Good morning, this is the conference operator. Welcome, and thank you for joining Ayvens's Q1 2024 Results Conference Call. Today's speakers will be Mr. Tim Albertsen, CEO, and Mr. Patrick Sommelet, Deputy CEO and Group CFO of Ayvens. 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 and zero on their telephone. I now hand you over to Mr. Tim Albertsen. Please go ahead, sir. Good morning, ladies and gentlemen, and welcome to this Ayvens' Q1 2024 Results Conference Call. I'm hosting this call with Patrick Sommelet, and as always, we'll provide more details on our trading statement issued this morning. First, I'll present the highlights of Q1, then Patrick will comment on our financial results, and then, as always, we'll take your questions after that. Let's go straight to slide 5. Ayvens started 2024 on a positive note in several aspects, which I will comment on today. In a mixed economic environment, where demand slowed, we recorded good Q1 2024 financial results and a clear upturn on the previous quarter, despite the weakening of the electric vehicles' used car markets. Our Q1 performance is promising. It reflects the solidity and the of our business model, as well as our agility and our capacity to swiftly implement our strategic roadmap. You remember that our underlying margins had eroded last year. Q1, our margins stabilized at 522 bps of our earning assets, and we registered substantial synergies from the LeasePlan acquisition in our P&L. We recorded underlying used car sales results per unit at EUR 1,661, stable versus the previous quarter and still at a high level. This translated into a used car sales profit of EUR 95 million this quarter. Our net income group share reached EUR 188 million, and our return on tangible equity stood at 9.6%. Our capital position remains solid, with a Q1 ratio at 12.3% as of March 31, 2024. We are well advanced in our funding program. We issued EUR 2.7 billion of bonds during Q1, which means we have already achieved around two-thirds of our annual program. We also further successfully diversified our investor base and currencies. Let's now move to page 6 on the progress of the integration. We made tremendous progress in the integration in Q1. We reached a few key milestones, which paved the way for value creation. First, we obtained the regulatory approval from the European Central Bank to proceed with the merger and streamlining of our operations. This approval allows us to start the merger of legal entities, and we are now implementing our target operating model locally and centrally, and we have launched the IT integration, expected to stretch well into 2025. This enables us to efficiently execute our roadmap and generate our cost synergies. Our transformation is well underway. Our Ayvens brand continues to be deployed in our local markets, and we already relocated our offices in five countries. Another key achievement is the rollout of Ayvens Carmarket, which combines ALD and LeasePlan remarketing capabilities in a single state-of-the-art digital application. This remarketing platform is the most powerful platform targeting traders and car dealers in Europe. Ayvens Carmarket is instrumental in optimizing and broadening our secondary market opportunities. Scale definitely matters in this field. The enhanced catalog, underpinned by the most innovative functionalities, is one of the largest in Europe. In Q1, we sold 93,000 cars to Ayvens Carmarket out of a total of 152,000 cars. This compares to a quarterly average of 60,000 last year. Ayvens Carmarket definitely boosted our efficiency. The number of bids per vehicle increased by 31% in Q1 compared to the 2023 monthly average, and this helped us to optimize our resale prices. Thanks to the large geographical footprint, we exported 23,000 vehicles in Q1, thus balanced the trends in each of our used car markets. Finally, we registered substantial synergies from the LeasePlan acquisition in our P&L. With our new scale, we buy more efficiently. Most of the EUR 20 million synergies materializing in our Q1 income statement came from procurement. Other synergy streams, such as insurance, also contributed, showcasing the power of our scale. We are on track to achieve the EUR 120 million of pre-tax P&L synergies over the full year. In March 2024, Ayvens and Stellantis signed a framework agreement for the provision of up to 500,000 vehicles across Europe over a 3-year period. This is an unprecedented agreement in our industry, and thanks to this flexible agreement with one of the world's leading automakers, we ensure our competitive pricing for our clients, we enhance our capacity to leverage on our new scale, and buying power to achieve better value for and synergies for all our stakeholders. Let's have a look at our activity on page 7.... Our earning assets increased by a dynamic 12.5% year-on-year on a like-for-like basis, to EUR 52.7 billion. The growth pace slightly decelerated compared to last quarter, which was at 14.2%. It reflects our strategy to allocate resources to sustainable and long-term profitability contracts rather than volume. I would like to highlight that this is fully in line with our financial trajectory to 2026. Our total fleet increased by 1.1% year-on-year on a like-for-like basis. In fleet management, the number of contracts was down by 3.4% compared to March 2023. This decrease results in the decision not to renew some contracts, which did not meet our profitability criteria. Commercially, the funded fleet continued to grow at 2.4% year-on-year basis. We achieved an EV penetration of 36% in Q1, stable versus the full year 2023, and battery EV