarus, as well as the entities part of the remedies Portugal, Ireland, and Norway. This is an outstanding performance in a context of continued disruptions of supply chains and shortage of new cars, and it's in line with our guidance of between 2-4% growth. The used car markets remain buoyant throughout 2022. Used car sales result was as high as EUR 2,846 per unit, double the already high amount we booked in the previous year. Our net income increased by 38% compared to 2021, leading us to propose the payment of a dividend of EUR 1.06 per share to our shareholders post rights issue. I remind that the current shareholders of LeasePlan will not receive this dividend. Let's go to page 6, where I will comment on our commercial performance in more detail. This page presents a few products which are addressing new market segments. They meet all the criteria of our Move 2025 strategic plan, and they encountered a large success amongst our customers. First, our Flex Fleet continued to grow rapidly, reaching 78,000 vehicles at the end of 2022. This performance perfectly answers our customers' needs for flexible mobility. We recently completed our offer with a new partnership between FleetPool and Kia to provide a flexible subscription service called Kia Flex in Germany. Second, the current shortage in new car markets also brings opportunities, which ALD was able to grasp. Used car lease is one of them. With 52,000 used car leased at the end of 2022, we are on track to reach our Move 2025 objective of 125,000 cars. As you know, this product is key in our strategy as it allows us to reinforce our relationship with our clients while reducing the residual value risk. Thirdly, we further extended the functionalities of ALD Move in France, Belgium, and the Netherlands. This mobile application allows users to plan, book, and pay multi-modal transportation. It contributes to the transformation of all employees' mobility journey. On top of that, it's an excellent way to reduce both the carbon footprint and the mobility budget. At the same time, this product helps us to broaden our customer base. Let's go to page seven on our commitment to lead the transition towards sustainable mobility. We continue to drive the shift towards electrification. 27% of our new passenger cars registrations were EVs in 2022. It's a strong performance in light of the continued disruptions in the supply chains. The demand for electrification is definitely there, with EVs representing 35% of our order book. ALD retained a leading position in Europe, well ahead of the market at 23%. The ALD electric offer, including charging, is now available in 34 countries, up from 22 countries a year ago. My Net Zero program is a unique and powerful modeling tool which helps clients design their CO2 emission trajectory. This product is particularly suited to our clients' needs. It simulates multiple options, factoring in several parameters, such as vehicle cycle renewal, the EV readiness of the countries in scope. Thanks to this product, our client could beat the initial CO2 emissions objectives quite substantially. Our strong commercial focus resulted in continued positive dynamics on page eight. Our funded fleet were up 3.1% versus 2021, excluding the entities held for sale. This is a good performance considering the supply chain constraints, it's fully in line with our guidance of between 2% and 4%. Fleet under management grew by a high 14.6%, underpinned by a new strong partner, banking partnership. Our total fleet exceeded 1.8 million vehicles, rising a strong 5.2% compared to a year ago. Our order book remains at historical high levels at the end of 2022. Let's move to page 9, where I'll provide an update on the LeasePlan acquisition. Last year, we worked hard on preparing the acquisition of LeasePlan, we reached key milestones towards closing. First, we received the main approvals from competition and regulatory authorities. We got the regulatory approvals from the ECB, DNB, and the ACPR. AMF granted a waiver to the obligation to file a tender offer on the ALD stock. The European Commission approved our deal, subject to a limited number of remedies which we had offered. Second, we secured the financing of the transaction price of LeasePlan by successfully completing our EUR 1.2 billion right issue last December. This right issue was oversubscribed by 175%, which demonstrates the strong support from both existing and new shareholders to the creation of the leading global sustainable mobility player. We continue to work towards closing the acquisition of LeasePlan by the end of March. An extraordinary general meeting will be convened to approve the acquisition and the issuance of new ALD ordinary shares and warrants as consideration for the contribution in kind. At closing, ALD will become a regulated entity with the status of a financial holding company. Immediately after closing, we'll launch the execution of the integration plan with the objective to lock in annual cost synergies of EUR 440 million by 2025, as we have guided. By ensuring that the best terms are applied to the combined entity, we expect to secure at least EUR 30 million of annual procurement synergies by the end of this year. These synergies will progressively materialize through the income statement in the following months. Cost to achieve are expected to ramp up further this year. After EUR 128 million booked in 2022, the amount will be in the range of EUR 150 million-EUR 180 million in 2023. Let me now hand over to Gilles, who will comment on our financial results in more detail. Yeah, thank you, Tim, and good morning, ladies and gentlemen. Another outstanding quarter and full year for ALD, which is also requiring specific comments on some items. We start with our margins on page 11. Our leasing contract and services margin, including non-operating items, has grown +36% compared to last year, including the exceptional items. Based on the significance and the materiality of the expected future profits on the used car sales, we have adapted in Q4 2022, the depreciation curve of our fleet and stopped the depreciation of vehicles when their net book value is well below the expected used car prices. This Q4 adjustment is reflecting our views on the expected future used car sales, taking into account the most recent fleet revaluation exercise that we have performed at the end of 2022. We are now expecting that car markets will only normalize gradually by the end of 2023. Our depreciation adjustments from prior quarters were based on former fleet revaluation with more conservative assumptions. This depreciation adjustment has led us to recognize EUR 350 million of positive contribution to the contract leasing margin during the year, with a negative impact, of course, on the used car margin that I will comment in a minute. The other non-operating items amounted to EUR 128 million over the year and had a positive impact on the leasing contract margin. We have three different items in hyperinflation in Turkey, the fleet