Ladies and gentlemen, welcome to Ayvens' third quarter 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. Please go ahead, sir.
Thank you. Good morning, ladies and gentlemen. Welcome to Ayvens' Q3 2026 results conference call. I am hosting this call with Patrick. First, we will present the highlights of Q3, then Patrick will comment on our financial results, and we will then take your questions. Let us now go directly to slide five on the highlights of the financial performance. Thanks to strong margins on disciplined cost reduction, Ayvens delivered in Q3 2026 a solid financial performance in a volatile used car market environment. The group is on track with its financial roadmap. Underlying margins increased further, reached 620 basis points, up 27 basis points versus Q3 2025. Conversely, our net UCS result decreased to EUR -169 per unit compared to EUR 536 in Q3 2025 and EUR -62 in Q2.
This reflects the constraints of used car markets impacted by the sustained high oil prices and interest rates, driving down our gross result per unit to EUR 118 versus EUR 1,110 in Q3 2025. Our continued focus on cost reduction has generated strong positive yields. This has led to a further improvement in our underlying cost-to-income ratio at 49.2% versus 52.8% in Q3 2025. Bottom- line, net income group shares stood at EUR 240 million, versus EUR 273 million in Q3 2025. ROTE stood at 13.2%. CET1 ratio stood at 12.8% as at September end versus 12.6% as at end of June. Our 2026 share buyback program of EUR 450 million, which was launched at the end of July, is advancing well. Our execution to date is close to 50%.
On debt capital markets, Ayvens successfully completed its September EUR 550 million green securitization in Belgium, marking the first green auto ABS issuance in Europe. This transaction attracted strong investor appetite. Let us now turn to slide six on nine months 2026 results. The group's nine months 2026 results show that Ayvens is on track to achieve our full-year targets. Margins are improving, totaling EUR 2.3 billion, up 3.8% versus nine months 2025. Net UCS results dropped 91% at EUR 29 million, with a decrease of EUR 400 million in gross UCS result, which reflects the deteriorating macro trends in the used car market. Costs are down 8.1%. The decrease results from higher cost synergies, lower CTA on strong cost monitoring. Underlying cost income ratio landed at 51.1% versus 56.1% in nine months 2025.
Net income group shares stood at EUR 754 million, a limited decrease of 1.2% versus nine months 2025, with better margins, lower costs, and lower effective tax rate compensating for lower net UCS result. Both ROTE at 13.6% on earning per share at EUR 0.90 improved versus nine months 2025. These improvements were supported by the distributions of excess capital to shareholders of 2025 and 2026, the exceptional dividends and share buybacks for a total of EUR 1.4 billion. Overall, nine months 2026 results demonstrate the robustness of our model, the relevance of our strategic actions we've taken in this volatile environment. Let's now turn to slide seven on fleet and earning assets. Earning assets stood at EUR 52.8 billion, up EUR 200 million versus both September 2025 and June 2026.
Q3 2026 fleet decreased by 5,000 units versus June 2026, a much slower pace than in the first half of 2026 when depleting total 50,000 units. Fleet management contracts stood at 574,000 vehicles, down 5,000 vehicles versus June 2026. Looking at deliveries by powertrain over the quarter, the share of battery electric vehicles in our passenger cars on LCVs deliveries slightly declined compared to Q2 2026 at 30%, versus 31% in Q2 2026, which was slightly up compared to Q3 2025 at 28%. PHEV penetration was also down at 10% versus 12% in Q2 2026 and 11% in Q3 2025. While the share of hybrids progressed to 31% versus 28% in Q2 2026 and 26% in Q3 2025. I now hand over to Patrick to present you the details for the Q3 2026 financial results.
Thank you, Philippe, and good morning, ladies and gentlemen. Let me start with the evolution of our gross operating income on the left-hand side. At EUR 739 million, it is down 13.1% compared to Q3 2025, driven by the decrease in the net UCS result. Margins decreased 2% at EUR 761 million versus EUR 776 million in Q3 2025 due to a marked impact of hyperinflation in Turkey this quarter. Conversely, underlying margins increased by 4.6% and reached EUR 817 million, the highest level since the creation of Ayvens, supported by both higher leasing margins and higher services margins. Net UCS result stood at EUR -21 million versus EUR +75 million in Q3 2025, and EUR -8 million in Q2 2026. I will come back to the UCS evolution in a few minutes. Let's now move on the next slide on margin.
