Good morning. This is the conference operator. Welcome, and thank you for joining the ALD LeasePlan Half Year 2023 Results presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Tim Albertsen, CEO. Please go ahead, sir. Thank you. Good morning, ladies and gentlemen, welcome to this ALD | LeasePlan H1 2023 results call. First of all, thank you all for joining us today. I'm hosting this call with Gilles Momper and Patrick Sommelet. Patrick will join ALD | LeasePlan as Deputy CEO and Chief Financial Officer from the 1st of September. He'll replace Gilles, who is leaving the company. I would like to express my gratitude to Gilles. He has been an excellent teammate over the past 16 years. He has played a key role in our company's expansion, and we will miss him. We wish him the best with his new challenges. Patrick is currently Deputy CFO of Société Générale, and therefore will bring considerable expertise as we are entering into a new phase of our development. Patrick has been involved in the LeasePlan acquisition process, so he knows our company very well. Patrick, welcome on board. Let's start the presentation. First, I will present our highlights for H1. Gilles will comment on our strong financial results, which are impacted by the consolidation of LeasePlan, and which clearly deserves some detailed explanations. Finally, I will say a few words on our outlook for the full year of 2023. Then, as always, we'll take your questions. Let's go to Slide three on the key takeaways. The main event of this first half year was, of course, the closing of the acquisition of LeasePlan on May the 22nd. Thanks to this acquisition, we achieved an undisputed leadership position. We started the execution of our integration plan immediately after closing. I can say that we are off to a very good start. Used car markets are normalizing gradually as supply and logistic chains continued to ease during H1. While new car deliveries in Europe recovered strongly from last year's low levels, the production of new cars remained well below the pre-COVID levels. For this reason, we believe that the normalization of the used car markets will continue to be gradual, with prices at high level. We now expect the normalization to continue until mid 2024 instead of end 2023, i.e., for the longer than we actually initially anticipated. This would continue to support used car prices globally. Our first financial results with LeasePlan, which is consolidated for only slightly more than a month in H1 2023, are strong and promising EUR 565 million. They are underpinned by the favorable situation in the used car market, which I just described, and while taking into account the ramp-up of LeasePlan integration cost and a loss of the disposal of ALD Russia. We have a very solid capital position with a core Tier 1 ratio of 12.5% end of June. Let's move on to Page five on our leadership position. The acquisition of LeasePlan represent a step-up change, which propels our company to a clear number one position in the operational leasing industry, where we, as stated many times, size matters. ALD | LeasePlan ranks number one multi-brand leasing player in 29 markets, countries, including in the top European markets. We operate a fleet of 3.4 million cars, twice the size of our nearest competitor. We have a direct presence in 44 countries. It is the largest geographical coverage in the industry. We have a strong foothold in Western Europe, and we are well-positioned in promising emerging markets all over the world. We own the largest multi-brand EV fleet worldwide at 428,000 vehicles, drawing on the broadest range of partnerships in the EV ecosystem and our unique capacity to address customers' needs, we are committed to continuing driving the transition to sustainable mobility. We also rank number one in the multinational segment. Our clients franchise in this category has increased from 320 clients, from ALD alone to 550 clients for the combined entity, which associate the fleet on the management increased from 378,000 to 610,000 vehicles. Our credit ratings were upgraded to the single A category just after closing of the acquisition, and we are now the best ratings amongst leasing players. A1 with Moody's, A- with both Standard and Poor's and Fitch. This is a key in the industry because it means more competitive funding cost and a greater access to funding providers. Let's now go to S lide six. We'll comment on the execution of our integration plan. We swiftly implemented our integration plan. Two months into the integration, I'm glad that we have achieved our first objectives. The execution of the plan will continue on the same steady pace, so that our first synergies can be secured by the end of the year. As the LeasePlan acquisition was finalized a few months later than originally planned, we now expect that our annual run rate synergies will be achieved fully by 2026 instead of 2025. Let me comment on some of the actions we have taken and which have already started to bear some fruits.... We are committed to offer a seamless service and to ensure the highest level of customer satisfaction. We have therefore arranged for a single team to face those clients who were previously served by both companies. It's important to note that we have received a very positive feedback, and we expect a low attrition from these clients. Our sales teams are already trained on the full range of product, such as light commercial vehicles, flexible leases, multimodality, to capitalize on the strength and the complementarities, and take the advantages of the multiple cross-selling opportunities offered by the combination of ALD and LeasePlan. Procurement is one of the main sources of synergies. We promptly started renegotiating the terms and conditions with our suppliers. This proved successfully so far, with bonus improvements already agreed by several OEMs. More recently, the first global tender was launched on tires. With four million units purchased per annum, we're in a strong position to improve our purchasing conditions also on this part. Based on this, I can say that we are on track to secure at least EUR 30 million of annual procurement savings by the end of 2023. These savings will progressively materialize through the income statement in 2024. Regarding overheads, we already launched a convergence of our IT tools and the streamlining of processes, and we will launch the local integration of IT by the end of the year, which will enable us to start materializing OpEx synergies from the end of next year. Let's move to Page seven, where we'll comment on our robust commercial performance. The positive trends of the previous