Ladies and gentlemen, welcome to the Ayvens Q1 2026 results conference call. Today's speaker will be Philippe de Rovira, CEO, and Patrick Sommelet, Deputy CEO and CFO. I now hand over to Mr. Philippe de Rovira. Sir, please go ahead.
Thank you. Well, good morning, ladies and gentlemen. Welcome to Ayvens Q1 2026 result conference call. I'm hosting this call with Patrick Sommelet. First, I will present the highlights of Q1, then Patrick will comment on the detail of our financial results, we will then take your questions. Let's now go directly to slide five on the highlights of the financial performance. Q1 2026 is a good start to the year for Ayvens as the group has once again delivered a strong set of financial results. First, margins stood at 587 basis points of earning assets, an increase of 25 basis points compared to Q1 2025. This reflects our focus on profitability with an adequate balance between growth, profitability, and tight monitoring of asset risk.
This increase in margin compensated the normalization of the used car sales results, which has continued in Q1 2026 at a similar pace as in Q4 2025. In Q1 2026, the gross UCS stood at EUR 470 per unit compared to EUR 1,229 in Q1 2025 and EUR 702 in Q4 2025. That decrease was mitigated by lower depreciation adjustments. On a net basis, UCS stood at EUR 403 per unit compared to EUR 703 in Q1 2025. Higher margins and lower costs resulted in strong positive yields again. Ayvens underlying cost income ratio has continued on its decreasing trend at 54%, 4 percentage points below its Q1 2025 level.
Bottom line, net income group shares stood at EUR 266 million, an increase of 21% compared to first quarter of last year. EPS increased by 29% versus Q1 2025, reaching EUR 0.31 per share. ROTE increased to 13.9% versus 11% in Q1 2025. This financial performance confirms that Ayvens is well-positioned to reach its Power of 2026 targets. These strong results, coupled with some additional RWA optimization this quarter again, have led to a CET1 ratio at 13.9%, which is above our target, same as last year. This is a topic that we will address as we progress into 2026. Finally, we have successfully executed two new bond issues in Euros since the beginning of the year of EUR 750 million each.
These are green bonds that attracted a lot of interest from investors. The strong appetite has translated into historically low spreads for the group, including for the second issue that was executed in capital markets disrupted by the war in the Middle East. Let's now turn to next slide on the key developments for the quarter. During the period, we continued to deliver on key priorities. First, regarding integration. India and Germany were migrated respectively in March and April. We are on track to deliver our target of EUR 440 million of gross synergies for the full year of 2026. Regarding our ESG commitments, the group has reached an important milestone as we obtained the validation by SBTi on our CO2 emissions reduction targets on all scopes.
It makes Ayvens the first international leasing company to obtain such a validation for both near and long-term commitments and strengthens the credibility of our actions for a sustainable future. Finally, as you know, Ayvens entered the MSCI Standard Index in February, thanks to the increase in the floating market capitalization about 2025. This has reinforced Ayvens' visibility on equity markets and has led to an additional increase in the daily liquidity of the stock. Let's now turn to slide seven on fleet and earning assets. Fleet numbers trended lower during the quarter as a result of the continuous strategic focus on profitability and asset risk management throughout 2025. Total fleet has decreased by 98,000 units compared to end of 2025, mostly on the back of fleet management contracts. We didn't renew one large contract which was not in line with the group's expected profitability.
Impact on services margin is very marginal. Earning assets stood at EUR 52.5 billion, a 1% decrease versus end of 2025. Deliveries per powertrain for passenger cars and light commercial vehicles showed stability of BEV penetration at 29% compared to 28% one year earlier. While PHEVs and hybrid penetrations increased to 12% and 29% respectively in Q1 2026, compared to 9% and 26% in Q1 2025. Conversely, ICE penetration was down 8 points at 27% versus 35% one year ago. I now hand over to Patrick to present you the details of the Q1 2026 financial results.
