Good morning, this is the conference operator. Welcome, and thank you for joining the Ayvens Third Quarter 2023 Results Presentation. The speakers today will be Tim Albertsen, CEO, and Patrick Sommelet, Deputy CEO and CFO. 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. At this time, I would like to turn the conference over to Mr. Albertsen. Please go ahead, sir.
Thank you. Yes, good morning, ladies and gentlemen, and welcome to this Ayvens Q3 2023 Results Conference Call. First of all, thank you for joining us today. I'm hosting this call with Patrick Sommelet. First, I'll present our highlights for the Q3, then Patrick will comment on our financial results, which include LeasePlan's since May 22. To help you better understand our performance, he will provide some additional explanations on a comparable basis. After that, I'll say a few words on our outlook for the full year of 2023. We'll then take your questions. Let's go to slide 5 on the key takeaways.
In the third quarter, we accelerated the pace of integration of LeasePlan, a number of key initiatives, of which global and local RFPs are well underway, and we have already reached our first procurement and objectives in terms of bonus with several OEMs. On top of that, we have taken two important steps towards becoming one. First, we presented our Power Up 2026 strategic plan last September. With this plan, we draw up our industry leadership to shape the future of mobility and achieve excellence. We have set clear, ambitious, while realistic objectives around our four priorities: clients, operational efficiency, responsibility, and profitability. Second, we launched our global mobility brand, Ayvens, which unites the two companies together on one single identity and highlights our new brand promise: Make life flow better by delivering mobility that is simpler, smarter, and sustainable.
The new name and brand launch has been extremely well received by our clients, partners, and employees. I'd also like to confirm that we expect to finalize our purchase price allocation exercise by end of this year, and that we will communicate on the outcome as soon as we can. In a context of challenging macroeconomic conditions and normalization, yet still favorable used car markets, we achieved a solid commercial performance and mixed financial results compared to a historical high on the 2022 base. Our commercial activity was particularly strong in Q3. Ayvens continued to lead the way to sustainable mobility and to the electrification, in particular. We own the largest global multi-brand EV fleet, with more than 500,000 BEVs and PHEVs. This accounted for 19% of our funded fleet at the end of September.
Thanks to the continued growth of our funded fleet, and with the acceleration of the EV penetration in Q3, our Earning Assets increased by 14% on a like-for-like basis compared to a year ago. We posted a EUR 226 million net income Group share and a return on tangible equity of 12.5% in Q3. Our capital position was strong, with Core Tier 1 capital at 12.3% end of September. Finally, we confirmed our strong funding capabilities as we issued EUR 2 billion bonds in September, our largest issuance ever. This brings the amount of our bonds issued year to date at EUR 3.85 billion. Let's move to page 6 on our strong business growth. As just mentioned, our Earning Assets increased by 14.1% year-on-year to more than EUR 50 billion.
This is a strong pace, which was taken into account in the financial trajectory to 2026, which we presented our Capital Market Day last September. In terms of volumes, the positive trends of the previous quarter continued. Our total fleet stood at 3.4 million vehicles, up by 3.8% compared to a year ago, reflecting our dynamic commercial activity. Our funded fleet reached 2.7 million units, up 3.4% year-on-year, while our fleet under management increased by 5.3%. We achieved an outstanding performance in electrification, with EV penetration at 37% of new registrations in Q3 2023. We are clearly leading the transition to net zero, with full EV penetration at 23% and plug-in hybrid penetration at 14%.
Over the first 9 months, our EV penetration was 34%, much ahead of the European market, which is at 20%-22% only. Let me hand over to Patrick, who will comment on our financial results in more details from page 8.
Thank you, Tim. Good morning, ladies and gentlemen. I'm now going to present the financial results and the contribution of LeasePlan into Ayvens results for the third quarter of 2023. I will start by presenting our reported figures, meaning with LeasePlan, as I said, from May 22, and then I will present our like for like performance so that you can have a better understanding of Q3 2023 compared to Q3 2022 and underlying business trends. Note that as Tim mentioned, in the reported figures, pending the finalization of the PPA, which we expect by the end of the year, no reduction in depreciation cost nor UCS results was recorded on LeasePlan fleet. The reported performance, which we are presenting, is before the impact of the PPA.