penetration was 22%, and plug-in hybrids, a penetration of 14%. Let me now hand over to Patrick, who will take you through our financial results. Thank you, Tim, and good morning, ladies and gentlemen. I will start with an overview of our Q1 2024 results on page 9. So in the mixed economic environment still, Ayvens recorded a clear upturn on the previous quarter, driven by the stabilization of our underlying margins and higher used car sales results contribution. And on top of that, non-recurring items were more limited this quarter than the quarter before. LeasePlan was consolidated since twenty-second of May, 2023, so was not consolidated in Q1 2023, thus not directly comparable. We present on this page a sequential view of our quarterly results. These figures are reported figures with the impact of LeasePlan's PPA attributed to each quarter since acquisition closing instead of Q4 2023 only. Our revenues, gross operating income came to EUR 802 million in Q1 2024. It is up by 9.6% compared to Q1 2023, and 32.2% compared to Q4 2023. The sharp turnaround compared to Q4 2023 can be seen in both our margins and our UCS results. The margin rise is achieved thanks to the stabilization of our underlying margins and the materialization in our P&L of our first synergy with LeasePlan. This quarter, we had a limited impact from non-recurring items, contrary to previous quarters. The contribution of UCS results was EUR 95 million in Q1 2024. It's lower than Q1 2023, which was exceptionally high, but higher than in Q4 2024. I'll explain why in a couple of minutes. Operating expenses reduced compared to Q4 2023, which is mostly explained by lower cost to achieve at standard EUR 490 million. Adjusted for UCS, non-recurring item and PPA, our cost income ratio slightly improved quarter-on-quarter to 67.7%. Our cost of risk remained benign at 25 basis points, and other results, our net income group share, stood at EUR 188 million, down 40% compared to Q1 2023, which was a very high base, but sharply up versus Q4 2023, which was at EUR 28.2 million. On page 10, let me give you more detail on stabilization of underlying margin. Our leasing and service margin stood at EUR 707 million in Q1 2024. It is up 30% compared to Q1 2023, as LeasePlan was not consolidated in Q1 last year. Our margin are also up by 16% compared to Q4 2023, which included LeasePlan. Underlying margin, meaning margin excluding non-recurring item and impact of PPA, progressed by 3.7% versus Q4 2023, and expressed as a percentage of average earning assets, our underlying margin stabilized at 522 basis points versus 515 in Q4 2023. As Tim mentioned, we recorded EUR 20 million synergies, mostly from procurements and insurance. The impact of non-recurring items and PPA was limited and is shown on the slide. It's certainly lower than previous quarters, standing at EUR 24 million versus 193 in Q1 2023 and -50 in Q4 2023. This is mainly because we had a limited amount of fleet revenue reduction in depreciation costs this quarter in a normalizing used car market. It stands at +EUR 17 million, compared to +EUR 174 million in Q1 2023, and +EUR 107 million in Q4 2023. Mark-to-market derivatives, which had significantly impacted our margin in Q3 and Q4, were limited in Q1 2024 at EUR 10 million. Interest rate movements were less volatile than those previous quarters, and as we had indicated, our actions to reduce the sensitivity of our aging portfolio bore fruit. If we now turn to page 11 on UCS, you see that we reported EUR 95 million UCS profit in our revenues as a contribution.... post accounting impacts on 150,000 cars sold. I remind that the used car market in Q1 2023 was exceptionally favorable. The situation in Q1 2024 was stable versus Q4 2023. As you can see from the graph in the middle, the used car sales, the used car market is normalizing from its peak, and the normalization is going on. Excluding the impact of previous reduction in depreciation costs and PPA, UCS profit was EUR 1,661 per unit in Q1 2024, versus EUR 3,102 in Q1 2023. Quarter-on-quarter, the result per unit is almost stable, as you can see from the line in yellow. On a reported basis, the results per unit is sharply improving from -24 per unit in Q4 2023 to +626 in Q1 2024. The evolution is mainly explained by the impact of previous reduction in depreciation cost, which was -EUR 191 million in Q4 2023, compared to -EUR 90 million in Q1 2024. We will now comment on the next page on operating expenses, which are down quarter-on-quarter by -5.6%. So the evolution is explained by lower non-recurring item in Q1 2024, EUR 27 million, versus EUR 66 million in Q4 2023. That's due to the decline in cost to achieve from EUR 45 million to EUR 26 million, while rebranding costs and transaction were down by almost EUR 20 million, quarter-on-quarter. As I mentioned, cost to income, excluding non-recurring items, slightly improved from 68.4 to 67.7 in Q1 2024. We now comment on net income and cost of risk on the next page. So cost of risk is up to EUR 33 million, so it's an increase on EUR 9 million compared to Q4 2023. It is mainly explained by the alignment of LeasePlan to ALD provisioning methodology. Expressed as a percentage of average earning assets, the cost of risk remain benign, at 25 basis points. Effective rate, effective tax rate is standing at 31.3% on the quarter. It's mainly this level, maybe above average level, is mainly explained by non-deductible expenses related to hyperinflation, in our subsidiaries in Turkey. Net income group share reached EUR 180 million in Q1 2024, a sharp rebound versus Q4 2023, thanks to, as we said, stabilization of