revaluation, and the provision in Ukraine. Let's start with hyperinflation in Turkey. You remember that we have revalued our asset base in Q2 and again in Q3. There was no additional impact in Q4, and the total impact over the years, a positive EUR 60 million on the leasing contract margin. By nature, this revaluation of assets corresponds to an anticipation of future used car sales profits. The second item relates to our usual fleet revaluation process, with a positive of EUR 72 million over the full year, compared to a positive EUR 50 million last year. The last item is an update of our provision covering our risk in Ukraine. On the year, the impact is negative EUR 3.6 million, this is based on our most recent assessment of the situation, whereby most of the fleet continues operating and the portion at risk is rather limited. This has led us to reverse around EUR 21 million of provisions in Q4, which were initially booked in Q1, 2022. The growth in the services margin was underpinned by a good growth in our Flex contracts and also a low base effect in Q4, 2021 last year, also boosted by the integration in the consolidation perimeter of our subsidiary FleetPool, which is now included in the P&L. I propose to move to page 12, where I want to clarify the mechanism of reduction in depreciation costs and then the impact on the P&L. Page 12. The reduction in the depreciation costs compared to the contractual depreciation schedule is illustrated on the graph that we also showed last time. You can see that on the left-hand side. This adjustment lifted our leasing contract margin by, as I said, a significant EUR 350 million over the full year, of which EUR 220 million in Q4 alone, as you can see on the graph in the middle. The increase in Q4 compared to Q2 and Q3 is explained by our new anticipation of the normalization of used car margins, which would happen later than in our previous scenario. This depreciation adjustment will result in a higher book value of our vehicles going forward, hence, a lower used car sales results when we sell the cars. You can see the impact on the used car sales results, which was negative by EUR -38 million in Q3, and EUR -73 million in Q4. Over the full year, the impact of the positive impact of the depreciation on leasing margin, net of the negative impact on used car sales was a +239 million EUR, as it's illustrated on the slide. All things being equal, and assuming that used car market conditions, volumes, fleet mix remain unchanged compared to the levels of 2022, we will continue going forward to have a negative impact on our used car sales results in 2023 from this depreciation adjustment. Also we expect a positive impact on our leasing contract margin also going forward. Let's move now to slide 13 on the used car sales results. The contribution from used car sales results reached a record at EUR 748 million over the year, including the negative EUR 111 million from prior quarter depreciation adjustments. This translates into an average margin on used car vehicles at EUR 2,846 per unit in 2022. If we had not recorded any reduction in depreciation costs previously, our used car sales results per unit would have been an estimated EUR 3,607 per unit in Q3, and EUR 3,054 in Q4. The trend that we've seen in Q4 is in line with our historical seasonality. Q4, 2021 was a bit exceptional, and it was the start of the inflation seen on used car prices. I only sold 263,000 cars in 2022 compared to 308,000 in 2021, and this decrease in volume is mainly due to the rising number of contract extensions and also used car leases. Let's now have a look at the rest of the P&L on page 14. Our operating expenses reached EUR 884 million in 2022. The increase compared to last year is mainly due to three exceptional items. The first one being the exceptional spendings in relation to the preparation of the LeasePlan acquisition. These costs amounted to EUR 128 million for the full year, and they are overall in line with our guidance of EUR 120 million. These costs reflect the intensification of the work in view of the closing, of which the costs of our rights issue, the antitrust filing, the costs related to the preparation of a future regulated status as a financial holding company, and the preparation for a smooth integration of LeasePlan. The second exceptional item impacting our OPEX is, as I said earlier, we have consolidated for the first time Sabadell Renting, FLEETCOR, and Ford Fleet Management UK. This consolidation scope effects represents more than EUR 30 million. The third item is of course related to the exceptionally high used car sales results, which has mechanically led to a further increase in our variable compensation provision, which also includes employee profit sharing in some countries. The cost of risk of EUR 46 million was up compared to a year ago. Expressed as a percentage of average earning assets, it remained moderate at 20 BPS in 2022, of which 23 BPS in Q4, and this is to be compared with a record low level of 11 BPS in 2021. Our net income reached a record level at EUR 1.2 billion, up 38% compared to 2021, and this is after recording a EUR 51 million impairment on our entities in Russia and Belarus, which were classified as held for sale in our financial statements. We are engaged in a process to sell these entities, which together operates a funded fleet of circa 15,000 contracts. The completion of this process would be subject to approvals from the relevant local authorities. I just also want to add that, as per IFRS 5, any subsequent differences between the fair value and the net book value will be booked in the P&L in the future periods until the closing of the transaction. The accumulated also, another point, the accumulated translation reserves, which will be reclassified into the P&L at the closing of the transaction, but of course, with no impact to the shareholders' equity, and the translation reserves, they were around minus EUR 54 million at the end of 2022. The impairment on Russia and Belarus is non-tax deductible, and this has hence impacted our effective tax rate compared to 2021, where we were still benefiting from the Italian Stability Shield, and that's why our effective tax rate rose to 26.9% compared to 21.3% in 2021. The earning per share came in at EUR 2.66, up 35% compared to 2021. You will have a detailed calculation of this on page 25 of the appendices. We are proposing a dividend of EUR 1.06 for the financial year, equal to a distribution of 50% of our net results. This dividend would be paid to our shareholders post rights issue. Just want to remind that the current shareholders of LeasePlan are not eligible to this dividend. I propose now to comment the balance sheet on page 15. Our earning assets increased by 10.3% over 2022 when we include the earning assets of the entities held for sale. The increase, of course, as for previous quarter, reflects the impact of inflation and the rising share of EVs in our fleet. The total equity to assets ratio was 22% at the end of the