Total margin stood at EUR 761 million, which is down EUR 15 million over Q3 2025, but that includes a EUR -58 million impact from hyperinflation in Turkey as the gap between CPI and the auto price index in the country has widened further. CPI in Turkey is now projected at 30% for full- year 2026, in line with the country's latest projections, while used car prices are expected to remain broadly flat. Turning to underlying margin, they stood at EUR 817 million versus EUR 782 million in Q3 2025. In basis point of earning assets, margins reached 620 basis points this quarter versus 593 basis points in Q3 2025 and 603 basis points for the first nine months of the year. This is a strong performance, which comes mostly from the increase in leasing margin, with lower interest charge across all funding sources, and our focus on the most profitable segments.
The service margins also increased, supported by better short-term rental activity. Let's move to the next page on UCS and depreciation results. Starting with the total UCS results, whose evolution is represented on the right-hand side of the slide. You see that the net UCS results shown as the blue line in the graph decreased to EUR -21 million , compared to EUR + 75 million in Q3 2025 and EUR -8 million in Q2. This is primarily the result of a significant decrease in the gross UCS results represented by the black line. This gross UCS result stood at EUR 15 million versus EUR 155 million in Q3 2025, and EUR 42 million in Q2 2026. This reflects the same trend as in the first half of the year. Increase in interest rates impacted the overall demand of used cars, and higher oil prices have shifted used car demand away from ICE towards BEVs.
As a result, profit on ICE and hybrid vehicles, which represent most of our sales volume, have decreased, while losses on battery electric vehicle have significantly reduced. This mixed effect is reflected in the decrease in the gross UCS results per unit shown on the left-hand side of the slide, and it decreased from EUR 1,110 per unit in Q3 2025 to EUR 326 in Q2 2026, and EUR 118 in Q3 2026. Turning now to depreciation adjustment, they amounted to EUR -36 million versus EUR -18 million in Q3 2025, and EUR -15 million in Q2. This EUR -36 million is the sum of three items which are detailed on slide 16 of our appendix slides. There is EUR -35 million of new prospective depreciation on the running fleet in continuation of the fleet revaluation performed in H1 2026. This related mostly to our running fleet of BEVs.
There is EUR -16 million of reversal of past positive prospective depreciation on the vehicles that were sold this quarter, and this number was EUR -39 million in Q3 2025. There is a EUR +14 million on other reversals, which is mainly relating to the vehicles sold in Turkey and representing the release of the impairment previously booked in the context of hyperinflation. The equivalent number for Q3 2025 was a EUR + 6 million . Let's now turn to the next page on operating expenses. Operating expenses continued to decrease in Q3 2026. They reached EUR 407 million, down 5.1% compared to Q3 2025, where they stood at EUR 429 million. This decrease is driven by both CTA and underlying OpEx. CTA amounted to EUR 5 million , down EUR 12 million versus Q3 2025, while underlying OpEx stood at EUR 402 million this quarter versus EUR 412 million in Q3 2025.
This decrease was notably supported by growing OpEx synergy at EUR 52 million this quarter versus EUR 39 million in Q3 2025. This decrease in operating expenses, combined with strong underlying margins, led to a cost to income ratio of 49.2% versus 52.8% in Q3 2025. On the next slide, we have the reminder of the income statement, starting with the cost of risk on the left-hand side, which stood at EUR 25 million , representing 19 basis points, which is in line with previous quarter, except for Q2, which benefited from a favorable one-off. In the middle graph, you see that profit before tax stood at EUR 306 million versus EUR 319 million in Q3 2025, this decrease being mostly driven by the decrease in net UCS result of EUR 96 million year-on-year.
Net income group share decreased by a much lower magnitude at EUR 240 million versus EUR 273 million, supported by a lower effective tax rate at 21.3% this quarter, versus 29.7% in Q3 2025. This low level of effective tax rate in Q3 is resulting from two one-off gains. First, we conducted a successful negotiation leading to the transfer of tax losses from a former Dutch LeasePlan entity to Ayvens. Second, the group benefited from a positive impact in Turkey. It relates to the reversal of deferred tax liability linked to inflation-related asset revaluation gains, following the election of Ayvens to recognize these gains as non-distributable equity under local tax regulations. For the full- year, we anticipate the effective tax rate to be at similar levels as in nine months 2026.