margin, materialization of our first synergy in our PNL with LeasePlan, and the more limited impact of non-recurring items in our UCS profits. On the next slide, you see the evolution of risk-weighted assets, so they increase from EUR 57.4 billion to EUR 59 billion in the Q1. So it's a combined impact of EUR 1 billion, which is related to fleet growth, minus 0.4, which is related to the reduction in order book. There was the annual update in operational risk computation in the LeasePlan perimeter, which is explained in point four, and there is a 0.6, which is a mix 0.6 billion impact, which is a mix of both market risk impact related to the equity in our non-Euro subsidiary, mainly the impact in the U.K., but also in Denmark, with a capital increase in this country. And also the increase of cash balance. Having done a significant part of our cash issuance, debt issuance, we have a comfortable cash balance for the rest of the year. Other results, CET1 ratio is standing at 12.3% at the end of March 2024. It was 12.5 at the end of December, and our strong capital ratio is around 110 basis points above the regulatory requirements. This concludes our presentation. Thank you for listening, and we are now ready to take any question you may have. 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 Geoffroy Michalet with ODDO BHF. Please go ahead. Geoffroy Michalet, your line is open. I'm speaking. Can you- I'm afraid we don't hear anything here. Mister, Michalet, your line is open. The next question- I think- The next question is from Sanjay Bhagwani with Citi. Please go ahead. Hello, thank you very much for taking my question also. I have got three questions. My first one is on the underlying margins, excluding UCS results. So thinking of this line item, going forward, for the rest of the year, how should we think of this, excluding any synergies, given that, if I recollect correctly, you have been renegotiating some of the contracts to reprice it for higher interest rates and higher inflation. So is it fair to assume that this is now what we have in quarter one is the low point, and it sees a progressive improvement, going into the rest of the year? That is my first question, and I'll just follow up with the next one, if that is okay. Well, thank you, Sanjay. Well, to your question on margins and, so I think what is important to state is that there's been a lot of work done to reset the margin on the business side. So basically, running through our customer portfolio and partner portfolio and ensuring that we basically, let's say, serve the right clients and at the right price. So a part of that is definitely sustainable and anticipated to continue, of course, going forward. We are not finished. We continue actually that work. We think there is more to do and more to be done. But of course, there's a few items, and maybe Patrick, you can give a few items that could still introduce a bit of volatility on the margin side. Yes, so as you said, it's, there's been a very intense work over the past three quarters to look at margin in details and to see whether the impact of the new economic environment was appropriately taken into, taken into account in our margin. So it's fair to say that this is having the first fruit. We intend to indeed stabilize the margin and probably have a action thereafter to expand them. So there can still be an impact of non-recurring items related to the mark to market of the swaps, even if we have decreased the volatility, and as you can see, the volatility is included in our appendices. It has decreased depending on the level of interest rates you can have a bit of volatility. On the underlying, I would say the stabilization is more taking place currently on the leasing margin. The service margin is still impacted by high inflation. As you know, inflation is slowing down now, main street inflation, but auto component inflation remains relatively high. We believe that this will progressively run down throughout the year, but this remains to be confirmed in the next month as the economic environment becomes more stable, probably. Thank you. That is very, very helpful. Second one, on the follow-up to that is that now that you are on the top-line side, you are prioritizing the customers which are more profitable, as you can see already in the services, auto fleet management, number of contracts. So, are you thinking of any actions more towards the cost side of the equation as well, in terms of either optimizing the cost structure further, keeping in mind this new customer mix in mind? That's my second question. Yeah, I think, Sanjay, I mean, we have also we have taken quite a strong, ambitious target for 2024, as you know, on the cost line. We anticipate it to bring the cost down compared, you know, excluding the cost to achieve. And of course, we have taken actions there, and as you can see from the Q1, we see also the first fruit of that. It's not fully implemented yet, but clearly, you know, the redressing of the business also includes, of course, the cost to serve and the cost to serve the different segments. Now, we do anticipate that we will eventually start seeing growth again, probably from next year, to a more larger extent. But where we think the growth should be, which is, let's say, targeting right segments, customers, partners, and so forth. But obviously, I think we have taken a strong, ambitious target for 2024, which is being implemented as we speak, on the cost side as well. Thank you. That is very helpful. So if the target for the full year is to have the lower operating cost underlying basis versus the previous year, is