quarters continued. Our total fleet stood at 3.4 million vehicles, up by 4.3% compared to a year ago, reflecting our dynamic commercial activity. LeasePlan's contribution amounted to 1.6 million vehicles as end of June 2023. Our funded fleet reached 2.7 million units, up 3% year-on-year, and our order book is continuous at a very high level. Fleet and management increased by 9.1% versus June 2022, primarily driven by a new banking partnership. We achieved an outstanding performance in electrification, with EV penetration at 32% of new passenger cars registered in H1, 2023. This is a massive seven-point increase compared to the same period last year. I'm proud that the combined entity is much ahead of the European market, which is only at 21%. We had an outstanding performance in battery EV and plug-in hybrids, with 19% and 13% penetration, respectively. Again, well ahead of the market, and we definitely lead the shift towards BEVs and battery electric vehicles. Our robust commercial performance was achieved from a more balanced geographical portfolio. Thanks to the acquisition of LeasePlan, our exposure to France, our largest market, was reduced from 28%- 20% of our total fleet. Our top 10 largest countries, including France, now account for 83% of our total fleet, versus 87% for an ALD standalone perspective. Let me now hand over to Gilles, who will comment on our financial results in more details on Page nine. Thank you, and good morning, everybody. As mentioned by Tim earlier, this semester is obviously more complex than usual. The H1 results embed not only the acquisition of LeasePlan but also the materialization of the sale of ALD Russia and specific reporting for the six entities that we have sold on the first of August. I will start the presentation with a general overview of these impacts on our financial statements, and then we'll go into the detailed figures, and I'm sure you will have questions afterwards. The first impact is obviously related to the parameters. LeasePlan, as we've already said, has been consolidated from its acquisition date, just slightly one month and a bit into the H1 income statement. We had also agreed with antitrust authorities that we would sell six entities. At the end of June, the ALD entities in Portugal, Ireland, and Norway, and the LeasePlan entity in Czech Republic, Finland, and Luxembourg, are classified as assets held for sale under IFRS, and you will see that in the balance sheet. Regarding the ALD entities, as these three entities do not represent a major line of business, they are reported in the continuing activities, whereas the LeasePlan entities, they do not contribute in the Group H1 income statements because these entities, the assets and liabilities, have been recognized at fair value in the purchase price allocation exercise, on which I will come back. The second change is related to the new regulatory status. Upon closing, as you know, of the acquisition of LeasePlan, ALD SA, which is the holding of ALD | LeasePlan Group, has become a financial holding company. We are now subject to new regulatory requirements. Thanks to this status, we have been able to optimize our capital structure with new layers of hybrid capital. You will note that additional Tier 1 is accounted for as shareholders' equity in the balance sheet, while the Tier 2 debt, which is subscribed by Société Générale, is accounted for as borrowings from financial institutions in our financial statements. The third impact, which you see on the slide, is of an accounting nature. The group will apply the IFRS3, the business combination standard, whereby a purchase price allocation exercise will be conducted in the coming semester. All, all acquired assets and liabilities will be recognized at fair value, and we expect this exercise to be finalized by the end of the year. For instance, and as a result of this PP exercise, no profit on LeasePlan's used car sales was recognized since the acquisition in May. The last element, which is worth commenting, relates to the harmonization of accounting policies and estimates across the group, which is underway, and which may also have a limited impact on the goodwill. The current provisional goodwill at the end of June amounts EUR 1.7 billion and is expected to be then further amended based on what I've just been saying. Let's go now on Page 10 to look at the margins. The total margins, meaning the sum of our leasing contract and services margin, reached EUR 1.255 billion in H1, increase of 55% compared to last year. Out of this amount, the contribution of LeasePlan, excluding non-operating items, was EUR 170 million. Globally, our margins were stable compared to the same period last year when we adjust for depreciation costs and non-operating items. On a like for like basis, and excluding the cost of the Tier 2 debt, which was not there last year, our margins were up by 4.5%. Again, in H1 2023, our leasing contract margin was boosted by the reduction in depreciation costs for EUR 315 million in the semester, compared to EUR 63 million for the same period last year. Depreciation has been adjusted or stopped for those vehicles whose sales proceeds are forecast to be in excess of their net book value. In H1 2023, as Tim alluded earlier, we changed our depreciation curve to take into account the most recent fleet evaluation exercise, which we performed earlier last year, this year, sorry. We are, in this exercise, assuming continued elevated used car sales prices well into 2024, and despite the start of the gradual normalization, which we'll see on the next slide. As, as we all... Another comment, as we anticipate a fair value of LeasePlan fleet in the frame of this PPA exercise, I would like to highlight that no reduction in depreciation cost was assumed on LeasePlan's portfolio. The EUR 350 million only relates to ALD vehicles. We also had some non-operating items this semester, which are detailed in the appendix, which is impacting positively the leasing contract margin by EUR 70 million, compared to EUR 48 million last year. Let's go to Slide 11 and have a look at the used car sales results. The contribution from used car sales results was a strong EUR 285 million in H1, compared to EUR 433 million last year, and last year was exceptionally high, and last year was also not impacted by the reduction in depreciation, as you can see on the slide. The H1 2023 amount remains very high, and despite, despite this, EUR 132 million, a negative impact, related to the depreciation adjustments booked during the previous quarters. The strong used car sales margin still benefit from contract duration extensions, due to the