The group return on tangible equity stood at 13.2% for the quarter, versus 13.6% for nine months 2026, and this is in line with our full-year guidance. If I now turn to our last slide on RWA and capital. Compared to Q2, RWA increased by EUR 200 million, driven by earning assets, so in line with earning assets. Our CET1 ratios stood at 12.8% versus 12.6% in Q2 2026 and 13.2% in Q4 2025. The graph on the right-hand side illustrates our ongoing capital generation and commitments towards shareholder returns. Over nine months 2026, the group generated 84 basis point of capital on top of ordinary dividend and AT1 coupon provisions, out of which 22 basis points in Q3 2026.
This has allowed the group to return 137 basis point of excess capital to shareholders at the end of Q2, in the form of share buybacks for 89 basis points and exceptional dividend on the remaining 48 basis points. 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 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, gentlemen. I had two. The first one, I am referring to slide 41 of your strategic plan for 2029, which was about the new and used car sales price evolution. At that time you had said, okay, ICE and hybrid slightly up, and PHEV and BEV downward scenario. Obviously, that second bit is probably still going to happen, but the ICE slightly up, are you actually changing that in line of the fact that the ICE car price is really going sharply down by the OEMs, and does that change will have any sort of impact about that particular outlook you gave? That is the first question. The second one on hyperinflation in Turkey, which seems to be a never-ending saga.
When do we see the end of it, or can we assume that EUR -58 million, I think is probably the worst we will see, at least for this year. Thank you.
Thank you, Jacques-Henri, for the two questions. I will answer the first one, and I will ask Patrick to answer the question on hyperinflation in Turkey. On the CMD, yeah, we gave indication on the scenario for strains. I agree with you that BEV prices will obviously continue to decrease. What is interesting is to see the recent developments on a number of factors on the cost of productions on BEV. The first one is you can see that there is inflation on chips, and very significant. That if you take the last 12 months that some materials like lithium increased a lot in prices.
It means that compared to our basic scenario. On the third topic is, in Europe, we see that the pressure of the OEM to decrease prices due to their need to reach its CO2 targets are declined, because now they are much more comfortable to reach the CO2 target. If we take the recent maybe two months or we can see that maybe our assumption on BEV can be slightly modified in the sense of being less conservative and a bit more optimistic on the evolution of prices. They will decline, but maybe not as much as what we were thinking. Conversely, on the ICE, it could be the opposite, but the number of factors
is quite significant. What is interesting is the change between powertrains. Our global scenario, which is an evolution of price based in the weighted average of different powertrains, doesn't change significantly in this context, because when you look at the production, not on the fleet, but on the originations that we've been doing in the last year and what we do this year, we have a balance between the powertrains that is quite interesting, which mean that when you've got one powertrain that goes up and the other goes down, it tends to balance the effects. Sorry for the long answer. In short, BEV may be a bit less pessimistic on the original price compared to what we said in CMD. ICE maybe the other way around, but it doesn't change, for me, the global scenario or my margin at that stage.
For the hyperinflation in Turkey, I will ask Patrick to-
Yes. Indeed, hyperinflation in Turkey is a complex and volatile topic. The thing is that since the beginning of the events in the Middle East and actually the war that we have had, the side effect on Turkey is that the Turkish government has been increasing its forecast for inflation in 2026, last August. Indeed, something which we were seeing as a slowly decreasing but still material impact is now viewed as a bit of material impact for a bit lower. I don't see an end to a hyperinflation regime before the end of 2028. That's one. Second, I think that hyperinflation should, if the war and the situation in the Middle East doesn't increase, should get a bit lower in 2027 and even more in 2028.
But again, it's very difficult to make forecast because the previous forecast had been postponed by the Central Bank in August, and the Turkish government is even more cautious. Now, for the quarter impact, I think this Q3 is a quarter where we have a significant discrepancy, as I said, between the CPI and the auto price index. We do not anticipate such a magnitude impact in Q4, for example. So it's a bit, the EUR - 58 million stands on the high side.
Thanks a lot, gentlemen.
Next question is from Geoffroy Michalet of ODDO BHF.
Thank you, gentlemen, for taking my question. Two questions. First one, can you speak a bit about the impact of the maturity of the fleet on the margin? Because I had in mind that the most recent vehicles in fleet have a slightly lower margins than the older vintages on the fleet. I understand that you onboard a bit less new cars versus the past, so that might be also a kind of a booster on margin. Can you remind us the reason of the differences on margin, the magnitude of the impact, and the level that you would have achieved if you had the kind of growth that you target for the 2029 plans?
