Ladies and gentlemen, welcome to the Ayvens Q2 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.
Well, thank you. Good morning, ladies and gentlemen. Welcome to Ayvens Q2 2026 Results Conference Call. As said, I'm hosting this call with Patrick Sommelet, our CFO. First, I will present the highlights of Q2. Patrick will comment on our detailed financial results. We'll take your questions. Let's go directly to Slide five on the highlights of the financial performance.
Q2 2026 has been a solid quarter for Ayvens, with the continuation of prior quarter trends, notably concerning the normalization of the gross UCS result. We remain disciplined in executing our roadmap. We generated, over the quarter, EUR 112 million of synergies, in line with the full-year guidance of EUR 440 million. In parallel, our focus on basing our profitability on robust margins on cost efficiency has helped us navigate this moving environment.
First, margins stood at a strong level at 609 basis points of earning assets, the highest level since the creation of Ayvens. This increase in margins has helped compensate for the normalization of the gross Used Car Sales result, which has been on a similar trend since Q3 2025. In Q2 2026, the gross UCS stood at EUR 326 per unit, compared to EUR 1,234 in Q2 2025, and EUR 470 in Q1 2026.
In net UCS, a decrease was exacerbated by higher depreciation adjustments at -EUR 50 million versus -EUR 38 million in Q2 2025. This has translated into net UCS at -EUR 62 per unit, compared to EUR 970 in Q2 2025. Higher margins and lower costs resulted in reducing the underlying cost-income ratio to 50.3%, 7.4 percentage points below its Q2 2025 level.
Bottom line, net income group share stood at EUR 248 million, a decrease of 8.7% compared to Q2 last year. On the back of these solid results, coupled with the capital build-up over prior quarters, I'm pleased to announce the distribution of EUR 700 million to our shareholders, which comes in addition to a distribution policy of a 50% payout ratio.
This new exceptional distribution brings our CET1 ratio to 12.6%, in line with our cruising level, and illustrates our strong commitment towards value creation. ROTE stood at 13.4% in Q2 2026. It was broadly stable year-on-year, supported by the exceptional distribution support in Q3 2025 and Q2 2026. Overall, this financial performance confirms that Ayvens is well-positioned to reach its PowerUP 2026 financial targets. Let's now turn to the next slide on our H1 2026 results.
Let me just highlight the key points for this first half of the year. First, in the backdrop of ongoing UCS result normalization and an uncertain geopolitical environment with the war in the Middle East. Our profit before tax has been stable in H1 2026 compared to H1 2025. Most of the decrease in the net UCS result was offset by the EUR 100 million increase in margin on the EUR 88 million decrease in total operating expenses.
ROTE for H1 2026 stood at 14.1%, supported by the decrease in the tangible equity at the end of the semester due to the new distribution to shareholders. Earnings per share grew 8.9% compared to H1 2025. The increase was further enhanced by the consolidation of the shares bought back last year. Let's now turn to slide seven on fleet and earning assets. Fleet numbers continued to trend lower during the quarter.
Standard fleet decreased by 82,000 units compared to Q2 2025, and 19,000 units versus Q1 2026. We have continued to reduce our fleet in the non-profitable channels, notably in the U.K. Nevertheless, order intake is showing good momentum, which is expected to materialize in the fleet in the coming quarters. Earning assets stood at EUR 52.6 billion, broadly flat compared to same quarter last year and Q1 2026.
On the right-hand side, deliveries per powertrain for passenger cars and light commercial vehicles showed notably continued decrease in BEV penetration at 31% compared to 27% one year earlier, and 29% in Q1 2026, in line with market evolution. Conversely, ICE penetration was down 8 points at 26% versus 34% one year ago. Now I hand over to Patrick to present you the details of the Q2 2026 financial results.