late, to the continued late delivery of new cars to customers, despite we see some, some improvement. As I commented during previous call, the amortization of the vehicle carries on when a customer keep its vehicle for a longer period than anticipating, and hence lifting the used car sales results. As already said, but I repeat it here, there has been no profit recorded on LeasePlan used car sales since the acquisition, due to fair value recognition. The average margin on the sale of used car vehicles, the reported average margin, came in at EUR 1,974 per unit in H1, but without the impact of the reduction in depreciation costs, our used car sales results per unit would have reached EUR 2,887 per unit, which is a very high level. We, ALD, has sold 140,000 cars in H1 2023, compared to 135,000 in H1 last year, and as indicated in the footnote, this volume does not include the volume sold by LeasePlan, on which again, we've not recorded any used car sales profits. Now, let's have a look at the rest of the P&L on Slide 12. Our operating expenses came in at EUR 632 million in H1. This amount includes a scope effect of EUR 166 million, due to the consolidation of LeasePlan, but also Fleet pool, which we consolidated for the first time in the second semester last year. The integration costs of LeasePlan for EUR 85 million compared to EUR 41 million last year, and also transaction costs in relation to the acquisition of LeasePlan, which you may remember we already had in Q1, and the disposal of remedy entities for EUR 26 million altogether, LeasePlan and the remedy entities for EUR 26. Our operating expense base is also impacted by the costs in relation to our new regulatory status, as we have now completed the project to become a financial holding company, and we have to put in place new teams to manage the new requirements. The cost of risk remained at a very low level, 13 basis points as a percentage of our average earning assets. In discontinued operation, we have the impact of the disposal of ALD Russia, on April, on the 20th of April. The net losses was EUR 91 million, which includes a negative EUR 72 million reclassification of accumulated translation reserves into the income statement at the closing of the sale. You remember, this was booked in the OCI last year, so it has no impact on the shareholders' equity. An impairment of the net book value for a negative EUR 29 million after tax, and the Q1 net income was reclassified from continued operations, so it's a positive EUR 10 million. Our net, our net income group share reached this semester, EUR 565 million, down 8% compared to the same period last year. I remind that H1 was off an exceptionally high base. Our performance this semester is strong because it was achieving, taking into account the ramp up of LeasePlan integration costs and the loss related to the disposal of ALD Russia. Our diluted earnings per share came in at EUR 0.91 in H1, compared to EUR 1.38 last year. This the change is distorted by the fact that the rights issue, which financed the cash component of LeasePlan acquisition price, was settled in December 2022, while LeasePlan was only consolidated from the 22nd of May. Let's have a look at the balance sheet on Page 13. As indicated earlier during this call, many times, we expect to finalize our PPA by the end of the year. So the related impact on the goodwill will be accounted for in our full year 2023 financial statements. So as a result, the provisional goodwill is expected to be to be amended. The earning assets are close to EUR 49 billion, more than double versus last year, and underpinned by the consolidation of LeasePlan, along with the rising share of electric vehicles in the funding fleet. Our risk-weighted assets amount EUR 54 billion at the end of June, with a credit risk weighting, credit risk weighted assets accounted for 85% of the total RWA. Just to say that ALD is in a standard approach for RWA calculation. LeasePlan is on the internal ratings-based approach. These calculations are currently under review, which could result in higher risk-weighted assets in the coming semester. Our common equity Tier 1 ratio was 12.5%, and our total capital ratio was 16.6% at the end of June. The total debt funding stood at EUR 47 billion, of which 33% consisted of loans from Société Générale and 24% from deposits. Part of our active liquidity management strategy, we continue to diversify further our funding by issuing EUR 1.85 billion of bonds in H1, which is a very high volume. The successful bond issues confirm the market's solid appetite for our debt instruments. Our outstanding senior unsecured bonds now rank as senior preferred obligations of the combined entity. In the future, we only intend to issue senior preferred bonds on the market through ALD FA, which will be the solar-rated issuer. Other, other new elements on the balance sheet, the fact that the combined entity benefits from ample available liquidity, which, with, cash at the central bank for EUR 4 billion and an undrawn committed revolving credit facility of one point... Close to EUR 1.4 billion. I'll now hand over to Tim, and I will say a few words afterwards, to comment the outlook. Thank you, Gilles. Yeah, let's move to Page 15, our guidance for the full year. The macroeconomic environment has dramatically changed over the past few months. However, our vision remains, as in the past, strong and resilient. Leveraging on the acquisition of LeasePlan, we expect now for the full year, funded fleet growth between 2%-4% versus the end of 2022 on a like-for-like basis, on the back of continued dynamic commercial activity and a high order book. Used car sales results per unit between EUR 1,200-EUR 1,600 on average on ALD's reported used car sales. The estimate includes the negative impact of reduction in the depreciation cost in previous quarters. It is based on the assumption that normalization will be progressive and that the used car markets will remain favorable. No used cars results, as Gilles has mentioned a few, few times, is assumed on the LeasePlan used car sales due to the fair value recognition. Cost to achieve integration and synergies between EUR 150 million and EUR 180 million, unchanged from our estimate earlier this year. That's it for the full year guidance, 2023. I'm also pleased to announce that we'll be publishing our strategic and financial roadmap on September 18th. We look forward to presenting our midterm objectives and the new management team. We hope to meet you in person or online on September 21st. This concludes our presentation. Thank you for listening, and we're now ready to take any question you may have. Maybe before the questions, I, I would like to, to, to thank you and to take the opportunity of this last analyst call for me within ALD to, to, to thank you all. It has been a, a real pleasure to interact with you during the calls, but notably during physical meetings and road shows and dinners that we may have had together. I would like to, to introduce and warmly welcome Patrick, who has been working along with me from Société Générale on the LeasePlan transaction over the last six months. Patrick is well aware of the transaction and all what we have been discussing today, Patrick is well aware of. Welcome Patrick. The questions will be for me, this semester again, and, and for Tim. Yeah. Thank you, Gilles. Yeah, we are ready to take your questions. 