So on page nine, you see that gross operating income is going up 25% from EUR 660 million in Q3 2022 to EUR 814 million in Q3 2023. This is a combination of several factors. The most important one is obviously the contribution of LeasePlan on the quarter, which comes after the consolidation adjustment I just mentioned. Prior to PPA, we consolidate; we do not include in our results the results related to reduction in depreciation costs and UCS results. Taking no UCS profit for LeasePlan is certainly a conservative assumption for future quarters. Depending on the evolution of the market prices, they could resume at a low level in the next quarter for LeasePlan fleet.
We'll come back later, we'll come back later to the underlying factors which are impacting our Q3 results and on the many exceptional items impacting the top line. One important factor is the mark-to-market of the swap, swap book, hedging net interest margin on LeasePlan side, which is negative this quarter for -EUR 82 million. We detail later, as I was saying, the exceptional on revenues and costs to help you understand the underlying performance. The growth of 25% is mostly the impact of the perimeter effect, comparing Q3 ALD standalone to Q3 2023 Ayvens, that is ALD plus LeasePlan. Total margins are going up 62% from EUR 459 million to EUR 741 million, for the same perimeter effect reasons. UCS profits are going down significantly.
As you can see, UCS profit per vehicle are going down from 3,014 in Q3 2022 to 1,033, Q3 2023. This is the effect of, firstly, market prices, and we will see the next slide, the gross UCS per vehicle, if I may say, that is before the effect of previously accounted for reduction in depreciation. And second factor, the UCS profit for LeasePlan, which is removed from the results, and hence, not contributing to the top line. Overall, the UCS profit are EUR 74 million in Q3 2023, and they were EUR 191 million in Q3 2022.
Operating expenses are going from EUR 219 million in Q3 2022 to EUR 449 million in Q3 2023, with a cost income excluding non-recurring items at 61.1 from 55.9 one year ago. This cost income is without exceptional in revenues and costs. The relatively elevated level is due to the fact that, as we entered in our CMD, we see pressure on margin. We'll come back to that in a minute. Second, we do not have yet the effect of synergies in both revenues and costs. Cost of risk is very benign and decreasing in basis points, reflecting a still excellent environment for corporate customers.
Net income group share is coming down from EUR 318 million to EUR 226 million, under the effect mostly of lower prospective depreciation on the ALD side, and the very strong reversal of swap book mark-to-market from Q3 to Q3 at LeasePlan also. If we flip to the next slide, number 10, you see there the progressive normalization of the used car market that we are seeing today. So we comment on this slide, as you can understand, only ALD information as for LeasePlan before PPA, all related revenue are eliminated from the income statement. You see the EUR 74 million we have this quarter, but also the impact of previously accounted for reduction in depreciation. Net profit, that is after those reduction in depreciation, the profit is going down.
But the fact that it is going down is the reflection of market prices beginning to normalize while staying still at an elevated level. So UCS profit, before reduction in depreciation, stands at EUR 2,346 per car in Q3 2023, to be compared with a very high level in Q3 2022, which was EUR 3,607. The number of cars sold in Q3 amounts to 77,500. For nine months, we have a net UCS profit per unit standing at EUR 1,654, which is in line with our full year guidance. That we'll come back to at the end of the presentation for the full year 2023, and this guidance was expressed post-reduction in depreciation costs. Now we are going to switch to like-for-like performance.
So before I comment on the details of figures, I'd like to spend some time on how to analyze the information which follows. We provide you here with an illustration of what would be a like-for-like performance, meaning flipping out of the consolidation scope effect, the consolidation adjustment, and their impact on UCS results, and also the non-recurring items. We have built Q3 2022 and Q3 2023 on the same scope as the one we have at the end of September. That is including LeasePlan, but excluding LeasePlan USA, which was sold in December 2022, and excluding the six Remedy Countries, which were sold on August 1st. Also, ALD Russia, which was disposed of earlier this year, is excluded. This P&L are before consolidation adjustment linked to the fleet of LeasePlan, which I explained just now. So let's now move to slide 12.