Thank you, Philippe, Good morning, ladies and gentlemen. Let me start with the evolution of our gross operating income on the left-hand side. At EUR 754 million, it is down 11.8% compared to Q2 2025, with higher margins partially compensating for lower net UCS results. Margins grew by 7% from EUR 712 million in Q2 2025 to EUR 762 million this quarter.
This reflects a continued improvement in the BEV margin and in the service margin to a lesser extent. Net UCS results decreased to -EUR 8 million compared to +EUR 143 million in Q2 2025, on which I will comment in a few minutes. Moving to the next slide on margins. Total margins stood at EUR 762 million, which is up EUR 50 million versus Q2 2025.
This includes -EUR 38 million of non-recurring item, consisting of hyperinflation in Turkey, as the gap between CPI and the auto price index in the country has remained elevated. Turning to underlying margin, they stood at EUR 800 million versus EUR 731 million last year. This is the highest level since the creation of Ayvens. In basis points, there were 609 basis points this quarter versus 550 in Q2 2025, continuing the increasing trend since Q4 2025.
This improvement is driven by our continued strategic action to focus on profitability and asset risk management. Underlying margin in EUR increased by EUR 69 million or 9.5% versus Q2 2025, despite the slight decrease in earning assets. Looking at the margin breakdown, leasing margin continues to be strong, reflecting higher leasing revenues and lower interest charge across all funding sources.
Services margin also increased, albeit to a lower extent compared to Q2 2025. The increase in service margin is the result of the ramp-up in synergies and higher margins on repair, maintenance, and tires across the group. If I move to the next slide on UCS, we see that net UCS results are driven by negative prospective depreciation.
I will start with the total UCS results, whose evolution is represented on the right-hand side. As you can see, the normalization trend of our gross UCS results continued in Q2 2026. The net UCS result shown as a full line on the graph decreased to -EUR 8 million compared to +EUR 143 million in Q2 2025. This is a result of a significant decrease in the gross UCS results from EUR 181 million in Q2 2025 to EUR 42 this quarter.
Since the start of the conflict in the Middle East and the related surge in oil prices, we observed diverging trends across power trains. Total cost of ownership advantage of BEV versus ICE is strengthening, which is driving used cars demand upward for BEV. As a result, our result on BEV is improving sharply month-over-month and is becoming less negative.
At the same time, demand on ICE, which remains predominant in our mixed of cars sold, is softening, so is our gross UCS results. This mixed effect is hence driving our gross results per unit downward at EUR 326 per unit, to be compared with EUR 470 in Q1 and EUR 1,234 in Q2 2025. Turning now to depreciation adjustment. They amounted to -EUR 50 million versus -EUR 38 in Q2 2025.
Last year, in H2 2025, we changed our price scenario to account for a deterioration in BEV prices, notably in the U.K. market. Since, we have been booking each quarter new negative prospective depreciation accordingly. In Q2 2026, in light of the current moving environment, we have also slightly adjusted downward our forward-looking price scenario, resulting in -EUR 41 million new prospective depreciation versus -EUR 21 recorded in Q1 2026.
Other moving parts are detailed on slide 17 in the appendix. Let's turn to the next page on operating expenses. Total operating expenses are turning down in continuation of prior quarters, showing a decrease of EUR 37 million compared to Q2 2025. Cost to achieve amounted to EUR 7 million compared to EUR 26 in Q2 2025. As indicated at the beginning of the year, we project CTA to be below EUR 30 million for full year 2026.
Excluding CTA, underlying costs stood at EUR 403 million in Q2 2026, a decrease of 4.3% or EUR 18 million year-on-year. This improvement reflects our continued cost discipline and increased cost synergies. Combined with higher margins, these lower operating expenses resulted in strong positive jaws with the underlying cost income ratio at 50.3%, an improvement of 7.3 percentage points compared to Q2 2025.
For H1 2026, our cost income stood at 52.1% on track with our cost income target guidance for around 52% for the full year 2026. Let's move to the next page for the reminder, the rest of the income statement. First, with cost of risk, which stood at 12 basis points, a lower level compared to previous quarter. It was driven by the reversal of a provision on specific credit file and lower credit risk across countries.