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 Delphine Lee with JP Morgan. Please go ahead. Yes, good morning. Thanks for taking my questions. My first question is on the used car sales results guidance that you have given. I mean, given that you closer to EUR 2,000 in the first half, I'm just wondering, I mean, are you and you seem to say that, you know, the normalization will not happen until, like, well into 2024. So just trying to reconcile your guidance of EUR 1,200, I mean, sorry, EUR 1,200-EUR 1,600. Is that, are you expecting a bit lower result per unit in the second half? My second question is on the comments you just made on the risk-weight assets that we could see some increase. Does that, does that mean that you could see - we could see more issuances in terms of Tier 1 or Tier 2, or has the bulk already been done as part of the transaction? Just wondering, because clearly what we have seen is that, the, the cost of the Tier 2 is, is, is having an impact on, on your margins. Then the last question is on PPA. Just around that process, just to understand a little bit, I mean, given the depreciation cost that we have seen for, for ALD and the used car sales results, I mean, is it fair to say that, you know, the PPA gains that you're going to book in the second half are actually quite material? Thank you. Thank you, Delphine. Let me just start. I think I'll, I'll give you a quick input on the used car sales globally in terms of what we see going forward. Then I think, Gilles can give a bit more details on, on, because it's of course impacted also by the, the prospective depreciation, as has been mentioned a few times. I think Gilles can also answer on, on, on the capital structures and the PPA. I think on, as we have said, you know, the, the used car sales markets remain strong. As we said, you know, the, the trading, was at EUR 2,900. It's a slight drop from, from Q1, around EUR 300-EUR 400 per car, which is quite normal coming from a very high level. Now, what we see, overall, is that there is still, you know, a used car sales situation where there is less supply than demand. That keeps, you know, the, let's say, the market's quite buoyant. We anticipate that to remain for quite some while, because you have seen since 2020, that the new car sales have been down close to 20%. Even in 2023 here, we're going to see that we will not recover from where we were at the 2019 levels, actually still 20% below 2019 and 2023. We still see inflation on new cars, which is also positive for used car sales. Obviously. what is also happening to some extent in the markets is that, a lot of the manufacturers are no longer producing A and B segment cars, which means that, to a large extent, you know, if you, if you cannot afford a new car in a segment C or D, you will actually be buying a used car. That, that actually, again, gives us good comfort in terms of, of the used car markets going forward. Clearly, we anticipate a normalization, as we have said, it is coming gradually and then slow. And as we said, you know, we are now anticipate that not to happen in 2023, but remain quite strong, and it will normalize at a higher level that we have seen in the past. There's no doubt about that. I think that's the global outlook on the, on the used car markets, Delphine, then. To precisely answer your question on this, Delphine, you have also to take into account, and it's what it is in the guidance, the EUR 1,200-EUR 1,600 include the negative impact of the prospective depreciation, which will kick in in the second semester. You have seen in H1, we had EUR 132 million, which is weighing negatively on the used car sales results, leading to an H1 reported figure of EUR 1,974. Just to give to the market a clear guidance, what we have given to you is a reported figure. Tim has just commented on the underlying trend of the used car sales, but it's worth taking into account this negative impact. It is, it, this is what it, this is the, the, the 1,200, 1,600 is the reported, so you have to multiply that by the, by the number of cars which will be sold at ALD. Okay? Regarding your question on, on, on RWA, I mean, we, it's, it's really too early to say and to quantify the magnitude of it. And, and also you, I don't know, you also to keep in mind the impact of Basel IV, which will, which will start in 2025. So far, I mean, we have been, during the, the, the Capital Market Day, we have been, commenting on the CET1 above 12%. This is still our compass for the years to come. It's just that it will. We are in the process of reviewing this. We are in discussion with the ECB regarding this topic, but it's too early to comment. But still keep in mind the CET1 target. And here again on the PPA, we are now two months post-closing, so it's a heavy exercise to conduct the fair value because it's on a car-by-car basis. You have to take into account all countries of LeasePlan, the net book value by country, the prospective depreciations, which has been accounted for, and from there, we derive the potential impact on the goodwill calculation. quite material could be, but it's too early to say at this stage, because there will be. I mean, we are going to fair value all the assets, so there will be plus and minuses potentially. Just, just to clarify, so the, the RWA, inflation we're seeing in the second half, that, that's, that's separate from Basel IV. Basel IV comes on top. Do, do you have like a, an estimate for Basel IV impact? The Basel IV will, will in a way floor, some of the benefits of the IRB model. What I mean by when I comment Basel IV, is just to say that it will, all the, all the benefits of the, of the IRB model are, are somehow fading, and, and so, going more towards, the standard approach. Okay. Understood. Thank you. Thank you. The next question is from Sanjay Bhagwani with Citi. Please go ahead. Hello, thank you very much