You see on this slide the development of margin on a like-for-like basis. Overall, and before exceptional items, total margin revenues are stable at -0.6%. This is +2.3 on ALD side and minus 3.3 on LeasePlan side. This comes on the back of Earning Assets increasing by 14%, which means that our margin in percentage are currently under pressure. We believe this comes mostly for two reasons. First, the impact of inflation and services margin on contracts, which have most of them been negotiated more than one year ago. And second, contract extension in the context of delayed car deliveries. You see that we still have reduction in depreciation cost on both sides, under the effect of market prices decreasing while still at an elevated level.
Then looking at the many non-recurring items, for which we give the full detail, you see that the most significant one is the mark-to-market of derivatives. Let us spend a few minutes on this. As a standalone company, LeasePlan was relying on a very diversified source of financing. To adjust for interest rates risk by maturity bucket, LeasePlan was using swaps held to maturity. It is important to state and to have in mind, that the book is economically hedged. That is the asset, the leasing asset on the asset side, and the funding and the swaps on the liability side. However, from an accounting standpoint and under IFRS rules, operating leases do not qualify as financial assets, and therefore are not eligible to hedge accounting.
As a result, we have on the asset side, operating leases, which are in accrued interest income, and on the liability side, a book of swaps, which is mark-to-market, thus creating some accounting noise. In 2022 and beginning of 2023, the mark-to-market of the swap book was positive. In Q3 2023, rates in euro are mostly stable, while rates in British pounds are slightly decreasing. In addition, we have the converging to par effect. This creates a -EUR 81.8 million impact on our revenues, to be compared with the +EUR 97.5 million, which was registered in the third quarter of 2022.
In appendices, we give more details on the swap book, as well as its current mark-to-market, stock of mark-to-market, which is a positive EUR 216 million at the end of September 2023. And also, its point in time sensitivity to interest rates, not considering the converging to par impact, which is at around EUR 17 million for each 10 basis points of variation. It is important to have in mind that should interest remain unchanged from today and the book also unchanged, we would have, by the maturity of the swap book, which is mid-2025, a negative minus EUR 216 million coming in our P&L progressively, and this is what we have taken in our account, in our business plan, presented at the Capital Market Day.
Among other non-recurring items, you see that we still have reduction in depreciation costs on both sides, under the effect of market prices decreasing, but still at an elevated level. At last, you also see the consolidation adjustment to get from underlying to reported. If we now switch to slide 13, which is the like-for-like gross operating income, you see that we find our margin number, which are stable, minus 0.6%. And then you have Used Car Sales results before and after the impact of the impact of reduction in depreciation cost previously accounted in our results. And before those results, it's a decrease of 17.3% under the effect of lower market prices. GOI as a result, GOI, gross operating income, underlying and like-for-like, is coming down 6.7%.
Let us turn now to slide 14 to comment on like-for-like operating expenses. Overall, there are exceptionals as well in operating expenses, which have a combined impact, which is displayed on this slide. Excluding exceptional, expenses would be up, but by 6.5% on a like-for-like basis, under the effect of inflation and headcount increases, reflecting the new regulated status of Ayvens and the integration of both companies before synergies. As a result, the cost income, excluding exceptional items, goes up from 57 in Q3 2022 to 61 in Q3 2023, as was anticipated in our business plan. If we switch to slide 16, we see that our Core Tier 1 ratios today stands at the end of September, stands at 12.3%, versus 12.5% at the end of June 2023.
You see that the RWA-related assets are increasing from EUR 54.3 billion to EUR 56 billion, under a number of effects, first of which, and the most significant one being the floor on LeasePlan credit model, which is accounted for at EUR 4.2 billion. We have the minus EUR 1.2 billion, which is related to the sale of Remedy Countries, which I mentioned. We have been able to optimize the capital treatment by EUR 1.3 billion on the quarter. This is mostly related to the credit conversion factors, which is applied to LeasePlan order book. Organic growth on the quarter comes out at plus EUR 0.5 billion of RWA. So this is the combined effect of credit RWA growth and a slight decrease in the order book.