year, 20.1% net of the proposed dividend, and of course, the increase is due to our EUR 1.2 billion rights issue, which was completed last December. I just want to also say that we successfully completed our 2022 funding program by issuing EUR 2 billion of bonds, thanks to strong markets appetite for our debt. Our total funding was circa EUR 20 billion at the end of the year, of which 69% of loans from Société Générale. Our credit rating agencies, S&P and Fitch, have both placed our ratings under CreditWatch Positive, indicating potential upgrade of our debt rating to a single A- at closing. Quickly on page 16, just to show that we achieved a very strong performance in 2022, in line with our guidance, as you can see on the slide. I'll now hand over to Tim, who will say a few words on the outlook. Thank you, Gilles. Well, as Gilles has shown, 2022 was a record and a fantastic year for ALD. Now let's take a look ahead. We are confident about our business development in 2023. In spite of uncertainties, the main economies in which we operate are resisting well. We are starting the year with a high order book, and the commercial dynamics remains good. As we have indicated, we expect the used car market to remain strong in 2023, with a continued favorable supply-demand situation. Our teams are working hard to close the acquisition of LeasePlan, and we are highly excited about the upcoming integration and the potential for the value creation of this deal. Once the closing is behind us, we aim to provide you with more specific operational guidance for the combined entity for 2023. This concludes our presentation. Thank you for listening, and we are now, as always, ready to take any questions you may have. Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Horst Schneider with Bank of America. Please go ahead. Hey, good morning, everyone. Congrats again for the great results that you presented this morning. I still want to understand to what extent now this lower depreciation is structural. If I understand your comments right, and please correct me if I'm wrong, then the depreciation will remain basically on lower levels throughout 2023. Then is it right that then the depreciation curve steepens again in 2024 because then you expect used car sales results to normalize again? Then in that connection as well, the margins you presented now for Q4, is that a kind of run rate that we can assume also ceteris paribus basically for the next two quarters? The other question that I had, I hope I don't ask too many questions is, on electric, on the EVs, because we have seen these significant Tesla price cuts, and you are one of the key partners for Tesla. Just want to get a statement from you, what you think about residual value risks in the EV space, and maybe you can provide some numbers to what extent you could be directly impacted by the Tesla price cuts via lower used car values then for the Teslas. Thank you. Thanks, Horst. Yeah. Good questions. Let me maybe start with the Tesla first, and a bit on the used car market in general, and then I guess Gilles can cover the question on the contract margin. I think, you know, it's true, of course, you know, that it had definitely made the headlines when Tesla reduced prices quite substantially. I think first of all, we have to keep in mind is that, obviously, if you look at the Tesla pricing, it's not the first time it has been quite volatile. They have a different pricing model than most of the other manufacturers, and they price pretty much every day kind of a demand supply thing. If you look at the Tesla prices, from early 2022 and up till now, they are pretty much back to where they were in early 2022. They actually increased their prices significantly throughout 2022. So a lot of the cars we have on the books is actually not impacted at all because they were bought, you know, at the cheaper price in the early start. Secondly, I guess, you know, if you look at the number of used EVs in the used car markets remains very, very low, you know. It's so I would say the impacts on the P&L of LE will remain insignificant from this, you know, on top of that. I think more generally and structurally around the used car markets, you know, the supply demand situation remains definitely in our favor also in 2023. There's many reasons for that. I mean, first of all, you know, new car sales has been down since 2020 with above 20%. New car prices have gone up, I mean, significantly. If you look, we have some countries where we have seen an increase of up to 50% on new car prices over the last 6 years. Of course, that has an impact positively on residual values generally. We still anticipate that there will be some inflation on new car prices as well. And again, you know, I guess Tesla, I mean, is not really, you know, in volumes today that has a real impact on the overall used car market. I think as we said through the presentation as well, we definitely expect, you know, the used car market to remain very strong in 2023. Obviously, as I said with Tesla, it's a very small portion of cars we actually have bought at, let's say, the increased prices at the end of 2022. Again, they are pretty much back to where they were in early 2022 with their pricing. Maybe Gilles, on the contract margin. Just to echo what Tim just commented on our views on the used car market, that explains the reasons of our high depreciation adjustments booked in Q4. As I said in my comments, the previous depreciation adjustments were based on former or on more conservative assumptions on the expected future car sales results. Now, as Tim said, we believe that the car sales market is structurally favorable for the next 12 months. Your question is whether this will stay at this level. I mean, whatever happens during the next quarters, keep in mind that most of the effect in the P&L will be reversing out into the used car sales. The real question is how much net impact of these depreciation adjustments we'll see in 2023 at the end of the year. Because whatever we booked in Q1 2023, for these depreciation adjustments, this will reverse out in the used car sales. Again, as I said, now, as we have not only increased our expected margin on the used cars, which has led to this strong Q4, adjustments, let's see how the used car sales develops. As you can see, it's a translation. This Q4, depreciation adjustment is a translation on the of the positive momentum on the used car sales market. I don't know whether I answer your question, Horst. Feel free, I can. Again, keep in mind wherever we Of course. I mean, the question that I have is of course, I mean, to what extent these effects are now structural, right? structural to the extent- If they are structural, then maybe you have got to pass on even more to your end customer in the long run, so that the margin normalizes then again, or the used car prices, they come down and then you revise again depreciation assumptions. One of the two. Therefore the key question for me is still, is this now a structural