for taking my question also. I've got a few questions, but before that, I would like to express a big thank you to Gilles. Thank you for, it's, it's really been a pleasure working with you and all those thorough and comprehensive discussions we have had over the past few years. Thank you. Yeah, I would also like to welcome Patrick. Looking forward to be working with you, Patrick. Yeah, I'll just begin with the questions now. My first question is a very big, I mean, just a very bigger picture question. When we think of the fleet revaluation exercise, so if I understand it correctly, your outlook for the residual values has improved significantly versus the time when you had agreed to pay the price for, to buy LeasePlan. Like, like, for example, for the LeasePlan fleet of somewhere around 1.6 million fleet, I, I believe, you agreed to acquire this, like, like a year and a half ago, when the outlook on the used cars and the residual value was not as exciting as it is now. When you try to do this revaluation, and suppose if the revaluations yield to a fair value, which is materially better than what the book value is. My question is, how does this help the shareholder? Will it just be like reducing the goodwill and hence, in the form of, let's say, the lower risk, on the, on the capital ratios? Or can there be some allocation, a direct allocation to the, to the shareholders? The reason why I'm asking you is because, let's say, if the same revaluation is done at the leasing contract margin level, then that directly flows to the shareholders in terms of the dividends. If it is just done on the level of the goodwill, then how does it translate into the shareholder returns? That's my first question. Well, maybe, maybe I can start, Sanjay, and thanks for the question. It's true, of course, you know, that the, the value of the LeasePlan fleet is substantially better than anticipated, I guess, when we started negotiations way back in 2021. You're right, that obviously the fair value means that we are not seeing an impact on the P&L, like you would see on the ALD fleet. It then goes to goodwill, which of course improves, you know, our capital structures. It's too early to, to give you a clear guidance, you know, but we are looking as well, you know, which we will then disclose when we get to, to our capital market day, our policy of dividend payout. Of course, this could potentially be an opportunity to look positively on that, on that particular part. I don't know if that answers your question, Sanjay. Again, Sanjay, we have to take into account the net book value of LeasePlan, including what they have reported as a reduction in depreciation. That's why I said earlier, it's a heavy exercise, just to precise that. It's not something. It's something we have studied, of course, but no conclusion at this stage. I see. I see. They may have, like, reduced the depreciation only on the cars they were already supporting to be sold in the near future, right? More like maybe 300,000 cars. Whereas now, when you do the revaluation, you use this new depreciation curve for the whole 1.6 million cars. Is that right? Yeah. So the full fleet of LeasePlan will be fair valued. You're right. Yeah. Yeah. Yeah. As I commented in the call, what we have done in the, in the, in the fleet evaluation of the first semester, is that we, we see, we see still very elevated used car sales prices. In fact, we are just shifting as every quarter, I would say, or every semester, since one or two years, shifting the outlook, the positive outlook we have on the used car sales by one by another year, so to speak. If you would have asked us the question one year ago, maybe our answer would have been, of course, different. Thank you. That, that, that sounds very encouraging. We get a color on then, how basically the value shift happens to the equity shareholders, more in September CMD. Is that right? Hmm. Yeah, exactly. Thank you. My second question is, I think you already mentioned about the order, like the order backlog is very strong. Can you maybe comment on how is the delivery times looking for now versus, let's say, on average? I think it's used to be somewhere around two to three months in a normal scenario. If you can please comment on that. Yeah. I think, you know, we have... It, it, it depends a bit on manufacturer and OEMs, you know, that we talk to. Overall, our average delivery times went above 10 months. You're right, in a normal scenario, you are typically between 2.5 and three months, so it's, it's, it has been substantial. I would say the production of new cars have definitely come back online to last year, since end of last year. There is now a problem overall, which is also seem to be solved, but logistics have been very difficult in Europe, which first of all, have an impact of the manufacturers getting the cars to the dealerships. It also have an impact on our used car sales, because we also transport a lot of cars, actually, at the end of the day. Obviously, there has not been capacity enough in Europe. We anticipate that as well to normalize over the, the, the coming months, but that has actually slowed down the, the delivery time. We have not seen a, a massive shift, you know, from the above 10 months, you know. I think we are maybe seeing one month or so, 1.5 months of improvement on delivery times, but that's practically it, you know, for the time being. You're right, the order bank remains high, actually only slightly decreasing from Q1. Thank you. Thank you. That's very helpful. Just one last follow-up on the, on the interest rate risk. Maybe just again, on the bigger picture, I think you mentioned that the combined group borrowing is somewhere around EUR 47 billion. So how should we think of overall interest rate risk profile changing after acquisition of LeasePlan? So basically, let's say keeping, keeping in mind that the rates are rising, I think for ALD, most of this was, was directly asset liability management was very, very linear. Yeah. The same time, I think LeasePlan may have a little bit different policies. Yeah, and again, when do we expect the benefit of these, potential increase in credit rating to flow into the funding cost? Yeah, so I, I, I guess there is no more appetite, at least plan on, on interest rate risk than ALD, to be fair, Sanjay. Anyway, LeasePlan will be fully embedded in the ILM policy of, of ALD which itself is well embedded in the Soc Gen ILM policy. It's, it's a matter for us of framing LeasePlan, reviewing their, you know, we are, we are, giving our entity some, some thresholds and limits. It's monitored on a monthly basis. We have a, a, a, quarterly ILM