The overall impact of -0.5 mostly comes from the reduction in cash deposits. I will now hand over to Tim, who will comment on our full year 2023 guidance.
Thank you, Patrick. Let's move to page 18 on our guidance for the full year. In the current macroeconomic context, the demand for our services remains strong. New car registrations continue to progress compared to last year. However, they remain significantly below the pre-COVID levels. This, together with the inflation on car prices, leads us to maintain our expectation that the used car markets will continue to normalize gradually while staying at a high level. For 2023, we continue to guide unfunded fleet. We expect growth between 2%-4% this year, and the guidance is unchanged. From 2024, we will guide on Earning Assets as we disclosed at our capital market day. Used Car Sales results per unit between EUR 1,200 and EUR 1,600 on average, including the negative impact of reduction in depreciation cost in previous quarters.
This is on ALD only, for which we forecast 290,000 vehicles sold over the full year. As previously indicated, no Used Car Sales results is assumed on LeasePlan Used Car Sales, pending the finalization of the PPA exercise. This guidance is also unchanged. Cost to Achieve at EUR 170 million, which is also unchanged to the past. I confirm that the Q3 2023 results published today are fully factored in, in the financial trajectory to 2026, which we presented at our Capital Market Day in September. We also confirmed the guidance which was given at our Capital Market Day, including the 50% dividend payout policy. We expect to finalize the purchase price allocation exercise by the end of 2023, in which case we will share the outcome with you as soon as possible and practical. This concludes our presentation.
Thank you for listening, and we are now ready to take any questions 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 Sanjay Bhagwani with Citi. Please go ahead.
Hello, thank you very much for taking my question. I've got three questions. My first one is a bigger picture on the dividend policy. So given that now we are seeing a lot of, let's say, one-offs in the reported income, and then, say, for example, we also have these mark-to-market derivative losses already in the reported income. So are you considering to, let's say, change your dividend policy, where the payout could be dependent on the underlying net income instead of the reported net income? The reason why I'm asking this question is because, let's say, for an investor looking for a dividend yield in ALD, a lot of the dividend is now dependent on, let's say, what happens to the interest rates in next two years. Could you please maybe provide some color on that?
Yeah. So that was your first question, Sanjay. I guess you'll come back to the other two, I guess, though. But—
Yeah.
So I think what we communicated at the Capital Market Day is that, you know, we have a 50% dividend payout policy based on reported results, and that has not changed, Sanjay, at this point. Of course, it's up to the board to decide at the end of the day. But that remains the policy, as we speak.
Thank you. And, and my second one is on, on the, on the LeasePlan UCS profits. I mean, we see that there is actually this profit has happened of EUR 33 million and, UCS, LeasePlan's reduction at depreciation cost of EUR 117 million. So the reason why these are not in the account is because you are still doing the fair value adjustments. So can we know when can we expect this to be in the account? Or let's say of this, of this 150, how should we expect this to be in the accounts by end of this year? And I'll follow up with the last one after this.
Okay, Patrick, you want to take that?
Yes, right. We are not considering these items because they are part of the PPA adjustment. You know, the PPA adjustment is not only about the operating leases assets. We are valuing kind of mark-to-market all the items which are composing, which are building the balance sheet, the assets and liabilities of LeasePlan. So this is a very long and comprehensive exercise. We expect to communicate on the results by the end of the year or the very beginning of 2024. The message we gave in our Capital Market Day is unchanged. It should be around neutral overall as we see it when we mark-to-market everything.
But the very details, I'm not in a position to detail because the computation are still ongoing, and then after, it needs to be reviewed by our external auditors and also approved by our board. So to be followed on this point.
Thank you. And one final one, just on the Earning Assets growth guidance. So the mid-term guidance is 6% Earning Assets growth, that is from 2024 to 2026. And right now we saw the nine-month Earning Assets growth is somewhere around 14%. So again, is it going to be normalizing gradually, or this can just go back to 6% next year itself?