expansion, the structurally higher return on equities, or this is more a kind of special transition effect, let's say, for 2023? To the level we are enjoying now that we'll certainly continue to enjoy in the next quarters, not to this level, I would say. Of course doesn't question the favorable outlook, I don't think we'll remain on this underlying EUR 3,000 plus profit per car. No. Yeah. It's not sustainable. I think, Horst, I mean, to be honest, you know, EUR 3,000 of profit per car, if we priced that into the contracts, we would not get any contracts, to be very honest. It's, you know, it's a very competitive market, you know. I would say so far I think, you know, we all anticipate this to be extraordinary. Hence, you know, I mean, we are not moving the residuals to, based on what we are seeing right now. If it becomes structural, obviously it will go back to the market, in terms of higher residuals globally, you know. I think there's no doubt about that. I think everybody understands it's an exceptional situation with the COVID crisis, the war in Ukraine. Mm-hmm. A lot of other items that obviously have, triggered, let's say, this undersupply of new and the used cars to some extent. It's not a structural margin you would anticipate for the longer term. Tim, the last one that I have is, can you maybe give a number on the percentage of EVs in your fleet? I think you just referred to the penetration rate for the new orders, but just percentage of used EVs in your fleet at the moment. I don't have that number off the top of my head actually. I mean, I think we are around, on the running fleet, we are around 12%, 13%. Okay, that's great. Yeah. That's good enough indication. Thanks for that. Yeah. Okay. You know Tesla, if you look at the used car market, Tesla is very, very small. I mean, it's less than. Mm-hmm. -you know, one percent, you know, so. Okay. Okay. Thanks for clarification. I hand it back to the queue. I have got more questions. I leave the rest of the other questions maybe to the rest of the crowd and get back again maybe at the end of the call. Thank you. The next question is from Sanjay Bhagwani with Citi. Please go ahead. Hi. Thank you very much for taking my question also. I have kind of somewhat similar follow-ups to Horst's question. The first one is on the leasing contract margin. I'm really just trying to unbundle some of the assumptions, which, I mean, on balance look quite conservative. Just to basically understand, see, you are the depreciation, the benefit that came from lower depreciation in Q4 is EUR 220 million. I assume this is basically on the cars which you anticipate to sell in next year. I basically say, you know what? This EUR 220 million allocated to somewhere around 260,000 cars, and I get a depreciation upward revision of somewhere around EUR 850 a car. If I remember correctly, your normal guidance for the used car sales margin is normally been like EUR 200 a car. I'm just trying to understand that let's say if next year used car sales, underlying used car sales margins are, say, EUR 2,000, then basically the used car sales margin, what we can see in your numbers should be somewhere around EUR 1,000, right? Basically trying to see like what level of used car prices would actually mean another further increase in this leasing contract margin in terms of like further requirement of reduction in depreciation. Yeah. I will recall first the mechanism because it's a prospective depreciation booking. We have not given a formal guidance, but indeed, this EUR 220 million of adjustments reflects our view on the future used car sales profits. It's not only, and you're right, we are forecasting based on the volumes of cars that we are going to sell next year, and hopefully a higher number than this year. This is taken into account in this calculation. It's not only the 2023 profits, but it's also somehow a bit of 2024. Of course you're right, most of it is in relation with the expectations of profits of 2023. As we say, most of this impact will be reversed out in 2023. Most of it. A part of it is related to 2024. This of course, adjustments could have been bigger, should we have been more positive on the 2024 outlook, for instance. I can't give you a real precise figure. You need to understand that it sits for the cars will be sold, which will be sold in, let's say in Q2 2023, this impact is spread over the coming quarters. In Q4, we grasped the impact of all the... We grasped one quarter of impact of the coming of the future used car sales volumes. Yeah. Yeah. Thank you. That is very helpful. Maybe just try to understand the ballpark figure. Let's say if the underlying use for this year is saw somewhere around EUR 2,800, right? If next year that is somewhere around goes down to EUR 2,000. That will mean that probably around EUR 1,000 will come in the used car sales results, right? That's just a bigger picture because that is in the meeting context. Yeah, I think, Sanjay, that's pretty correct. I mean, you know, the number is not 2,800 of real trading, you know, as Gilles mentioned. Yeah It's more around the EUR 3,200. Of course, that number is impacted by the prospective depreciation that was done in Q3 already, you know. But I think your numbers is pretty correct. We try, I mean, we try to be as prudent as we can on what we can expect from future used car profits. This is based on our fleet evaluation exercise. Of course, as I said earlier, we are more positive on 2023 than on the outer years, of course, as usual. Thank you. That is very helpful. Just one follow-up on the new car pricing. Let's say given that the supply chain bottlenecks are coming back, and potentially at the latter end of the year, you may see some consumer demand weakening. That's why I think there are some market concerns that the new car prices, which have been, like, really high for the last two years, may actually come down. I'm just trying to ascertain how will that impact your business on balance. On one side, I can imagine, like, you probably get better competitive offers from the customers. On the other side, you probably make lower percentage on the lower sticker prices. How this new car pricing, maybe if they come down, how do they impact the used car, like, pricing? Yeah. That's a good question, Sanjay. I think, I mean, we also anticipate, of course, that we will not continue to see these very high increases that we have seen the last two years on new car prices. There's two elements, the street price that obviously, you know, coming up, you know, quite dramatically, in particular the last two years. On top of that, of course, the discounts given in the markets have been declining as well, based on the demand and supply situation. I think there's two things, you know, we could anticipate like we have seen with Tesla, because obviously they have overproduction now. It's not necessarily what we see everywhere, but they have decreased their prices. As I said, you know, they're just aligning them pretty much to where they were early 