committee, which the CFO is sharing. On that front, I'm not expecting much bigger appetite on interest rates. That's, that's, that's, that's sure. There was none at LeasePlan. Of course, as I commented, I want to still make the comment that I did in previous calls, that because of the contract extension, I, I've commented in my in the speech this morning, the positive impact on the used car sales, but it has a negative impact on the leasing margin because of the sudden and strong interest rise that we have seen during the last years. As the customers are keeping their car longer, there is here a bit of a mismatch. You, you, you remember, I, I, I assume. This is where we are in a transition, in a transition towards normalization here again. It may last still a bit, and it's a bit unfortunate because we'll see, we don't see the benefit in the cost income. Because on one side, you get the benefit in the used car sales, which is not accounted for in the cost income, but you get the hit, in the interest margin. Yeah, worth reminding that also. Thank you. That's very, very helpful. All the best, Gilles. Thank you. Thank you, Sanjay. The next question is from Akira Wijaya with HSBC. Please go ahead. Yes, sir. Good morning, everyone. Firstly, thank you, and best of luck to Gilles for the future. Yeah, welcome, Patrick. I think you've crossed paths with some of us in the past, from your Soc Gen IR days. Yeah. Welcome back, I guess. In terms of questions, coming back to that fair value exercise, I'm afraid. Look, once you've revalued the LeasePlan fleet upwards, you know, that process happened through the second half of this year. I guess, what are the risks that that used car result could turn negative in 2024, just for that standalone, LeasePlan fleet, if the used car market continues to soften? Then I guess, how much room for maneuver do you have within the constraints of IFRS 3 to ensure that doesn't happen, i.e., you know, how forward looking can you be in your approach to that fair value exercise? Then just turning to the capital and the consequence of the revaluation exercise, I guess theoretically you could well end up with the year-end CET1 ratio being above 13%. So I know it's a hypothetical scenario, lots of moving parts at the moment, but how do you think about that kind of excess capital? Would you keep that more as a buffer because, you know, you've got things like model RWA, inflation, and Basel IV, and you want to, you know, you've got some funding requirements, want to maintain a stronger credit rating, but is actually trying to think about deploying, returning some of that excess? I think in the previous question, Tim alluded to, maybe, you know, a more aggressive, generous dividend payout ratio. Just your thoughts around potential excess capital and, and, what you would do with that? Thank you. You, you want to start? Yeah, maybe, maybe Akira, thanks for the questions. Let me start with, maybe with the last point you raised, and I think, you know, we will be quite specific, I guess, on this question when we meet in September. Clearly, you know, you know, we have said we want to be above 12% CET1, you know, that's typically still the policy, and that's what has been agreed with the ECB as well. Obviously, excess capital can be used either as a further dividend payout, could also be, you know, for share buyback at some point, if that would make sense, you know. Clearly we are looking at that, Akira, and we don't want to be over-capitalized, you know. In, in the past, we already said that, you know, we wanted to have a bit of firepower for bolt-on acquisitions and, and, business development. Where we are right now, I think with the size we have now, obviously that is not necessarily, on our radar right now. Could come back in two or three years, and hence, you know, the, the, the way we think about capital is to be, you know, having a, a, a good, strong position, but, not, not be over-capitalized in any way. On the, on the fair value, Akira, we will be using further the. Of course, if you put yourself in the shoes of the auditors, they want to have the same value for the same car in both ALD and LeasePlan books, so we will be using the fleet valuation of ALD. I mean, and this fair value was to be done at the time of the acquisition. It's not, it's currently being done. It will not be done, it's not the view that we'll have at the end of the year. It's the view that we have now that we'll take into account. Just to echo your question on what if the used car sales. we are, we are obviously not forecasting a cliff in terms of used cars sales. As you can see, the underlying results is very strong, and, despite if our guidance is a, is a bit, shows a bit of a lower result for the second half, we just want to, to, to remain, prudent and this is reflecting that. Got it. Thank you. Thanks, Akira. The next question is from Geoffroy Michalet with Oddo BHF. Please go ahead. Thank you, gentlemen, for taking my question, and thank you, Gilles, for all your support in this year. My question was obviously on, on dividend, but you already answered it. Another one is on the non-operating items that we have to think about for H2. Also, the transaction cost that we had of EUR 26 million in H1, how do we have to view that in H2, since now the merger is at least the deal is realized? Thank you. I guess, yeah, on the non-operating items, and there's been a lot done during the last year, when you think about it, but on the transaction costs, I guess these costs are now behind us. I mean, the sale of ALD Russia has been concluded, the sale of the six entities has been done two days ago, and the LeasePlan transaction is behind us. No banks, no, no lawyers, of course, now. The main costs will be around the integration costs. That will be the main costs. In the non-operating items, you know that you have a slide in the appendix, summarizing what we call non-operating items, and we've had quite some numerous ones. You have the Turkey hyperinflation, the provisions we booked last year on Ukraine, I guess on these also, you can expect them to, to, to fade somehow. Maybe one, one additional on this front. Could you maybe elaborate a bit on, on what are the derivatives, you know, of the LeasePlan? Because it was, let's say, quite an amount. If this also, should fade, or, will you change the, the policy of the combined entity? Thank you. Yeah. It was a positive EUR 24 million for this reporting. It's true that LeasePlan has a much lower base of notional of IRS swap. As I said earlier, it's just an accounting effect because. It should take, if you read LeasePlan's accounts from prior year, they