So, Sanjay, I think it's so what we, you know, when we did the 6% in Power Up 2026, that is taking into account the fact that actually what we are delivering now of cars, is cars that was ordered actually 12, even 18 months, years, months ago. And obviously, at the time, where discounts were very rare actually on these cars, plus probably the most expensive cars we have seen. So first of all, we anticipate, we can already see that we are getting discounts back in the market, which will help. And it's also true that, what we have seen in, in the past is that it's really premium cars in terms of the electrification that's going out.
In our Power Up 2026 trajectory, we anticipate, of course, as you have seen, that the manufacturers will start delivering EVs as well at the price mark, around EUR 25,000-30,000, which will also have an impact. The 6% on as a CAGR is still valid, and it anticipates that obviously that the market normalizes, and obviously that we steer also our business towards that target.
Thank you, very helpful.
The next question is from Matt Clark with Mediobanca. Please go ahead.
Good morning. So a couple of questions on balance sheet really. Firstly, on the goodwill and intangibles that increased, third quarter on second quarter. I mean, is that the UCS, realized UCS result at LeasePlan reflected there, or if not, what is it that drove that increase? Second question, kind of similar on the IT intangibles at LeasePlan. Could you just confirm that those are fully deducted within the CET1 calculation? Therefore, if you did have to write down that IT intangible, it would not affect your regulatory capital, and any update you can give on assessing that IT project would be appreciated. And then finally, another similar question on the mark-to-market of the swaps. Can you just confirm that that is regulatory capital impacting?
We will see regulatory capital fall in line with the adverse impact that will have on reported profits, so over the next 18 months to 2 years. Thank you.
Right. I think Patrick will answer your three questions, and I can give you a quick overview of the review we are doing of this IT program on the LeasePlan side, after that. So perhaps, Patrick, you wanna give a go?
So yes, the mark-to-market. Thank you, Matt, for these questions. The mark-to-market of the swap is indeed accounted for in the shareholder equity. So at the end of the day, it ends up in the CET1 capital, so the mark-to-market is impacting the CET1 ratio. Your previous question was on the intangible assets. So this one is, yes, the very large majority is deducted. It's not yet in production, so it's deducted from CET1. So an impairment would have an almost neutral impact or close to neutrality.
As for the goodwill, very slight evolution, it is a price, yes, some price components on the acquisition, which have been registered in the quarter. But as you can see, it's a very limited amount.
Yes.
Correct.
Yeah, does that answer your questions there, Matt?
Yep, thanks.
Okay. Then, you know, just on the NGDA program or the IT program that we also disclosed, I guess, at the Capital Market Day, it's still under review. So I think there's no particular news now. We are making a full review of the program. In the meanwhile, we have seen some of the modules going live in the UK with success, so that's good news. But it's too early to say and give more details on that, Matt. But, again, I'm pretty sure when we can communicate on the PPA exercise, we can probably also give you a much more detailed review of the IT program on the LeasePlan side.
Okay, thank you.
The next question is from Kiri Vijayarajah with HSBC. Please go ahead.
Yes, good morning, everyone. Just a couple of questions on my side. So quarter-on-quarter, it looks like there's been a dip in the fleet size. So could we just have a bit more color on what drove that? Was it from the legacy ALD side or LeasePlan where you saw shrinkage quarter-on-quarter in the fleet? Would you attribute any of that to potentially arising from disruption from the business integration in any way? And linked to that, could you just talk quickly about how the forward order book is shaping up heading into next year? And then when you look at the shape and the mix of that order book, does it feel like there's a bit of a—
A slowdown in that rush towards EVs, or is that, would you say that's more just a retail phenomenon, and less sort of visible on your side of the vehicle side? And then, on the CET1 capital and the RWA optimization work that you've been doing, so firstly, have those steps been properly signed off by the regulator? 'Cause I'm not sure if they sort of will be happy that you can just at the stroke of a pen reduce your RWAs like that. And is that all of it done, or is there more of that optimization lever still in the pipeline? And then just quickly, a clarification on Matt's question about the derivatives and the impact on capital.