Thank you, Philippe, and good morning, ladies and gentlemen. Let me start with the evolution on slide nine of our gross operating income on the left-hand side of the slide. At EUR 816 million, it is stable compared to Q1 2025, but with a better quality mix as higher margins in euro offset the decrease in the net UCS results. This 7% margin increase from EUR 708 million in Q1 2025 to EUR 757 million this quarter has been achieved despite the decrease in the fleet, thanks to the revamped profitability of our portfolio and contracts. Net UCS results decreased to EUR 59 million this quarter, compared to EUR 111 million in Q1 2025, in line with our anticipation of normalization of used car sales results. Let's now move on the next slide on margin.
Total margins to that EUR 757 million, which is up EUR 49 million versus Q1 2025 on the back of better underlying margins and lower non-recurring items. These items consisting mostly of hyperinflation in Turkey, reduced by EUR 26 million versus Q1 2025. Turning to underlying margin, they stood at 587 basis point versus 562 in Q1 2025, continuing the increased trend seen throughout 2025. This improvement is driven by our focus on profitability, supporting our strategy of value versus volumes. Underlying margins in EUR increased by EUR 23 million or 3% versus Q1 2025, despite the decrease in the earning assets. Looking at the margin breakdown, leasing margins continues to be strong, reflecting higher leasing revenues and lower interest charge across all funding sources.
On services margin, the decrease compared to Q1 2025, mainly due to a base effect. Indeed, they were positively impacted in Q1 2025 by accounting harmonization in the context of IT migration. In parallel, interest margin diminished slightly due to higher frequency of claims as a result of adverse weather condition in the first quarter of this year. Let's move to the next page on UCS. Starting with the total UCS results, whose evolution is represented on the right-hand side. As you can see, the normalization trend of our UCS results continued in Q1 2026. The net UCS results, shown at the full line of the graph, decreased to EUR 59 million compared to EUR 111 in Q1 2025. This is the result of a significant decrease in the gross UCS result from EUR 193 million in Q1 down to EUR 69 million.
Across all per train, January was particularly weak with a gradual improvement seen throughout February and March. This effect was partially offset by lower negative depreciation adjustment, which stood at minus EUR 10 million. This minus EUR 10 million depreciation adjustments include notably minus EUR 21 million prospective depreciation, driven mostly by the evolution of the U.K. BEV market. Other moving parts are detailed on slide 16 in the appendix. Per vehicle, as shown on the left-hand side on the dotted line, gross UCS results per unit stood at EUR 470 versus EUR 1,229 in Q1 2025. On a net basis, the decrease is less steep at EUR 403 versus EUR 703 last year. Let's turn to the next page on operating expenses. Total expenses are trending down, showing a decrease of EUR 51 million compared to Q1 2025.
Cost to achieve are moderate to EUR 4 million compared to EUR 36 million in the same period last year. As guided at the beginning of the year, full year CTA is estimated to be below EUR 30 million in 2026. Underlying costs are down EUR 18 million year-on-year, a decrease of 4.2%, thanks to our continued cost discipline and increased cost synergy. This combined with higher margins, we have a lower operating expense with higher margin, which generates strong positive jaws, with an underlying cost income ratio at 54%, down 4 percentage point compared to Q1 2025. Let's now turn to the next page with the rest of the results.
You see that on cost of risk, we have a decrease of EUR 5 million in Q1 2025 at EUR 26 million of 19 basis points of average earning assets. Profit before tax is up 15% versus Q1 2025 at EUR 365 million. This is the results of increasing margin and lower expense, which more than offsets together the decrease in the net UCS results. Net income group share reached EUR 266 million, an increase of 21% versus Q1 2025. Now we can turn to the next slide on RWA and capital.
RWA at the end of Q1 2026 to that EUR 52.6 billion, which is a decrease of EUR 1.2 billion compared to Q4 2025. This decrease mainly comes from our continuous effort to optimize our RWA with two actions this quarter. First, a decrease of EUR 1 billion, which was achieved as a result of the netting agreement with Société Générale . This agreement allows to net off loan liability and cash deposit to Société Générale and thus exclude this deposit from RWA computation. Second, a further reduction of EUR 700 million, which is linked to the methodology alignment between accounting value and risk exposure value for the computation of earning assets. These two actions were partially offset by the increase of EUR 600 million, mostly from off-balance-sheet items relating to forward deposits and a slight increase in order book.