never include the mark to market of these swaps, because anyway, they are reversing out. It's a bit, we are in the process also to work on the transformation of the treasury. We, it's difficult for me, of course, to predict the mark to market to the swaps, which have been also, which will widely depend on the variation of the interest costs. Of course, interest costs have still further increased during the reporting period, hence the positive mark to market. And it's, yeah, I don't know what to comment or to give. I can't give you a guidance on mark to market. It's true. No, no, no, that's true, but since they are, you know, on the, on the P&L, just wanted to know if at least the policy will, will evolve, you know, in the, in post, post-merger, I would say. Yeah. I mean, we are systematically hedging against interest rates and liquidity risks. It's what it's what also LeasePlan is doing. That's the, there's no, there's no change, but it's too early for me to comment on the, on the full, on the full policy going forward. Okay. Thank you very much. That's it from me. Thanks, Geoffroy. The next question is from Horst Schneider with Bank of America. Please go ahead. Yes, good morning. Thanks for taking my questions as well. I just have got two small follow-ups left. The first one, again, on residual values. You have explained basically the trend of the A and B segment. I'm just wondering if you can give a bit more detail on what trends you see by sub-segments as well. So for example, ICE versus BEV, premium versus mass, large versus small cars. I think you mentioned that this A and B segment, but nevertheless, this premium versus mass and ICE versus BEV would be interesting. Then, the other question is, related to your purchasing cost savings that you plan. Can you maybe provide some color how quickly that can be realized? I mean, you are now one company with LeasePlan. You have got the higher purchasing volume. Does that feed through immediately, or it takes a while, that you agree that with the car makers, and how is this process working? You can basically influence the mix of the brands in your portfolio, or it's basically decided by the customer which brand, which vehicle they want to buy. Thank you, Horst. Yeah, we, we don't give, you know, a lot of details on the segments, on the used car sales, Horst, and, you know, we will not start doing that here now. Mm-hmm. My, I was alluding to the A and B segment in terms of new car production, where, you know, as, as you probably know, a lot of the manufacturers now have not seen those models being particularly profitable, and they're basically abandoning, you know, the, the smaller models. Which means, you know, if you wanna go and, and, and you are entering the market, typically you would enter through a segment A car if you're a young family, and, and that is not possible anymore. I would say the interest price now to the market is EUR 20,000 or above, you know, to get in, which a lot of families cannot afford, you know, which means they are obviously forced to typically buy a used car. Typically they buy a newer used cars, which is what we got, you know, and, and, and we see that as a real strength, you know, for the used car sales for us as well. It's, it's another area that will support used car sales, going forward. That was more what I alluded to, in terms of- Tim, the, the sales share of this A and B segment, it should be quite small for you, right? I mean, normally these cars are not leased, so it's cash purchase for most customers or not? Yeah. No, no, so you're right. I mean, we don't have a big portion of A and B cars in our fleet. You're right. It's mainly typically what we have would be in our flex fleet and all that. You're right, that's not really one. It's more actually to say that, you know, when we have a used car, three years old with 40,000 km, that will be purchased instead of buying a new segment C car. Mm. Because people cannot afford the new segment C car. That's a bit, you know, again, to say that the demand for used cars, and in particular our used cars, will remain strong, you know. That was actually what, what I meant about that. What we are seeing, as we said, you know, we have seen that there is a slight decrease of the market globally on used car sales, coming down from 3,300 to just below 3,000 from Q1 to Q2. Again, you know, it's a very high level at the end of the day. We anticipate a slight deterioration going forward, but clearly remaining very strong for the end of 2023. On electric vehicles, I think you, you, you had a specific mentioning of electric vehicles. It's true that we have seen probably a faster decrease of, of used EVs than than on the ICE cars. And again, you know, our part of, of used EVs is very, very small for the time being, and we think it's mainly related to the fact that, you know, the pricing have been quite volatile on EVs lately. Again, sitting on a, on, on a very big part of the EV market going forward, we will be the market for used EVs to a large extent, and we believe we, to some extent, control the prices on these cars. So, so we feel very comfortable on that part as well. On the procurement synergies, obviously, times are a bit more favorable. You know, if you talk to us a year or a year and a half ago, where the manufacturers obviously had less cars that they could sell, they would not be, let's say, as, as, as, cooperative as they are now. You know, first of all, the demand have decreased quite substantially in most markets, and most of the manufacturers are back on full production. We see that they are very interested in having discussions with us. As I said, you know, in the introduction, obviously, we have basically renewed all our OEM agreements with better conditions than we had before. Of course, that will come in. Now, we, as we said, on the procurement synergies, you know, we have guided on the EUR 440 million, when it's fully phased now in 2026. Approximately half of that is coming from procurement. We have no reason to doubt on that, that number. And obviously, as we said as well, you know, that the procurement synergies are the ones that comes first. The OpEx synergies, we need to make sure we have integrated, the countries, one legal structure in the countries, one legal structure at the center. But the procurement synergies will come in actually, as I said, we anticipate around EUR 30 million of procurement savings this year. That's not necessarily run through the P&L for 2023, but will start kicking in, you know, by end of next year, our anticipation is that we have taken the full the full synergies from procurement. So far, I have to