So as those volatile derivatives roll off over the next couple of years, does that help your market risk RWAs? I appreciate obviously the P&L goes through into CET1 capital, but in terms of the market risk RWAs, as those roll off, does it help your capital consumption there? Thank you.
Thanks, Gary. That was a lot of questions, actually. I'm sorry, but we are happy to answer all of them. So, on the fleet, you know, I think so obviously, as you have seen, you know, year-on-year, we are growing still, you know, the funded fleet by 3.44%, and globally 3.8%. The dip in Q3 is the remedy countries. You know, we were basically the six remedy countries went out in August, so I think that's the one that you probably see there. Otherwise, there's definitely nothing that is slowing down growth, you know, that we have seen. To your question on the order bank, so first of all, we are now starting seeing a reduction in the order bank, which is good news, I would say.
We have been waiting for that for some while, but it's still at a very, very high level. I mean, so still, you know, good, I would say dynamics in terms of the market. And to your question around the electrification, I mean, there's a big chunk of EVs, you know, in the order bank. Is it slowing down? Actually, for the time being, not, but we also have to say, and we can see, you know, that I mean, electric vehicles, we are still, as I said, just before to Sanjay, we are through, sorry, to Matt, well, that, you know, the EVs that is at sale today is simply too expensive for a lot of the car policies that is around in the companies.
We have to wait for the manufacturers to come in with products that is between the EUR 20,000-EUR 30,000 mark. So we could potentially anticipate a bit of a slowdown until that happens, but for the time being, it's not the case, actually. But we would anticipate over the next 12-24 months that unless we start seeing products, cheaper products, it could slow down to some extent. So, and I think with that, I give the word to Patrick, to the last—
Yes, and thank you, Kiri, for the question. On CET1 and RWA optimization, we are reaping the low-hanging fruit currently on that, but it's a work that will continue for the next one or two years, huh? Clearly, we need to optimize the way the RWA, the Earning Assets are being treated, because it's one of the rare financial businesses where you have, actually, RWA higher than Earning Assets. So there is potential room for optimization because it's always potential, and it requires also discussion with the various regulators, which are setting the tone on this side.
For the one we have this quarter, it's mostly related to the improvement of the commercial credit conversion factor of the order book of LeasePlan. We have gathered sufficient data to apply a better factor. We were already doing that on the ALD side before, so it's something which was, it was mostly a question of data collection. And, if I now answer your question on the effect of the mark-to-market and RWA market risk, no, there's no obvious relation. The RWA market risk that we have is mostly related and only related to the exposure we have in non-Euro countries due to our subsidiaries in those countries.
That is, to some extent, unoptimized as well, because we need to be working on it, but it's not something that can be delivered in a quarter. That requires some intense data analysis and exchanges with the various regulating bodies. So probably more to come in terms of RWA optimization. Very difficult to give a target, and very difficult to say to what rhythm, because it depends on a number of factors, which we do not have in our hands fully.
Great. Very clear. Thank you, both.
The next question is from Lahmidi Mourad with BNP. Please go ahead.
Yes, good morning, and thank you for taking my question. So, I have two. The first one is on the mark-to-market swap hedging that you reported today. Just wondering, was there any similar types of hedging at ALD side? And if so, why haven't we seen a similar impact on ALD? So maybe you can dig into the mechanics. And the second question is on the LeasePlan IT cost, the extra EUR 200 million that you referred to during the CMD. Maybe can you single out that line on Q3 2023 expenses? Thank you.
Hello, Mourad, thank you for the question. For the first one on the hedging of the interest rate exposure, ALD was previous to the acquisition in a different situation, because it was benefiting from the funding from Société Générale. And therefore, the risk was kind of transferred to the corporate center of Société Générale, meaning that when ALD wanted, for example, a term maturity loan, Société Générale was quoting a market price, and ALD was borrowing. So there was a lower need of adjusting those interest exposures with swaps. Not to say that there was no swap, there is no swap on the ALD side, but much more limited than on LeasePlan side.