The second question is a bit on the competitive landscape because yesterday, the CEO of BNP Paribas, owner of Arval, mentioned that they had been more cautious since 2024, although they have been continuingly outperforming in term of market share. Can you comment on what you see on the ground in term of commercial positioning of competition versus you and the most recent development? Thank you.
Thank you, Geoffroy, for the two questions. On the first one, there is a technical effect, which is when you got a new on the fleet, it is when you put a car on the road, the first year, the profitability is lower than the fourth year of the lease. It is a way that operating lease is accounted. It is clear that mechanically, if your fleet is declining, it helps a little bit your margin. We are not talking about something that is very significant. When you grow, that is one of the two reasons that we had indicated in the CMD that when the fleet comes back to growth, there will be a slight softening. The other reasons being the mix of BEV ICE. We are not talking about a bigger order of magnitude.
What influences much more the margin is the commercial behavior on one side and the action that we perform on cost. These are much more impacting than the effect on the average age of the fleet. By the way, the average age of the fleet is not something that moves very significantly and not very fast. I would not take this factor as a Tier 1 factor. On your second question, which is a competitive landscape. If we talk about what we have seen this quarter, the reality is we have not seen anything moving really compared to the previous quarters. We have not seen any competitor making significant moves. On our side, we continue to originate as a gross margin that is year- to- date, exactly at the same level as what we originated the previous year.
Meanwhile, we have increased our order intake by 15%, and we have seen the effect of that in the fact that in Q3, the decrease in fleet has been much lower compared to the pace of before. The pace of H1, as we have stated, was 50,000 for H1, so 25,000 per quarter. In the third quarter, it was 5,000. It is to say that the order intake increase has not come from a change in policy of pricing that remains stable versus last year.
Thank you very much.
Next question is from Sharath Kumar, Deutsche Bank.
Good morning. Thank you for taking my questions. Firstly, on margins. I understand that the current year funding plan is largely complete, so wanted to check your conviction for margins remaining around, say, 600 basis points for 2027. How do you see the impact of higher funding costs and your ability to pass it on to customers? Related to this, you had aspirations of increasing the deposits in your funding mix. If you can share any sensitivities on how impactful this could be or how beneficial deposits are versus other sources, it could be helpful. Second, on the extraordinary capital returns, can we expect something again with full-year results over and above the 50%-60% dividend guidance that you have provided? Lastly, a quick follow-up to the previous response on used car sales. Are you confident of UCS still being positive or not negative for 2027?
Thank you.
Okay. In fact, those two questions are three questions, if understood well. I will ask Patrick to answer the second one. On the first one, the indication that we gave about interest rates is 100 basis points of increase in interest rate is worth around EUR 20 million, because we have a good capacity to pass the interest rate increase to our customers, given the kind of contracts that we have. We always have been extremely disciplined on passing the interest rate increase to our customers and in the commercial policy. Just for your reference, we have a weekly meeting and decision on this to check that the rigor and execution is what it should be. On the deposit, it is correct that we continue to push on the retail deposits.
You may have seen that in the Netherlands and in Germany, we have launched some promotional campaign, which is quite traditional in this sector to increase the level of deposits. This has proven to be working in Germany. In the Netherlands, it has started very recently, so it is too early to judge. That remains a significant part of our funding strategy, knowing that at the moment, given the tensions on the bond markets, the difference between retail deposits and the bonds is at quite high point. It makes the interest of going to retail deposits even higher compared to the past. On the UCS, it is a bit early to talk about 2027 on that.
You know our process, what we do every year is when the full- year of 2026 results are published, we have the call for the full- year results at the end of February, and that is the moment where we guide on the different elements, including the UCS. The environment is quite volatile. I think that makes sense. Maybe to give us some color, when you look at the Q3 versus Q2, there is a decrease in the gross UCS, as you have commented. What is interesting is to see that September was much better than August. August was a low point, and September seemed to be better and above the average of the quarter. Just to say that drawing too fast conclusions on the curve can be misleading.
We will see how things evolve by the end of the year and give guidance for 2027 at the end of February, as we always do. Patrick, can you answer the second question?
Yes. On capital, on the extraordinary capital dividend, capital share buyback dividend, return to shareholder. We are still in the process of executing the one that we have announced, and we anticipate that given the liquidity, it should take us until, say, the beginning of next year. As you know, we have communicated during the capital market day on a payout ratio of 50%-60%. There is a likelihood that the board early December decides to increase the current 50%, but we need to wait until this period of time. Clearly, we have said it should be between 50% and 60%. As you have seen also in the capital slide, we are currently generating significant capital. One should have in mind that the profit, it will keep going on, but probably with a growth in RWA when the fleet returns to growth.