say, the manufacturers are coming to us actually, and not the other way around. Actually, at day one, we have set up meetings with all the manufacturers, with all the suppliers, and, you know, we prepared that particular well, I would say, in the last two, three months that we got delayed. We have, we have come off to a very good start, and we have some really good discussions with our partners and suppliers, you know, and they can also see a very interesting relationship with us in, in this part. Wish I could join one of these meetings. I think it would be very interesting. No, all the best for you, Tim. Yeah. All the best. Thank you, Horst. Thank you. The next question is from Julien Onillon with Stifel. Please go ahead. Yes, good, good morning. I just would like to come back on the remedies, because I understand that's been closed in the 1st of August. Could you remind us the number of vehicles which are concerned, both from ALD and LeasePlan, but also any price you could communicate now, as it's been closed, and eventually a capital gain? Yes, Julien. I will not comment on the last part, because Well, we'll, we'll show that a bit later, I guess, but, so, so first of all, it has been a very fast process. You know, as you'll recall, we got the, let's say, the clearance from, the European Antitrust Authorities back late November last year. Finding a buyer of six entities, and closing the deal in seven months, I think is, really, really a strong achievement. And we have done a great work there. It's around 100,000 vehicles that's concerned in those six countries. Just to re-remind, we are selling ALD in Portugal, Ireland and Norway, and LeasePlan is selling LeasePlan in Luxembourg, Czech Republic and Finland. It's around 100, 120,000 units, I think, that goes to Crédit Agricole and Stellantis, yeah. The, and the deal was basically closed yesterday, the first of August. Yeah. But I mean, the LeasePlan entity, as I said in the speech, have been fair valued. There's no expected P&L gain to be recognized in the income statement. At the end of the day, this will reduce the goodwill somehow. We are not disclosing the price. Just to be precise on that. We may have the price, during the Capital Days, and so it means possibly that for ALD, there will be some, some capital gain eventually. Yes, some, some, some more limited capital gains than, yeah, than on the six entity. Yeah. Thank you. The next question is from Reg Watson with ING. Please go ahead. Morning, all. Coming back to the PPA, sorry to mention it again, but I think Tim and Gilles, you both mentioned it several times, so I think we, there's probably an intent there. You have provisional goodwill of EUR 1.7 billion. How should we think about the changes to that going forward in the revaluation exercise? Because I could easily take 1.9 million vehicles from LeasePlan, apply a EUR 1,000 uplift on the value of those, because that's what we're getting in used car sales value, and effectively wipe out the goodwill. Clearly, that's not the answer, but before we all go off and, and come up with our own independent calculations, it would be quite helpful, I think, Gilles, if you could at least give us some parameters on how the provisional EUR 1.7 was calculated. Yeah ... And what the variance might be from that. Yeah, no, yeah, it's a good question. Just, just to remind you the, the, how it will the, the theory, I mean, around it. What you have to take into account is also the fact, you have to take into account what is the net book value of the cars in, in LeasePlan books. What is the net book value of LeasePlan vehicles in the, in their books, is depends on their residual value and what they have already accounted for as a prospective depreciation. Because as likewise, for ALD, they have been since last year, recognized prospective depreciation. It's not because it's not because you only see paid 1,000, 2,000, 3,000 of used car sales profit, that you, you, you can deduce your, your, your PPA impact. It may be more limited to, to, to what you, you, you, you just earlier mentioned. It's more complex than that. So that's why it's one, difficult at this stage for me to give a, a precise answer on the impact. Because you have to take into account these two elements, because the, the, the, what we book, for instance, as a prospective depreciation in H1, you will not see it in the used car sales in H2. And you have to think about that when you think PPA also. Am I clear? Yeah. I guess what's important then is the date at which that provisional goodwill, EUR 1.7 billion, was struck. And, and, yeah. Take it, that it was from the final... Yeah. Yeah. Because the net book value of depreciation. Yeah. Yeah, exactly. Sorry? It's the, what will be, it will be the difference between the net book value at LeasePlan, which includes what they already had booked in terms of reduction of depreciation and the fair value that we see of these same vehicles. Okay. Yeah. Okay. It's more subtle than than what you said earlier. Yeah. And will it be the LeasePlan book value at end 2022 or actually at the point-. At closing. In May? At closing. At closing. Okay. Am I right in thinking we as external observers, we don't have any indication of that, or is there a published set of closing accounts? No, but I mean, the best proxy you may have is Q1, for they have published. Yeah Q1 results, and from there. Yeah ... Yeah. Yeah. That's fine. That's good enough. Appreciate that. It's not on the... Oh, last comment, last comment, you were commenting on 1.9 million cars. Yeah. LeasePlan do not have a 1.9 funded fleet, because they also have, like, some fleet management contracts. I don't know whether we disclose or they disclose the funded fleet, I think yes or no, but maybe Beatrice can come back to you on that point, but it's much less than that in terms of funded fleet. Yeah. Okay. Anyway. Thanks so much. Yeah. Thanks so much. Yeah. Thank you. Yep. Okay. Mr. Albertsen, there are no more questions registered at this time. I turn the conference back to you for the closing remarks. Thank you. Thank you so much. Yeah, I think, thank you all for your attention today. We know it was a bit of a complicated call and a complicated announcement, so hopefully we have given a bit of clarity to that. Of course, our IR department is ready to assist you as well, if there is, should be any more questions. Thanks for that, and we look forward, hopefully, to see you, as we said, either in person or online, when we have our capital market day in September. Thank you. Thank you very much. Thank you. Have a good break. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.