Fair to say that going forward, I think we will, and I believe we can do some optimization here again, because we will have to review the fair value convention when it comes to asset and liability management. So we can probably implement lower volatility in the future, but there will be some volatility given to which is related to the fact that operating leases by accounting norms are not financial assets, and are not, most of the time, eligible to cash flow hedging. So something that will stay, albeit probably at a lower level. In the IT cost, we do not disclose this specific line, but there is no change in the rhythm compared to the previous quarter, in terms of expenses and amortization.
Clearly, we are in the process of assessing in the PP exercise what the market value we think is appropriate for this investment.
Okay, thank you very much.
The next question is from Julien Onillon with Stifel. Please go ahead.
Yes, hi, good morning, everyone. I got 4 questions. First, concerning the used car market. There's been a decline of the UCS pricing by about 300 EUR in the quarter. What's your prospect going in the fourth quarter? And I will say a bit beyond the fourth quarter, because you gave a guidance already, but at the beginning of next year, on this pricing. Second question will be on the EVs and the residual value of the EVs. You know, a year ago, the price was the levels for the EVs, and you were making some depreciation and assumption, and then suddenly, like when Tesla cut its pricing for EVs, significantly, pricing has been very different in a very short period of time.
Do you think that there is a risk of on the residual value of these old cars than when you will resell them in four years' time? So I would say now in three years' time, it was a year, a year ago. The pricing of those EVs as they were starting to the high levels pricing, when you buy it new, will be that effectively the depreciation rate you have put there is not enough to considering that the price decline we have seen. And is there a risk on those specific cars? My third question, I would like to come back a bit on the remedies because you made the disposal on the first of August.
It appears it was EUR 1.2 billion, but I've seen one of your slide, but it was not necessarily disclosed very precisely. Could you give more details on the pricing on those remedies? Remind us also the number of cars which were involved, just to have and the idea behind that is to have the value of, let's say, the remedies per cars, because it's always a very interesting indicators. Is there— I've not seen any capital gains either in this disposals, where we were knowing that a lot of people were buying, trying to buy those remedies, very interested. And I see also some profit still from the remedies in Q3, when I would have expected that to go to zero because of the disposals.
And my final question, I just come back on the dividend. You have now effectively given guidance, which is quite precise in a way, for the fourth quarter. We have a very strong view of what could happen. Why didn't you disclose a dividend, where you have—I mean, to support your share price? You know, the share price has been suffering, as you know, very strongly, and a dividend could have been a good way to make a support, if you were communicating that this today, which is not the case. So what did you have in mind, or maybe the board had in mind, because the board makes a decision of that, not to disclose the dividend? Thank you.
Yeah. Thank you, Julien. No, so let me take the first two questions, and Patrick will answer your third and fourth one. So on the used car markets, I mean, our anticipation for the fourth quarter is pretty much at the level of Q3. But what, of course, you have to take into consideration is that the respective depreciation is, you know, substantially more heavy in Q4. But in terms of trading, we anticipate that Q4 will remain fairly stable to Q3. That's what we're seeing right now, at least. And then I think, for the future years, 2024, we still anticipate to be a good, strong year for Used Car Sales.
And, as we said, at the Capital Market Day, a normalization up till 2026 will then happen, probably like a kind of a linear line, but at a higher level than what we had before the COVID crisis. And that is basically supported by lack of used cars that remains because of new car sales, has been very, you know, very, very much down in the last four years now. Plus a very high inflation on new cars, that obviously supports this as well. So that's the anticipation for the used car market. So Q4 pretty much at the level of in terms of trading of Q3.
On the EVs, it's true that, obviously some of the manufacturers have had, and in particular Tesla, you're right, have had kind of a volatility in terms of their pricing. We have some protection in terms of that pricing, first of all, and secondly, you know, if you look at Tesla in terms of their pricing, it went up, I think, EUR 11,000-EUR 12,000 before it actually started, you know, dropping down again. So for the time being, when we— I mean, as always, there is particular models that is not selling well, but Teslas are still selling very well, and obviously we are not seeing a particular risk on that, and not the cost that we have taken on at different times.