This reduction in RWA, together with a strong organic capital buildup, led to an increase in Ayvens' tier one ratio at 13.9% versus 13.2% in Q4 2025, a level which is above our target. This concludes our presentation. Thank you for listening, and we are now ready to take your questions.
Ladies and gentlemen, if you wish to ask a question, please press star one on your telephone keypad. To ensure clarity on the line, please make sure you are in a quiet environment and speak with a clear and loud voice when asking your questions. Please limit yourself to two questions at the time. First question is from Jacques-Henri Gaulard, Kepler Cheuvreux.
Yes. Good morning, everyone. I had two questions. The first one is, there was press reports about your agreement with Renault about a remarketing, I would say, a warehouse and factory, that's gonna help you, obviously, increase the leasing life of some of your vehicles. If we could have a little bit more color on that'd be great. That's the first question. The second one, obviously, the environment has totally changed with what has happened in the Middle East. I was wondering if you were seeing a bit of change in demand and if you had any sense about the impact that would have, potentially on your used car sales results going forward. Thank you very much.
Okay. Well, thank you. Good morning, and thank you for your two questions. Well, the agreement with Renault, I would say it's part of our focus to make our remarketing more professional and more efficient. We've got a lot of work on this activity. I would say it combines a number of actions that are to make it simple to control much better the pricing, to control much better the channels in which we sell in, and to control the cost that we generate when we have to remarket the car.
This agreement is helping us to answer these three, well, not all of those three on this one, but is contributing to these actions. The action plan that we're remarketing is much broader than this one short agreement, and it's something that we are deploying in all countries to have an action plan of the three dimensions that I've mentioned. It means that to be much more KPI-driven that we were at a level of detail on remarketing that is much higher compared to what we were doing.
I sense that we've got opportunities in the remarketing area, and that will be important to be able to address the challenges of the coming years. On the Middle East, what we can see for the moment related to UCS, is we've seen in the second part of March and in April, that in the northern countries, we've got, when saying northern countries, I would mention, for example, the Netherlands, but not limited to that. You've got some customers that are asking now for BEVs that were not asking for BEVs before. It's true that in the last weeks we've seen in these markets an increase in prices in BEV, which is obviously a positive. As at how long will it last?
It's really difficult to say because is it just a one-shot link to the war in Middle East or is it a more structural trend because customers will say, "Well, finally it makes sense." Frankly, it's difficult to say, that's what we see. That's a positive. On the other hand, on the Southern Europe countries, the global situation tends to be a slowdown in the demand of cars, which are mainly IC in southern part of Europe. All in all, when I look at the UCS, what we've seen is January, that was very low, February, which was better than January, March, that was better than March. Sorry, March was better than February.
We expect April to be more or less at the same level as March, with a change in the mix as I was mentioning.
Thanks a lot.
Next question is from Sharath Kumar, Deutsche Bank.
Good morning. Thank you for taking my questions. Firstly, on the CET1 trajectory, I'd say very encouraging. Again, thank you for the additional color on the moving parts. Is it fair to say that it could continue to grow in the coming quarters given the strong organic capital generation? Would Q2 be still the right time to expect this capital distribution? Similar to 2025, can we expect a broadly even split between dividends and buybacks? That is the first one. Second is on fleet growth. It was negative at -3% in the quarter. If you could elaborate on the drivers. Would you again stick to your full year guidance of last week, which means, which implies some growth in the remaining quarters? If you could also give some color on the competitive positioning.
Finally, interested in hearing your thoughts, in the autonomous vehicle, which has been developing at a rapid pace. How do you see your positioning? Do you see yourself as a net winner? Again, given the light of recent developments, it's hearing your updated thoughts. Thank you.
Okay. Okay. The first question was about the return of excess capital. As mentioned in my introduction, it's clear that the level of CET1 is significantly higher compared to our target and the cruising level that we feel comfortable. We will address that as we progress in 2026. You've seen that we've done that in 2025, and we'll address that later on in 2026. We cannot give more details at that stage. Obviously, we are committed to returning excess capital. On the second question, I understand it was about the fleet NEA evolution.