2022. Clearly, you know, as new car production comes back online, you know, we would anticipate that there will be a different trajectory on new car prices and potentially declining slightly. At the same time, as you alluded to, our, you know, let's say, leverage of our volumes will enable us to get better discounts than we have had in the last three years as well, which should offset, you know, as a minimum, what we can see on the used car prices. Overall, you know, we think it's quite neutral on that part. The way it's gonna impact the used car markets, you know, we think there is, you know, there are several things that has an impact on the used car prices. As I said, one of the big ones is, of course, the supply and the supply of used cars, which remains to be down because of the new car sales in 2021, 2022. Plus, you know, all the demo cars and the rental cars that you have seen in the markets before the COVID crisis have disappeared to a large extent. We don't really anticipate a return of these cars, at least in 2023, which also means that the car markets or the used car markets remain strong. There is, of course, a question whether, you know, there is still, you know, quite some inflation in a lot of the parts that you use to build a car. If that will not necessarily allow a lot of the manufacturers to reduce the car prices, as we have seen with Tesla. You know, if you look at Tesla, their margins on their cars are substantially above their competition. Tesla can afford it. A lot of the others, especially when it comes to electric vehicles, cannot afford it. That's also why you have seen that quite a few of the manufacturers have decided not to follow the trend of Tesla. I mean, you know, there is clearly a correlation between new car prices and used car prices, we think there is probably five other things that keeps the flow on the used car market at high level, at least for 2023. Thank you. That is very helpful. Just the last one, are you seeing more supply coming into the fleet segment now? Because I think until last year, the car companies were prioritizing the retail segment. Now do you see more coming to the fleet? Sorry, Sanjay. I didn't get that. Could you repeat that? Yeah. In terms of the supply, what we saw is like until last year, car companies were prioritizing the retail channels more because those are more profitable. Now recently we start to see that the fleet is outperforming the retail segment. Are you also seeing this evidence that the supply is coming back more to, let's say, fleet, that is to ALD? I think no doubt, you know, we are seeing. I mean, this is really a demand question, you know. The obviously the consumer demand have come down because potentially the, let's say the economic situation, you know, and, anticipation, and that helps us, of course, you know. I mean, to be very honest, we have not felt we have not been getting the cars, we should get. In the past, you know, we have discussed that many times, you know, that a lot of the, our clients is also viewed as the clients of the manufacturers, and obviously through our partnerships, you know, we get the cars we get. The problem have been, you know, the very long, delivery times more than anything else. It's right. I mean, we see of course, you know, that the manufacturers now is seeing a demand weakening on the consumer side. Hence, you know, they look more to the fleet space and our space, the corporate space. It gives us again, you know, a better position when we negotiate our deals for the future. Thank you very much. That's very, very helpful. The next question is from Geoffroy Michalet with Oddo. Please go ahead. Mr. Michalet, your line is open. Please go ahead. Is your phone on mute perhaps? The next question is from Matt Clark with Mediobanca. Please go ahead. Good morning. Three questions from me, please. Firstly, could you give some kind of outlook for fleet growth in 2023 on a pro forma level? You know, can you do better than whatever it was, 3% last year? Presumably not the 6% longer term target, but some guidance there would be helpful. Second question is on the pro forma CET1 ratio. I know that you're targeting 12%, but when you've completed the merger, what do you expect the CET1 ratio to actually be at that point? Or what is it currently now on a look-through basis? The third question is on the kind of delay from the original closing of the LeasePlan acquisition. Has there been any change in the pricing mechanism to reflect that? Obviously, the existing LeasePlan shareholders are getting an additional quarter of windfall profitability that I'm assuming they're hoping to dividend out before the deal closes. Is there any mechanism there that helps protect the kind of the embedded value for ALD shareholders as acquirer? Thank you. Thank you, Matthew. Maybe I'll start with the fleet growth and then we get to the CET1 with Gilles, I'll come back on the last question. On fleet growth, I think what we said, you know, as I said, we start with a very high order bank, which is good, and obviously the commercial dynamics is good as well. You know, we just launched the new partnership with SMAP that, you know, we actually announced quite some time ago, but it has been ramping up, and it went live in Germany in December very successfully. We anticipate that to be very interesting. Overall, I think, you know, we are in a good position. I think what we have said all along, that the year of integration could bring some disruptions, you know, and hence we are not so bullish on the growth for this year. We anticipate to be around where we are this year, to be very honest. We don't guide at this point because we want to get to closing, and we want to obviously guide for the combined entity, and it's too early to give any guidance on that, as we said. You know, anticipation is we are probably at least, you know, where we are this year in terms of fleet growth. Okay. Thank you. On the CET1, Matt, I cannot be more specific than restating that we are planning to be at 12%. I mean, we said 12% around, and you can see on our fleet growth and RWA assets growth, I mean, we are in line with what we were expecting. I mean, it will. We can't see your RWAs because you don't publish them yet, right? No, no, of course not. You can guess. I mean, you have a balance sheet, it's in line with our expectations. I can here just confirm the CET1 ratio that we committed on for the deal. Okay. Yeah. And on your last question, Matt Clark, I think you know this, I mean, any delay in closing obviously would be the benefit or the opposite, depending on the situation, I guess. In this case, the benefit to the shareholders LeasePlan. I mean, LeasePlan, the agreement is that comes with a NAV of EUR three and a half billion. I mean that's the deal basically on what happens, whether it happens end of 2022 or end of quarter if you want this year. What happens in between is for the benefit of the LeasePlan shareholders. Just a follow-up there. Obviously, you've seen a kind of benefit