that correct? But for the full year, Sanjay- Okay. For the full year, we have given a cost income target, which we confirm, which is 65%-67%, excluding CTA. Thank you. That's, that's very helpful. And, and just a final one on the, on the tax rate. So Q1, as you mentioned, it's, there are some non-deductible, tax expenses which spiked the effective tax rate in Q1. How should we think of, this tax rate for the rest of the year, please? Well, as you know, this quarter, it has been impacted by a very specific hyperinflation accounting in Turkey, so it's really difficult to be very specific on that as a prediction. We intend that it should remain approximately around the same level. A gain, depending on the evolution of, main street inflation and car index inflation in Turkey, which are volatile items by nature. Thank you very much. Sorry, so basically, effective tax rate more towards for the full year, more towards still within 27%-29%, or it could be higher? Well, I think it's not big difference. Thank you. On the same level than currently, and I think it's a good, good estimate. The next question is from Kiri Vijayarajah with HSBC. Please go ahead. Yes, sir. Good morning, everyone. Couple of questions. Firstly, just coming back to the core margin dynamics, and this time looking a bit further out. So how quickly do you think you can recapture the kind of 600 basis points that, you know, ALD, on a standalone basis, kind of regularly kind of achieved before COVID? You know, is it feasible for maybe at some point in 2025 we can get back to the 600 basis points, or is it kind of more long drawn out process? And then secondly, could you just comment on the informal contract extension? Because I know that had been a negative factor on the margin. Is that still a drag for you, and could that drag fade a bit more in the coming quarters as the, you know, delivery backlogs clear away, and also the, obviously, the contract, extensions also feed through into, the informal, side of things as well? So just, the state of play on the informal contract extensions and what impact that's having on your core margin, please. Thank you. Thank you, Kiri. I think on the margin base trending towards 600 basis points, you know, I think to be honest, I think the industry has been impacted, you know, quite dramatically over the last couple of years. And probably, you know, we are taking a lot of actions right now to some extent, separately for the rest of the industry in terms of pricing and residual values, and clearly we want to remain competitive in the market. So we do not necessarily anticipate the 600 mark anytime soon. And I think we probably have to realize that, you know, the margin overall will be trending a bit below what we have seen in the past globally. Which means it's comes more down to our cost income levels and our cost efficiency over the longer term at the end of the day, because competition is fierce, and we anticipate competition to increase over the years as well. We see new players coming in, and that's basically based on the fact that, first of all, we are a very profitable industry. Secondly, we are, you know, a growing business. As we have said many times, we are going from kind of a niche product to become more mainstream. So obviously, we will probably see more competition in the years to come. So we do not necessarily believe that we will get back to that level, and hence, you know, it will really be around our cost efficiency, which we believe will be extremely helped by the merger between ALD and LeasePlan over time. On the contract extensions, you know, it's an ongoing exercise. We are doing good grounds, and I think that's part of the stabilization of the markets you have seen. But, you know, every month there's a new set of informed extensions that have to be addressed, and that's what we're doing. But we are definitely decreasing the number overall and keep a close eye on that. As long as the interest rate remains high, inflation remains high, it's clearly a practice that needs to be, you know, followed very closely, and that's what we're doing. Very clear. Thanks very much. The next question is from Matt Clark with Mediobanca. Please go ahead. Good morning. A few handholding questions, please. So, firstly, on the cost of risk alignment, should I read that as a one-off kind of lumpy increase in cost of risk this quarter? Or is that alignment meaning that it will run at this higher rate going forward, and you know, because of a different way in how cost of risk is assessed on an ongoing basis for you versus historically at LeasePlan? Secondly, in terms of battery electric vehicle losses in the UCS result being outweighed by ICE gains, I mean, clearly they were this quarter. Do you remain confident that that's gonna be the case going forward? Maybe just an update on how the year is playing out for BEV versus your kind of depreciation assumptions. And then finally, I don't see you reiterating the 2026 13%-15% ROTE target anywhere today. Could you just confirm that that still stands? Thank you. Thanks, Matthew. I think I'll start with your second question, then, Patrick will answer your question on cost of risk and, our objective for ROTE. So I think clearly the battery electric vehicles is not performing well, to be very honest, for the time being. But as you rightly, rightfully said, you know, it's outweighed by, you know, the very strong performance of ICE cars in almost all markets. And of course, it's also quite important to distinguish between BEVs, you know, full BEVs and the plug-in hybrids. And, you know, we have around, you know, 10% BEVs and 