What I can say is the evolution of NEA was exactly at the level expected in our internal budget. Our internal budget is consistent with what we told to the market a few months ago, in which we were saying that the NEA will increase with a small one digit progression, and that the fleet we wanted to stabilize it. For the moment, this is consistent with our planned trajectory. What we can say is the order intake of Q1 2026 has been around 20% above 2025, Q1 2025, which was a low point. We've done that maintaining the same rigor in terms of focus on the profitability of the orders.
All in all, you remember that our priority is value, more than growth. We consider that Q1 is consistent in terms of NEA and fleet, compared to our expectations. Anyway, it's not the top priority. The top priority remains the focus on the creation of value creation. You had a third question, I must admit that I'm not sure I've understood it because the line is really not good. If you can repeat the third question. I thought it was about autonomous vehicle, no? Can you confirm?
Yes, indeed. You know, given the rapid pace at which autonomous vehicles have been developing and I'm interested in your updated thoughts as well as your positioning. Do you see yourself as a net winner? Thank you.
Do you see as a net what? Net winner.
Do you see yourself as a net winner from the ultimate development in which this space could evolve?
Well, okay. On the autonomous vehicle, what we see is the market starts to exist. We see that in China, we see that in the U.S., we see that it starts in Europe. For me, it's not a surprise that it works, and it starts by the collective usage, which mean the robotaxi, which has good acceptance by the final customer and makes sense from a financial point of view because you just can amortize the other cost of autonomous vehicle by the fact that you save the cost of the driver on intensive usage. I'm convinced that this will pick up. First start with collective usage like a robotaxi.
It will also be with shuttles that are driving always the same journey in the day. Later on, and probably on this second aspect, it will take significantly more time. It will go to individual usage. On individual usage, I think it will take more time because the other cost is much more difficult to absorb. At the moment, for the customers, at least in Europe, what the industry, auto industry is trying to do is to already to pass on the other cost of electrification to customers. I don't think that on individual usage, they will be able to pass on both electrification and the other cost of autonomy. For us, Ayvens, I don't see autonomous vehicle as a threat.
I see that more as an opportunity because each players in the value chain is specializing on part of the value chain. I think our focus is to continue to lease a car and provide the right services. We are a company that is supposed to make mobility easy, we'll help these companies that develop in the autonomous business to serve, maintain the cars. That's the direction that we are taking.
Thank you.
Next question is from Geoffroy Michelet of ODDO BHF.
Hi. Thank you and congratulations for those good results. Two questions for me. The first one on synergies, since I think you reached EUR 110 million, which if you multiply by four quarters, is equal to your target of run rate synergies. Does it mean that can you go even further on synergies than you initially planned? That's the first question. The second question is more related to your exiting fleet in 2027 and 2028. Can you give us your view on the pricing assumptions and volume assumptions on those BEVs and PHEVs for the next year? Thank you very much.
On the synergies, as you just rightfully said, we are on track for the full year EUR 440 million synergies. You know, I think what is important is to say that we're going to maintain focus on cost. 2026 is not the end of the story for the cost to income ratio. Of course, this pace of improvement will not be the same as what we've experienced the last two years, because we had the huge level of merging organizations that were a similar size on the making the same business. We will continue to work on that.
I don't think for the future it makes sense to call it synergies, because by definition synergies compared to what you would have done if you had not merged, okay, for the forward plan in three years it makes sense. One day you've just to say, "Well, now we are one company, and we just address the cost question." Directionally, my answer is we'll have to continue to work on the cost to income ratio and continue to progress on this with some important issues in particular linked to AI that we need to implement, and we're working on that. On your second question, if I understand, it was.
When you say exiting fleet, I suppose it's about the mix of used car sales, if I understood well. You remember that we had a mix of 10% BEV in our used car sales in 2025. In Q1 2026, the mix was 12%. This is supposed to grow in 2027 and 2028 to between 20% and 25%. You can never have a perfect forecast. Of course, you've got the contract that gives you the forecast, but after that, it depends on the behavior of the customer that want to extend some cars and not others. You can have distortion on mix on that. It's decision of the customer.
You can also have other factors like the availability of the different cars of the car makers that impact that. As an order of magnitude for these two years, I would give you a range of between 20% and 25% for BEV, compared to 10% in 2025 and 12% in Q1 2026.