from revaluing your depreciation curve that kind of upfronted the economic benefit of high used car prices. Is there any kind of checks or balances in there with respect to LeasePlan doing that prior to closing, or is it purely what the auditors will allow is kind of the check and balance on that process? I guess the methodology, based on what we know from the Q3 accounts, the methodology is the same. It's around the assumptions that the auditors of LeasePlan will validate. The methodology is a prospective also depreciation. Yeah. I can't be more specific than that because we don't have a view on that as we speak. Okay. Thanks very much. The next question is from Dominic Edridge with Deutsche Bank. Please go ahead. Hi there. Just two questions from myself, please. Just on the order book, I know you stated it's at record levels. Could you give a bit more clarity on that, particularly on new order flow during the year? Because I'm guessing there was a lot of unfilled orders last year. How have you seen that order flow during the course of 2022, and are you seeing any sort of impacts from rising interest rates, slower economic activity, all the things that we all read about? The second question was just sorry about going back to the depreciation, appreciation curve. In terms of how we should think about the business that you're now writing, should we be thinking about it along the lines that with the much higher new build costs, on the cars first, are you still using a sort of percentage of the original cost, as it were, in the curves? Or are you still using sort of historical, residual values to sort of price up contracts? If you can... I know it might be a quite sensitive issue commercially, but maybe if you could help us just understand, how you think about things currently. Thank you. Right, Dominic, let me start on the order bank. I mean, the order bank is pretty much double the size what we normally would anticipate, you know, the order bank to be. It has been quite stable across, you know, the year of 2022. I mean, there's nothing particular to mention there. We are, you know, we basically normally cancel any order above 9 months in the order bank as we would anticipate it to be, you know, not fulfilled. I mean, and hence, you know, at this point we do revision of the order bank a bit more often to make sure that we don't cancel orders that is actually there or count orders that is still there because as you know now, average delivery times have been between nine and 11 months. There's nothing particular to mention on that, on the order bank. I think, our anticipation is that when the new cars come back online and more quickly than we have seen in the last two years, we will empty out the order bank to some extent, and it will come down to more normal levels, I guess, perhaps, you know, by Q3 or Q4 this year. Yeah, on the, I mean, on the depreciation adjustments, I mean, the fundamental of the business has not changed. We are setting our residual value based on as a percentage of lease price. This, depreciation adjustments is an accounting trick, I would say, which is imposing us to reflect the correct value of the car from an accounting standpoint. It doesn't have an impact on the way we are conducting the business. As Jim is saying, we are not now revising all of the sudden our RV based on, these, exceptionally 3,000 EUR of profit. That's not how you need to appreciate the business. I mean, it's an accounting adjustment, I would say, more than anything else. So I kind of have one follow-up on that. I mean, there's an obvious thing that obviously in the industry as a whole, that as a way of gaining market share would be to take a much more aggressive approach on residuals, which you know is always the road to disaster for leasing companies. Do you have any concerns over people maybe becoming more aggressive in the market as a whole, given where asset prices are currently? Well, as I said before, it's a very competitive industry. You're right, you know, we have seen in the past, you know, I mean, to be very honest, we always have one or two players who is aggressive. You know, I think the customers, what they want to see is long-term relationships and see that there is the right pricing in the market. I mean, for the time being, I think we are, at least the big players are all viewing this as exceptional, and hence you don't see it coming into the residuals for the time being, and that's clearly our position. It is exceptional and, I guess, you know, we are also at a point in time where, you know, technology is changing and, there could be volatility in some of the segments on that as well. I think at least the bigger and more serious players will, you know, will consider this seriously before starting pushing these kind of op results into the pricing of the contract. As I said, we haven't really seen that amongst the big ones for the time being. Thanks very much. The next question is from Julien Onillon with Stifel. Please go ahead. Yes. Hi, good morning. Three questions. One again, question on the leasing contract margins. Just to be clear, in the third and second quarter of last year, you were looking at six months, if my memory is correct. How the next six months sales of used car to reappreciate or review the depreciation of the cars coming in the next six months. Now, what I understand, you're looking at for a year and a bit more than a year because you're looking at also the market for 2024. Does it mean that in the first quarter of this year, you will again put again on, you know, a little more than a year looking at how the sales will be early 2004 then for more, continue to review that on a year and a half, maybe a year and three months ahead? That's my questions. My second question is coming back on LeasePlan. LeasePlan has not published its fourth quarter results for the time being. I guess you probably have an idea on that because it's quite important because it will depend about the dividend that LeasePlan will pay to its shareholders just before the merger. The estimate was around EUR 2 billion of dividend paid by LeasePlan to its shareholders before these acquisitions. Are you expecting something bigger than EUR 2 billion today, considering that the results, your results have been better than expected? Maybe it will be also the case for LeasePlan, or you expect something in this range? My third questions concerning the remedies. We have seen a lot of press, some press in France around different assumptions, a lot of interest on the remedies that will come. Some pricing has been indicated in the press. How the discussion are going on? Are you expecting something on the high end of the different, let's say, speculation has been on the pricing? Could you give a little update on the, on this remedies factors, which is important? Thank you. Thanks, Julien. Maybe I'll start with your last question and then Gilles will continue on his talk on the contract margin. On the remedies, I think, you know, we cannot really comment