Profit before tax is down 12% versus Q2 2025, at EUR 340 million, as a result of the decrease in the net UCS results, which was partially offset by our higher margin and lower operating expenses. It also includes an EUR 11 million gain on the sale of our 49% equity interest in LeasePlan Emirates that was completed last June.
Net income per share stood at EUR 248 million, a decrease of 8.7% versus Q2 2025. Return on tangible equity stood at 13.4% for the quarter. H1 2026 return on tangible equity is higher at 14.1%, as it doesn't take into consideration the level of tangible equity at the end of March 2026. Please now turn to the next slide on RWA and capital. RWA stood at EUR 53.2 billion, an increase of EUR 0.6 billion compared to Q1 2026.
The increase in credit RWA mainly reflects both higher volumes of delivered vehicles awaiting contract commencement and the aging of the running fleet resulting from lower fleet numbers, both of which have a heavier RWA weighting. The graph on the right-hand side details the 86 basis points of CET1 capital that Ayvens has generated on H1 2026.
This capital buildup results from, first, a strong organic capital generation of 69 basis points on the first half of 2026, reflecting our good level of profitability. Second, as you can see, the credit risk RWA optimization communicated in Q1 2026 generated a 44 basis point increase. Finally, the credit risk RWA increase this quarter, which I just mentioned, is representing an impact of -37 basis points.
On that basis, the Board of Directors authorized a total distribution of EUR 700 million, representing 137 basis points of CET1 ratio, bringing it down to 12.6%, closer to our targets. Philippe will conclude on the presentation with the next slide.
Thank you, Patrick. Finally, we're on track to achieve our financial targets for the year. As indicated last February, we'll hold the Capital Markets Day on the September 21st. It will be held in London, in Canary Wharf, and I look forward to meeting you there and presenting our strategic and financial roadmap for the years to come. This concludes our presentation. Thank you for listening. We are now ready to take your questions.
Ladies and gentlemen, if you wish to ask a question, please press star and one on your phone 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 a time. The first question is from Geoffroy Michalet with ODDO. Please go ahead.
Hello, gentlemen. Congratulations for the very good results. Two questions for me to start with. The first one on the margins above 600 basis points. Is it something that we could call a new norm? Was there any kind of one-off that were a bit boosting it? First question. The second question is on the cost reduction. Could you give us a bit more information on where did you find, let's say, the pockets of reduction? You mentioned in the previous call that synergies were a bit over. Now it's more the general cost that you needed to adjust. Do you see still headroom to improve there? Thank you very much.
Thank you, Geoffroy, for your two questions. On the margins, I think we should have in mind that what is important for the company is to base our profitability not on the UCS, but to base the profitability of the company on margins and OpEx reduction. Margin can vary, as you can see, between quarters, but it's important to have robust margins.
There is continuous work, in terms of selection of channels, customers for the leasing margin, but also continuous work on the service margin, to work on the costs. It's important because in the service margin, you need to have in mind that you've got many times more costs in the service margin than in your OpEx. That's a real point of attention.
It's all the more important that in the context of electrification, if we want to keep our margins at a good level, we need to work hard on these costs that are included in the service margin. Can be some variations quarter-on-quarter, but to your question, there was no special one-off in Q2. We continue with our policy to drive this margin to be robust. On the cost reduction, we still have significant synergies, I was mentioning at the beginning of the call. On the quarter, the synergies are to EUR 112 million, which is absolutely consistent with the EUR 440 million that we are going to deliver for 2026.
I think what is important for the company is that we work on all components and to drive the culture that management in each country is delivering value when it brings solution to decrease costs, which is maybe a culture that is a bit different from the past. We're an industry in which, in the 2010 decades, I would say what was important was to grow very fast the top line and to grow the OpEx a bit less on the top line. We've moved in an industry in which there will be less growth, and that what you see globally, in which the focus on cost is higher. To be more specific, we try to push harder on the support functions.