But it's clearly something that is monitored very closely with us, as it is a market that is obviously moving quite fast. But for the time being, we don't see any risk on the EVs we're having. Maybe on the remedies and the dividend?
Among, for the remedies, I'm not sure I exactly understand your point, because it has been sold in the first quarter, so in the like-for-like, we take, we strip out the contribution. On the dividend, so we have set a dividend policy, which was confirmed by the board one month ago. As the dividend are taken, the decision which is taken by the board in the light of full year results, so it's a decision from the board early 2024. There's no— I think it's, you know, we wouldn't change the dividends on the back of every quarter's performance or this performance.
Yes. Just on the remedies, because the remedies have been disposed technically on the 1st of August. So basically, normally it's in Q3 when you get the cash, in a way, and the disclosure of the remedies pricing was not been disclosed from this time. So I just wanted to know what was in the pricing of the remedies, because hopefully, I was hoping that we'll get some information effectively in, in Q3. So it's why you're coming on the remedies. I know the decision has been taken before, and of course, it's been approved before, but technically was made on the full third quarter, is why I ask you these questions. And on, on, on the dividend, it's very clear about the dividend policy, clear about the 50%.
It's just that you could have say, we have, we know what will be our profit for the full year, because we have given the guidance, therefore, we know what could be the dividend, and therefore we make it a bit, a bit of communication on that. But anyway, and—
No, but Julien, clearly, we have disclosed, I think we have published, a press release on the sales of the, of the remedies. We have not disclosed, indeed, the price of sales and the capital gains, but it was nothing significant in terms of CET1 ratio, if you want to know.
Okay.
Yeah. Okay. That answered your question, Julien?
Yeah, thank you. No, it's perfect.
Okay. Thank you.
The next question is from Geoffroy Michalet with Oddo BHF. Please go ahead.
Yes, hello, gentlemen. Thank you for taking the question. I have one regarding the consensus level on 2024. I think it has never been so wide when it comes to the net income. I think it ranges from EUR 1 billion to EUR 1.5 billion, with an average of EUR 1.2 billion. Could you maybe comment a bit on, on, you know, the wideness you see in, in that consensus? And maybe give us some indication on what you think should be reasonable assumptions, maybe perhaps also in term of cost income. I know that there are a lot of moving parts, including the derivative one, which is, which is strong. But yeah, thank you for that.
Hello, Geoffroy. Thank you for the question. But it's true that the consensus level is wide, and it's the fact is also the result, the consequence of having such a large transaction where you are putting two companies, the effect of PPA, which are not yet public. So, and also the effect that we are coming out of a very exceptional period, which was taking place in 2021, 2022. So I fully acknowledge that the readability of our results, if I may say, is not perfect, and that may lead to wide consensus. And we are trying to give those technical items which are needed to appreciate what is the underlying performance.
That said, we will not give any further additional guidance to what we have been given the Capital Market Day, especially given that we are currently doing the budget process for the new group events, and we are confirming the business trend that we have been seeing for the past year on the confirming in the process of confirming our financial trajectory. So it's difficult to tell you more about that today. All that we can say is that we stick to the guidance we have communicated during our Capital Market Day.
Okay, just one last question on that front. Are you considering potentially for next year, when you will release the full year 2023 results, to communicate a cost income target, unlike 2023, but like you did for the previous years before the merger?
To be seen when we have done the budget assessment. So, you know, you're asking questions which are interesting, but depending on many moving parts at this stage. Sorry.
Okay. Thank you very much.
For any further questions, please press star and one on your telephone. Gentlemen, Mr. Albertsen, there are no more questions registered at this time.
Okay. Well, I guess that concludes the call, so thank you all for your attention and for your questions. And, as always, our IR team is ready to answer any further questions you might have, so really don't hesitate to contact them. We know there's lots of moving parts, so they can help you understand things a bit better. So thanks a lot for your time today, and see you soon. Goodbye.
Ladies and gentlemen, the conference is now over. You may disconnect your telephones.