on the pricing, but what we can say there is a good process and there is good competition, there's a lot of interest, you know, from very serious players. The process is ongoing. I mean, you know, it's a very dense, you know, process. The only thing we can say is that there is a good interest and that we anticipate to get some interesting final bids on these entities very soon at the end of the day. We cannot really comment on pricing or who is in there at this point. Do you expect the remedies to be, sorry, to be done before first quarter, end of first quarter? I mean, we are working as we have said, you know, all along, towards closing, end of the quarter. Of course, it would be nice to have that done also before closing. Okay. I can come back on the leasing contract margin, Julien. It's, yeah, it's key that everybody understand the mechanics. As I said earlier, I guess everybody got the fact that in Q2 and Q3, we did this depreciation adjustments based on some assumptions, on some expected used car sales price estimates. At the time, back in Q2, Q3, we were more conservative on the normalizations of the buoyant used car market. What we have seen instead, and this is by the way, part of our fee to evaluation exercise that we are conducting twice per year. What we have seen instead is prices continue to increase in Q3, strong, and remain very strong in Q4. Of course, we have been underestimating, so to speak, the depreciation adjustments in Q2 and Q4. What we have done in Q4, it's not only a revised estimation of 2023 used car prices, which are now higher than previously anticipated. Because again, the adjustments that we booked in the previous quarter was mostly concentrated on cars which will be coming off lease in the next few months. Now the depreciation adjustment is now based on the larger number of vehicles, and this volume effect explains also the difference that you can see now compared to previous quarters. Am I? No, it's clear. It's clear. So it's- You take effectively buying a larger number of cars to be sold. Definitely, you take a longer view... Yeah. than previously, which were more 6 months, as you remember, for Q2 and Q3. Here, it's more than a year, if I understand you correctly. Yeah. Yeah. My question on this plan, dividend, the big dividend expecting just before the acquisition, we were expecting calculation to be around EUR 2 billion. Do you expect something bigger now, or considering the results and the market? We have no specific insights on the results of... I mean, we still are in competition, and we have to be very careful on that. We don't have any insights on the precise net income of LeasePlan for 2022. I mean, the principle of the deal has always been that the net asset value of LeasePlan, which will be provided to us, is a net asset value of EUR 3.3 billion. From there can be a preclosing dividend. Okay. Thank you. The next question is from Kiri Vijayarajah with HSBC. Please go ahead. Yes. Good morning, everyone. A couple of questions from my side. Firstly, coming back to your order book commentary, obviously on your side, all very healthy, and I guess it has been for a while now. Actually I'm more interested in how the LeasePlan order book is looking. I guess, you know, should we be worried they've taken their foot off the pedal in terms of trying to win new business? You know, I think in the context that, you know, for them, the P&L, the revenues have been more than fine through the course of 2022. I wonder if, you know, talk of change of ownership may have caused some of their big customers to press pause on contract renewals. Just anything you can say to us to reassure us that the LeasePlan franchise and order book is in a similar kind of strong, resilient shape, as you progress with the integration? I guess ultimately, you know, the whole project has dragged on for longer than everyone's originally anticipated. So, you know, maybe some erosion, concerns that there's erosion to the LeasePlan, franchise. Second questions on the dividend, kind of the forward-looking dividend for 2023, say, you know, in the context of downward normalization in the used car sales results. You've also, got elevated integration costs or costs to achieve in 2023? I was just wondering, is there any kind of flex or temporary flex in the 50% payout ratio so that, you know, you can try and smooth the absolute dividend off the EUR 1.06 base that you paid out for, as of 2022 earnings? Just how you're thinking about the dividend absolute versus the payout ratio, please. Okay. Kiri, yeah, maybe let me start with the order book and then, I think on dividend, Sheila can give you a quick input on that. You know, it's again, one of the areas where we cannot, you know, be, you know, really transparent with each other, you know, between us and LeasePlan, where we talk about sales and orders and, pricing and all these things. What we see is that LeasePlan is competing nicely in the market with us and with the others. We have no reason to believe that, their order bank should look very different from ours, to be very honest. They've been very active. You know, to be very honest, when you look at the work done, it's more the ALD side than the LeasePlan side for the preparation, even if we are working very closely together. They are, I mean, they're still very active. If you look at their growth in Q3 was very good, better than ours, actually. Again, you know, there's no reason for us to believe that they are taking the foot off the pedal, I would say, to be honest. We anticipate that they will look pretty much like us in terms of order bank, and also in terms of the fee growth. That's anticipation. Yeah. On the dividend, I mean, as usual, I would say that we have always been very transparent in the way we are paying our dividend. It's as we've been on an accounting basis. We have been stating a medium-term target of 50%. This has been shared, by the way, to the ECB when we have done our discussions with the ECB to become a regulated entity. We would like to stick to that. To answer to your question, I mean, the payout will be 50%, based on the reported results of 2023. Again, the results of 2023 in relation to the leasing contract margin, I mean, to echo what I said earlier, will also depend at the end of the year, 2023, how the outlook on the used car sales will be. We could also be in a situation where at the end of 2023, the used car sales remains strong, and that we still have to recognize depreciation adjustments. That's, and that of course will come back later in the year. Okay, fair enough. That's very clear. Thanks, guys. The next question is from Reginald Watson with ING. Please go ahead. Morning, all. Just coming back to the depreciation and the lease margin. I just had a question. Why would you choose to do this now? You're effectively shifting your booking P&L into the lease margin in 22, which you're then going to lose through used car sales margin in 23. It's gonna make the 23 comparison much harder for you versus 