In the improvement, you got a significant reduction of cost, in IT, in HR, in finance, in the support functions, more than in the operational functions. That is something that I will come back on during this CMD in September.
Thank you very much.
The next question is from Mourad Lahmidi with BNP Paribas. Please go ahead.
Yes. Good morning, gentlemen. Thanks for taking my question. I have two. The first one is on the prospective depreciation that on the running fleet that you booked in the second quarter of 2026. My understanding is that most of that is related to the U.K. fleet.
My question is, how prudent were you in the fleet reval exercise on that fleet, and should we see some carryover of that going forward? My second question is that, during 2022 and 2023, you had more contract extensions, which translates into less cars sold in 2026 and likely 2027. Would you have any ballpark assumption in terms of how many cars are you going to sell in the next couple of years due to that? Thank you.
Thank you for the two questions. On the first one, you're right to say that there is an impact of the U.K. on the PDs as part of the effect, that's related to the PDs that we took last year and that continues to have an impact this year. The second part is we've maintained our global scenario of price for the coming years, we've made it slightly more conservative on all energies, on the back of the external macroeconomics and the very volatile environment. The scenario is very consistent with what we had before, slightly more conservative. These are the two reasons for the PDs that we see on the Q2 2026.
On the Used Car Sales volume, I think your comment is probably due to the fact that, or your question that you've seen that in Q2, our sales volume on UCS are a bit lower compared to what it was in the previous quarters, it's related to what you mentioned. I think this quarterly volume is quite representative of what we should have in the coming quarters, because it's true that four years ago, the number of cars put on the road were lower than the years before.
Thank you very much.
Just a quick reminder, if you wish to ask a question, please press star and one on your phone keypad. The next question is from Nicolas O'Sullivan with UBS.
Hi. Thank you for taking my questions. Actually, I would have a question on volumes and then on capital returns. I would like to ask on the volumes, if you could tell us a bit about the segments where you're actually seeing growth, perhaps by geography and by customer segmentation. On capital return, two things. Number one, are you still committed to 50% of full year EPS paid in dividend, in Q4, and announced in Q4? Still on capital returns.
Today you're giving us exceptional capital returns to bring back your CET1 closer to 12%, but you were at 13.9 in the prior quarter. In Q3 2025, you gave us also EUR 700 million, after CET1 being at 13.5. I just wanted to know how long shareholders should wait or expect to wait in the future, for you to build excess capital to distribute to shareholders. Thank you.
Okay. Thank you, Nicolas, for the two questions. On the first one, the geographies in which we see a commercial activity that is more favorable, are mainly the south part of Europe, mainly Spain and Italy, in which order intake has rebounded more significantly, compared to the other countries versus last year. Which is both an effect of the market and both an effect that you take Spain, for example, one year ago
We were in the migration phase, and we had some internal issues that were not making the development of the business very favorable. It's both a market-driven rebound of orders and a question related more specifically to Ayvens. On your questions on segments or type of customers, the big IKA, individual key accounts, are not a segment that is going to grow a lot in the coming years.
It's more on the smaller size of fleet that we will find growth. We'll come back to that during the CMD in September. As to your question on capital return, the cruising level that we've indicated for CET1 is 12.5%. That's what we've indicated in the last quarters, and that's what we'll feel comfortable. Our payout ratio is 50%. For the rest, I think, please allow me to refer to the next CMD to explain what we're going to do in the future.
Thank you.
We have no more questions registered at this time. Mr. de Rovira, the floor is back to you for any closing remark.
Okay. Well, thank you. Thank you for your attention and your questions. As always, our investor relations team is ready to answer any further questions you might have, do not hesitate to contact them. Again, thank you. Goodbye.
Ladies and gentlemen, this concludes today Ayvens conference call. Thank you for your participation. You may now disconnect.