Thank you very much. That's very helpful. Any, let's say, differentiation of pricing in your estimates versus current pricing?
You mean for the U.S. over the coming years?
Yes.
Well, I would say, compared to what we've said three months ago, I would say there is no significant change. We continue to have a price scenario that is similar. As you remember, our price scenario is in the coming years, a slight increase of the IC prices and a significant decrease of BEV prices. That's what we've entailed in, included in our scenarios. We have not changed them so far. We consider that the last months were consistent. It's obvious that what happens in the last, say four, six weeks with the Middle East doesn't make the exercise of forecasting easier. I don't know if it's ever been easy.
For the moment, we consider that our price scenario remains valid with the direction that I've indicated. Anyway, as I've already stated in our call three months ago, the normal UCS, when you've got the perfect crystal ball, is a UCS that is close to zero because you project perfectly each RV on each and every car. The message remains the same message as three months ago. Let me make it simple.
Thank you very much.
Next question is from Nicholas O'Sullivan, UBS.
Hi. Thank you for taking my questions. The first one will be on margins. We saw previously that margins can be volatile on a quarter-on-quarter basis. Do you think the margins right now are sufficiently strong that you can afford more rebates and be a bit more commercial in the second half in 2027? Finally, the other point is that the kind of a sustainable run rate of margins going forward and no one-offs in this Q1 print? That will be on margins. That will be the first question. The second question will be on costs. You reported underlying cost income of 54%.
Expenses, yes, are down, but flat, quarter- on- quarter. Are we actually seeing the benefits of the synergies yet or are you investing more in customer satisfaction and IT perhaps? That would be my question.
Okay. Thank you. On margins. What we can say is it's not our intention to modify our margin policy in order to gain market share of volumes. What we want is to stabilize the fleet this year with an order intake that remains at a good level of margins because that's the basis of our policy, and we don't want to change our strategy on that. Which means, for example, that in the Q1, when we've seen the interest rate increasing due to Middle East events, we've passed on the increase without waiting to our countries for them to include in their pricing.
I think it's something important to have to have in mind. On the cost income ratio, we're at 54%. It's a 4-point improvement versus Q1 2025. 4 points is exactly what we need to do for on a full year basis as we, our target is to move from a 56% to 52%. What we've done in Q1 is perfectly consistent with what we need to do from the full year. At that, on a quarterly basis, you can have some volatility on between quarters as we've seen last years.
I would say that we are perfectly on track, consistent with our, our target and has answered a bit to the question of I think it was Joe Paul before. It will not be the end of the story.
Okay. Thank you.
For any further questions, please press star one on your telephone. Next question is a follow-up from Sharath Kumar, Deutsche Bank.
Thank you. I have a follow-up on used car sales results in light of the comments that you made regarding BEV mix in 2027, 2028. Appreciate this is a bit distant in the future, but do you think there is downside risk to consensus, which currently has gross UCS per car between EUR 300-EUR 400? Is this consistent with your central scenario? Thank you.
Well, you know, I think, we've repeatedly, say that, normalization of the UCS will take place.
What we see is that is happening in 2026. That's generally speaking, our policy is not to comment on the consensus, on top of that are a bit volatile if we did. What we have said and that we repeat is UCS is normally 0 or 0+ , let's say. That's the normal thing that should happen. That's the way we wanted to manage the company.
It's fair to say that with increasing volumes of BEV, that puts more pressure on the UCS, but that's the reason why we say that UCS will not be as high as it is, as it was in 2025, in the future. No, no change of message on the used car sales.
Thank you.
We have no more questions registered at this time. Mr. de Rovira, floor is back to you for any closing remarks.
Just wanted to thank you for these questions and on comments. I think you understood that this quarter is a quarter in which we consider that we are on track versus what we've announced to the market previously with no significant event or change compared to the messages given in a few months ago with the full year 2025 call. Thanks a lot for your attention, and we'll be happy to meet you in the if necessary, in the coming days or weeks. Thanks a lot. Goodbye.
Ladies and gentlemen, this concludes today's Ayvens conference call. Thank you for your participation. You may now disconnect.