22. That's the first question. I have a couple of questions on the costs. Yeah. It's a good question. I mean, it's not a choice. I mean, again, I want to repeat here that it's not a change methodology or accounting methodology, something which is intrinsically linked to the exceptionally high level of used car sales. The fact that our net book value is, I mean that there is a huge difference between our net book value and the expected sales price is leading us to stop amortizing our cars. It's just as per IFRS, we've had the, just to give you a bit of insight, we've had this challenge from the auditors since the end of last year already. We tried to push back on that. I mean, IFRS are what they are, and we have to apply that. It's not a choice to answer to your question. I agree it needs to be seen as a net between the positive in the margin and negative on the used car sales, which is illustrated in our communication on page 12, I guess. Yeah. Under-understood. On that communication on page 12, you give a Q1 sort of illustrative, another uplift, in the sort of green bar then. Are we to assume, based on the sort of your previous explanation on this call, that that's just to roll forward again quarter by quarter until such point as you decide to contract the forward outlook from a little over a year to then bring it back down to six months or nine months or whatever you and the auditors agree on? Yeah. To be more precise on that, as I said, this exercise is based on this famous fleet evaluation exercise that we do twice a year. We do it generally in the first semester of a year and in the second semester of a year. The next time we'll do these depreciation adjustments, we'll still be basing our assumptions based on the fleet evaluation that we've just conducted. However, as I said earlier in the speech, whatever we book in Q1, surely most of it will be reversing out in the used car sales. What matters at the end is what will be the end of year position at the end of 2023. Yeah. Yeah. Okay. This will be adjusted based on how the car sales remains to be buoyant and blah, blah. Yeah. Like I said earlier. Moving briefly on to costs, can I just confirm the scope effect for Sabadell, FLEETCOR and Ford. Did that come in in the fourth quarter or has that been in all year? Yes. No, in the fourth quarter. That's. This year had been down. Yeah. And the variable comp, can you give us the delta between this year's variable comp and last year's in absolute terms? We are not disclosing that, but it's most of the remaining increase are in most, yeah, it's a big, I mean, again, it's EUR 1.2 billion of net income, which is well above budget. We are all, I mean, most of our subsidies are based, are bonus based on budget targets. We are, as you can see, we are fine on the fleet, we are fine on all the elements of the P&L. There is some profit sharing also scheme which we have to take into account. Okay. It's a significant amount. Okay, thank you. A couple of broader questions for you, Gio, and also for Tim. I appreciate that you're all working towards closing by the end of March. Working towards it is not the same as being confident that you'll achieve it. How confident are you that you'll actually get closing by the end of March? you know, it is a complex deal, you know, and, you know, it's a transaction with a lot of stakeholders in a quite highly regulated environment, you know. to be absolutely confident that we're gonna make it, I mean, over the line, end of March, you know, I cannot tell you that here. that's what we are trying to do. I mean, there is a risk that, you know, small risk that it might slip with another month, I guess. Okay. Okay, fair enough. Arval posted higher funded fleet growth than you did. Where do you think they're outperforming you, and what can you do about it? On the Arval, on the Arval growth? Yeah. On the growth of Arval, I think, you know, they have, I mean, they've been performing really well for quite some while, you know. They have had a good success on their partnerships. I think, you know, we've talked a bit about, you know, I guess, one of the previous questions of people is a bit aggressive on residuals, at least on the pricing. Obviously, Arval have been quite aggressive and stays aggressive in the markets. I mean, that's where I think they are on a good run. We know structurally, you know, that obviously with the partnerships, when you start a new partnership, you get a lot of new business, and then there's a three, four-year cycle before you start getting returns of these, which is a bit more difficult to re-sign of the nature of these clients. That's actually what have hit us a bit. You know, I think we tried to explain that, you know, we had our best years with partnerships in 2017, 2018 and 2019. They started to, let's say, return these cars in 2021 and 2022. Obviously, you know, when we were at our best with that, you know, we saw 8%, 9%, 10% organic growth, those years. It's a bit structural in the way it's combined as well. But we have to applaud them for a good performance on the growth side, on the arval side. Okay, thank you. Understood. The next question is from Geoffroy Michalet with Oddo. Please go ahead. Yeah. Hi, gentlemen. Sorry, I have some trouble with my phone. One more question on the OpEx side, because I understand that the scope effect for Q4 is superior by something like plus EUR 20 million. Yet your total OpEx is really increasing by more in Q4, and although you still have the same kind of expense for a LeasePlan versus Q3. If you could just elaborate a bit on your OpEx ratio or operating expense. Thank you. Yeah, Geoffroy. Honestly, when we quote, I mean, in the, in the slide page 14, when we quote, the big elements of OpEx, I mean, there is of course all these costs related to the preparation of the LeasePlan acquisition. I mean, can quote them again, but they are embedded in the 128. There is for the year EUR 31.5 million scope effect. Some of that has been included in Q2, if I remember. If I well remember, FleetPool and full fleet management in Q4. This is. The remainder is really, as to echo a question earlier from Julien, I guess, or I can't remember who. It's the viable compensation. It's a massive amount. I mean, as you can imagine, I mean, our used car sales results has almost underlying double. The net income is. That's the main reason. There's no other major deviation. Okay. The variable compensation is a significant amount. Okay. I was just wondering because of course it is an important amount. In Q4, yet it was inferior to Q3. Yeah. Yeah, but we have done, there's been some revaluation exercise and, yeah. Okay. That's right, yeah. Thank you very much. Mr. Albertsen, this concludes our Q&A session for today. The floor is back to you for your closing comments. Thank you. Well, thank you all for your attention and, all the questions. As always, our IR team stands ready to answer any further questions you might have, so don't hesitate to contact them. Thanks a lot, and have a nice day.