We have to take into account all these parameters before submitting a proposition to the Board early 2027.
Thank you.
Next question is from Nicolas O'Sullivan, UBS.
Hi. Thank you for taking my questions. Actually, I have two small ones. The first thing is you describe in the press release that Q3 underlying cost income ratio of 49% is seasonally low. What is exactly seasonal about the 49% this quarter? Is it driven by what you said earlier on the leasing and service margin? Is it something in OpEx? If you could point to what is the seasonal item here. The second question is about, so you disclosed that you have EUR 319 million of debt securities accounted through OCI. I just wonder if you could provide what is the composition of this portfolio account at through OCI, especially if that is sovereign debt or French OAT. Thank you.
Thank you, Nicolas. I will ask Patrick to start answering the second question, and I will come to the first question on cost- to- income ratio.
Yes, indeed. Part of the debt securities we have in OCI is related to the investment portfolio of our proprietary insurance company, for which the share of French government is very limited. When I say very limited, it is below 10%. That is what it is. There is also there the effect of cashflow hedge on securitisation transaction. It is a mix of these two components with, as I said, very limited to French government bonds.
Yeah. As to the question on cost to income ratio, the purpose of the message was not to extrapolate on Q4 the same level. Generally speaking, Q4 is a bit higher, so it is just to remind that within the year, all quarters do not have the same seasonality. We are not talking about a special one-off in Q3, but there is in year. We have confirmed the cost to income ratio for the full year, and obviously, I think we should be a bit better than the 52% that was mentioned, even where we are at the end of September.
Okay. Thank you. If I may ask a follow-up. Q4 last year had a bit more costs on a Q-on-Q basis. Are we going to see the same trend if you need to make investments or make additional one-off costs?
What I just say is, there is seasonality in the year. Q3 tends to be better, Q4 tends to be a bit higher. We will be better than the 52% that was in our guidance, and there is no other bigger specific items to be mentioned.
Indeed, all the suppliers are keen to send their invoices before the end of the year, and generally it comes in Q4. This is the main explanation, but we book in a year.
Okay. Thank you very much.
Next question is a follow-up from Geoffroy Michalet of ODDO BHF.
Yes. Thank you for taking the follow-up. You mentioned in your speech that you had a higher short-term rentals business, which enabled the margin, which boosted a bit the margin. Can you elaborate a bit the context of this activity? Is it more lease extension for existing clients that are waiting for cars or something else? Thank you very much.
Yes. Geoffroy. Indeed, as you know, we have a policy to steer better all the various components of service margin, one of which being short-term rentals. As we steer better, we have had better results in short-term. That means, for example, that the capacity of utilization of the short-term fleet is slightly better, and also the various components of this line of activity. It is just what it is, which is causing an increase in service margin. Explaining the increase in service margin, we can see between Q3 and Q4 this quarter.
Let's give an example, not to be misleading about what is this short-term rental activity. The typical example, when you've got a customer that will have a car with a leasing starting within six months. Typically, we provide the car for the transition period while he's waiting for his new car. This is part of this short-term rental activity. One of the factor of success in this activity is, as Patrick was underlying, the utilization rate. When the utilization rate is high, you make much more profit than when the utilization rate is low. One of the action that we've got on the service margin, because it goes in service margin, is to drive this utilization rate higher compared to what it was in the past, and this is proving to be effective.
Thank you. That's very clear. Maybe one last follow-up. Given where you are now on margin, and since it seems to be a bit sustainable at some point, don't you think that the implied margin assumption for your 2029 plan is somehow a bit conservative at this point of time?
Well, I think that we've published a CMD one month ago, so it would be a bit strange to change things just in October. Let's work on our fundamentals, which is what we are doing, the fundamentals of leasing margin, service margin on OpEx, to deliver our plan. No other comments at this stage.
Thank you.
We have no more questions registered at this time. Mr. de Rovira, the floor is back to you for any closing remarks.
Well, no specific closing remark. I just wanted to thank you all for your attention and the questions. Thank you. Goodbye.
Thank you.
Ladies and gentlemen, this concludes today's Ayvens conference call. Thank you for your participation. You may now disconnect.