10% plug-in hybrids in our fleet today. We do not necessarily anticipate a lot of improvement on the BEVs for 2024, except that we probably have had a bad mix, you know, to be honest, in Q1. But overall, we anticipate it to be quite a weak market in 2024. But all of it well contained by our ICE cars for 2024, for sure. And you know, we have taken actions quite significantly on repricing BEVs going forward, so we believe that we have the right residuals for all the new BEVs coming onto the books. It's something we follow very closely. You know, we have a specific team work on that. Basically, every month, you know, we have a view on that, and we will be taking corrective actions if needed, you know, very quickly on that particular market. So you could say we have what we believe a well-contained challenge in our existing fleet. And for the future, we do believe we are pricing at the right levels for the time being. Over to you, Patrick, on the two others. Yes, thank you. Hello, Matthew. So cost of risk, it's something that will have an impact on the rest of the year. It's representing approximately half of the increase in Q1, so it, it's here to stay. Albeit cost of risk remains overall at a relatively benign level if you look at it on a long-term basis. ROTE targets in 2026 are confirmed indeed. Great. Thanks very much. Thank you. The next question is from Geoffroy Michalet with ODDO BHF. Please go ahead. Hi, gentlemen. Thank you for taking the question, and sorry for the technical issue at the beginning of the call. Just two additional question from me. First one, when you said that you believe that the 600 basis points margin belongs to the past, could you help us, maybe to be, to bring a bit more clarity on what are your long-term assumptions for the margin? Is it 580, 550, that we should target in the future? That was the first question. And the second question has to do, again, on the EV and, more precisely, the BEV residual value risk that you foresee in total on your, on your book. We understand that part of it will be exited in 2024. Could you help us to quantify the potential negative impact that we can foresee for this year and maybe next year? Thank you very much. Thank you, Geoffroy. Maybe again, I can take the last question on the BEV first, and then Patrick can give you some input on the guidance for the margins going forward. You know, as we said, you know, today, BEVs are clearly not performing well in the used car markets. But you know, we are quite confident that, you know, the ICE car markets remain strong throughout 2024 and will contain the potential losses we have on the EVs by far. Of course, we are taking a lot of actions, not just on the new contracts, but also on the existing contracts in terms of prolonging contracts, in terms of second life lease. So in many markets now, we try to, if they are performing particularly bad, we try to bring them to a second life or third life in our fleet, which is successful in quite a few markets today. So you know, we don't give details on this, you know, but overall, as you have seen from Q1, where we have been selling quite a number of BEVs in many markets, that we are still stable on the used car sales prices. And we do not necessarily expect, you know, a particular bad impact further out in 2024 on that part. Maybe on the margin. Yes, on the margin, so, the lowering on the margin that we have seen at the end of 2023 is related to a mix of impact. And first of all, it's useful to mention that, first of all, the price of car we buy and we finance has increased, and that's related to the transition to electric vehicles, which are on average more expensive than ICE cars. Now that BEV prices are coming down, this should help in the coming quarters and years, having a better margin. And the question is to which speed and to which extent this decrease will take place, which will also impact our UCS results, as you can understand. And the second impact was on interest rates and inflation. I said for inflation, it's still, the repricing is still in progress. So we expect it, if things are stable from a inflation interest rate perspective, are stabilized to mid-high levels, such as the one they have currently, we expect margin to recover as well from this front. Now, it is still, it is a more and more competitive market for us, so we do not expect those margins to come back to pre-COVID level, I would say. If you believe that pre-COVID level were around 5.8%, that is not in our plan to restore margin to those high level. We would expect that we would, and it is not a firm guidance because it's depending on a number of parameters, and at some point we might also get back to a more aggressive growth again, I would say mid-medium term. So certainly having margin higher than 5.3, in the range of 5.3-5.5, would be for us a good target for coming years. Thank you very much. This is very helpful. That was it for me. As a reminder, if you wish to register for a question, please press star and one on your telephone. For any further questions, please press star and one on your telephone. Mr. Albertsen and gentlemen, there are no more questions registered at this time. The floor is back to you for any closing remarks. Well, thank you. And thank you all for your attention and your questions. And as always, our investor relation teams is ready to answer any further questions you might have. So, please don't hesitate to take contact to them. Thank you for your attention, and have a very good day. Goodbye. Thank you. Bye-bye. Ladies and gentlemen, the conference is now over. You may disconnect your telephones. Thank you.